The Challenge

[bond_trader1]

10 months to go.

Starting balance: £1,000

Target: £10,000

Current balance: £690

Not looking good...

 

[bond_trader1]

Short £2 September Bund at 110.54.

Stop is at 110.72 (18 ticks or £36)

Target: Open

++++++++++

Edit:

If the movement of the Bund today proves anything, it is that I am getting good at drawing support lines.

On the hourly chart, the Bund bounced at the 110.55 support level I've had on my charts for a while now - to the very tick!

Shame that's working against me right now...

++++++++++

 

[bond_trader1]

I am holding this position overnight.

I am currently down £14.

Let's see what tomorrow brings.

 

[bond_trader1]

The bund gapped up through my stop on the open.

Fortunately only by 2 ticks.

Another loss. This time it was £40.

 

[Hoggums]

The bund gapped up through my stop on the open.

Fortunately only by 2 ticks.

Another loss. This time it was £40.

bond_trader - you seem to be picking trades that go against the longer term trend (from the 2 I've seen) which in my view is a risky strategy. When you make a profit I'm sure they will be large, however you are relying a break of the current trend for that to happen, which in my view will not happen more often than it does.

Just my 2p's worth..

 

[Splitlink]

bond_trader - you seem to be picking trades that go against the longer term trend (from the 2 I've seen) which in my view is a risky strategy. When you make a profit I'm sure they will be large, however you are relying a break of the current trend for that to happen, which in my view will not happen more often than it does.

Just my 2p's worth..

I feel that you are right. I have had two good days this week trading against the long term trend but that does not make it right-it makes me fortunate! You have to keep your trend tight to do that, so that the losses are small. Nevertheless, today they are mounting up, with 4 trades and a net loss of 14 points. I do another instrument, by the way, but am following this thread with interest.

Bond trader, not wanting to interfere, but look at the hourly trend and take a view of it. Depending on what you think it is, up or down, is how you should be trading, on the tops of the swings your risk/reward will be better, perhaps?

Watch your trade size and keep it low.

Good luck.

Split

 

[bond_trader1]

Hoggums, Splitlink,

Thank you for your advice.

I agree - on both of these trades, which are the only two I have made, I have been fighting the trend.

On the plus side, I've been disciplined and taken my losses so I'm not going to berate myself too much.

What I am going to start looking for is price action, at support/resistance levels or other confluence areas with the trend.

I'm also going to drop my trade size to the minimum - £1 per tick and stay at that, until I have some profitable trades banked.

I'm realising that although I need to trade with size to win this challenge, the most important aspect, is to learn to trade profitably and strive for that magic word: consistency.

Then and only then, I can step up the size.

 

[bond_trader1]

A quick question for anyone reading this who trades the Bund.

Do you know if it conforms well to Fib levels?

I heard that they work very well in Forex but that they have had a varied degree of success in other markets.

 

[fibonelli]

BT1,

The current trend is up. There is a trend at the moment towards risk aversion which is why the YEN and equity markets are trending up and down respectively.

Good luck

Fibonelli

 

[Splitlink]

You are wise to keep your size as low as possible. If you lose all your money because of large trading sizes, there is no going back---you are out. At least, if you lose the bet but end the year with 1,2, or 3 thousand, you will have learned enough to be a successful trader, which is a year well spent.

Split

 

[bond_trader1]

At this point, I have lost three trades in a row and have £650 left of my original £1,000.

Of course losses are to be expected, trading is incredibly hard, this is a difficult product to trade and I am very inexperienced.

But I can't help realising that if I had kept to my original plan and traded price action setups on an end of day basis, I would now be ahead.

If you look at the two circled pin bars on the chart attached you will see the first one was the one in which I lost 74 ticks.

The second one would now be ahead 81 ticks.

Of course whether this would have meant I would now be in profit would be dependent on many things such as where I would have trailed my stop or whether I would have exited some of my position at resistance levels.

However, it is confirmation that if you have an edge or a strategy, you need to give it time to play out. What I did is take a large loss and start trying to trade intraday which is, I have been told (and am really starting to believe) far, far harder.

 

[Hoggums]

At this point, I have lost three trades in a row and have £650 left of my original £1,000.

Of course losses are to be expected, trading is incredibly hard, this is a difficult product to trade and I am very inexperienced.

But I can't help realising that if I had kept to my original plan and traded price action setups on an end of day basis, I would now be ahead.

If you look at the two circled pin bars on the chart attached you will see the first one was the one in which I lost 74 ticks.

The second one would now be ahead 81 ticks.

Of course whether this would have meant I would now be in profit would be dependent on many things such as where I would have trailed my stop or whether I would have exited some of my position at resistance levels.

However, it is confirmation that if you have an edge or a strategy, you need to give it time to play out. What I did is take a large loss and start trying to trade intraday which is, I have been told (and am really starting to believe) far, far harder.

What you see in the chart is a classic acceleration downwards followed by a pullback. However the pullback is now approaching the top of the downwards trend channel so I would expect some resistance in this area.

I would not go long unless this channel is convincingly broken, a lot minor breaks followed by a small fall may mean the channel holds and a further fall could be expected.

Just my opinion....

 

[bond_trader1]

Descending TL was clearly rejected then.

And the rising channel from the recent lows has now been broken.

Are we going to see a test of 110.00 support again?

 

[bond_trader1]

This situation is playing out and I have totally frozen.

Consolidation at lower levels (just above a support) with a triple bar high on the hourly and a five bar har on the 30m charts.

A break looks like a very good place to go long but the risk is 17 ticks and there is resistance just overhead and if I use that as a target it makes the risk:reward on the trade unappealing.

Having said that, it could well go through resistance and I could trail a stop at the previous bar lows.

But then add to that the fact that there was a sharp fall yesterday and that today it is continuing lower and I am just not sure what to do since going long is counter the short term daily trend.

I am very undecided and I'm just sitting here watching this resistance build.

 

[bond_trader1]

This was a beautiful setup on the 30m charts.

A clean head and shoulders setup with a double bar high and a lower close right at the neckline.

This left the bund looking very vulnerable and triggered a large fall...

 

[bond_trader1]

First winning trade!

I've attached two charts - first chart is a closeup with reason for entry, placement of stop and exit for this trade.

Second chart is the larger picture with the levels of support and resistance that I had on my chart prior to entering this.

I went long because of a breakout of a tight channel on the 30m charts. There was five touches of a resistance level at 110.15 and I put in a buy stop to enter at 110.19 (which is +1 from reistance on the charts and +3 for the spread as my charts work off the bid) with my stop at the channel low - just 9 ticks away at 110.10.

Unfortunately, as disciplined as I have been on my exits, as soon as it broke sharply upwards, I closed it at 110.34 for 15 points profit.

As soon as I saw the wick developing at the top of that breakout candle I started worrying about giving my profit back. So it was a case of wanting to take my winnings off the table. I did this despite seeing it break through the resistance level I had drawn in overhead.

With the Bund now being bid at 110.65 (31 points higher than my exit), I admit this was a horrible mistake.

The only other thing to add is that I used TD Waterhouse to enter this trade, which gave me £150 free as part of a special offer. The company impose a minimum £3 a point stake in the Bund which is the level I took this trade at. I tell you all this because I promised a few posts back that I would be entering at £1 a tick going forwards and I don't want everyone to think that I have no discipline or regard for money management.

This trade made me £45 and brings my overall balance to £695.

 

[fibonelli]

Hi BT1

There was breakthrough in the pivot point for the Bund, Bobl and Long Gilt. Good to see you taking advantage. I missed it 'cos I was busy researching a trading strategy.

 

[bond_trader1]

Hi BT1

There was breakthrough in the pivot point for the Bund, Bobl and Long Gilt. Good to see you taking advantage. I missed it 'cos I was busy researching a trading strategy.

Hi Fibonelli,

Can you tell me what Pivot Point you are referring too? I've not actually looked at these so far in the Bund...

 

[fibonelli]

Hi BT1,

11017 for the Bund. It was the intra day support on 5 July 2007 which became resistance during the afternoon of the same day and the next day. Resistance gave way after 1pm today. Easy to see on a 15 min chart.

Fibonelli

 

[bond_trader1]

Hi BT1,

11017 for the Bund. It was the intra day support on 5 July 2007 which became resistance during the afternoon of the same day and the next day. Resistance gave way after 1pm today. Easy to see on a 15 min chart.

Fibonelli

Ah, you mean the S/R pivots. I can see that now although I am working off the 30m charts and so have these in different areas.

Do you use calculated Pivot Points though?