Wednesday, January 25, 2012

Fading gold was not a good idea on a FOMC day

Today, I had the "brilliant" idea of fading gold when it reached the +1.5% appreciation for the day (which is an above average appreciation on a daily chart). But it was without counting on the fact that (for once) the Fed rate decision was going to move the market a lot. Yet, lately, the FOMC's meetings had failed to produce any type of reaction from the markets. But today, for some reasons, gold as well as crude oil roared without looking back in the rear view mirror... and I was left holding the bag with my short gold trade so to speak. Fortunately, my other trades on natgas and crude helped cushion the blow. One thing I learned today is that you cannot trade gold from the technicals at this time and this until things calm down on the mega-debt-of-the-developed-economies front. We learn every day, don't we? Result for today -$591 trading 2 contracts (commissions deducted). Details below.

Tuesday, January 24, 2012

Internet blackout Tuesday

Hi folks! I haven't been able to be online nor trade the whole day because my internet provider was replacing its main wires in the neighborhood. It made me realize how dependent we have become to technology. Especially day-traders. At least I was glad I didn't have any position left opened in the market. I wonder how traders in the 80's or 90's managed to really control risk prior to the instant-internet-access/overnight-trading-sessions era. Food for thought. The positive aspect to today's "internet blackout" is that I didn't lose money :-p. I'll be back tomorrow.

Monday, January 23, 2012

The euro's been a nightmare to trade lately

Unless you trade overnight during the European session, the euro has not been easy to trade lately nor has it been really generous in terms of ticks intraday. And today was no exception to what now seems to be a new normal during the North American session. Thanks God there are other commodities to trade like crude oil, natural gas and gold that give you your money's worth of intraday action. Again today, crude oil was my biggest winner followed by natgas and gold on an equal basis. Of course, as you may suspect, euro and t-notes (again) were both losing propositions. T-notes especially are on my "negative watch" list. I am evaluating keeping them or dumping them from my basket of traded instruments. I'll give them another 2-3 weeks maximum before I make a decision. All in all a good day nevertheless with net result of +$985 trading 2 contracts (commissions deducted). Details below.

Friday, January 20, 2012

T-notes are still giving me a hard time

Lately, 10-year Treasury notes have been the black sheep in my herd of traded financial instruments. I have lost 80% of my trades on them since the beginning of 2012. Last year they were one of the most reliable and consistent profit making machine for me. What a difference a year make. Anyway, I am not going to give up on them yet but another couple of weeks like that and I might ditch them for good. Crude oil and natgas were my biggest winners today (not a huge day BTW). In the grains sector, I tried again today, for the 4th time since the start of 2012, to play the odds with a spread trade long wheat/short corn and had minimal success with it. This arbitrage will eventually pay off but it did not correct sufficiently today to make a big difference. I will keep watching it and will one day for sure succeed with it. Other than that, nothing special to report. Net result for today +$634 trading 2 contracts (commissions deducted). Details below. Have a great week-end!

Thursday, January 19, 2012

60% of this week's profits has vanished today

The market has finally punished me (again) for that stupid and risky natgas long trade taken at 2.580 on Monday. I was hoping for a more bullish EIA withdrawal number this morning but got a very disappointing one instead. Needless to say that within minutes of the announcement my stop at 2.38 was triggered generating a nice little $4000 loss in my trading account. Thanks God I got some pretty decent trading results today on other trades that helped dampen the hit. Basically, I lost 60% of the week's profit during today's session. I am obviously pretty mad at myself and encourage all readers here to not follow me in this contest of the stupidest trade because I will certainly win hands down all the time. Amazing. I keep repeating the same mistake over and over again. That's certainly a sign of mental illness don't you think? That's all I have to write about today. I'll go get drunk now. Net result for today -$1940 trading 2 contracts (commissions included). Details below.

Wednesday, January 18, 2012

Held on longer on my crude trades

Today, crude oil was my big winner with a little more than 100 ticks net profit. I did try to hold on to my winners a little longer today which for me is not necessarily an easy task considering crude's volatility. But I think I did a better job than usual. Other trades involved a long gold/short euro spread that was also profitable but (again here) it would have been even more so had I held on longer. T-notes are giving me a real hard time lately. I wish a trend will materialize soon  in order to get rid of that horrible chop-chop environment. I still have my long natgas position from Monday opened. At one point today it looked as if a short squeeze was underway but it didn't last very long. So, I'm still down $2000 more or less on this one. Tomorrow might see a resolution to this trade as the EIA forecasts another bearish number in terms of gas withdrawals. Wait and see. Net result for today: +$1489 trading 2 contracts (commissions included).

Tuesday, January 17, 2012

Pretty good day except for my natgas long

Today was pretty good in terms of trading results. I made a couple of trades on crude oil and one each on euro and gold. All of them were winners. My only loser was a t-notes short trade made at the beginning of the pit session that ended up losing me 11 ticks. I was able to make some of that loss back later with a long trade that netted me 4 ticks. So, all in all, a good day. The only dark spot on this otherwise ideal day was that my natural gas long trade (opened yesterday at 2.580) dropped even more touching a low of 2.44 at one point during the session. I have probably jumped the gun too quickly again on natgas yesterday thinking a bounce to higher levels was imminent. My "panic stop" is placed at the 2.38 level which would generate a $4000 loss should it gets triggered. At this point I am not looking to profit from that trade but only to get my capital back (maybe tomorrow) given a chance. I'll soon find out. Net result for today +$1182 trading 2 contracts (commissions included). Details below.

Monday, January 16, 2012

Martin Luther King holiday trading

Markets closed earlier today because of Martin Luther King holiday. Consequently, action was particularly muted on the markets but, surprisingly, not completely dead. Early this morning I had the opportunity to go long crude oil and short gold. Most of my profit today came from these 2 trades. T-notes were not moving really so I exited at almost breakeven on the trade. Natgas has continued to slide again today but my indicators are telling me that we are more than overdue for a bounce/short squeeze. I went long at 2.580 the February contract this morning targeting a move upward over the next few days. I am not normally carrying positions overnight but I will make an exception for this one. Panic stop set at 2.38 on natgas. Result for today +$588 trading 2 contracts (commissions included). Details below.

Friday, January 13, 2012

Friday the 13th screwed my timing

I didn't seem to be able to enter trades at the right time today. Of course I'm kidding when I say it is because of Friday the 13th. Nevertheless, I struggled all day with my timing and that is the reason, I believe, why my results ended up slightly in the red. As a trader you know how important timing (and resolve) is to your bottom line, right? IMO, it's probably the KEY element in successful trading. Bad timing apart, I've been a little bit lucky today to minimize some of my losses particularly on a crude oil long trade that turned against me in a big way. My biggest winner was for a third time in a week a long gold/short euro spread trade that netted me approximately $450. Apart from that, this first Friday the 13th of 2012 is a day to forget and learn from (again?). Net result for today -$353 trading 2 contracts (commissions included). Details below. Have a good weekend!

Thursday, January 12, 2012

Markets display volatility but are clueless about direction

Markets are really schizophrenic and do not have a clue as to what direction they should take. Oh, they do indeed sometimes trend in one direction with great conviction... but only for an hour or two. Not easy to trade in that type of environment. Today was a good example of these "new normal" market conditions. I did try a couple of spread trades during the morning session (long gold/short euro, natgas calendar spread and a missed long wheat/short corn) that, with the markets' schizophrenic behavior, had limited success of course. Again today, crude oil was my most consistent winner. I should have stick with it but you only know that after the facts not before. Although trading conditions were not ideal, I managed to end up in the green for the 4th consecutive day. I cannot complain. Net result +$681 trading 2 contracts (commissions included). Details below. 

Wednesday, January 11, 2012

The markets are pure speculation right now

Sometimes, when analyzing if one should take a long or a short trade, fundamentals will play a role in the decision making process. But in today's markets I would venture affirming that ONLY technicals matter. Of course, there are still a small number of markets where the rule of supply and demand is important to take into consideration (like natgas for example) but for the vast majority, no need to lose your time reading long reports on supply/demand because only the short-term direction of the market matters. Crude oil is the most obvious example of this situation as today showed after the bearish inventories report from EIA led to a... rise in the price of crude. At the end of the pit session price was back to where it was prior to the EIA release. If this is not trading on technicals, I don't know what it is. Anyway, my results were relatively good again today ending in the green with a few good trades on natgas and t-notes (for a change). Net result +$871 trading 2 contracts (commissions included). Details below.

Tuesday, January 10, 2012

My winning streak continues

I am pretty satisfied with my trades today. Not necessarily with the net result (although pretty good) but more specifically with the way I kept my focus, risk management and discipline inline throughout the trading session. Wish I could be like that every day. The only thing that I could really self-criticize is my lack of patience (again?) particularly concerning my natgas trades. But, hey, nobody's perfect, right? Crude oil trades and spreads long euro/short gold (not the other way around) accounted for most of my profits today. As for t-notes, it has become increasingly difficult to trade them in the last 2-3 weeks. There is absolutely no trend going on there since well before Christmas. Therefore, trading is confined to "chop-chop" market conditions. It will have to start trending soon or I will have to avoid them all together. We'll see. My winning streaks continues with net result today of +$1266 trading 2 contracts (commissions included). Details below.

Monday, January 9, 2012

Most of the action was done before noon

Today, all of my trades were completed before noon. From that point going forward I was satisfied simply being a market observer. Crude oil did indeed push upward after 1:30 PM but it was too late for me at that point considering I try as much as possible to be flat by 2:00/2:30 PM. Nevertheless it was a real nice move that I unfortunately did not catch. I'll have my chances tomorrow, I'm not worried about that. Crude is so volatile that I think one could spend 24hrs a day trading it and be presented with several BIG opportunities to trade long or short along the way. As far as my results are concerned, thanks to another successful spread trade long gold/short euro I was able to rake in a nice profit that kind of put me ahead for the rest of the trading session. Other trades were so so. A good start of the week with net result of +$794 trading 2 contracts (commissions included). Details below.

Friday, January 6, 2012

Second losing day in the last 3 weeks... not too bad

Nothing was going my way today. After the NFP release, I put on a few trades. The first was a short t-notes trade that ended up turning violently against me within minutes. The other one was a long natgas trade that hit my stop and exceeded it by only 2-3 ticks before turning around in the right direction. I would have made a nice profit of course if I wouldn't have used a stop in the first place. Obviously, there's no prize when you finish second in this business. The third trade was my second attempt with a long wheat/short corn spread trade (you know the one I had lost yesterday). Well, although the conditions were even better than yesterday, this spread only produced another losing trade today. One point to mention here: wheat has not sold at a discount to corn more than 3-4 times in the last 25 years. So, this is a rare event. Unless, we would be confronted here to a new normal in the grains market, this discount isn't likely to hold for very long. Therefore, believe or not, I might be back at it again on Monday given a chance. Thanks God, the other trades I made were winners including a long gold/short euro spread and one on crude oil. Net result for today -$1220 trading 2 contracts (commissions included). Details below. Have a good weekend!

Thursday, January 5, 2012

An extremely volatile day on the markets

Violent moves are what best describe the state of the commodities markets today. It started this morning with the release of the ADP job numbers and never abated until the end of the pit sessions. Crude oil was especially volatile going up and down inside a pretty large trading range. My biggest winning trade was a spread trade (again?) long gold/short euro. My biggest loser was a long natgas trade I should not have placed right after the release of the EIA withdrawal numbers. Also, after analyzing the spread between wheat and corn, I noticed that wheat was selling at a discount to corn which normally is the opposite. So, I put on a spread trade long wheat/short corn but wasn't successful during this trading session. I might be back at it tomorrow if the conditions I noticed still prevail. All in all a good day but it could have been better. Net results +$773 trading 2 contracts (commissions included). Details below.

Wednesday, January 4, 2012

Everything's green today. Patience was key.

On a net basis, I didn't lose on any of the financial instruments I traded today. Of course, I was down often and sometimes by a substantial amount but my patience was "perfect" (OK, almost) today. This doesn't happen to me often because patience has never been my forte if you see what I mean. When I say that my patience was almost perfect I refer particularly to a spread trade long gold/short euro that I made and that could have netted me 3 times what I gained had I been just a bit more patient. This is definitely a quality I have to work on as it would help me improve my results without a doubt. I envy those traders who are patient by nature. I am not sure what I could do to improve that really. Any suggestion is welcome. Overall a good day as everything is green in my report. Net result for today +$989 trading 2 contracts (commissions included). Details below.

Tuesday, January 3, 2012

Another gain due to a spread trade

Again today I favored spread trades as my main trading strategy. That didn't work too well last Friday but today was a different story. This morning around 8:30 AM I entered a spread trade long gold/short euro. The transaction netted me a little bit more than $1500 which is not a bad way to start 2012 right? At one point during this morning session I entered into a second spread trade (long e-mini S&P 500/short euro). The result was less spectacular but nonetheless profitable. My other "solo" trades on natgas and t-notes were relatively small losers. All in all a pretty good start of the year with a net result of $1280 trading 2 contracts (commissions included). Details below.

Friday, December 30, 2011

Correlation was on vacation today

With the hindsight, it wasn't that much of a good idea to use spread trades exclusively today as the markets were anything but correlated. Maybe because today was the last trading day of the year. Or maybe because of some window dressing activities. Or both. Go figure. Anyway, the only trade that made me a profit was the long Dollar Index/short T-notes spread netting me a little bit more than $825. The other 2 spread trades I made were net losers. The long e-mini S&P/short euro spread lost me $740 which is not that bad compared to the long crude/short gold spread which buried me by approximately $2425. Net result for today -$2339 trading 2 contracts (commissions included). Details below. Consolation: I ended the month of December with a surplus of +$6573 in my trading account. I will work hard to do better than that in January. Thanks for all your comments and Happy New Year 2012 to all!

Thursday, December 29, 2011

A pretty good day to end (almost) 2011

Today, I decided to use spread trades instead of straight forward unidirectional trades. Judging by the results I got, I might do that more often from now on. My first spread trade was placed yesterday evening before going to bed and involved being short gold and long crude oil (using 3 contracts on each side). It turned out to be a pretty good decision as I ended up bagging a little more than $5k on that one. The other one, a calendar spread on natgas (long Feb/short March) was a lot less shiny. My strategy was to wait for the release of the EIA numbers at 10:30 and then if the price went down, get out of the short leg and stay long for the rest of the day. That's exactly what happened except that after I closed the short leg of the trade the price of natural gas kept falling down and I had to close the long leg at a substantial loss. Thanks to my gold/crude trade I had a comfortable buffer to absorb that loss. Net result for today +$3402 trading 3 contracts on average (commissions included). Details below.

Wednesday, December 28, 2011

To stop the controversy about my crude oil trade

For those who think I'm a liar here's the screen capture of my Interactive Brokers account for today. You will see that I had a huge gain today. It compensates for the huge paper loss I had on Tuesday (too bad I don't have that screen capture). Needless to say that I'm not proud I took that much risk. Regarless of that big gain today, my trading account balance is only about $300 more than what it stood at last Friday. Maybe I'm a reckless gambler/trader like some people qualified me but certainly no liar. I hope this is clear now.