It's variable based on local bar height/volatility. It's usually 8-25 pips--but the intial entry stop is only 10-12 pips. If you want to catch these 50-150 pip moves you really need to sacrifice your stops. If you look at a high range day (let's say trending up), usually you can make sense of the higher lows but the local highs are like wild west, they shoot up fast and come down fast. But the lows trend up nicely. You can only catch such whole move with wide stops. Chinook
Trading resumes after GLOBEX break ... ... and some trades are visible sporadicly on the downside - from 1.2178 down to 1.2170. Roughly 10-14 contracts total, maybe. What happens ? MarketMaker lies a few pips over and moves things higher ... Sometimes better to not show trades in the book - although MM probably has a good figure on how many are short/long and from where. edit: Actually quite thin right now, so jewish holiday probably has some spooked. At least MM got a coherent orderbook lined up on bid-side now ... edit2: nice book I liked: http://www.elitetrader.com/vb/showthread.php?s=&threadid=34781&perpage=6&pagenumber=5 Jay Kaeppel "The four biggest mistakes in futures trading" It focuses a lot on how to stick with plan, and what common mistakes to avoid. I completely agree with the author on that there is no perfect way to do futures trading, but one can at least try and avoid the common pitfalls. [22:15 EUR/USD: Another Session Of Tight Ranges Favored In Asia] Sydney September 17. Expectations for higher rates in the U.S. slipped overnight as the U.S. treasury"s closed sharply higher on benign CPI figures for August at 0.1% and a Philly Fed index of 13.4 against forecasts of 24.5, which contradicted Wednesday"s Empire State figures. The data lead to a mild USD sell off, with an overnight high of 1.2203. The relatively mild reaction overnight suggests that the market is not heavily positioned and this is corroborated by the thin order books in Asia this morning. There are buyers at 1.2120/25, the overnight lows, small offers above 1.2200, with stops above 1.2220. Tight ranges have been an Asian market feature this week and today looks like another one, with 1.2215/1.2165 favored.
How are you holding up? Are you still short $ biased? Do you have any wisdom for us about what it really takes to survive in this trading business? I guess bottom line is risk management. But how did you keep fear and greed away from your risk management decisions in the past while getting established in your career? Thanks, Chinook
Do you think there's an actual Market Maker in the book? Sometime ago, somebody mentioned that CME hired a guy to keep the futures in line with the spot by arbing. But I'm not sure. I always thought that some independent firms are arbing the futures vs spot and this is what keeps the futures in line with the spot FX. My biggest mistake is not staying disciplined over and over again. Chinook
Yes, actually there are MMs - and they of course get caps and discounts on fees like members etc. http://www.cme.com/abt/news/04-36EurodollarPrograms6260.html excerpt: "CME will also expand on the GLOBEX market maker program in its electronic Eurodollar futures market by increasing the number of market makers allowed in the program from 6 to 15 and by extending the program to include CMEâs regular trading hours session from 7:20 a.m. to 2:00 p.m. (CST). Designed to ensure liquidity, market makers are required to post sizeable bids and offers in designated Eurodollar futures contracts. Participants in the expanded market maker program, including members or member firms that trade at least an average of three percent of regular trading hour volume on a monthly basis, will have all GLOBEX fees waived. For the first time, the program will also allow non-member proprietary trading groups or arcades to participate at a rate of 22 cents per side for all Eurodollar futures trades. The program is set to begin in March 2004." Well, discipline contradicts being dynamic and adapting constantly - so one need some middle way. Of course - the 'mental brakes' need to work, but trying to be totally systematic gives headway (pun intended) to the idea of automated systems trading. Any successful system would have to be quite adaptive in my view ... The book I mentioned is actually quite sensible, and I even think it might have been spread quite extensively on the P2P sharing networks - although it's available free as I pointed out.
Hi Gringinho, These are the eurodollar-interest rate futures not the FX futures. I used to get these confused too. Base symbol is ED. Yes, I try to be adaptive but then sometimes I take unnecessary hits since the rules are not rigid. Then I become rigid and then miss decent opportunities. It's a very delicate balance. This is why I became more interested in stress build up, mental relaxation, how to keep the internal chatter down etc. I exactly know what to do but can't do it all the time. Thanks, Chinook
Yes, you're right ... I knew I had read about MMs on CME before and tried to find it, it just didn't occur to me right now that it was on the ED. With 14 million jews on holiday and the japanese too it could become much thinner ... [23:37 USD/JPY Likely To See Importer Demand Today, Long Week-End] Tokyo, Sep 17. The long Japanese weekend is likely to result in better-than-usual demand for foreign exchange at the Tokyo fix today. Importer settlements are usually large on the 20th anyway and it being a national holiday should boost demand for USD/JPY and, to an extent, EUR/JPY more than usual today. USD/JPY is already a bit on the bid side. Japanese importer interest was noted last night at the New York-London lows yesterday as well, helping to limit the downside to 109.48. Though large oil-related settlements, as that seen Wednesday, are probably done with, other importer-side flows are being seen as well, enhanced by the upcoming fiscal half-end as many look to settle up well ahead of book-closings. USD/JPY sees initial support at 109.40-50. Some light stops may be seen below but more bids are eyed towards 109.00, a leg of a very near-term 109.00- 110.50 double no-touch option position. A series of daily lows are seen down to just below 109.00. Upside resistance today is eyed ahead of 110.00 and then up to 110.40-50. The Ichimoku cloud today is between 109.76-110.51, the tenkan line at 109.70 and the kijun at 110.40. USD/JPY currently trades 109.65/70.
... and what a lame session it is. Extremely lackluster; it seems many japanese are looking forward to the long weekend into monday, and will take no bets. Who can blame them, really ? Why should they take any chances ... [02:04 Japan FinMin Tanigaki - U.S. Should Strive To Cut Deficits] Tokyo, Sep 17. Over Reuters. The FinMin refers specifically to the U.S. current account imbalance. Well, I think the chance of that is similar to the chances of (a) Snow(ball) in hell. edit: no bets from Thomson either -- [03:41 GMT Sydney September 17th] Deficit funding fears were smoothed by the Treasury TIC data overnight, but the CPI and the Philly Fed data came in weaker than expected, contradicting the Empire State data of the previous session and the USD was sold off as U.S. yields slipped lower. The EUR/USD touched a high of 1.2203 overnight and opened in Asia at 1.2182. The Asian market in the EUR/USD has been characterized by tight ranges and low interest this week and today was no exception. The range has been 1.2181/97 in thin markets, lead by USD/JPY. The pairing has been without a trend in recent weeks, as it trades in a choppy fashion, with slowly decreasing ranges in a broad triangular formation. Sentiment in the market is that the range trading is set to continue and volatility has been sold over the week, with no touch options in demand. The net effect of this is selling interest between 1.2275/1.2300 and buyers at 1.2000/25. These structures tend to be self fulfilling at first, but the usual outcome is that when there is a range break, it extends. We have no bias at this stage, but look for a break next week. [01:51 GMT Sep 17th] USD/JPY continues to go nowhere. Early action saw a blip back up to 109.70 on expected Japanese importer settlement demand ahead of the weekend and national holiday on Monday. Exporters were seen to have been equally active however, and USD/JPY traded off well ahead of the fix. It continued lower, trading below the overnight low of 109.48 and tripping some light stop in the 40-45 area and to a marginally lower 109.35/40. More light stops are eyed below 109.30 and 109.20 but bids are likely to be stiff below to 109.00. More Japanese importer interest is eyed there and option players are likely to be aggressive in defending an option trigger there. Option triggers have been noted at 109.00, 108.90, 108.80 and 108.50. Upside resistance is seen stiff at 110.00-10, if not ahead. Japanese exporters are tipped to leaving offers there while Tokyo is on holiday, trailing up to another large batch at 110.40-50 and even higher. Some stops should be seen above 110.50 however, an option barrier. EUR/JPY, for its part, looks to consolidate on 133 now that a bottom looks to be in place at 133.00-10, also 61.8% Fibo retracement of 131.80-135.10. <pre>| [ EUR/USD TRADING PAGE ] | [SPOT] |[TECHNICAL SIGNIFICANCE] |[RECOMMENDATION] | [POSITION] : 1.2325(M) |daily high Aug 23 |flat on a failure | [FLAT at] : 1.2310(S) |high Sep 10, t/l |buy a break above | [1.2175] : 1.2260(M) |failure high Sept 15 |sell a failure | : 1.2225(M) |congestion resistance |sell a failure |Open|16/09/04 [1.2188] 05:00 GMT FRI 17 SEP : | TIME!17 10| : 1.2120(M) |daily low Sep 16 |expect stalling | | : 1.2080(M) |Fibo tgt fm 1.2310-1.2220 |cover on a bounce |TGT | : 1.2030(M) |pullback low Sept 8 |cover on a bounce |Stop| : 1.1990(M) |daily low Aug 30 |take profit, sell break | ============|==========================|=========================|=============</pre> EUR/USD continued trading within the 1.2000/1.2300 range overnight. Price action has been erratic the last 24 hours without testing either side of the range, more consolidation is likely. Intraday traders can sell rallies at 1.2220/30 with stops at 1.2265 for re test of overnight low at 1.2125. We will stand aside for break 1.2000/1.2300.
[14:09 EUR/USD: Back To Session Lows] Boston, September 17: EUR/USD was unable to stage any kind of meaningful bounce after the Michigan sentiment report as it was fairly close to the mark. EUR/JPY selling is the main catalyst weighing on the spot rate at present, sending the pair back to support in the 1.2180 level. A break targets a full retreat to 1.2120. [14:39 EUR/USD: US Yields Drifting Back Up, Helping USD] Boston, September 17: Yesterday afternoon"s strong bond market rally after the disappointing Philly Fed is being reversed in large part this morning. EUR/USD gains are being reversed with it. 10-year interest rate differentials have widened out 4 bp to 12 bp just in the last few hours, supporting the greenback. EUR/USD has given back half its gains from the 1.2120 lows yesterday morning. Next support is at 1.2160/65 where there were a few hourly highs yesterday. Below that, its back to 1.2120.
Two trades and b/e as a result on both of them ... 6JZ4 starts to look tempting and is quite liquid as well, but I just need the patience, although today's session will end with the start of the weekend, so trades need to be kept on a quick pace. [15:09 EUR/USD: Big Selling Leaves Longs At Risk] New York, September 17: With a large short-term model player dumping nearly three quarters of a yard of EUR/USD on the market today, rallies are elusive. The single currency has fallen and looks like it can"t get up. There are stops forming between 1.2140/45 and large bids don"t even come into play until 1.2080. Look for further weakness as a quick sample shows almost no EUR/USD short positions among day traders looking for the market to corrector set to call it a week. Prices have just set a fresh session low at 1.2158 and more weakness is likely. My brain is just not working right now - maybe it had to do with me playing Doom 3 alongside watching the slow-crawling asian session. Well, the sun's shining (like every day with 30+ deg C) and the beach is close by, and a caipirinha (resembles mohito) could do some good - although a little early - but it's weekend soon and the week has been pretty ok.