10th May – Bund Daily Trade Plan

10th May – Bund Daily Trade Plan

News

1035 GE AUC 1300 EZ DRAGHI 1330 US EX/IM
1530 US CRUDE

Previous Day – Range day with neutral down close with bof of 60.14 (DB) hi at 60.48 upside t 60.80-61.00 Downside BP.T 59.87-59.57 (BZ 59.87-58.75)

Big Picture

60m – Down TR, hold 60.44-54 bac 60.11 for cont

10m – Neutral, in blance 60.44-60.11 bac for dir poss bull trap @ 44-54

Context Play

1. BU

Longs: bac 44 hold 38.-25 on rrt t 54 bac 67 t 77-82 t2 88-98 watch for bof

2. Balance

Shorts hold bof 44-54 t 38 t2 25

Longs hold/bof 20-11 t 36

3. BD

Shorts bac 14 gold 18 on rrt t 00 t2 89-72 bac 73 t 59-48

9th May – Bund Daily Trade Plan

9th May – Bund Daily Trade Plan

News

0700 GE IND PROD 1400 US FOMC SPK 1500 US JOLTS

Previous Day – Range day with neutral up close BP.T 59.87-59.57 (BZ 59.87-58.75)

Big Picture

60m – Down TR, hold 60.81-61.00 bac 60.25 then 14

10m – Down TR, in LTF bal, hold 60.77 -60.88 and bac 60.38 for cont

Context Play

1. Trend Cont

Short: hold/bof 60.57 bac 60.37 t 60.25-14 (watch for bof) bac t 89-73 bac t 59.50

2. Balance / PB

Longs: hold / bof 60.37-25 and bac 56 t 60.67 t2 77-88

Shorts: hold 60.77-88 t 67 t2 56 t3 37

8th May – Bund Daily Trade Plan

8th May – Bund Daily Trade Plan

News

0700 GE FACTORY 1335 US FOMC SPKRS FR ELECTION

Previous Day – BEAR DAY WITH STRONG DOWN CLOSE BP.T 59.87-59.57 (BZ 59.87-58.75)

Big Picture

60m – hold 60.97-61.15 bac 60.37 then 60.14 for cont

10m – hold 60.69-60.77 bac 60.37

Context Play

1. Trend Cont

Short: hold/bof 60.57 bac 60.37 t 60.25-14 (watch for bof) bac t 89-73 bac t 59.50

2. Balance / PB

Longs: hold / bof 60.37-25 bac 56 t 60.69-60.77

Shorts: hold 60.69-.77 t 56 t 37

3. 60min PB

BAC of 77 then longs t88 t2 97-17

Shorts: messy area 97-17 t 80

US Non-Farm Payrolls – May 5th

US Non-Farm Payrolls – May 5th

Historical Performance

Last year of NFP data, back adjusted for revisions

What is the Range and 1 SD?

Number range for last 6 months is 137k

1 SD Range for the last 6 months is 46k.

Is there a trend in the data?

The large miss has put a dent in the trend and overall flat for the last six months.

What number would constitute a change in the trend?

Not applicable but a number less than 210 could mean a change in trend in these numbers.

What would be a big beat/miss?

Exp is for 185k

Between 160k to 210k. Would treat as inline / slight beat miss.

160k to 135k would be a miss. 210k to 245k would be a beat.

Below 135k would be a big miss and above 245k would be a big beat.

Notes – Out of the Last 30 NFPs’ (Time 1330 to 1500 BST)

In 22 cases, the low was made by 1345

In 7 cases, the high was made by 1345

What is Range Profile on the Bund in ticks

Last 12 NFP

VAH90

68

VAH70

59

VAL70

30

MODE

51

What is the Daily / 240 Structure

Bund

240 mins


Daily


62.15

HI

61.73-94

SZ

61.48

LVN

61.26-20

POC/SESS HI

CP
60.74

SESS LO

60.43-37

CONF

60.23-14

BZ

 

Hypo NFP EXP = 180K

Trying a slightly different tactics this month. Same sets up but just going with the flow. (IM = initial move. SM = Secondary move)

 

Trade 1

Join the IM 50% T extreme of IM

Trade 2

If before 1345 and BOF of pivot / level then fade T IM 50%

Trade 3

If failure to break 1345 extreme then fade T IM 50%

Trade 4

BAC of IM 50% then join on PB of this SM T Origin

Trade 5

BAC of Origin then join on PB T next level

Trade 6

Join on SM 50% T next level

Trade 7

If BOF of pivot / level then fade T SM 50%

Review

4thMay – Bund Daily Trade Plan

4thMay – Bund Daily Trade Plan

News

0855/0900 GE / EZ PMI 0900 UK PMI 1000 EZ RETAIL
1130/1200 EZ SPKERS 1330 US INIT JOBS 1500 US FACT ORD

Previous Day – ID X 3 – HI @ 62.15 LO @ 61.02

Big Picture

60m – Neutral Bal 61.94 – 61.45 bac for dir

10m – Neutral Bal 61.94 – 61.45 bac for dir

Context Play

1. Balance – Break down

Short – bac 61.45 t 61.34-26 bac 26 t 61.12 t2 61.02 bac 60.85-64 (watch for bof @02)

2. Balance

Longs – hold / bof 61.25 t 61.45

Shorts – hold/bof 62.15 t 61.94

3. Balance – Break up

Longs – bac 62.15 t 61.24/38 bac 38 t 62.50

2nd May 2017 – Bund Daily Trade Plan

2nd May 2017 – Bund Daily Trade Plan

News

0855/0900 GE/EZ PMI 0930 UK PMI 1000 EZ UNEMPLOY

Previous Day – Inside day with weak down close

Big Picture

60m – Neutral, HL at 61.26, for t/c to Up, hold 61.26 and bac 62.15

10m – Up, hold 61.48-61.26 and bac of 61.85 (HL at 61.60 ???)

Context Play

1.Up

Longs hold 61.60 t 61.73 t 61.85 bac t62.03 t 62.15 bac 62.30-38.(Watch for bof at 62.15)

2. Balance

Shorts: Hold 61.85 bac 61.73 bac 61.64 t 48 bac 48 t 36-26

Longs: Hold 48 or 36-26 t 61.73

3. Down

Shorts: bac 61.26 t 61.02 (watch for bof) bac t 84-77


27th April 2017 – Bund Daily Trade Plan

27th April 2017 – Bund Daily Trade Plan

News

0700 GE CONS CLIM 0800 SP CPI 1030 IT AUC 1245 EZ IR
1300 GE CPI 1330 US CORE DUR 1330 ECB PRESSER 1500 US HOMES

Previous week – Range week with strong down close, at channel top and bal va extreme, bac of 62.50 t 61.54 t2 60.94 t3 60.18

Previous Day – Range up day with strong close hi 64.47/63

Big Picture

60m – Neutral, bac 61.63/60.64 for direction

10m – Up, hold 61.18-61.10 bac 61.36 for dir

Context Play

1. Balance

Shorts: hold /bof 47-63 t 61.20 t2 61.06 t2 60.84

Longs: hold 60.84-64 t 61.06 t2 62.20

2. Break Up

Longs: bac 61.63 t 72-78 bac 78 t 90 t2 62.02

3. Break down

Shorts: bac 60.64 t 43-37 t2 23-14


26th April 2017 – Bund Daily Trade Plan

26th April 2017 – Bund Daily Trade Plan

News

1035 US CRUDE

Previous week – Range week with strong down close, at channel top and bal va extreme, bac of 62.50 t 61.54 t2 60.94 t3 60.18

Previous Day – Down day with strong down close, m50% at 61.00 tbc

Big Picture

60m – Down, hold 60.93-61.10 and bac 60.71 for cont

10m – Down, hold 60.93-00 and bac 60.66 for cont

Context Play

1. Down

Shorts: hold 60.93-61.10 bac 60.71 t 59 bac 59 t 44 t2 23-14 (watch for bof)

2. Balance

Longs: hold 60.58 t 60.71 bac t 81 t2 90-00

Shorts holds 61.90-00-10 t 60.80 t2 60.70

3. Up

Longs: bac 61.10 t 61.19 bac 21 t 61.31-37


25th April 2017 – Bund Daily Trade Plan

25th April 2017 – Bund Daily Trade Plan

News

1035 GE AUCT 1400 US SP HPI 1500 US CONS CONF

Previous week – Range week with strong down close, at channel top and bal va extreme, bac of 62.50 t 61.54 t2 60.94 t3 60.18

Previous Day – Gap down to weekly targets 61.54 and 60.94, neutral close(bupin hi @61.63)

Big Picture

60m – Down, balance day, bac of 60.93 for cont and bac of 61.61 for pb

10m – Up, hold 61.40-33 bac 61.63 for cont

Context Play

1. Balance

Shorts: hold/bof 57-70 t 40 t2 33 t2 25

Longs: hold/bof 16-07 t 25 t2 33 t 40

2. Up

Longs: bac 63 t 78 t2 62.02 bac 62.02 t 62.18-30

3. Down

Shorts: bav 08 t 93 (watch for bof) t 60.78 t2 69-59 t3 45


Financial Targets – Show me the money

Financial Targets – Show me the money

On the 19th April 2017, Tom Dante, tweeted a poll on whether traders had monthly, quarter or annual financial targets.

The responses were interesting, and seemed to be along the lines that setting these sorts of goals could do the following

Limit Potential Growth or returns from trading.

Add pressure to the trader.

Give the wrong mindset.

Pressure the trader into taking trades not in the plan just to meet target.

Cannot manage returns only risk.

All of these are valid responses and to certain extent I agree with them.

I feel that financial targets do have a place as a tool to improve a trader’s performance.

And I mean using financial targets as a tool to improve a trader’s performance rather than target or end game to hit.

Therefore, I think they should be used as goals to help drive the behaviours and focus needed to be improve.

As with all tools, they need to be used appropriately.

Here is a list of when I think financial goals are a waste of time.

Trader has no edge.

The target / goal here should be to find an edge. At this stage, the trade does not even know what they are potentially capable of, and it is bit like saying that I want to win the Formula 1 Championship when I have never even seen a car.

Whilst that might be a dream it is not a relevant goal at this stage and would do nothing to improve the traders lot.

The primary goal here should be to find an edge.

Trader has an edge but not applying it consistently over time.

Primary goal in this situation is to be applying the edge. Financial goals will do nothing but add more pressure to the already hard task of applying the edge consistently.

Trader has an edge, applying it consistently but still makes mistakes in applying the edge.

Primary goal, should be working on reducing the mistakes down to acceptable level, as close to 0-10% as possible.

Financial goals in this situation will do nothing to improve a trader’s lot. It will just add pressure to the situation and increase the error rate.

Where a financial goal could help, would be to track the financial cost of these mistakes, to help drive behaviours that will reduce the error rate.

When financial goals can be beneficial.

Trader has an edge, applying it consistently, mistakes are rare. They are at stage 4 and above of the competency curve.

Stage I – Unconscious incompetence – the person is blissfully unaware of their ignorance

Stage II – Conscious incompetence – the person aware of their skills shortage

Stage III – Conscious competence – the person is able to demonstrate their competence with a high level of concentration or focus

Stage IV – Unconscious competence – the person is able to demonstrate their competence with a low level of concentration or focus

Stage V – Shared competence – the person is able to teach others by explaining not only how but also the the why’s to achieve a level of competency

What does a trader do then to help drive behaviours that will improve the performance over time, when they are at stage 4 and better.

All the low hanging fruit in terms of goals have been done.

I feel that having a long term financial goal can help drive the trader to view their trading and what they should be doing on a day to day basis in a different light or at least give them a structure.

A trader at this level, will have an understanding of their risk profile and the typical returns of the system including the variance based on market and seasonal cycles.

One question, traders / everyone should ask is where do I want to be in the next five years?

By using a financial goal, this then can be broken down into performance goals and what needs to be done.

I always use the following process to help me decide what I need to do to meet my goals. This process can be used for any type of goal.

Outcome goal

What is my goal?

What results I need to do to achieve this goal?

Process goal

What process do I need in place to do achieve the outcome goal?

What skills do I need to achieve these processes?

What do I need to practice / learn to have these skills?

Performance Goals

What benchmarks and standards that I need to hit to ensure that I am following my process goals?

As we can only control entries and risk, by setting a long term financial goal, this can then be reverse engineered backwards to see what sort of risk we should be taking and whether realistically, our trading system is potentially capable of giving us this sort of return, bearing in mind variance.

Example

Trader A is at Stage 4

He has built his account up to 15000 USD.

His previous performance shows that the system has 50% win rate and the win to loss ratio is 2 to 1, and averages 3 trades a day.

His goal is to turn his 15,000 into 1,000,000 over a five year period.

Using quarters as the primary measuring device to avoid the focus being on the short term performance.

Trader A needs to return of 23.5% every quarter compounding, to turn this 15,000 into 1 million in 5 years.

Trades taken per quarter.

4 days a week, to allow for days off and unforeseen circumstances,

11 weeks to a quarter, again to allow for holidays and unforeseen circumstances.

4 x 11 = 44 days. Which is under the typical 65 working days per quarter.

Average of 3 trades a day x 44 days = average of 132 trades per quarter.

A return of 23.5% of 15000 is 3525.

Therefore, a performance bench mark for the first quarter is 18525.

Running 100 simulations shows that the variance of this sort of system and gives us a minimum variance of 18,924.

In theory, we can see that it Trader A risks 1.5% of the initial account balance on every trade over the quarter.

This is gives Trader A the best opportunity of hitting his bench march without forcing anything different on to the trader, but just adjusting one of the things that we can control.

The risk.

This is a rough example of how to use financial goals to guide performance over the long term, but I believe they should not be used as targets and should only be used as a tool when appropriate.