Leo00o83's Trading Lessons

So long Blogger.com

2010-08-01T19:03:00.000-07:00

On to ETFPROPHET.COM...

Euro Meltup 7-13-10 & 7-15-10

2010-07-18T21:26:00.000-07:00

------------------------------7-13-10-----------------------------

------------------------------7-15-10-----------------------------

Euro Meltup 7-16-10

2010-07-16T06:08:00.000-07:00

Overnight Review

I will post about my previous HORRIBLE trades this week tomorrow. For now I just want to focus on this very trendy Euro action.

7-18-10 Update:

Euro 7-7-10

2010-07-07T10:16:00.000-07:00

Yesterday's >20K volume spike in 10y treasury bond was the topping signal for ES_F:

Happened today too, so expected topping to happen soon in Euro:

Another day another stop loss gunned down for me... I was so close to nailing this one but not close enough.

Massive Euro/Gold Liquidations 7-1-10

2010-07-01T23:59:00.000-07:00

Haven't touched this market till yesterday since my last post. Got stopped out on a badly executed fill after having price go in the direction I expected prior to this trade, which gave me the confidence to make the trade.

Saw big buying cluster (now green, used to be red), then expected price to stay above VWAP but it didn't, got stopped out with -5 tick damage.

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Gold vs. Euro correlation: What correlation?!

Gold's long term uptrend hit the breaks on this liquidation day... tanked over 3%

While euro had a no dip Thursday... up over 2.4%

Also notable on the tape today were big orders at capitulative volume spikes (over 90), either long or short

Euro bumped into 50DMA resistance...

...and made its first significant dip of the day before ramping into 1.25s

Also notice the big sell print in spot Euro on the retest of that 50DMA, these kind of prints happened last week too, so far the most consistent swing buy signal in Euro since I started tracking it:

Euro 6-21-10 New Structure

2010-06-21T06:52:00.000-07:00

Overnight Review

UPDATE:

Took another loss today. -9 ticks damage. I was expecting some kind of 30-40 tick bounce as it did before this major structural change. Well the bounce was very muted and didn't even reach the morning low, which was my target. I heavily relied on the tape since it was so useful to me in the past quarter. I saw some supposedly capitulative volume on 1min chart, a reversal signal and several retests of low but it kept bumping into the same lower high under morning low and eventually returned back to low so I had to cut my loss. Then it broke to a new low and made another leg down with another muted bounce afterwards.

My rationale for buying was because there were several nice bounces overnight and that the theme is still one of squeezing the shorts, hence all bounces should be shallow. *buzz!* WRONG! mean reversion was muted and Euro kept sliding down.

I was expecting confirming indicator in the tape in the form of gradually increasing sell orders to follow the rise in price. (this has happened last week in a very trendy up move on the way up to upper 1.23s). Didn't happen. After the big clusters of long stops getting hit, instead of typical massive buy orders to gradually work into the tape, there were just less frequent long stops getting hit instead.

Euro Short Squeeze 6-14-10

2010-06-14T05:11:00.000-07:00

Overnight Review

ZeroHedge noted this weekend here that long term

shorts *cough SOROS* are not backing off despite this ugly squeeze last night

Euro Action 6-10-10

2010-06-10T05:27:00.000-07:00

Overnight Review

New signals are repeating this week.

Euro Action 6-9-10

2010-06-09T06:35:00.000-07:00

Overnight Review:

Structure is gradually changing: Noticing new continuation signals, lower overnight volume, volume spikes big relative hourly average in 1 minute chart.

Also note this morning: heavy selling in 10y future.

Afternoon Trade:

Saw pretty heavy orders around 1.1970s-80s so I waited for the shakeout 30-40 ticks under that range then bought after it bottomed:

This is the night before ECB rate decision and after New Zealand central bank raised rate to 2.75% on inflation concerns, which helped rally.

It's pretty hard to trade in afternoon since the volume is so thin. This is also a curve ball since its rollover day into September contract.

Euro Action 6-8-10

2010-06-08T06:20:00.000-07:00

Overnight Review

By the way, nice fireworks in TX from the nat gas explosion, 2nd incident this month already...

Euro Action 6-7-10

2010-06-07T06:19:00.000-07:00

Overnight Review

This week's goals:

Only trade on an identified crystal clear intraday theme, add on winning positions, stop when trade does not go as expected up to 1/2 of profit target range.
Study high ATR / low volume signal in Euro
Study Pound's intraday structure as well (today's structure has very interesting high ATR/ low volume reversal signals in 6b_F)

~More as the day progresses...~

Euro Chaos 6-4-10

2010-06-04T17:14:00.000-07:00

This is going to be a LOT longer than usual because I want to cover the whole picture of my decision making on this very eventful day. Today's trade halted my 2 week hot streak. I was not in tune enough to changing market conditions and refused to stop myself out when downside for my trades was, in hindsight, about 3 to 1.

Or so I thought... turned out Gold was a much better indicator of further downside/upside risk

I started out the quarter being cautious and trading only when rigid clear technical themes were repeating. When I wasn't trading I was experimenting; testing out different ways of looking at market with simulated trading. I wasn't trying out new ideas without testing them out first.

I ended the quarter with trading without stops, bad entries with ~3 to 1 downside vs upside and worst of all I added to losing positions when I didn't time it right. I also didn't notice, typically after hot streaks, that I'm not trading any more - I'm gambling to continue my hot streak while ignoring the fact that with appreciating volatility I could of easily erased 4 good profitable trades after adding to a losing position.

I tried to rely on correlations that worked consistently this quarter/month/week but gradually broke down one by one today and when I realized that doesn't work any more I sticked with exclusively watching the tape for signals. The tape is a double edged sword: on "normal" days it is relatively easy to read but on chaotic days like today its almost impossible to keep up with. Flooded with lengthy clusters of big prints, todays tape only made sense in hindsight and even then it was difficult to decipher into concrete signals.

I need to get back to paper trading until I get back on the right track. Even though my account didn't take any hits, the next loss could of been too big.

You can't force a good trade when you're not experienced enough to deal with rapidly morphing intraday structures with unfamiliar themes like in today's chaos.

Euro Chop 6-3-10

2010-06-03T11:30:00.001-07:00

SNB intervention reaction was in the process of being totally erased since it retraced the whole move down almost, filled most of the gap up from 5-18-10:

Expected AUD/JPY and NZD/JPY to breakout of resistance diagonals, which would also help boost eur/usd:

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Update:

Looks like Yen went exactly like I expected, and euro is still bouncing off the high of that breakdown from 1.2180s

Euro Chop 6-2-10

2010-06-02T06:28:00.000-07:00

Noticed selling on the way DOWN not on the way up, and strong selling in spot under 1.22, right off the small retrace from the breakdown to new LOD, essentially a choppy shakeout of overnight longs. All this while AUD/JPY and NZD/JPY (my most risk sensitive indicators in FX) were bouncing sharply.

Update: before the VWAP breakout I assumed the choppy structure was a shakeout of longs and later it was the right call. Heavy selling into 1.2190s before & after LOD shakeout and heavier buying into 1.2180s did lower my confidence into that assumption:

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I also held a very small BP long position overnight. Rationale was that sentiment was extremely negative after a -15% knockout punch. I also wanted to pay more attention to the whole oil spill charade and the best way to do that is to be long oil rigs at the center of this deliberate terror attack (notice GS date of sale) like BP. Overnight risk is just way too big for me. Its far better to scalp them than holding O/N. Got out +$.80 in early morning before open.

Euro 6-1-10 New Month & New Low

2010-06-01T07:27:00.000-07:00

Overnight Review:

Screens:

Scalped short 1.22 on big buy cluster, exited 1.2193 (held through shakeout to 1.2205)

Notice big buying on the highs

and any price till 1.2350's - could be a multi-week low?

Euro Action 5-27-10

2010-05-27T08:05:00.000-07:00

Very nice day indeed :)

5-26-10 Euro Action: The Barely Tradable Noise is Gone!

2010-05-26T06:47:00.000-07:00

Overnight Review:

Started to break down on rumors:

Big prints

Made my first trade in over a week since it was a barely tradable noisy structure the whole time. Now it is surprisingly back to its "normal" structure now and is very tradable again. YAY! :-D

5-24-10 Pre-Open Magic Monday ECB-SNB Street Fight 2.0

2010-05-24T05:51:00.000-07:00

5-19-10 Euro Chaos (big spike screens)

2010-05-19T07:00:00.000-07:00

Euro Action 5-18-10

2010-05-18T09:31:00.000-07:00

Update: well that didn't last long! euro crashing after a perfect LOD bullish signal, ouch. Good thing I sold 8 ticks higher

Euro Action 5-17-10

2010-05-17T22:18:00.000-07:00

Tape reading has been crystal clear lately, and it paid to listen to the tape more than technical signals today, and most of last week.

Fadable might not be a legitimate word, but still...

Nice long signal in Dow cumulative tick today, been repeating good signals lately:

Euro Action 5-14-10 Sarkozy rumor / almost '08 low tag day

2010-05-14T10:01:00.000-07:00

Heavy buying of 1.2450-60s range

Followed by another leg down, resistance diagonal break since late morning and rally:

Internals heavily pointing down for indexes, ES_F "underperformed" USD/JPY (made lower lows when usd/jpy made higher lows) before the big move down:

Euro Action 5-13-10

2010-05-13T12:07:00.001-07:00

5-12-10 Euro Action

2010-05-12T08:42:00.000-07:00

Must adapt... Must adapt... Must adapt... Must adapt...

Salmon Run of Thursday 5-6-10

2010-05-11T08:20:00.000-07:00

It was a big High Frequency Salmon Run indeed.

Was at a Station casino here later that weekend, saw this and knew I had to capture and post it here.