Bone: Trading the 7th

Discussion in 'Trading' started by bone, May 6, 2010.

  1. bone

    bone ET Sponsor

    1. React to the market, don't sit in a position waiting for the market to confirm your bias - you stand a 50% chance of capitulation even if the market eventually proves your bet.

    2. Don't fade alone. If for example you want to fade a 2 sigma move, fine. Rather than hold up your arms and declare to the world: "that's far enough!", wait for some other like-minded souls to join you - then, race them by giving up edge at the market to get in. It's smarter to give up some range in exchange for knowing there might be some other order flow with you. Besides, you need them to make you a winner.

    3. Relative value spread traders always do really well in periods of extreme volatility. The primary reason is that they usually have great perspective on what's 'rich' or 'cheap'. The other reason is that historically-correlated spread trades have a mcuh better chance at mean reversion than a flat price instrument.

    4. Know the exchange rules to game the system for fun and profit. Know the exact conditions and regulations an exchange uses to bust a trade. My best trade was made 6 seconds after the U.S. released it's civilian unemployment number and I bought 800 Liffe Euribor futures 5 tics from the exchange daily trading limit. And the Eurex Shatz was only off 12 tics for the day.
  2. I've hit the "COMPLAIN" button on him at least 10 times.