misctrader-- the way your are figuring risk/reward is bass-ackward. The risk is where your initial hard stop is, and the reward is where you can reasonably expect the trade to go if it works out. All of this is known before the trade is opened. Furthermore, if something changes after you open your trade that significantly reduces the probability of success, it is correct to close the trade right there/tighten stops, even if it's only a 1 tick profit. It doesn't change what the initial risk/reward was (the original motivation for the trade).
peter: I understand that. Point taken. It was just that Friday's trade was too "scared" and the chart showed there could be a reversal which I waited for on Monday and luckily closed out with a small profit instead of a huge loss. Normally, I wouldn't try to do this! Anyhow, you know how the CBOT electronic hours work? Because on the website it said it's closes at 4PM CST. Which is true. And doesn't open until the following morning. But now, I see ZN quote at 111'10!! That would have been 6 full ticks! Instead of the 3 full ticks I was forced to cover before 4PM CST close. I wasn't willing to hold overnite. But I was willing to trade afterhours if it was available. hmm... misc
>>And doesn't open until the following morning. Trading Hours Open Auction: 7:20 am - 2:00 pm, Central Time, Monday - Friday Electronic: 7:00 pm - 4:00 pm, Central Time, Sunday - Friday Trading in expiring contracts closes at noon, Chicago time, on the last trading day.
ckor30, yeah. really really ODD! I wanted to short some ZN. But I didn't because of memories from last Friday's strong rally and that I barely got out alive. It was too strong. What I should have done was follow my own TA and went long for the ride. Intraday was like more than 17 full ticks! More than all the ticks I've gotten trying to short it. Sometimes, markets ignore fundamentals. Or put it another way, you could lose your shirt trying to trade on "funny-mentals" if you though inflation would be bad for bonds, which it should be. oh well. misc
'Flight to quality' out of corporate bonds into treasuries (following GM concerns), and rotation of cash out of equities. Scared money just rotating around the market - yields will go up ... eventually.
thats what everyone is saying, that yields will go up....maybe the market knows something we dont or is trying to tell us something and we arent listening
Just so you know the Bonds are only closed on the electronic between 4pm and 7pm every day, you read the hours wrong. Thus, they are open 21 hours a day, and then the pit opens at 7:20am and closes at 2:00pm, with settlements for the day at 4pm going off of the pit settlement at 2pm. As for what bonds are telling us, in my opinion the long end of the curve is right, there is no inflation and not enough job growth to keep the economy growing at the current pace. Not to mention the possiblity of new regulations concerning pension and insurance fund portfolio holdings to match long-term liabilities. On the other hand, the Fed has signalled they will keep raising rates and are worried about inflation increasing rapidly. How to take advantage of this, put on the curve flattener trade, sell Two-year note futures or Five-year note futures and buy ten-year note futures or 30-year bond futures. Just my opinion.
The curve flattener was a hot trade on '04 but it hasnt really done much this year so far, just keeps bouncing around.....not sure if it has just paused or if it still has room to move like last year
Looks to me like 111 is a critical point today. Bottom of a 2 day trend channel but also bottom of a 3 day hinge. Personally i'm hoping for a breakdown here.