Wednesday, November 30, 2011

A day that really started on the wrong foot

Boy, what a day! Out of luck completely today. Not that luck can be counted on in trading, but usually you do not anticipate absolute bad luck either. This morning at exactly 07:59:52 AM, I entered in a long T-notes trade. At exactly 08:00:00, which is to say 8 seconds later, there was that news coming out of the blue on the wire about a coordinated Central Banks intervention to lower swap rates across the board, effective immediately. Boom! T-notes price dropped instantaneously by approximately 30 ticks, and never really recuperated. From that point I knew my day was pretty much screwed and that all I could possibly try to achieve for the rest of the day was to minimize losses. Needless to say that after such an electro-choc, markets were pretty chaotic and totally clueless in terms of direction. Therefore, I wasn't able to recuperate anything and recorded by biggest losing day in more than 3 months. One consolation: tomorrow cannot be worst from a "bad luck" point of view I am sure. Net result for today -$699 trading 1 contract (commissions included). Details below.

Tuesday, November 29, 2011

The present volatility helps my trading results

Volatility can be a two-edge sword. It can mess up your results in a big way (not to mention your trading system rules) but it can also enhance them when you are on the right side of the equation. Today is a good example of what volatility can do for me sometimes (hope that it could do it all the time of I didn't do anything out of the ordinary today. I didn't stay longer in my positions. I wasn't more patient than usual, nor did I traded a bigger size. I just made the same old trades I do 95% of the time but my results are above average. The only explanation to this is volatility. It was good to have it on my side for most of the time today. But since this is not a factor that I can control, I still have to stick to my basic rules no matter how volatile a particular market can be. T-notes and the euro have been very difficult to trade lately. Maybe other traders have had more success with them but for me it's been nothing but a struggle to trade these. Better days will be back eventually. Markets are always changing. Net result for today +$746 trading 1 contract (commissions included). Details below.

Monday, November 28, 2011

My only lost today is a trade made by mistake

I don't know what I was thinking about when I hit the sell button on the euro early this morning but it took me a little bit of time (maybe 15 minutes) to realize I had actually sold the e-mini S&P 500 Dec. contract instead of the euro. Realizing my mistake, I immediately closed the position at a loss and forgot about any euro trade for the rest of the day. It's always better and less costly to correct the mistake immediately than waiting/hoping for the unwanted trade to start making money before getting rid of it. Fortunately this was my only bad trade of the day. Crude and natgas more than compensated for my mistake on the ES producing together my biggest winning day on a net basis since early July 2011. A very good day indeed. Net result +$976 trading 1 contract (commissions included). Details below.

Friday, November 25, 2011

A lot of hot air was blowing on the markets today

A post-Thanksgiving environment with shortened trading hours for a second consecutive day brought a lot of what I call hot air on the markets. I mean by that when commodities inflate quickly to deflate as rapidly. Some traders like that kind of environment, but not me. Last couple of days were rather uneasy for my style of trading, particularly coming from the Treasuries market which clobbered me almost all week. Hope for the return of some normality on Monday. Maybe I'm just tired too. This happens sometimes when some kind of a mental fatigue takes hold of you (me). T.G.I.F.! Net result for today +$133 trading 1 contract (commissions included). Details below. Take care!

Thursday, November 24, 2011

I should have stayed on the sidelines today

When there is a shortened trading day like we had today for Thanksgiving, you can either have a very interesting trading session (maybe because nobody really expects it) or a dud. Today was kind of a mix of all that where we had a yawner for the first 2-3 hours and then the markets woke up suddenly towards the end and started doing something. Unfortunately for me I got trapped in the middle of this environment and was "surprised" by the sudden move. After that, I was never really able to turn things around in my favor due to the lack of time until the markets closed. Some days it really is better to stay on the sidelines than going in and lose simply because there's enough time left on the clock. Net result for today -$258 trading 1 contract (commissions included). Details below.

Wednesday, November 23, 2011

Low volume = a lot of whipsaws

Typical low volume-lots of whipsaws pre-holiday trading day on the markets. I wasn't able to get any decent signals on the euro (again) and crude oil today but fortunately t-notes and natgas were there to compensate. As much as in the last couple of days I got hammered with bad t-notes trades, today it was the exact opposite as the Treasuries market was quite favorable to my trading style. Because of Thanksgiving tomorrow, the weekly EIA injection numbers for natural gas (normally on Thursdays) were released at noon today bringing with them instant high volatility on that market. I was fortunate enough to catch a ride on the way up, scalping some precious ticks all within a couple of minutes. Right after that markets started to hit the snooze button and I was done for the day. Net result +$289 trading 1 contract (commissions included). Details below.

Tuesday, November 22, 2011

What a difference a day make...

As usual, not much time to write on my blog, so I'll be brief again. Today was basically the exact opposite of yesterday's monster volatility day. Maybe because it was a pre-holiday trading day, traders were thinking more about tomorrow's turkey than markets, I can't say. The euro market for one was a real snoozer. I never got an entry signal, so I just didn't trade it. The crude oil market has been good to me lately and today was no exception, with nice orderly up and down movements. Really nice and, should I say, easy. Can't say that about the Treasuries market that is just awful right now. No direction, no conviction and... manipulation by the Fed. It's been a losing proposition for me since the beginning of the week. It'll come back to "normal" eventually, but when? OK, that's it, no more time to blog. Net result for today +$283 (trading 1 contract, commissions included). Details below.

Monday, November 21, 2011

A little too much volatility for me today

Another day of low volume/high volatility on the markets. I guess I better get use to it, and adapt, since it looks like it has become the new normal. And adapt I did. So, for me it's been a day of spread trades again because I definitely prefer to lower my risk when markets conditions are unpredictable like that and spread trades are the only way I know to achieve that, besides of course staying on the sidelines. So, I was successively, long crude/short euro, long January natgas/short December natgas and long t-notes. The end result was not bad at all considering what it could have been had I decided to go all in in a particular direction (and proven wrong) in such a volatile environment. So, one more day in the green with net result of +$495 on the basis of 1 contract traded (commissions included). Details below.

Friday, November 18, 2011

Another spread trades day

Definitely, spread trades have been more and more useful and profitable under the recent market conditions than I first expected. We are not talking about mega profitability here but at least the risk is more under control than when you are outright long or short a particular futures contract.When you use unidirectional trades, you absolutely have to be right about market direction in order to make money. In a spread trade, the risk of error is still there but if you know what to look for as entry setup and are able to time your entry, well you do not have to be right immediately. You have the luxury to wait for the "natural" imbalances of the markets you spread trade to right themselves (they will eventually but sometimes not for long) and close your entire spread trade at a profit. I think that I will make this strategy a central part of my play book in the coming weeks, at least until the chaotic market conditions that we experience now become a little bit more normal. Net result for today +$253 trading 1 contract commissions included. Details below. Have a good weekend!

Thursday, November 17, 2011

Natural gas saved my day... or the power of diversification

If it wasn't for a very profitable natgas long position (btw that I opened seconds before the release of the weekly EIA injections number. Call me lucky here.), I would have ended up my day of work in the red. Almost all of the other transactions I made were losers. This, I believe, illustrates the importance of diversification when trading for a living. I know some people will disagree with me on that saying that specialization in one particular market is more profitable, but from my experience it certainly wasn't. Each trader is of course unique and operates more efficiently I am sure when adopting a style that suits his/her personality. Mine is "diversify and you will win more constantly". Sometimes, I have to admit, a little luck is helpful. But this aspect of trading probably evens out over a certain period of time. So, all-in-all, another winning day with a net result of +$300 (trading 1 contract, commissions included). Details below.

Wednesday, November 16, 2011

A lousy whipsaw Wednesday

With the exception of crude oil (which swift upward drive at the beginning of the pit session I missed), the other instruments I trade did not really go anywhere today (especially t-notes). They just went up and down in a disorderly fashion that is kind of difficult (and boring may I add) to trade. Natural gas has been on such on depressed state of mind lately that every time you believe it is done falling, well it falls even more. Wish I had shorted that little s.o.b. back in June. This is starting to look as the short trade of the decade. If this goes on, soon they will pay you to accept delivery of the stuff. It's really a truly undervalued commodity imo, but visibly the market hasn't noticed yet. It will in time for sure. Hope I'll have the guts to back up the truck when that time comes around. Overall a yawner type of day for me. Net result: +$96 trading 1 contract commissions included. Details below.

Tuesday, November 15, 2011

A doubling up on natgas that paid off

Not much time to blog today as I am already late for a late afternoon appointment. Today, I came back to my usual 4 futures contracts and had pretty good results overall. Natural gas has kept going down lately but I am convinced that it will rally over the next 2-3 weeks. It almost always goes up during the last 2 weeks of November and I feel this year won't be any different. That's why when it came down again this morning I doubled up on my initial position and exited with a nice profit. Since I'm a daytrader I do not keep positions overnight otherwise I would have held on to it. For me over the next 2 weeks it's going to be a "buy any dip" type of trading strategy with natty. I did not get any good setup on the euro today so I didn't trade it. That's about all I can think of right now so here are the net result for today's trading: +$552 commissions included. Details below.

Monday, November 14, 2011

Trading different financial instruments sometimes

Today, I traded several different financial instruments because they seemed to offer more potential than my usual 4 futures contracts. I particularly liked the spread trade involving corn and wheat. Normally, wheat sells at a premium over corn. Today, it was the opposite, so it gave me an opportunity to enter long wheat/short corn. I did not want to wait too long before closing that spread trade cause, hey, we never know. The other trades were pretty much breakeven trades, so not much to say about them. I was kind of busy today with other things so i didn't want to spend too much time in the markets. Tomorrow will be business as usual. Net result for today +$152 trading 1 contract (commissions included). Details below.

Friday, November 11, 2011

A tiny losing day because of a second spread trade gone bad

When I am not sure of the market's likely direction on any given day, I should refrain from trading. In fact, this is what I normally do. But lately in a futile effort to outsmart the markets, I have started using spread trades in these situations. If well executed, a spread trade does not represent the same degree of risk than a straight forward regular unidirectional trade. Sometimes you can even be wrong on the main direction of your spread and still make money (obviously a less frequent occurrence, but still). Well today for me it was more in line with statistics and my short euro/long crude spread trade never really took off. I had been patient enough (I think) to wait for the right setup before initiating it but the euro at one point went through the roof and, frankly, I wasn't expecting it to go that way that fast today. Too bad to end the week on a reddish note but that's the way it is in the wonderful world of trading. Net result for today: -$48 trading 1 contract (commissions included). Details below.

Thursday, November 10, 2011

A spread trade that did not turn in my favor in the end

After carefully analysing both the crude oil and euro markets early in the morning (at least I thought I had done a good job at that point), I decided today to enter into a spread trade where I was long euro and short crude. I rarely take those kind of positions because I find the timing of the entry to be a delicate operation of "guessing". But from my earlier analysis things looked particularly good today for a spread trade. At the beginning of the position being put on, everything seemed to work just as planned. But it did not stay like that passed the first hour. The problem was mainly due to crude which keeps trending up on vapor thin volume these days. Probably because of the Iran-Israel potential conflict, but who knows really? Anyway, I had to close my spread trade at a loss towards the end of the day cause I didn't feel like carrying it overnight. Thanks God I had other winning trades to compensate and I ended up my day in the green. Net result for today: +$288 trading 1 contract (commissions included). Details below.

Wednesday, November 9, 2011

A good, volatile day of trading, especially on crude oil

Thanks to crude oil's incredible volatility, today was one of my best trading days in about a month and a half. It is difficult to explain why there was so much volatility on the markets but, in general, for a daytrader/scalper like me, it is generally very profitable to trade under that kind of market condition. I had problems only with natgas and the euro, but for the same volatility reason. So this can be a factor both ways in your trading  if you see what I mean. In short, a very good day for me. Net result for today: +$606 trading 1 contract (commissions included). Details below.

Tuesday, November 8, 2011

Rumors aside, there was nothing to stimulate the markets today

Besides rumors coming out of Europe, more specifically out of Italy, today was very light in terms of economic news, at least concerning the markets that I trade. So, as is often the case in such a context, markets were more or less drifting in search of meaning and direction. I kind of like to trade under those conditions because I find it is easier to anticipate support/resistance areas that are likely to hold. You trade the range so to speak. Opportunities maybe rare in such a low volatility context but risk is low too. All-in-all, a good day for me. So here is the net result for today: +$340 trading 1 contract (commissions included). Details below.

Monday, November 7, 2011

Nothing was going smoothly today... hey, it happens

Nothing came easy today with my trading as the many whipsaws in the markets were stopping me from doing any real progress in positive territory. Especially, the t-notes and euro markets were particularly indecisive today as my results can attest. It was one of those days were you are always fighting, so to speak, to come back from losses. At the end of the day, the markets won and I lost. Since it is only my third losing day in the last 18 trading days, I have nothing to complain about. Tomorrow should be better as usually after a whipsaw kind of day the markets tend to trend more decisively. We'll see. So, results for today -$318 trading 1 contract (commissions included). Details below.

Friday, November 4, 2011

Post-NFP trading: a slow day at the races

Every month when NFP day arrives, I always ask myself if I am going to trade or stay on the sidelines. The reason being that on those specific days, the markets tend to be highly irrational prior to the announcement and sometimes as much as a couple of hours after the release. Well, today was worst in my opinion cause it took until lunch time before the markets that I trade started behaving more "normally" (granted such a state exist). Some traders like to trade those yo-yo like markets but me it makes my head spin. So, I got involved but kept my stops tight, head cold, and ended up in positive territory at the end of the day. That's all that matters for me. So here is the net result for today: +$224 trading 1 contract (commissions included). Details below. Have a good weekend!

P.S. some people have asked me why I keep writing "trading 1 contract..." after my results. Well it's to show that consistency in trading is more important imho than anything else. Once you're consistent enough, you just trade bigger in terms of contracts and multiply by 2, 3 or 4 your daily results without changing anything to your trading style.

Thursday, November 3, 2011

Nothing special to report... except profits

Most of my trading today was done in the morning, as it is more and more the case lately. T-notes and crude oil trades were the most predictable again as opposed to euro and natural gas. One has to admit that the euro has become of late prisonner of politicians' hidden agenda and is more than ever prone to mainstream medias manipulation. In short, it is not easy to trade solely on a technical analysis basis. I have to use my "intuition" more and more and I don't like that very much. Concerning natural gas, we had today the weekly release of the EIA injections number, that incidently came on the bearish side. So every Thursday it's kind of rock'n roll on this market. I got caught the wrong way a couple of times with natty but managed to escape with little damage. So for today, net results of +$376 trading 1 contract (commissions included). Details below.

Wednesday, November 2, 2011

A breakeven day

It hasn't been a very interesting day to trade for me today with the FOMC meeting looming on the markets for most of the day. My main loser was a t-notes trade that I took early this morning and for which I was up 12 ticks at one point but neglected to close. These are the kind of mistakes that are easy to make especially when the market is not moving very much in anticipation of a news to be announced that, when finally release, doesn't produce any significant effect. Tomorrow should bring some volatility because the markets will try to anticipate the employment numbers to be announceed on Friday. Net result -$13 trading 1 contract (commissions included). Details below.

Tuesday, November 1, 2011

How a good trading day can be spoiled by a bad trade

Lately, it seems that I'm always on the wrong side of the trade when it comes to natural gas. Maybe not always on the wrong side, but these trades are laborious more often than not to say the least. At one point today I was up over 70 ticks but then I entered this stupid trade on natural gas visibly right on time to see it turn against me. In no time at all, my stop loss of 40 ticks was hit and even slipped a little bit. Sometimes, it is difficult as a trader to rely solely on technicals when your knowledge of fundamentals are in contradiction with what you see on the chart. This was one of those cases where I was right fundamentally but wrong technically in terms of my timing. Anyway, I managed to end up my trading day on the positive side with a net results of +$303 trading 1 contract (commissions included). Details below.