Not really for me to comment but I don't like the look of your Eurodollar spread at all (EDU6-EDZ5). Looks as thought it's seasonal trend came early this year. That said you're only half way thru the seasonal window and have the whole of October for it to make up for lost ground.
No...I don't like it all either. When I got into the trade there was a "ross hook" at the time, and the spread was trending up. Of course, as luck would have it, the spread immediately took a turn to the left , but has started to trend back again within the last few days. My plan on the Eurodollar trade is to continue to hold it for awhile and see what happens - I've made for myself a mental stop on this trade of $500 - to be honest that number is somewhat arbitrary but is loosely based on the drawdown amounts that you see on the MRCI Spread Strategy.
I'd hold on to your K wheat spread - I'm thinking of getting in myself (Buy Dec Sell May) on Monday.
We're both in the hog trade and it's looking good so far. Text book start. Time to pyramid?
I don't know enough yet about pyramiding, so at this time I will sit it out. It seems like you would want to pyramid at the time a retracement occurs in the spread. What do you think ?
Can I ask you a question? How did you end up with 2 KW contracts? Did you pyramid in when it was going well? Obviously your business so don't feel compelled to answer.
Well, the first KW trade was my first spread trade. After reading Joe Ross' book on Spreads, Abel's book on spread trading, and most of the posts written by Goldtrader, I veered off from the recommendation that they give over and over and over - I bought MOO instead of MOC. Because of this I was down $275 the very first day. I complained about this to my broker and he gave me an explanation I wasn't real satisfied with but took it anyway and have chalked it up to experience. Just like in my 8-5 profession (I'm a criminal defense lawyer) you learn so many of your important lessons the hard way unfortunately. I still felt that based upon the other Kansas Wheat trades performing so well up to that point , and doing what little research I know how to do, I couldn't find any fundamental reason why this spread would be any different so I decided to enter one more contract the next day MOC (!!) . I still feel pretty good so far - based on the past drawdown amounts that you see in the MRCI Spread Strategy for this spread, the current drawdown is not that significant. Also, I subscribe to an email that is sent out by the KCBT (
www.kcbt.com) that updates on KCBT wheat trades twice a day. I find it is a good source just to read and watch as this spread develops. I only wish I could find somehting similar for eurodollar /interest rate products.
Please keep me informed about how you are doing. Just remember that I'm an extreme "newbie" at this - in other words, I know enough about spread trading to be dangerous. (dangerous to my wallet, that is).
