Eurostoxx Market Characteristics

[jerry828]

Stuggling at the moment to make ends meat. Finding the afternoon particulary difficult as the market seems almost random with mostly sideways direction but bags of volatility. I'm more of a directional trader but trying to adapt to these types of markets as I believe it's important to be flexible.

Anyone else finding it difficult or easy? In the case of the latter, any advice?

Hi Jaydee, and thanks for picking up the thread.
What you mention here is actually one of the main reasons for my move back to Dow/S&P. The eurex market has a tendency to reverse or/and fluctuate a lot more when US open comes into play. I also found it more profitable to capitalize on these moves trading the US market in the pm, rather than it's echo on eurex. The US volaltily is certainly high at the moment, and that reflects the pm moves in the eurex.

 

[Jaydee]

Last Friday was good because of the big down move but the days before were exactly what you describe. I'm finding that when it moves down into new lows, it trades at these lows intuitively for several days before things start to get confusing again and it needs a fresh break to resolve things.

I'm just being patient and picking my moments as best I can. When it gets volatile and directionless, it's easy to trade too much as the Stoxx pretends it's making a move when really it's not.

Anyway, I hope your DOW/S&P trading is going well. Feel free to drop by - I'll still be here

 

[fcmisc]

Do you guys just punt the outrigts? Or spreads such as eurostoxx/dax30?

 

[Jaydee]

I'm an outright directional trader. I believe Jerry is as well.

From your question, I'm guessing you trade the Stoxx/Dax spread?

 

[clbfjc]

Does anyone trade the spread Either Stoxx / Dax or Stoxx / Cac, if so how are they finding it?

 

[rawrschach]

Right now the (demo) feed of X trader I have going is showing the orders bid suddenly gap down about 4 ticks every few seconds making it extremely easy to repeatedly make 2-3 tick profits instantly (it's 2100ish BST) - just wanted to ask if this happens often?

 

[fcmisc]

I'm an outright directional trader. I believe Jerry is as well.

From your question, I'm guessing you trade the Stoxx/Dax spread?

Yes. That's what I trade. as wel as stoxx/cac and smi/ftse and a few others. There don't seem to be enough people on here discussing the spread, and there isn't too much I can contribute to discussions about trading outrights. I did my first outright bund punt and managed to take out 3 ticks on a 1 lot. My buddy at a bank followed my tip, but got his timing a bit better and took 8 ticks out of 1,000 lots. Alas his bank is getting raped by the credit crunch so he's not getting paid for that EUR 80k he made anyway.

 

[Jaydee]

Right now the (demo) feed of X trader I have going is showing the orders bid suddenly gap down about 4 ticks every few seconds making it extremely easy to repeatedly make 2-3 tick profits instantly (it's 2100ish BST) - just wanted to ask if this happens often?

Hi Chocolate

I don't trade at this time so haven't noticed such behaviour. However, you can bet that if this is real maket behaviour and not due to a lagging demo feed, traders will find and exploit it until it no longer exists.

I used to trade a lot of RBS and just after the stock split, a similar type of 'free money' behaviour occured. It disappeared within a week.

Best

JD

 

[Jaydee]

Yes. That's what I trade. as wel as stoxx/cac and smi/ftse and a few others. There don't seem to be enough people on here discussing the spread, and there isn't too much I can contribute to discussions about trading outrights. I did my first outright bund punt and managed to take out 3 ticks on a 1 lot. My buddy at a bank followed my tip, but got his timing a bit better and took 8 ticks out of 1,000 lots. Alas his bank is getting raped by the credit crunch so he's not getting paid for that EUR 80k he made anyway.

Yeah, sorry mate, I don't have a lot of spread experience - used to do the BP/Shell spread with cash equities a few years back but nothing else. There is a forum on T2W dedicated to spread trading - have you tried there?

 

[_JWG_]

Yeah, sorry mate, I don't have a lot of spread experience - used to do the BP/Shell spread with cash equities a few years back but nothing else. There is a forum on T2W dedicated to spread trading - have you tried there?

Hey Jaydee,

Just read your post becuase i'm looking into trading the Stoxx. You mentioned the afternoon session is choppy becuase of the US open. I ask because i'm trying to figure out the best time slot to trade. If the afternoon session is really choppy then that suits me becuas i'm in australia and i will just trade the morning session.

So how has your trading been in stoxx? What times have you been trading it?

Cheers
JWG

 

[Jaydee]

Hi JWG

The afternoon does seem to be where the volatility is at and the market often moves in a wider range later on in the day. I really just sit tight until I can figure out when the sideways movement is likely to stop and some directional movement gets underway. Typically, this seems to be happening just after midday (GMT) but every so often you get movement in the morning (maybe 25% of the time).

I was trading about 3-5 times a day when everyting kicked off a few months back but the markets have calmed a little so I don't trade quite as much now.

My trading times are between 7am - 5pm but if things look interesting after 5, I'll trade for longer and do the whole session until 9pm.

The Stoxx is great market to trade and is a personal favourite now. Have only been trading it for 7 months or so but I am really enjoying it. If the volatility dries up, I'll start to trade longer time frames and increase my size.

Best

JD

 

[_JWG_]

Hi JWG

My trading times are between 7am - 5pm but if things look interesting after 5, I'll trade for longer and do the whole session until 9pm.
JD

Thanks for the tip JD!

when you say 7am- 5pm is this GMT time? or +1GMT time?

I currently have my charting set to +1GMT brussels time.

Cheers
JWG

 

[Jaydee]

Thanks for the tip JD!

when you say 7am- 5pm is this GMT time? or +1GMT time?

I currently have my charting set to +1GMT brussels time.

Cheers
JWG

Yes, GMT. The Stoxx opens at 7am my time but 8am Eurex Local time so +1GMT would be correct for that.

 

[nine]

I've got a principle:

Markets do tend to follow each other (US>Asia>Europe; rinse and repeat) and when there is overlap the dominants will influence the others. So the principle is: always trade the strongest market at the time you want to trade.

Also, if you like trends, beware of times where directional movement is less likely (like eurusd during asian times or the bell ringing that follows major US news). In this case the principle translates to: "trade estx, gbl, dax, eurusd during the European morning when the trends based on European opinions play out and move to the US markets for the US morning (but beware of major news events which, for example, make eurusd frequently harder to trade during US influenced times).

 

[_JWG_]

I've got a principle:

Markets do tend to follow each other (US>Asia>Europe; rinse and repeat) and when there is overlap the dominants will influence the others. So the principle is: always trade the strongest market at the time you want to trade.

Also, if you like trends, beware of times where directional movement is less likely (like eurusd during asian times or the bell ringing that follows major US news). In this case the principle translates to: "trade estx, gbl, dax, eurusd during the European morning when the trends based on European opinions play out and move to the US markets for the US morning (but beware of major news events which, for example, make eurusd frequently harder to trade during US influenced times).

Nine,

So simple but not so obvious.

Thank you for sharing this observation.

I'm currently back testing the Eurostoxx 50 with good results so far. I'm only trading from 8:30 (+1gmt) to 12:00 (+1gmt). or 5:30pm to 9:00pm local time.

JWG

 

[_JWG_]

Hi JWG

The afternoon does seem to be where the volatility is at and the market often moves in a wider range later on in the day. I really just sit tight until I can figure out when the sideways movement is likely to stop and some directional movement gets underway. Typically, this seems to be happening just after midday (GMT) but every so often you get movement in the morning (maybe 25% of the time).

I was trading about 3-5 times a day when everyting kicked off a few months back but the markets have calmed a little so I don't trade quite as much now.

My trading times are between 7am - 5pm but if things look interesting after 5, I'll trade for longer and do the whole session until 9pm.

The Stoxx is great market to trade and is a personal favourite now. Have only been trading it for 7 months or so but I am really enjoying it. If the volatility dries up, I'll start to trade longer time frames and increase my size.

Best

JD

Happy 2009 Jaydee! How is your Stoxx trading going? Are you back yet?

 

[Jaydee]

Happy New Year to you too JWG.

Yes, I'm still at it. Volatility has dropped considerably over the last few weeks, so I'm now using longer time frames. 30-60min at the moment. Was using 5 - 15 mins when it was kicking off a few months back.

Also, I'm thinking it's time to go back to the DAX. I left it for a while as I was finding it a bit too lively but it's calming down now and I hope to be back trading that product soon.

Hope all is well with you.

JD

 

[MrGecko]

Not into indices trading myself, but FWIW I think we have just finished off a retracement and now will go on to test the lows of 21/11/08. Add salt to taste.

 

[Jaydee]

Not into indices trading myself, but FWIW I think we have just finished off a retracement and now will go on to test the lows of 21/11/08. Add salt to taste.

Yes, that's certainly a strong possibility. I think it will fall out of bed again 3rd - 4th quarter this year. I'm expecting it to range a bit over the next few months before we get past the summer.

 

[_JWG_]

Hey guy's, is it just me or has anyone else been struggling with the Eurostoxx morning session this week? Low volatility or Low volume? Thoughts anyone?