Guess I'm squeezed...... S 10 Bonds. Still. Puked some Beans today. Very painful. Paid 51 freakin cents for 5 puts that I sold for .20 and lost a dime (9.5 cents) on 5 longs from 744. Still long another 5 beans from much higher. Long a 20 Corn against 10 nearby calls and 10 far OTM Jul calls. So long basically 14-15 Corn. (figuring that d in my head atticus, don't know no Greek) This Soybean trade has been like so many huge losses that I've suffered over the years because of carelessness. It all started with some put sales that were immediately in my face. Then a couple of ok scalps in the same direction. Ultimately followed of course by the "scalp" that's so ill conceived it becomes part of my Bean portfolio. The last adds are usually at great levels as were some of these, but then the exits become key. Twice I was within pennies of scaled up exits that would have saved me literally $15,000 from today's prices. I'm pissed at my self. My subconscious saw Beans possibly going to 720 when they were at 780. Beans have been trading weak to Corn for a year and gave a renewed tell in the past week. I was lackadaisical. I truly felt the market would do more work chopping around the 750 area then it ultimately did. I let my profits in Corn (not just from my recent journal trades but also the longs I had on from Oct-Mch) distort my risk tolerance on my grain positions. I'll admit it, I got freakin' greedy. Non index products are great for guy's who want explosive performance. I could never margin and carry these positions in ES. Thus it's so easy to conjure up images of doubling up on winning commodity, bond and Currency positions.
I'm trying to keep away from the trading screen and my computer. Obsessing over the "last" provides little added value to me. I've sold an additional 5 ZB at 111.16 and paid 720 1/2 for 5 SK. Positions: S 15 ZB, L 10 SK, L 10 CK, S 10 CK 360 calls, L 10 CN, S 10 CN 4.00 calls
I probably could have let my CK futures get called away but I didn't want the risk of not being exercised so I liquidated my futures and options on the close yesterday. I gave up a quarter cent to do it (1 in the 360c against 360 3/4 in futs). All and all a great trade as I pocketed 6k on those calls against a 2k loss in the futures (5@55 and 5@73). Talk about working out of some horseshit. Leaves me with 10 CN longs paired against S 10 CN 4.00 calls. Still S 15 ZB. I'm flexible on Bonds. I'm bearish but I need to trade my money a bit here. I'm long 10 SK. Emotionally I'm married to a long bean position, particularly after the hit I just took on them. I'm also on guard though that a break to 680 could be in the offing. I'll roll SK into SN on Monday and I'll price a 720-700 2-1 ratio put spread. A few weeks back I mentioned I was semi bullish on the Pound and I intended to put on a ratio call spread. I called the CME floor and got some ridiculous market so I bagged the idea. I thought about legging it but as you all know getting caught long gamma in currencies has been a crappy proposition the past two years. Down the road I'll try to hook up at Oanda and participate in some of their products but for now I have no access to anything other than exchange traded contracts. Sigh.
Fortunately I lost those May Corn longs on Friday. I 've sold 7 of my 10 beans this morning (1 at a clip) at prices ranging from 722 1/4 down to 720. Any new Bean longs will be in July. Sticking with the July Corn. Sticking with Bond shorts although I've been a 110.31 bid for 5 all night and day. Positions L 3 SK, S 15 ZBM, L 10 CN, S 10 CN 4.00 Calls
Geat journaling Pabst, a lot of traders can benefit from what you're doing here, just by taking your trades and reviewing them (if anyone even thinks about trading as many instruments as you're listing here) as well as looking over the various trades and trying to piece together how they would do it with good money management. Which leads me to a couple of questions. How can you realistically keep track of all o these markets and trade them with the highest edge possible? I would think that tracking more than 3 or 4 (out of all the markets out there) would become fairly difficult, unless you were partially automated. Also, what is the point of trading redundant markets? If you break markets down, pick a Financial, a Note, an Energy and maybe a Currency and/or an Agriculture I would think that would be a pretty sophisticated futures trading portfolio, and would be relatively easy to keep tabs on once you get in the groove. Just some thoughts. Good trading, Jimmy Jam
Thanks for your interest in my journal Jimmy Jam. Try saying that a few times really fast. Now back to my soapbox about edge. Since 1982 99.99% of my trades have been in just 3 markets, Bonds, Eurodollars and NQ. As a local in the former two markets I enjoyed that mythical floor traders edge. In addition I knew everything there was to know about fixed income markets, i.e. the yield curve, corporate issuance, auction levels, economic releases and who the players were and what motivated them. At some point in the 90's, perhaps the fallout from LTCM or perhaps because of the cornering effect from Asian Central Banks, I found the credit markets to become less predictable than in earlier periods. Unfortunately it was only after losses of over a million bucks that I reached that epiphany. In 2002 I started trading NQ because I liked the transparency of the underlying cash market. Even though I didn't make a dime trading it (I lost probably 30k in 4 years) I had lots of fun. If I'd bitten the bullet and leased an IOM I could have made a go of it (my commissions were in the 10's of thousands each year) but alas I tried to stay retail and bot's have cleared away what used to be a nice tape racing "edge." These days I'm not sure if product specialization and the specific knowledge inherent constitute anything beyond a wee intellectual edge. Yea, I notice my Bond trading is the best thing I do but IMO that's just been random luck and not because I actually know what I'm doing. My counter argument with myself is that from a micro perspective traditional commodities have the least amount of available fundamental data. A guy can sit down and trade EUR with ED and Euribor quotes and probably figure out a way to scalp EUR successfully. There's no way that Beans can offer a tell of such type. Let alone Coffee or Cocoa. Hence commodities for the short term trader are edgeless. I think in most cases though we can assume short term trading is edgeless for those who aren't directly trading against disadvantaged retail clients. So I'm trying to take shots devoid of edge, lol. As far as correlated markets: Here's the dope. I like to look at multiple items within an "asset" class. Currencies: BP, SF, EUR Grains: Beans, Corn and Cotton (CT isn't a grain but it shares land with the others). I've never traded a contract of Wheat in my life and I follow the old adage, "gentlemen don't trade Oats". Fixed Income: The entire Treasury curve as well as Europe (I lack Eurex and LIFFE quotes and it's a detriment) Indices: All of 'em. Spreads give fantastic information. Look at today in grains. Corn being lower says something bearish but Beans being strong relative to Corn speaks volumes. The market's saying "great planting weather equaling an abundance of Corn with Beans not going into the ground as aggressively." You can get that skinny easily from spreads. Multiple markets in a class also give trading opportunities to go with the strong or weak hand. There's been times where you could be short YM and add in a strong market and be able to get out ok on a decent rotation during a period when shorts in NQ or ER2 would rip your head off. Or visa versa. If a guy was bullish on the dollar the past two years and shorted JY he's up a fortune whereas if a dollar bull shorted AUS he's toast. Monitoring is tough and I need to develop rules and automate to some degree even if it's idea generation rather than actual trade entry. I'm a work in progress. Even after 25 years.
My lack of practical options knowledge is amazing. I'm a 6 cent bid in the CN 4.00 calls. Corn needs to be down limit all week if I'm to get those. Instead I'll do what option traders are prone to do, I'll turn it into a spread.