Jul 152014
 

Today a live trade was made.

Unfortunately, the trade was not as good as I would hope.
Fortunately, it was not too bad.

Two trades were taken.  The first was after a forceful down move shortly after the market open.  A large volume spike was seen on the chart and the market reversed direction.  Several up bars were seen and a trend line indicated further up possible.

After the trade was entered, the market went a tick in our favor but then reversed direction on a comment by the Federal Reserve Chair Person.  The software executed a fixed stop loss protection and a 4 tick loss was in the books.  The chart is below:

First trade at 1971.25 with -4 tick stop

First trade at 1971.25
with -4 tick stop

When the first trade failed the market seemed to want to reverse and an entry short was made.  This trade went in my direction about 2 or 3 ticks and then reversed.  I manually exited the trade with a 1 tick loss.  Had I not taken the stop, the 4 tick stop would have been hit resulting in a 4 tick loss.

After this trade, the market went flat and the Fed Chair Person was still talking so I decided to stop for the day or at least wait until a direction was determined.

Second trade with a 1 tick manual stop

Second trade with a 1 tick manual stop

Jun 302014
 

(This post is from Friday June 27, 2014)

After many delays and distractions I think everything is setup properly to begin trading.

Let me start by giving an introduction to my methods.

My technique is to watch the ‘order-flow’ of the instrument I am trading.
Some people call this ‘reading the tape’.  The technique requires watching the support and resistance areas on the charts and watching multiple time-frames of the same instrument.  The chart below shows an image of my desktop/workspace with all of the charts shown.

ES-Desktop

On the workspace I trade from the large chart that covers most of the image.
The instrument I am watching is always on this chart.
This chart has the volume shown at the very bottom in red/green columns
On the right side is the custom DOM (depth of market) with volumes traded in numbers for the bid & ask and shown in graphical format.  I can go into further detail but it will probably bore you.
Everything on this chart means something and helps me see possible trade opportunities.

To the left of that chart are several smaller charts.
Most of the charts are the same symbol but with different time-frames or chart types.

The two charts on the top left side are usually the other symbols I am watching.
These two charts are for reference only so I can see if they are setting up for a possible trade.
If I see something interesting I can open that workspace and examine it closely.

**********************************

The primary symbols I trade in the futures market are:

  • US Treasury Bonds/Notes                  ZB   &   ZN     7:20 a.m.
  • WTI Crude Oil Futures                         CL                   8:00 a.m.
  • S&P E-Mini Futures                              ES                   8:30 a.m.

I may at times trade others but these are the ones I trade most often.
The regular session of the market on these symbols opens at the times listed to the left of each in the central timezone.

My normal routine is to get up early and check the market.  (Usually about 4 a.m.)
I watch the charts of the market while I am showering and dressing to depart for my trading desk.
I have found that trying to trade from home presents too many distractions so I have a quite place at my office where I can setup and watch the market in the early morning hours.  I normally arrive at my trading desk between 6:30 and 7:00.

After I get things setup and have been able to do my preliminary checking of the charts, I am ready to take any trade that occurs.  This means that many times I will be taking trades prior to the regular opening of the market.  I have found that this allows for less volatility but still is able to take advantage of increasing trade volume just prior to the open.

**********************************

Today, I arrived at the trading desk a little early (about 6 a.m.).  It usually takes me a few minutes to review charts and setups before taking any trades.  Today an entry was showing on the charts as I opened them.  Without proper review of the charts before taking a trade the result can be unsatisfactory so I did not take this trade.

I have posted the chart of the trade opportunity below.

The candle at 6:08 was the ideal entry for this trade.
The volume candle on that time at the bottom of the page and the previous support shown on the supporting charts was the cue to enter.  The magenta arrows on the candle show an increase in volume to the downside without a break of the low.  This also shows a possible support area.

The candles that follow confirm the trade.  I have to admit that had this trade been taken it would have only resulted in a $35 to $50 profit because I would have taken an exit when the candle at 6:44 was being created.  I know in hindsight that the trade would have continued higher but during the trade it would not have been as evident and an exit would have been taken.

20140627 Pre-Entry ES

In the second chart you can see the results after the next resistance area was reached.
The buyers lost control at 1945.75 when the sellers regained the edge.
The result was a pull back to the previous support area.
There was no real signal to take a trade here.  The market was very sluggish and no momentum was present.

20140627 Pre-Entry1 ES

After this time, the market went flat (about 8:00) so I decided to add this entry to the blog and wait to see how things developed.

 

 

Jun 282013
 

End of the month volatility today is normal.
I made one trade resulting in a small loss.
Sometimes I’m wrong about being wrong.
It happens!!!

No one likes to admit they are wrong,
to admit you are wrong about being wrong sucks.

The trade I took was a SWAG (Super Wild Ass Guess).
My usual indicators were showing long and I took a short.
The trade was simply on ‘feeling’.  Never a good way to trade
(at least for me).
The rhythm of the action was short but Delta, Schaff were Long.
The short indications were Bid / Ask and Time and Sales both showed short action.

So I took the trade short.  I initially chased it 1 tick and then got filled.
The trade was fine and holding the level but then made what I saw as a significant Delta move up.  The Bid/Ask and Time and Sales turned to buying.

With a higher low and the change it rhythm to long, I took my exit with a 2 tick loss.  My stop was not hit and had two more ticks to be stopped out.  The exit was my decision.

As it turned out, I exited at the high point of that leg and the trade again turned to short.
The images are below.  It is still falling as I write this.

Sometimes being wrong about being wrong continues to suck.
But discipline is the best way to survive.

6/28/13 Trade Entry

6/28/13 Trade Entry

6/28/13 Trade Exit -2 Ticks

6/28/13 Trade Exit -2 Ticks

6/28/13 After Exit. Wrong about being Wrong!

6/28/13 After Exit. Wrong about being Wrong!

Jun 262013
 

I arrived at my trading desk at / near 7:20 just before the revised GDP report.
I watched the market rise (on mobile) all morning and noticed earlier that it was at an extreme but I was not confident it would drop because of the underlying volume pushing it up.

When the GDP report was released, I noticed an obvious top and I decided to take a stab at a short.  The results are below in the charts.  The only thing I should have done was trail my stop for a few more ticks.  That is easy to see in hindsight but in actual trading, the trailing stop would have gained maybe one or two ticks at the most.

Over all, I’m happy with the results of the trade and target selection.  A 10 contract trade on this trade would have been heaven but as they say, no balls, no glory…  :-)

Trade entry 6/26/2013

Trade entry 6/26/2013

Trade target placed 6/26/2013

Trade target placed 6/26/2013

Trade Exit 6/26/13

Trade Exit 6/26/13

After the Exit 6/26/13

After the Exit 6/26/13

 

 

 

Jun 192013
 

I’ve not posted lately but I have been watching / trading the market as usual.
My normal routine is to get up at 5 a.m. and check the charts.
I get ready for work (Shower, shave, etc) then do my pre-work duties such as tend the Aquabiotic Farm (hobby www.Aquabiotic.com) and feed all of my critters. (Wild Turkey, cats, earthworms, fish, ducks etc).

Then I leave for work (45 min drive under good conditions).  I arrive at my desk for trading about 7:00 – 7:20 a.m.and start my charts and data feeds.  Start Twitter, StockTwits, Econ News Feed and CNBC plays in the background.  Although these are running, I only check them initially to get a feel for the market sentiment and pending Econ Reports about to be released.

Today, the market was mostly flat and not moving well.  I took one stab at a trade and quickly decided to exit for a +1 tick on the ES.  This is almost like breaking even after commissions.  The charts for the day are below.  It is now 8:30 and I’m done for the day unless I decide to get on later during the FOMC report at 1:15.

Trade Entry

Trade Entry

Trade Exit

Trade Exit

After The Trade

After The Trade

Jun 082012
 
Linkedin passwords were stolen today.
This is a good time to mention password security & password length.
Even if you don’t have a Linkedin account, this applies to all passwords.

If you use a short password your password is in danger of being hacked. With fast computers, cracking passwords has become very easy and quick.

Here are some facts:

A six-letter password takes a little over seven seconds to crack.
A seven-letter password would takes 13 hours.
An eight characters pushes the time up to 57 days.
A nine-character password takes up to 15 years.

For better security make your passwords 12 to 16 letters with a mix of upper/lower case numbers and even ASCII characters.

Like my dad used to say…

If yours is short, it is useless…

(I’m not sure he was talking about passwords tho)

Jan 082012
 

I’ve watched the tech industry for many years.
I became part of the tech revolution back in my college days in the 1970′s.
I learned Fortran (computer programming language) back in the early 70′s.
My first PC was a Radio Shack Model 1.

The progress in the tech arena has been at times:
frustrating  -  slow  -  or too fast to keep up with.

I recently told a colleague that the new tablet craze is very similar to the beginnings of the PC industry.  At first, there were few full-featured software packages.  The biggest thing in the beginning was ‘Shareware’.  Which was small apps written by individuals to fill needs of themselves or clients.  These are very similar to the current state of the smartphone / tablet market.  Small apps, free or inexpensive to do small tasks or play games.

The PC was at first very limited.
My Model 1 only had 64K of ram.
This lack of ram and processing power was a big barrier.

In 1978 I spent several months writing software and database for a point of sale inventory system.   I loaded the data only to find the system was not capable of handling the large database.

I was very frustrated about that. 
The result was I put the Model 1 into a closet and left it for a few years because
“It was not ready for prime-time in a business environment”.

After a few years, the industry leaders developed many full-featured software packages and office suites that filled the need but at the cost of larger hard drives, more ram and faster processors. (If you can call 286 processors fast).

I remember my first laptop.  I think it was a CompuAdd 286 SX with a huge 20 mb hard drive.  I remember telling my partner, I will NEVER fill that drive up.

Of course, I filled it up within 6 months and had to soon upgrade the laptop to the latest ‘cutting-edge’ laptop. (386 processor)

I’m writing all of this to make the point that from small, very limited resources, the PC and tech industry developed into a fast moving, very efficient software / hardware industry.  PC’s soon developed into systems that could do ‘everything’ in one package.

I see similar things happening with the current state of the Smartphone / Tablet industry.

From a very limited, slow processors and software the Smartphone / Tablet industry is quickly upgrading software and hardware almost on a monthly basis.  Next week, CES (Consumer Electronics Show) in Las Vegas will announce many new items, many of them will be Smartphones or Tablets.  Each company is racing to be the first to market with the newest, fastest, kewlest items.

The trend in this industry, as in the early PC industry is to create a device that will be ‘Everything to Everyone’.  Each new improvement creates a device that desires to replace many of the other tech devices each of us own.

I think we will soon discover, (or maybe we already have during the last Christmas season) that Smartphones and Tablets are replacing many tech items.

For example, last time I rented a car.  I was asked if I wanted to pay extra for a GPS in the car.  Of course I said No.  I have GPS on my smartphone.  Why would I pay for an extra device?

Or why would I buy a digital camera?  Most Smartphones have an 8mp camera built-in.  It is always with me if I need to take a video or snapshot and I can share it with the world in minutes from the phone.

Why do I need a special game console when I can play the same or similar games on my phone or tablet?  Why would I buy a Blue Ray player when I can see 3D movies on my smartphone or tablet?

I don’t think the phone/tablet industry will completely eliminate these devices.  But I think soon. Very soon, they will significantly affect the revenue figures of these devices because everyone wants it ALL with them ALL the Time.

HinseLee

Jan 082012
 

J’aime Le Cafe
       I Love Coffee

In my first post I mentioned that every month or so a new study comes out saying coffee is really good or really bad.  The latest information I’m using to justify my addiction is from:
Jerru-Ann Jennings, M.S., RD
(Associate Nutrition Editor at EatingWell Magazine)

 

Below are some of the points made in a recent article:

 

1.  Coffee Protects your Heart – Moderate coffee drinkers have lower rates of stoke than noncoffee drinkers. (Linked to coffee’s antioxidants that activate nitric oxide that widens blood vessels and lowers blood pressure)

 

2.  Coffee helps Diabetics – Those antioxidants boost sensitivity or insulin that helps regulate blood sugar.  (effects of caffeine may also reduce insulin sensitivity so decaf may be better for diabetics)

 

3.  Coffee boosts brain and reflex functions – DUH… it’s a stimulant

 

My advice, if you like it drink it.
(of course, in moderation)

 

Don’t you just love it when something you like is found to be good for you too! 

 

Jan 082012
 

J’aime Le Cafe
       I Love Coffee

I think it is appropriate that my first post on my newblog to be about coffee.

Every work day I MUST stop at Puccino’s Coffee on my way to work.
Someone told me that Puccino’s was out of my way to work.
My response was, no it’s not, you see, if I don’t go there, I never make it to work so it is really a shortcut to work.

Seems that every month or so, some research study finds that coffee is bad for you ro causes cancer or some dreaded illness.  But don’t worry, next month a different study will be published reversing that study and saying that coffee is really very healthy for you.  :)

Rather than worry about who is correct, I’ve decided to just drink it and enjoy it.