November 14, 2013 - MDT Pro Tips A.M.
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.
Current Positions
Long SSO ? ? ? ? ? ? ? ? ? ? ? ? 91.60 ? ? ?? 91.60 ? ? ? ? ?? 102
Long SSO???????????????????????? 94.98??????????????????????????? 102
Long DXJ???????????????????????? 48.46??????? 47.20???????????? 53
Long TBT???????????????????????? 77.40??????? 75.20???????????? 82/90
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Today's Working Orders...
BUY TBT? 1/2 position @ 76.20 GTC
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Stocks..
Spu's...have come a long way. We'll have to monitor the pullbacks today to see where they hold on breaks.
?
Bonds...
30 yr. Bonds...133.11-15 would be a low risk sell zone. Closing over 133.24 would put the Bonds back on positive footing.
FX...
USD/JPY...98.85-99.15 is the Yen resistance zone. App 100.88-101.24
Futures. Keep selling before you buy Yen at this zone until proven wrong.
Commodities...
General Comments or Valuable Insight
YESTERDAY WAS A GREAT EXAMPLE OF TRADING THE PRICE ACTION AND TIME FRAMES.
The Equities opened on their lows, with the Equity Indices immediately braking out of their respective opening ranges to the upside.
After the initial selling in London,?every major time frame held and closed higher.
We put out Stop close only trades before noon CDT knowing that closing above these levels would lead to higher prices.
The difference between a great trader and an average trader?is one who can see that they need to lead off on the stop close or pay up later at a higher level. This is the Art of Trading.
My schedule didn't allow me the time in front of a screen yesterday to watch so I paid up on the close.
The previous few days, this discipline saved us lot of money by not chasing the rally at the wrong levels by buying prematurely.
Stop Close Only orders are a two edged sword. You want to make sure the break out is occurring, however you don't want to be chasing a big directional move that skews your entry level giving you a much bigger stop and risk profile.
Such is trading. There is no right or wrong here. Only an observation that the intuitive Trader knows when to lead off. Most times they are correct, however when any active trader?sees?they are premature they?just bail on the position and wait to give it another go.
In yesterdays webinar we focused on how the black boxes (Bots) swept the order books looking to elect stops at these OR levels. We endeavor to give you levels of inflection to watch for directional follow through or price rejection.
Knowing where to look is half the battle.
Failure to follow thru gives you a tight stop level?for a contra trend trade.
New lows or highs followed by a quick reversal gives the active professional risk definition to make a trade against the grain to see what develops. These can turn out to be big home?runs.
You just never know for sure.
What you do know is your risk to give it a go.
We bought a small piece of the TBT (short Bond Trade) to leg the Spu/Bond.
Short Term View...
Keep trading to make money. The opportunity will be in individual names.
Individual stocks look to be an easier read based off their own technical s. The Equity Indices seem stretched at these levels.
Go with the flow. Use the 9/30/13 ( September 30th) closes as your macro pivots. Trade the opening ranges and early time frames.
For Glossary of terms and abbreviations click here.