Wednesday, March 21, 2007

Wednesday's Trading Results

"Do what it takes to sit and wait until the low hanging fruit appears"
- Alan Farley

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I made just a handful of futures trades today, and was patient enough to sit on my butt and not trade until after the FOMC interest rate decision. Then I acted quickly once the decision was made public.
In retrospect, since ES was in such a small trading range, I should have placed buy and sell stops just outside of the range, ie. buystop @1427 and sell stop @1422. Had I had these stops in place, the break of the volatility squeeze would have put me into a position at a much better risk/reward. Oh well, something to remember for next time.
And of course, instead of getting giddy about making close to 10 points on my position, next time I will remember to focus on using the 5 SMA line as my stop loss guide.

The components of my uranium index got dragged up with the rest of the market after 215p EST. Not sure if there will be any follow through tomorrow, we'll just have to wait and see. Certainly there are individual components that are acting well, like FSY, UEX, and URE. The index is inching its way closer to the key resistance level. I will continue to play it cautiously, and with small lot sizes until I see a sector wide breakout.

For the past two days, I've been thinking about what would be the criteria that would demonstrate and establish that my recent string of profitable futures trades were not just a fluke. The only criteria that I can think of is one of consistency. Consistency comes from being patient, and simply waiting, and waiting (and then waiting some more) for the low hanging fruit to appear. For example, the trade in ZG this morning was considered low hanging fruit in my mind. I had a clear entry point, with a well-defined stop loss, but more importantly, I had a high probability scenario, because the 657-ish level was identified as yesterday's intraday support level. Now I just need to keep on doing more of the same

One last thing. There will be no more intraday update postings. I have joined the Twitter bandwagon, and will be posting my intraday ramblings from there.


Anonymous said...

Excellent trades on ZG and ES.

Particular on ZG, that's the trade I won't be taking since I am so bad in picking bottom. But the way you have traded leads me to give some thoughts over this.

Well done!

Gav said...

The last comment was posted by me. Accidentally click on the submit button.


Phileo said...

Hi Gav,

Yeah, with futures, it seems that buying support levels works better for me than buying breakouts. Still a work in progress, obviously, but I'd like to put together a few more of these trades.
I'm also finding that using trendlines (eg. 5 or 9 bar EMA) as a guide for my stops works more often than not.