Jan 312011

I’m back to real money trading after several weeks on simulator and recorded my two trades on video.

Here is my bund chart with my two shorts marked.  I circled potential trade areas that I did not trade.  You can see my two trades were exactly at my levels.  I’ve made a lot of progress on my patience.

First trade was risky. My level was not that strong yet I want to avoid fear of losing so I take it anyway, particularly when I see 800 on the offer and it’s holding.  I figure the cost of finding out (120 euros) is relatively small compared to the potential gain so I take it.

If I had not taken it and it had been high of the day I would have regretted it. I stopped out right away. You can see I put my stop at 5 ticks but I got out at 4, that’s because there were a lot of prints there. As it turns out a 5 tick stop would have held for a while but later taken out.  Correct stop placement is really challenging for me.  A 6 tick stop can result in less stop outs however those that do cost more.  I’m currently using 4-6.

Second trade was a great trade. I accelerated the playback 5x because I was in this trade for a long time. You can see me adjust my targets. That’s me lacking confidence that my original targets would be hit. otherwise known as “cutting winners short”. But I think it was justified here as we were in a tight range and I did not want a positive day to go negative (after my first trade was a loss).  This is known as “Trading for the P/L”.

The last target I eventually moved to 85 because I thought the LVN would hold, and it was hit (not shown on video). The market then continued down to 68. So all of my original targets would have been hit.  I noted these in my journal (download the excel template here):

So let’s analyze this: The stop out was perfectly valid trade.  Risky but valid.  I took it without fear of loss.  Not easy to do when trading 3 contracts and facing a 120 euros loss!  So I think I made a huge progress here.  Part of me knew it wouldn’t work but the other part said “trade the plan”.

After I stopped out from my short, the level held the sellers which made a good long setup.  It wasn’t obvious because I had stopped out 1 tick off the high so I thought it was still going down.  Had I caught that long it would have made a huge difference in my P/L today.

Then the market came up to 94 which was the level I was waiting for.  No way was I going to miss that one, even if it took several tries.  Unfortunately the tight range had me lose confidence in my original targets.

I ranked my lessons according to the most broken last week, missing pullbacks is #2 and I did it again.  But just tracking it and writing about it will help me to be more aware of it.  And cutting winners short.  At least in this last trade I let the targets get hit.  I adjusted the targets to make them more likely to be hit but I never just said “heck with it, take the profit” even as it pulled back to my entry.  I’ve learned my lesson not to do that.  It’s stop or target.  I just have to be careful moving my targets too close because that’s still cutting winners short.

Trading is simple but it’s not easy.  Writing about this is very helpful to me and I hope it’s helpful to you too.

Here’s the video showing the DOM:

  8 Responses to “Two live real-time bund trades”

  1. Hey, seems you like to listen to classical music during trading 🙂
    Good trades, but I wonder why you have put sometimes your SLs and some changed targets right before (SL) or in (target moved to 80) the large bids/offers (terrible sentence, but I think you get it).


  2. I usually listen to new age but I thought some classical would calm me down. Plus I’m going to be learning some classical pieces on piano (I’m beginner at classical music & piano both). So far it’s very relaxing and I like it. I like any calming music without words. Helps to relax. If I surf I take my eyes off the charts. If I listen to music I can still focus on the charts.

    i’m not sure what you mean with your question. I was constantly studying the charts and evaluating the odds of it hitting various targets and I must admit looking at my PL and calculating what I need to be positive etc. it’s not my best trading in fact I post that more to write about what I did wrong. 🙂

    if you can refer to a specific time in the video I may be able to recall what I was thinking.

  3. BTW the default target & stop is just a starting point. I always adjust them immediately once I’m in. The stop goes 2 ticks beyond high/low. The targets go at first obstacle, CHVN, then CLVN but I’m flexible as I want confluence with recent price action.

  4. Michael,
    how does it come that you have a mkt depth of 6 levels on your Ninja DOM? I thought it is always 5 and no way to change it.

    Regarding SL and target placement: At 1.20 you moved your SL up to 123.84 – 1 tick below a big offer (1.9k). Would it not make sense to move the SL to 86 and exit if the big offer at 85 decrements – you would risk one more tick.
    At 2.22 you moved the SL right where the big offer where (123.98). At 4.51 you moved you last lot from 75 to 80 right where the big bid where.


  5. If you look in the DOM properties there is an option to show cumulative depth. I always have this enabled. So the 6th row you see is the sum of the first 5. I find it useful to see which side has the most orders as often the market will move to that side.

    So when it looks like I’m putting my stop/target next to a large order it’s not really an order there.

    I used X_Trader for a couple months and had 10 levels and I don’t find the extra levels really useful except to know my place in the queue.

  6. ROFL – that’s it.


  7. Michael

    Thanks for posting your trades I’m new in following FT-71. Can you tell me what the wide light maroon band at the top and smaller one in the middle of the chart represent.



  8. The orange horizontal lines are prices I want to put on trades. The light purple bands around them are the zones around these prices where I will trade.

    There are two parts to this method:

    1 – learning how to determine the zones
    2 – learning how to execute trades at these zones

    I suggest learning #1 and how prices act around these zones before starting #2. It takes a lot of time just observing. Good luck!

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