Nov 052010

Ok this is so incredible that I have to share:

I was very unhappy with my Bund trading this morning.  I got stuck short in a move that went straight against me and I didn’t have a chance to get out.  This is a disadvantage of using hard stops but I find more often than not a hard stop is hit only to take me out before the trade goes in my way, so for now this is a limitation I can live with.  Anyway, the market goes against me but I wait for the next level and look for a setup, which I finally get and I go short and end up with a small profit.  But I’m unhappy with my self because had I took a small (4 tick?) stop on the first short, I would have made twice as much on the second.

So I decide I take a break from trading, and possibly put myself back on simulator to work out this issue.  It was 10:30am and the market was was really calm so I figured the morning volatility was over (this morning was exceptionally volatile for the Bund).  Ok I’ll be honest, this actually happened twice this morning.  Once I can forgive myself but twice indicates there is a problem on which I need to work.  I was up $100 and was happy with that considering my trading was really crappy.

So I go and work on a programming project that I’ve been during outside of trading hours and I don’t even look at the market.  About 30 minutes later I finish some changes and test it out and I’m satisfied with the results and feeling good about myself.  So I decide to look and see what I missed on the bund:

I cannot believe my eyes.  The bund is retesting the high, the very same high that I shorted earlier and got over 10 ticks.  Furthermore, I can see it retesting and struggling.  I quickly bring up my DOM and study it for  a few seconds and then click to go short at 130.84 which happens to be 1 tick lower than my previous short here.

Then price starts dropping immediately.  I’m working on not using fixed targets and this is one case where it was to my advantage (which isn’t always the case).  Price kept dropping and I had my finger on the buy area.  Finally I saw it struggling at 130.72 and I got out with 12 ticks which is the biggest win I’ve had all week.  (It went down another 10 ticks but since I had only entered with one contract I couldn’t scale out).

What an amazing coincidence!  So now I have $265 and feeling really good.  But I still have to work on that problem I mentioned.  🙂

There are several morals to this story:

  1. The best setups can come when you’re least expecting it
  2. It’s worthwhile to wait for the really good setups
  3. It’s good to be lucky once in a while

Good luck with your trading.

  2 Responses to “My lucky bund trade”

  1. What I was doing then was stupid. now I take small stops and I don’t need luck, just a small edge.

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