1. There is a STRONG and URGENT need to be able to develop the art of being able to spot the broader (2/4 hr) trend in the market. This probably must start with asking this basic question multiple times a day – “RANGE or TREND”?
2. Z5 broke 9863.0 to the downside, after having supported THRICE on 60 min chart. After the first spike down, it came back up to 9862.0, and paused. Absolutely missed spotting this in real time! Whereas this was a trade that I should have been waiting for.
1. VERY poor discipline early on in the day. Held U5 o/r 10 lots against for 6 ticks, and then did a revenge average by adding another 20 lots! Booked everything 1 tick below. Day stop.
Counting Friday, this was day stops in 2 continuous sessions.
1. Regaining some cool and making back everything in gross.
With the increased volatility, the Friday unidirectional are getting even more violent.
1. Being on the wrong side of the Friday american hour move, CONTINUOUSLY! Even taking a double tick loss on 3-month spread.
2. Loss of discipline in o/r loss booking during ^^ move. Day stop.
When USDJPY broke 102, and S&P rallied to a new all time high, our markets didn’t sell off immediately. But there was no point holding flatteners (specifically this time – but in general any wrong side spread for scratch), and leaving them overnight. Especially when you have the chance to make a fly. (Think scale).
Pretty significant steepening during the Japanese hours yesterday. This happened due to USDJPY breaking the 100 level, triggering PRDC flows. Since the USD was strengthening, banks had to hedge by selling in the long end of the curve.
We had a meeting early on in the day in which our Head of Trading told us how such a thing was significant (trading-wise) and how it being Friday today, it was very likely that the direction triggered during American hours would continue and exaggerate without retracement.
Being prepared and taking trades on the lines of what was discussed in the meeting.
1. 10yr US treasury paused at a significant level (132.065), and had a small retracement. Was alert and took short in outright at this point.
Couple of ticks below, when it paused again, I thought I’ll play a small retracement yet again, but ended up making a SHORT 9 month spread. And almost within minutes, there was a spike down and my spread got blown. I did not make any money on the trade + missed the extra down move.
2. Took a 3 month steepener with 35 lots. And scalped 2 ticks on it! Also took the adjacent spread and scalped 1 tick on it with 50 lots.
Had positions in a 1yr fly and a 6 month fly, with 30 & 20 lots respectively. The 1 yr fly kept drifting into more loss, and still I did not get out. Partially this was because I took was making some money on the steepeners i took, and hence let my losses ride here, just hoping that the fly will revert. Never did I realise that I was down 30*7=210 ticks just on this position.
Need to ensure that I follow my rule of booking loss early, not just on outrights, but on any damn position! Had no business holding that position when it had broken some significant support levels.
+ve s AND -ve s:
1. Identified 9930.0 to be a good resistance in U5. Went short with few lots as at least a short term hedge against ALL my other (steepener) positions.
BUT didn’t hold on to it. Instead, made a short spread which got blown much too soon :-S
2. Bought Z5:H6 when the outrights looked a tad bearish (after #1 i.e.).
BUT when again when 16.5 in Z5 was holding, didn’t try and leg out, even partial lots.
3. When 9930.0 got blown, in U5, didn’t go long immediately.
BUT went long only 1 tick above, and that too with less lots, for that scalp.
4. #RedFlag -ve only
Suddenly went in long with 30 lots although market had become sticky. (1st mistake – Usually took trades with a clip of 10 today – too much increase in exposure). Abruptly decided to make spread since I wasn’t getting scratch. That too a 15 month one by shorting H7! Suddenly H7 spiked TWO ticks up, I booked loss, WENT LONG, and booked loss again when it retraced.
Learning: More often than not, the far months exaggerate and the move is > 1 tick. So, it is best to book loss at the 1st tick, especially when the entry was not planned. Because I held my position, had to panic and get out at the next tick. And consequently, got into REVENGE mode, and paid the price for indiscipline.