they are definately not illiquid ! I agree with you on the extreme choppiness except when they are trending intraday
The question is why would you want daytrade the Bonds or Note or Currencies(off the floor of course)? You simply don't need to! IMO you waste too much time and energy trying daytrade the Bonds rather than giving them a bit of room to run. But this assume that one's account is sufficiently capitalized to do so. Also one needs to be in the proper frame of mind to allow them the room to let them show you what they want to do. I've said it before(even in this thread I believe) that Bond and Currencies don't trade like shares. Don't try to force them to. Don't try to force them to play your game. Watch them closely, they'll tell you what you need to know. Regards, Dr.Zhivodka
Would someone kindly explain what a bond vigilante is please. Aaron Trask used the phrase without defining it in an article after the first day of Greenspan's testimony before Congress two weeks ago and I've seen it several times since. A Google search isn't helpful unless you need some material on Charles Bronson. Geo.
Berkshire Unloaded Huge Slug of Treasuries Last Quarter By TSC Staff 08/09/2003 03:20 PM EDT Pundits groping for reasons to explain the selloff in Treasuries over the last few months might consider Berkshire Hathaway's (BRK.A:NYSE - commentary - research) second-quarter earnings statement. Warren Buffett's investment vehicle said it unloaded a portfolio of long-term government bonds worth more than $9 billion before the end of the quarter -- just before rates took off The company put up $900 million in investment gains during the latest quarter, about $600 million coming from the sale of "virtually all of the long-term U.S. government securities held in Berkshire's actively managed, fixed-income portfolio." The sale added $9.1 billion to Berkshire's cash equivalents, which vaulted to $24.4 billion from $10.3 billion at the end of 2002. http://www.thestreet.com/_tscfoc/markets/marketfeatures/10107193.html
As far as illiquid, I meant the currencies like EC or CD on a 5 minute or under chart. _____________________ Zhivodka is right about them not trading like stocks. I think the key might be some kind of MACD or moving average cross or trendline break and then a trailing stop loss that allows them to rattle around in the direction of the trend. All that being said, I don't trade bonds or currencies (yet) and this is all just my humble opinion.
Dr. Z for a system trader like myself, your advice makes as much sense to me as someone saying buy low sell high. Would you care to elaborate? Thanks
Hi Chessman, Yes, I knew that I when hit "submit" This is a problem when trying to fit 14-15 years of trading into a quick off the cuff paragraph. First, I don't have time to answer fully. Sunday BBQ. Second, I'm not a systems trader per se. I use a certain set self-developed protocols that roughly mimic an expert-system(me). Trying to developed the ultimate system always seemed like an exercise in futility to me. I've developed thousand of systems. Some of which were very profitable but none of which were terribly satisfying. You're always going to be chasing your tail in systems development. So the quick and dirty is that I can't always describe what I see or feel in market place. It definitely doesn't fit into nice neat system package. But I've done it since '88-89 and it seems to work. I'll try to be more verbose in follow on posts. Regards, Dr.Zhivodka
It basically means that 'the tail wags the dog.' The market rules the political bullshit, not visa versa. The Executive branch of the American triumphant often likes to ( pretend ) believe that they are in charge of certain policies. The Bond vigilantes often must remind them, sometimes violently, that they only imagine that they are in charge. The market is the arbiter. And price tells all. Regards, Dr Zhivodka
Bonds inflict pain. Squeeze or be squeezed. Just that simple. And for some stupid as yet to be explained reason I can scalp ES for three tics a pop, and yet I get shook out of the bonds every time I try to scalp them as of late.
The bond vigilantes enforced the notion that smaller deficits meant lower interest rates. So if some politician did something that would increase the deficit - bonds would sell off raising interest rates and scaring the politicians. However, bond vigilantes may be passe in an era of deflation. If deficits can increase and interest rates decrease or trend neutral - then the vigilantes are out of a job.