Trading the Indices on Fundamentals

Discussion in 'Index Futures' started by FXtrader8911, Jun 18, 2019.

  1. 11AM, US Futures all settled down already, y'day rally has all but evaporated. Got out of my ASX:WOR direct shares at $15.50 and increased my NIK225 Shorts at 21,795 (pre-market)
    #41     Jul 1, 2019
  2. Interesting development after the European open... S&P500 futures starter rising, now just 1pt away from an all-time hight, but the VIX is also rising (by over 1%). I see this as a sign that dumb money is buying but smart money is taking out insurance against a sell-off. Time for caution especially since the US is closed on the 4th and the bots will therefore be free to cause havoc without the humans countering their wildness... remember Feb18 when bots caused a 2k pt (DOW) movement.
    #42     Jul 3, 2019
  3. French PMI just came in at 52, German is 55, US came in on Monday at 51. These figures make me comfortable on being long EU & short US. BTW, S&P just broke the all time high (now 2,980), the VIX remains positive despite.
    #43     Jul 3, 2019
  4. Y'day was shortened trading in the US, still, the DOW returned to its high. We were there also on Jan18, Oct18 and April18, all 3 previous tops were followed by a serious sell-off... 3.5k in Feb, 3k in Oct and 5.3k in Dec, will history repeat?

    There is a proven patern that shows new highs can't be made until the previous low has been taken out (the flush-out principle), the Dec sell-off did indeed take out the Feb lows so technically, new highs and a surge beyond should be able to be made, however, changes in the fundamentals since the Dec low make this unlikely. Unless there is a decisive surge going beyond current levels, I would say that history will repeat and a correction is the likely outcome.
    Last edited: Jul 4, 2019
    #44     Jul 4, 2019
  5. To be a successful trader one needs to develop a strategy that will work in all market conditions, start by studying the methods of some of the most successful traders and investors of our time, learn from the best and combine their methods:-

    W Buffet: Be greedy when others are fearful, be timid when others are greedy
    Medallion: Have a clear view, let the objective reach whether it takes a moment or seasons
    Edd Thorp: master hedging and scale out of losses
    Victor Niederhoffer: Don't play the other person's game
    Stanley Druckenmiller: Watch the market insiders to predict economic slowdown

    We each need to develop our own style revolving around individual life constraints and comfort levels, trading is challenging for all but the ones that find it satisfying will be more successful than the ones that find doing it frustrates them, trading is not for everyone.

    Besides developing a good strategy, a successful trader also needs to preserve capital, placing S/Ls isn't always the best way to preserve capital as many STOPS in a row can deplete capital. As Edd Thorp said, if you can master hedging, this will keep a status quo even when markets turn against the positions, hedging can substitute S/L and magnify results. Indeed good trading requires to be in the right direction most of the time, but even this, requires protection against temporary reversals... STOPS can often turn an otherwise good position into a loss, hedging, as an alternative to S/L and when done properly, can save the position until the temporary reversal recovers, and, can itself generate a profit.

    Hedging does have a cost but using it can also give the trader >3,000 ROI compared to >200 ROI when using STOPS on the 1:3 principal. So, if you scalp just on technicals then continue with the S/L strategy, but if you trade on fundamentals then hedging is a better way to go... remain convicted to the fundamentals (Medallion's strategy) but take out insurance against sentiment swings, when sentiment goes against the fundamentals then, rather than STOP the positions, add to them, being hedged will allow you to do that and come out the other side with 6 fugure profits.
    Last edited: Jul 6, 2019
    #45     Jul 6, 2019
    Quocquang and Utah like this.
  6. Overnight


    #46     Jul 6, 2019
  7. The ASX opened lower and kept on falling today, a sea of red, just about every name is down over 1%. It always amazes me how a company can loose $m in capital value for doing nothing. As the saying goes... when the US sneezes, the rest of the world etc.
    #47     Jul 7, 2019
  8. Today's trades:
    Closed 400 NIK225 Shorts at 21,538
    Entered 5 NDAQ Longs at 7,763
    Also working limit orders: DOW Buy at 26,729, S&P500 Buy at 2,953, FTSE100 Buy at 7,480
    #48     Jul 8, 2019
  9. Overnight we saw another lacklustre session, uncertainty on what the Fed will do and whether Trump is cool with zero progress on trade is keeping corporate America paralyzed, capital expenditure is at a standstill negating the stimulus of the tax cuts with companies preferring to use earnings to buy back stock rather than decide to spend on cap expenditure.... good for markets but not for the economy (and eventually not good for markets also). Trump is right in saying that markets would be 10% up if it wan't for Powell. I think that reporting, starting on the 15th, will mostly disappoint and might be the trigger to get markets to move lower (PE is kept high due the buy-backs but profits will give the true picture).

    No trades for me overnight, prices too high to go long and I'm already short... it's a waiting game for now.
    Last edited: Jul 9, 2019
    #49     Jul 9, 2019
  10. Overnight


    China CPI at 9:30 PM ET, might have an impact.
    #50     Jul 9, 2019