Update

Im still in the 6B short and the 6A shorts holding them both for awhile into the night but if I exit I will post the pics.

http://gyazo.com/3c691b87a3ffb9ad3c8da7055e63c731

right beneath the long button is a "short position" button

Thanks for the response on COT data. As I said, this is something I have looked at in the past, but did not find useful. I am interested to see how you parse the COT data.

Thanks for starting this thread.

Morning Update and Important Concept 5/12/15

Well I went to bed last night and moved my stops to break even on the 6B/ British Pound trade at 130 and I took a loss on the 6A / aussie dollar

So not a great start to the week down 3.2% but its still only Tuesday and we are going to keep this thread a REAL as possible and just like poker we don't think in terms of Todays results we think in terms of long term edges and monthly results

Overnight we can see that Manufacturing Production came out as a hit on the 6B British Pound


http://gyazo.com/9591669c2802a0a6cb6e9a0ab66b5746


This was the data that I was hoping would be the catalyst on the 6B short position and why I had to move the stop to break even

I would like to introduce you to another very IMPORTANT CONCEPT at this time.

The Concept is called Risk On and Risk Off

This concept is where we start our day at the fund and is the most important concept to trading that you will ever learn.

So what exactly is Risk On and Risk Off ??

Well when come to our desks in the morning we need to be fully aware of what events our effecting the market each day and then we assess whether or not we we want to PUT Risk On or leave Risk Off or more simply put do we want to be in the market or stay flat till the event passes.

Make sense ?

So lets look at and example of what events would be Risk Off

If you open Bloomberg News for the day and we see WAR just broke out in Libya then that would be a Geopolitical Risk Off event so anything massive Geopolitically is a Risk Off event and we want to take profits or move stops to breakeven if we are in trades.

What else would be Risk Off ?

I would like to point your attention right now to this News Link and I would like you all to book mark it because its the 2nd place you should start your day after you've read through the morning headlines on Bloomberg. Actually I will include both links right now

http://www.bloomberg.com/markets This is were you should start your trading day first thing each morning even before opening your charts !!!

You are looking for any Risk Off Geo political events.

The next place you should turn to is any good data release calender I like this link because its simple and easy to follow.

http://www.forexfactory.com/calendar.php


So what events are we looking for that are Risk Off in here ?

Well as a starting hand rule of thumb any event that is a Red high priority event should be Risk Off for all you guys as you are starting to learn to trade. As your skills grow larger you can trade some events but not till you really get a handle on fundamentals.

So for example last night when I went to bed you can see that there was a Red Event = Manufacturing Production on the 6B British Pound and that is why I moved my stop to break even it was a Risk Off event that I would have had to wake up at 3 am in the morning to monitor.

So there you have the most important Concept you will ever learn to start your trading careers. This is just a start there is much much much more we have to build on but this is the most important question you ask yourself each day first.

Could you give your thoughts on position sizing? i do both day and swing trades and my sizing goes from less than 0.5% of account for day trades to 2-3% for some swing trades, dependent on the expected holding period.

New trade opened

6B short I'm giving this a third attempt at a short trade here.

https://www.tradingview.com/chart/GB...pgR-GBP-Short/

Here's the tradeview for the official record

btw Tradeview does not have a short trade feature for entries and stops sorry

http://gyazo.com/dc814c1494e8163af3e886de77587849

.50% is a really good number and as long as you average 1:2 risk to return ratios then your risk of ruin is fine.

At the hedge fund we usually use much lower numbers but we are trading huge amounts so that would be normal but as a retail trader I will go as high as 2% risk per trade but only on my best trade situations.

Just like poker hands different trades require different pot sizes and I go from .05 to 2%

it DOES have a short entry button

https://www.tradingview.com/x/hkEHrPho/

It's the same button u press for longs, when u hit it a drop down menu comes out with short being an option

Huh? Market was expecting a hung parliament or coalition and instead got a Tory majority and you think that makes no fundamental change?

Got it thank you now I will do that !

Yes that was the expectation but it has changed nothing fundamentally from before the expectation.

Update on 6B short I'm moving my stop to b/e again before bed.

http://gyazo.com/12b97e83d76569da6b670449e274ecc7

I would have thought how the economy and government spending is going to be managed for the next five years as something fundamental, no?

O absolutely but my point is that the "expectation" of a minority government was what moved the market so once that "expectation" move gets factored in its back to business as usual for the UK. So the market will be focused back on the data and fundamental numbers. We have know Cameron's policies for a very long time so nothing new here.

Wednesday 5/13/45 Update and News Trade Concept

First off let me apologize to you guys because "normally" trading takes up 90% of my time and life but now that I lost my job at the fund I'm playing poker and golfing a lot more so I'm not putting in the time to trade my own account as much as I would normally be. So there are a lot of trades I'm missing but this thread was really more about education and concepts so I will try and focus on that in light of the lack of trade content to fill in the gaps.

So lets go through a regular days routine:

Today Im just opening Bloomberg to read up on any News events that I see that will effect todays trades. right off the bat I can tell you today will be a high volatility day and the markets will be moving in big ranges during NY.


Front page News is Retail Sales Disappoints so let's discuss this news event and see if we can find a tradable opportunity. To do this we need to dig down into the data and see IF this Headline is just noise or is it some new fundamental shift that will force the market into a trend day or can we fade this news???

http://gyazo.com/195db3b4cfae90e9bc1d15577d650e75


So to do that lets look at the historical data on Retail Sales and get the facts.

First here is the Data

http://gyazo.com/34c1db49438422b6ff336f20e12f4c32

We can see that the expectations were missed by 3 points.

Now lets look at the historical data

http://gyazo.com/81a699990d85de8d3df1d79248553ec2

As you can see that this number although it's a miss ain't so bad is it? Considering Jan and Feb were miserable this is a decent number.

So that means we can look for FADES off any strong move this number creates right ?

So let's look at some charts now so lets start off with a strong market that we want to avoid today and that would be the 6A Aussie Dollar this is a table that has alot of aggro pro's on it and my edges will be minimal so I'm going to avoid it today here is a pic and you can see that it has broken out to new highs on the 30 min charts so no edge here.

http://gyazo.com/b5ee5ffdc671a15a5da9a6056be7b6c0


The best trade that I see right now is the 6J Japaneses Yen

As you can see with this chart it is still contained inside a very large range for the last 7 trading days so this is my weak fish table and were I will have the greatest edge is going to be at any of these extreme levels I have marked off here and I will trade them today. If I see what I need to see at these levels.

http://gyazo.com/1c6376a8dbe75bf258bda57608955d9a

Trade

6J Japenese Yen Short or USDJPY long

ok I think I figured out this tradeview software but I hope it lets me adjust my stops?

https://www.tradingview.com/chart/USDJPY/UJ71btMK-JPY/

Trade

6C or USDCAD

https://www.tradingview.com/chart/US...uWdPRE-USDCAD/

Adjusting this stop to .008410 I cant do that on tradeview sorry

I really don't understand your trade here; market has been pricing in the possibility of minority gov/labour/hung parliament, now instead the pound got the best possible result and has correctly rallied; and you're selling into this?

we must think in similar ways. i had setups also in usd/jpy and usd/cad. i took usd/cad @ 1.1943 with initial stp at 1.1906. a small balance has since formed on 10 min chart to allow me to move stop to 1.1916. I have tgts at 1.2020 and 1.2131. i will move stop to b/e if it reaches 1.995.

I didn't take usd/jpy because i don't want to double my risk trading same way on usd. did you split your risk between the two or use normal size?

Well I was selling into it yes but I have now stopped and am waiting for a strong down close day. The trade is fundamentally is simple. The market priced in a minority government and when the results came out majority we did get a strong reaction but nothing has changed in terms of fundamental data and all of Cameron's policies are well known. So the point being this is an emotional reaction that has caused a lot of short covering and we saw that from the COT report last thursday (you can find that post in this thread) Now until I see this weeks COT data I have to assume that this is just short covering and not new positions being opened and I have not seen any signs of that yet in the derivatives market.

That will be my next Concept Lesson I will cover on the weekend.

But basically to answer your question yes I was selling into the emotional reaction / short squeeze but it was risky because I do not know how much NEW open interest will show up till thursday.

I took larger size on the JPY and only half size on the CAD

Update on 6C and 6J shorts

Im still in both these trades

http://gyazo.com/b86b7e7d9a57ad73556f0713bb620a16


http://gyazo.com/8e5b45f713e6582a347d86e7e63d349f

It's not an emotional reaction though, it's a return to normality. The market was pricing in a risk, that risk has abated and the pound is where it should be.