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.

The reason why I didn't publish results yesterday

Yesterday, I didn't publish my trading results because I was still holding a sizable position in crude oil at the end of the pit session. 99% of the time I make sure I am flat at 2:30 PM. But yesterday was different. At one point I was down around -160 ticks on that short trade with 4 contracts. I was afraid that by publishing my results readers of this blog would think I had lost $4000, which I had on paper but not in reality. A trade is not over until it's over, right?. So, I didn't take a screen capture of my broker's platform and post it here like I do usually. FYI, the only trade (besides the one on crude oil) I took yesterday was a natgas long trade that ended up at +31.1 ticks. So that is basically the net result for yesterday +$311. Today, I did not trade. I just closed my crude oil short trade when the price dropped to my entry level of 100.07. So, I broke even on that one which is good considering the risk I took by doubling up to 4 contracts yesterday. Therefore there is no result to publish today either. I will be resuming trading tomorrow given a chance.

Friday, December 23, 2011

Low volume day typical of Holidays

To start let me wish you all a "ginormous" Merry Christmas! Hope Santa will bring you whatever it is that makes you feel happy. Today's low volume-low correlation environment was typical of Holidays trading. Personally, I only traded during the first hour and a half of the session this morning. I always prefer to limit my exposure when markets display low volume and do not correlate between each others as usual. So, I only did 2 trades. One on natgas and the other on t-notes. Both were small winners. Today was also the 7th consecutive winning day for me and, with only 3 trading days left in December, there is a possibility that I beat my record of 10 consecutive winning day. Not that it matters that much but it would certainly feel nice. I cross my fingers. Net result for today +$230 trading 2 contracts (commissions included). Details below.

Thursday, December 22, 2011

Natgas was my biggest winner today

Some of the people that leave comments on this blog or on twitter/stocktwits on my trading have been "warning" me lately to stop trading natural gas presumably because it would "kill" me. Well, looking at the performance over the last 5 trading days, one has to realize that natgas has been one of the main contributors (with crude oil) to my positive bottom line. So, I'm not too sure what those warnings are all about but I certainly don't subscribe to them. In fact, I believe that to be consistent in trading, one has to diversify the type of commodities/futures contracts he trades. In November for example, t-notes were consistently winning therefore contributing to my bottom line. December is the exact opposite. T-notes have lost me money more often than not during this month. You see what I mean? I'll stick to my strategy of diversifying my financial instruments no matter how many "warnings" I receive. Nevertheless, I appreciate the challenge of point of view that they bring. Keep them coming please. Net result for today +$687 trading 2 contracts (commissions included). Details below.

Wednesday, December 21, 2011

A fifth consecutive winning trading day... yeah!

Although small in terms of net result, today was my 5th consecutive winning trading day. Last time I recorded the same kind of winning streak was around mid-October. Other than that I am afraid I have not much to report from my trades except maybe to say that most of my trading signals were weak today. Natgas could have been a big winner for me but, since I had put a "take profit" limit order in place when I initially entered the trade, I was stopped out prematurely with a tiny 15 ticks gain (at least that's a profit) when the market erupted on an aggressive short squeeze. The euro spent most of the pit trading session range bound inside the Initial Balance area therefore I didn't get any signal to enter. Overall I'm satisfied with the positive outcome of my day with a net result of +$133 trading 2 contracts (commissions included). Details below.

Tuesday, December 20, 2011

Most of the action took place overnight

Today was kind of a non-event day in the sense that most of the action in the markets had already taken place during the overnight session. It was especially the case for the euro and crude oil markets. Since we are only a few days before Christmas, volume is low. Therefore, moves tend to be exaggerated normally in such an environment but this was certainly not the case today. All in all, not a very exciting day and nothing really special to report in this post. I nevertheless managed to end my day in the green for a 4th consecutive day. Net result for today +$475 trading 2 contracts (commissions included). Details below.

Monday, December 19, 2011

Crude oil and natgas made my day today

Today, the most volatile commodities among the ones I trade on a regular basis were crude oil and natural gas. After registering a new year-to-date low around 3.050, natgas bounced back up en route for 3.120. Like I said last Friday, I believe natgas has bottomed for the rest of the winter. Oh, of course, we may experience a retest of today's low but I think that, if it happens, it will prove to be a bear trap more than anything else. I don't see it drop (and hold) below 3.000. Crude oil was its good ole self. Very volatile, very "fluid". A real treat for daytraders/scalpers. Euro and t-notes didn't have any detectable trend so I basically ended up breaking even on my trades on both. Net result for today's trades +$834 trading 2 contracts (commissions included). Details below.

Friday, December 16, 2011

Options expiration Friday... didn't trade much

I usually do not like to take too much risk on opex Friday because of the irrationalities often witnessed in the markets on that particular day. Correlations do not exist anymore and it is rather difficult for me to find my way in such an "anything-goes" type of environment. So I concentrated on natgas (again?) because my analysis was telling me that its very oversold condition could only lead to a bounce of some sort today. And I was right. So, other than this trade on natgas (and a less successful one on t-notes), it's been a pretty quiet trading session. I nevertheless managed to end my day in the green and keep my batting average above 80%. Net result +$531 trading 2 contracts (commissions included). Details below.

Thursday, December 15, 2011

Tried a calendar spread trade today on natgas for a change

Fed up of going in only one direction on natgas lately, I decided today to enter into a calendar spread prior to the release of the EIA injection/withdrawal numbers this morning. I was short January/long February contracts. After the release the market spiked up... and down within seconds so I wasn't really able to exploit discrepancies between prices during that short a time span. Nevertheless, after maybe a little more than 1 hour into the trade I finally closed the spread at a small profit. I may try this more often in the future and possibly with bigger size next time. I like the fact that the risk is relatively low on that type of transaction. My other trades today were pretty much "standard" short-term trend following as usual. All in all a trading day than ended in the green. Net result +$797 trading 2 contracts (commissions included). Details below.

Wednesday, December 14, 2011

Gosh! Couldn't help it. Had to lose on natgas...

Today,  my stubbornness regarding the direction natural gas should have taken cost me dearly. Natgas is so oversold that I couldn't get myself to short it although, with the hindsight, it was the right (and should I add very profitable) thing to do. Well nobody is perfect, right? But I should know better. I've been there, done that and lost money in the past with that attitude. You see this is the one thing I still have to work on. When I am convinced that a particular financial instrument is very oversold/overbought, I have a hard time following the trend. If I were a position trader, I might get away with it most of the times, but as a day trader it's probably the surest way to lose tons of money. Overall, a day to forget but to learn from nevertheless. Net result -$691 trading 2 contracts (commissions included). Details below.

Tuesday, December 13, 2011

The Fed leaves everything as it was - non event

There were a lot of expectations going into the FOMC meeting today but the mountain delivered a mouse so to speak. Most of the action on the market today was before the announcement and not after as it is often the case, although volatility was less than usual. All my trades were made before noon because I do not like being in the market (unless hedged) before the Fed's rate decision press conference. Other than that, I finally was able to make a couple of trades on the euro this morning. It had been a while since my last euro trade. I haven't felt comfortable with currencies lately especially because they have been powered by unpredictable political events/rumors more than anything else. Everything will eventually be back to "normal". The question is when. So, overall, a positive trading day. Net result +$730 trading 2 contracts (commissions included). Details below.

Monday, December 12, 2011

Started (finally) to trade 2 contracts at a time

Big stressing day today for me as I started trading TWO contracts at a time instead of just one on my intra-day trade signals. Well, it wasn't so bad after all except that at one point, on a crude long trade, I was down substantially and decided to double up on my position to average my entry price down. Risky and kind of a double edge sword but it turned out to be the right decision to make and that's all that matters. The rest of the day was pretty smooth as the markets started going nowhere (and slowly with that). Possibly already starting to anticipate the FOMC interest rate decision tomorrow. Speculation is going wild as to what the Fed will decide. QE or not? I don't think they will launch QE tomorrow but... we never know. All in all a relatively non-event trading day that ended up in the green. Net result +$584 trading 2 contracts (commissions included). Details below.

Friday, December 9, 2011

A euro summit that turns out as a non-event

A lot of traders were expecting high volatility today on the markets because of the European summit. As it turned out, the Europeans did not announce anything new to save the euro (no surprise considering it is a hopeless situation), therefore the markets behaved... well, as usual, i.e. went up and down to close virtually at the same place than the days before. For a daytrader/scalper like me, this is not a bad trading environment. I managed to do pretty well on crude today while making sure to stay away from the euro. Natgas was the black sheep during this trading session. For the last couple of years, this commodity has been in one of the most impressive downtrend that I have witnessed in my 11 years plus of markets observation and trading. Wish I had shorted this little s.o.b back in June and sat on it until now. Sometimes I envy the position traders for the kind of return they can make over a few months. But... this is not my style. Ain't patient enough for that... too bad for me. Result for today +$471 trading 1 contract (net of commissions). BTW, thank you for your comments! For those who think I should be trading more contracts, I totally agree with you. I hope to be able to garner enough courage to increase my size soon (been burned so bad in the past that I'm still scared I guess - I'm no hero). Have a good weekend!

Thursday, December 8, 2011

Today's spread trade: long gold/short euro

For those of you who have taken the habits of reading my posts, I apologize for not being able to publish during the last 2 days. I had to cope with a major tradestation computer breakdown. Now everything is finally back to normal with a brand new trading computer. Today, I did a spread trade buying gold and selling the euro simultaneously. I very rarely do spread trades but the opportunity was too tempting this morning and I couldn't resist. The outcome has been pretty good also, netting me roughly 30 ticks without taking too much risk really. Other than that, I did the usual t-notes and crude oil trades with pretty good results. But I wasn't able to get into any natgas trade today. Don't know why. I didn't feel it... and on top of that signals weren't very clear. Anyway, I had a pretty good day overall with a net result of +$1042 trading 1 contract (commissions included). Details below.

Monday, December 5, 2011

Today a natgas trade hit me on the head

It's very late and I'm back from the hospital. My mother had to go through an operation and I have been kind of worried all day because of that. But that's not the reason why I had negative results today. It has more to do with a natgas trade that went sour after (on a rare occasion) I doubled the size of my initial position to average down its price. It was a bad decision considering natural gas kept on going down without any sort of bounce up whatsoever. Thanks God I went short crude oil at a certain point and was able to reduce my loss to a manageable 49 ticks. In short, a day to re-learn to never average down again. Net result for today -$486 (commissions included). Details below.

Friday, December 2, 2011

A NFP day that didn't produce a lot of momentum

Usually the first Friday of the month when the statistics regarding jobs creation and unemployment rate come out, they produce a lot of movement on the markets. But not today. Maybe because numbers came out pretty much as expected and, I should add, were basically pale in terms of impact compared to the blockbuster announcement of Central Banks coordinated intervention earlier this week. T-notes are so difficult to trade for me lately that sometimes I want to stop trading them. But just about a month or so ago, I was writing here on this blog that they were the most regular money making instrument for me. Conditions change quickly on the markets nowadays needless to say. So I will keep trading them for a little while still. I'll re-evaluate later. Net trading result for today +$268 trading 1 contract (commissions included). Details below. Have a good weekend!

Thursday, December 1, 2011

I was not able to concentrate on my trading today

Lots of things and distractions going around today in my trading office has resulted in a poor state of concentration on my part. Consequently, my entries were lousy and my exits even worse. In a sense, I am lucky to end up my day in a quasi breakeven situation. I should have probably avoided trading all together today but my "addiction" (sorry... passion) is too strong and even if conditions were not ideal I just couldn't stay away from my monitors. Tomorrow is NFP day, so a lot of action and chaos are to be expected on the markets. Therefore, caution will be the name of the game. Result for today -$95 trading 1 contract (commissions included). Details below.