I get confused on my first trade ! HELP me please.....

[herm4n]

Dear Friends,

I get some confused on my first futures spread trading and I need some help.


Question 1:

Yesterday, I traded "buy Jul Lean Hogs and sell Oct Lean Hogs",but my available funds was decreased till $2200 and my initial margin now is $305.10 and maintenance margin is $226.

Don't you say that if I do future spread for lean hogs example the margin is below $1000?

Why the cases above can be happened?

Could some of you explain to me?thanks



Question 2:

Yesterday, when I want to enter the futures spread trading for Lean Hogs. I saw the ask price was 16.30 and the bid price was 8.50.

Should I enter that trade?

Why is the spread between ask and bid so wide?

Is there any something wrong?


Question 3:

Yesterday, when I saw my future spread chart for Lean Hogs on futuresource.com was $12.47 and WHY when I wanted to enter the ask price was 16.30 ?

Why can be so different between the number of future spread charts with the actual ask price?

Which one is correct?

 

[peto]

If this isn't a wind up...........!?

I know nothing of Lean hogs, but several thoughts occur to me from your questions, the foremost of which is: why are you already trading an instrument about which you clearly know so little? Would it not be better to research your subject, study how the prices and the bid-ask spread move and change on all time-scales from second to second through to month to month, over a period of many months and almost certainly years before launching yourself into any actual trades?

For a little more specific help, NO do not trade if you

saw the ask price was 16.30 and the bid price was 8.50.

Should I enter that trade?

Unless you want to blow your account instantly with a mouse click!

I would suggest respectfully that your chosen instrument is far too illiquid to trade successfully, perhaps because you have chosen an unpopular month not the "lead" month, and/or are trading it at unpopular times of the day. The suprising figure for margin is maybe the result of an overnight hold, which will normaly double your margin requirement. The quote from futuresource is probably the mid-price from the bid ask. You need a real-time bid-ask price feed to trade.

Please cease any real-life trading until you have some idea what you are doing. Good luck....
pete

 

[oatman]

A quick search... http://futures.tradingcharts.com/marketquotes/LH.html
Looks like Apr/Jun is the one to trade.

 

[anley]

Forget about real-time trading for a few months, you are mad to start in the first place.

Instead, open a dummy account and trade with that until you really know what you're doing. Then fund the account with a few hundred £ and trade with that for a few months. Then you'll be ready to fund the account with your full cash balance.

It's hard enough to make money in the markts anyway so if you don't fully understand what you're doing and how to trade you've got about a 100% chance of losing overtime.

Take it slow though and your chances will improve by at least 30-50%.

 

[-oo0(GoldTrader)]

simultaneous moc

Question 1:

Yesterday, I traded "buy Jul Lean Hogs and sell Oct Lean Hogs”, but my available funds was decreased till $2200 and my initial margin now is $305.10 and maintenance margin is $226.

Don't you say that if I do future spread for lean hogs example the margin is below $1000?

Why the cases above can be happened?

Could some of you explain to me?thanks

Lets get back to the basics. Did you enter the order for both sides simultaneous “Market on close?”

Question 2:

Yesterday, when I want to enter the futures spread trading for Lean Hogs. I saw the ask price was 16.30 and the bid price was 8.50.

Should I enter that trade?

Why is the spread between ask and bid so wide?

Is there any something wrong?

Why worry yourself about trades that may never actually take place. Spreads are on the close, compared the close of one day against the next. Just as they are charted.

Question 3:

Yesterday, when I saw my future spread chart for Lean Hogs on futuresource.com was $12.47 and WHY when I wanted to enter the ask price was 16.30 ?

Why can be so different between the number of future spread charts with the actual ask price?

Which one is correct?

Don’t get off track. How did one day’s close compare to the previous. Your concern, if you have the trade on, is the change from day to day. You are trading the spread between two months, not between the bids & asked.

 

[peto]

.Don’t get off track... You are trading the spread between to months, not between the bids & asked.

Unless he's putting in market orders? In which case you are way 'off track'.

 

[-oo0(GoldTrader)]

Moc

What do you mean market orders?

A newbie should not be entering orders any other way except “Market on close.”

 

[peto]

What do you mean market orders?

A newbie should not be entering orders any other way except “Market on close.”

Read his post again. He is not just a newby, he is completely at sea, and to encourage any trading at all with this level of knowledge is reckless.

 

[Spcboe]

GoldTrader...

Lets get back to the basics. Did you enter the order for both sides simultaneous “Market on close?”Why worry yourself about trades that may never actually take place. Spreads are on the close, compared the close of one day against the next. Just as they are charted.Don’t get off track. How did one day’s close compare to the previous. Your concern, if you have the trade on, is the change from day to day. You are trading the spread between two months, not between the bids & asked.

Ok, so you are saying place your spread as MOC, right?
Also, if one has a profit of +1 and wants to close the positon at that +1 profit (assuming +1 profit has been maintained in intraday trading) should you close the position on the closing also?
Furthermore, (again assuming +1 has been maintained in intraday trading) if market closes @ your +1 profit, since you are trading the difference in price, should one expect slippage?

 

[Bundman]

Dear Friends,

I get some confused on my first futures spread trading and I need some help.


Question 1:

Yesterday, I traded "buy Jul Lean Hogs and sell Oct Lean Hogs",but my available funds was decreased till $2200 and my initial margin now is $305.10 and maintenance margin is $226.

Don't you say that if I do future spread for lean hogs example the margin is below $1000?

Why the cases above can be happened?

Could some of you explain to me?thanks



Question 2:

Yesterday, when I want to enter the futures spread trading for Lean Hogs. I saw the ask price was 16.30 and the bid price was 8.50.

Should I enter that trade?

Why is the spread between ask and bid so wide?

Is there any something wrong?


Question 3:

Yesterday, when I saw my future spread chart for Lean Hogs on futuresource.com was $12.47 and WHY when I wanted to enter the ask price was 16.30 ?

Why can be so different between the number of future spread charts with the actual ask price?

Which one is correct?

I'm confused too about my trading, everbody here is v. clever and helpful. Why would you want to buy lean hogs in July and then sell them in October? Will you fatten them up before you go to the market?


Anyway sounds far too complicated for me....I trade German Guilts


Best to you and Good Luck,


Bman

 

[-oo0(GoldTrader)]

Also, if one has a profit of +1 and wants to close the position at that +1 profit (assuming +1 profit has been maintained in intraday trading) should you close the position on the closing also?

Spreads are actual trades made simultaneously. How are you getting trades made at the same time in different months NOT end of day?

If you cannot get them occurring, operating, or done at the same time, then where are your quotes coming from?

Think about it. During the day prices may move similar to a sign wave. Suppose the spread stays the same but you bought one side at the peak of a wave and sold another six minutes later at a trough. Would your trade reflect the true spread prices?

Why don’t you just go take a walk by the shore until the market is closed, then check the spreads when they are finalized. Tharp has a chapter on the fallacy of trading on fantasy data.

should one expect slippage?

Always expect slippage!

In your example use a limit order. You might not get filled, but when you do, it will be at your price.

How come slippage never appears in Brokers glossaries?

Does anyone remember what “Victor Niederhoffer,” had to say about slippage?

 

[oatman]

Spread orders should be placed as a differential.MOC could kill you.

 

[-oo0(GoldTrader)]

Spread Orders

When ever you do anything new on a computer a window pops up with two choices. Do not agree, or continue. If you are going anywhere you might as well read it from the bottom up. Because if you chose the first button, then you are going no-where. Read it from the bottom right going up and hit continue as soon as you find it. Limit orders can remain unfilled. They give you an excuse not to get in, they can hand you your head when they do not let you out.

Jesse Livermore explained all of this in detail. If anyone needs a copy of Reminiscences, email me, I have a standing offer to send any interested trader a free copy anytime. Moc gets you into spreads and out, near the close. It is the only time you can check to see when your broker is screwing you. And it gives you evidence to get the problem fixed, or notice that you need a new broker. The close is the only time you can get simultaneous trades to even get a spread quote. What are you going to do trade off of yesterday’s quotes?

Estimating where it is going to close in the future whether today or tomorrow, seems like an unproductive waste of Beach time. Look, all you have to do is get on during the harvest at normal closing prices and get out near first notice day for your spread. Limit orders may remain unfilled no matter what the market does.

Floor spreaders cannot mess with you because they do not know that you are placing a spread. If your broker however has not been trained by you properly. They may not be placing your two market orders on the close simultaneously. In that case it is like two separate orders. Look at the settlement. If your entry has slipped far from that. Get another broker. You might also want to trade more liquid contracts.

When you find a trending seasonal spread that may last for months. You just have to get in by the close of the last day of the week. Moc you may end up chasing the market, or not getting in (or out), at all. Crops grow over the weekend.

A market never takes off until you are short!!

I had a technique when I was trading ComexGold (EOD). When I wanted to know where the bottom was I would short a mini. Believe me, when that market finally turned I was aware and loading up in Hong Kong, after NY & Stochastic closed with the signal. There is no way you can miss a bull thrust in a market you are bullish on when you are short.

 

[jxntntrader]

Spread orders should be placed as a differential.MOC could kill you.

I would like to hear other's experiences on how well they get their orders filled on limit orders. My limited experience is that limit orders do not get filled so I stick with MOC orders. The one exception, however, that I have been making recently has been with NY market orders. I have been getting killed by slippage with MOC orders.

Jxntntrader

 

[oatman]

If the floor broker values your business, he will "work" your order.If your trade and objective are correct, your spread differential order will be filled when the market is ready.If you trade MOC or start lifting legs, you have no control over the trade.

 

[Spcboe]

Spread orders should be placed as a differential.MOC could kill you.

Could you explain what that means? Thx for the replies. Thanks to you too, Goldtrader.

 

[oatman]

If you trade both legs of your spread as market orders you will sell one side at the buyers price and buy the other at the sellers price.....unless your spread is quoted as such.Therefore you are not guaranteed your spread differential.Trading spreads is no different from a straight buy/sell position. You must have worked out your entry and objective before you deal.

 

[-oo0(GoldTrader)]

Limit Orders

Hybrid View
Limit Orders
New York is bad. The other exception is Euro$. The market is so liquid you can use simultaneous market orders anytime the US is open. MOC or Limit orders near the US close during night sessions without much slippage._

limit orders do not get filled so I stick with MOC orders .. NY market orders. I have been getting killed by slippage with MOC orders.

Jxntntrader

Good point. There are exceptions, one which you have run across. NY is notorious, you have to use limit orders.

or as called by

Oatman> as “differential” orders.

Because you are handing the order over to floor spreaders who try to get you the “difference,” that you want, (as long as they can get it at a greater difference).

I had a case in NY where the spread chart was in a strong uptrend. I put in an order to buy MOC .. everyday for over a week the spread closed with higher highs. I got out MOC on the close of “FN,” again on a new high! How can this trade still end up a loss is beyond me. Newbie’s should not be trading in NY Futures.

Another time my Broker was on Vacation so they turned my spread account over to her manager. This Sue lady kept calling me during the day when the market was open, for margin calls on Crude when my Crude Spreads were closing higher each day.

These exceptions noted: There is a lot of action on the close, you can get good spread fills MOC, and check against the settlements to see if your broker is raking you over the coals one last time. If you are trading Seasonals when you get in is more important than to try to imagine and hit some price target that exists nowhere but your mind. Harvest happens in real time, just as first notice day has a specific timed objective reality.

You must have worked out your entry and objective before you deal.

In time, not necessarily price. A Seasonal chart pretty much shows you when you want to get in, when you need to liquidate, not at what price.

 

[Spcboe]

Anyone care to mention the broker they are using(good or bad)?

 

[oatman]

What happened :?: