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The transition to Futures trading

Discussion in 'Derivatives' started by pavilion103, Mar 26, 2013.

sentifi.com

Aussie Stock Forum Sentifi Top themes and market attention on:

  1. LinRegSlope

    LinRegSlope

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    At what time was this based on, just curious so I can check it out on the charts?
     
  2. pavilion103

    pavilion103

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    5 min chart.

    Just after it tested the highs.
     
  3. LinRegSlope

    LinRegSlope

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    Ok got it. Had a setup to go short around the same area (entry would have been @ 5516), but passed it up due to the lacklustre nature of the price action today. Wise decision as it would have got stopped out.

    Fence sitting for now ..........................
     
  4. MichaelD

    MichaelD Not fooled by randomness

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    Some challenging food for thought.

    You're already wrong no matter what happens with price from here on in.

    I believe there is no circumstance with the small size you are able to trade where you should allow 90 points of profit on a single contract to potentially evaporate.

    1/3 - 1/2 of your trading size is currently locked up when it needn't be.
     
  5. pavilion103

    pavilion103

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    I agree with this part. This is your belief.

    You need to take into consideration time frame when trading.
    If holding for a longer term position trade, more risk will need to be taken.
    If price moves 300 or 400 points then risking 90 in open profit would mean I only need to be right 20%-25% of the time for these particular moves.


    The only potential thing that I have done wrong is leave the position over a 3 day weekend.
    That can be questioned.

    I am open to opinions and views but I have no time for someone stating as fact that I am wrong because I am holding longer than they would.


    It would be easy to come on here, state my own opinions as fact, take shots at other people and simply post hindsight trades and sentiment surveys.
     
  6. pavilion103

    pavilion103

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    DAX showing some real strength here.

    Maybe cause for concern about holding over the 3 day weekend.
     
  7. LinRegSlope

    LinRegSlope

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    Some of the recent conversations begs me to ask the question - do you have a trading plan set in stone regarding stops / profit targets before you enter the trade? I never enter a trade without knowing where I intend to get out, for profit or loss!

    On a lighter note, will be interesting to see if the SPI tests the 5560 resistance area, and what plays out from there ....................

    SPI 30 min.jpg
     
  8. beachlife

    beachlife

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    Doesnt being concerned contradict your previous post where you said you are happy tp risk 90 points for a 200-300 potential profit. If your long term analysis says stay short then why be concerned :confused:
     
  9. pavilion103

    pavilion103

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    I mentioned that holding over 3 days was the concern, not the fact that I had 90 open profit.

    Michael was stating that at any time, me having 90 open profit is wrong.
    I said no it isn't.
    The only thing that may be wrong is holding over a 3 day weekend.

    Can you see the difference?
     
  10. beachlife

    beachlife

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    I get that, what I dont get is what difference one non trading day makes to your long term view.
     
  11. pavilion103

    pavilion103

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    Well there was always 2 possibilities:

    1) I remain in

    2) I get stopped out



    With the DAX gapping up and moving strong, I'm thinking the FTSE could follow and I get stopped out.

    I don't predict what will happen.
    I put myself in a position and with positive expectancy over time I make profit.

    Always the chance of getting stopped on one individual trade.
     
  12. pavilion103

    pavilion103

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    To add to that the long term view could change substantially with one trading day.

    If the FTSE gapped above the highs, then all of a sudden I would not be looking for shorts.

    I'd be waiting to see how it responds after the gap and then potentially look for longs.


    I said it all along.
    Until the resistance has broken I remain short in my opinion.
    If it does get broken, I reassess.
     
  13. cynic

    cynic

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    To the best of my understanding, each additional non trading day represents an increased amount of time (and hence opportunity) in which precipitous events can occur.
     
  14. beachlife

    beachlife

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    You have missed the point, I was trying to get you to question your concern. If you have a plan with a positive expectancy emotions like concern shouldnt be getting under your skin. Who knows, maybe the US will tank tonight, take the DAX and FTSE with it and the non trading day has kept you in a trade that might have been stopped out, or maybe it will have a 300 point rally and all your profits will be gone at the open tomorrow. Who knows, who cares.

    There is no point worrying, hoping or guessing, just trade what you see.
     
  15. CanOz

    CanOz Home runs feel good, but base hits pay bills!

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    The US is not trading tonight...Memorial Day.

    I agree that holding over the weekend needs a specific plan, its like trading another time frame. Pav said he's good with that, planned for it, except he neglected the holiday. So the next time he plans to hold he checks the calendar.

    The DAX is up over 3/4's of 1%, there has clearly been a reaction to the weekend news, then the gap has caused shorts to cover, driving prices even higher.....It will be interesting to see if this closes the some of the gap before the FTSE opens tomorrow.

    Hope you're not sweating it too much Pav!
     

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  16. MichaelD

    MichaelD Not fooled by randomness

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    No, not at all what I said.

    You are trading 2-3 contracts in total.

    Letting 90 points of open profit get away from you with 1 of your very few available contracts is, in my opinion, simply wrong, even more so when short an index.

    If this was 1 contract out of 50 you were playing with - no problem.

    My concern is with both the open profits you are willing to give up AND the opportunity cost of holding given your position size limits.
     
  17. pavilion103

    pavilion103

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    I know that it is 1 out of 2-3 contracts now, but in the overall profile of trades, over months, it is 1 of very few.

    This is not at all a regular play, but rather at times that I believe there is strong potential. Because I believe that the potential payoff is higher here, I am prepared to take more risk here.

    If you follow my trading over months, you will see the standard is something like: take 2 contracts in the first hour. Take one off when it looks weak/strong for say 30 points. Let the other go IF the market is trending well. Then exit if this one doesn't look good, maybe 40-50 points or maybe leave over night for 1 night and exit in the morning.

    Not uncommon to bank 30-80 points on a night and have it closed out in the morning (before trading hours close).

    For me this is the standard approach in most conditions.


    People may agree or disagree with this current play. But it only in specific conditions which rarely occur.
     
  18. CanOz

    CanOz Home runs feel good, but base hits pay bills!

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    I see what you're trying to do, Tech talked about it many times. You're trying to nail an outlier, a life changing trade. You're other trades help cover the costs of these here and there.

    I'm not sure though, that just trading the way you do, day in and day out you wouldn't be better off. But still trying to get my head around the strategy.
     
  19. pavilion103

    pavilion103

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    It's a once in many months play. If I make 5000 points in a year. I might risk 100 points twice a year on a play like this (rough example).

    Notice that first and fired most I aim to manage risk so that even when it fails worst case is break even MOST times.
     
  20. pavilion103

    pavilion103

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    If this bar closes near the high on the DAX I no longer have a short opinion.

    Depending on the FTSE tomorrow night I may also abandon attempts at a longer term short.

    I will analyse bar by bar as I always do.
     
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