Dow 2007

[brutusdog]

linesniffer,

bingo, you guys are much more concise than me....

 

[lurkerlurker]

I don't know if that "live book" shows all the orders or not, but the prices seem to be RT. I think it may only show 10 orders each side.

Anyways, if you look at the Dow minis, people are looking to buy a few tics above the support at 13300. I assume that the YM will be the small money. Correct me if I am wrong, but I am guessing that the institutions and the big traders trade the BIG DOW. The BIG DOW is $25/tic - I know they all use margin etc, but does one DD contract have a notional value of around $333,000?

I see a BUY order for 10 BIG DOW contracts at 13292 (may make a good short term target). Furthermore, there are buys at various levels right down to an order for 7 at 12750!!! Correct me if I am wrong, but does that mean that there are large traders (BIG DOW) looking to buy on some small retracements back south?

Also, a good deal of shorts around 13330. (makes me feel silly for being short from 13309)

This is a live orderbook, so if things are different when you all check, my apologies.

Could anyone with more experience of trading by the order book than me look at it and comment?

 

[frugi]

LL,

1 lot of DD has an NV of $333k as you say. But the DD contract is barely traded, 50 lots a day if it is lucky, whereas YM usually trades between 100k and 150k lots. There are plenty of traders throwing 30-60 lots around in YM which is decent size, though small compared to traders doing 500 or 1000 lots in the ES.
DD was launched quite recently and so far has failed to attract business. This lack of interest makes the order book illiquid: whereas in a liquid contract like YM you'd see orders at every price level 10 levels from the current bid/ask (though not at 4.47 AM US time when you posted), in DD there are only a few scattered around. Yes someone wants to buy 7 at 12750 but that information in itself is not very useful.

 

[lurkerlurker]

Thanks frugi - I'll keep my eye on the YM order book instead. I'm still short from 13309.

 

[lurkerlurker]

Interesting - just got another entry signal here. At the same price I was already in at. Looks like I'm holding this short for now. Anyone else with any new positions?

Also, does anyone know if smccreedy covered his 2 YM shorts from 131--?

 

[Pat494]

Looks like a flat opening, but keeping in mind that the underlying trend is up.
Oscar forecasts down.
Sitting on my hands till first 1/2 hr is over, it should be clearer by then imho

 

[lurkerlurker]

Yes, the underlying trend is up. I am holding a short from 13309 in the June Future. I have a stop at 13339. I am hoping to hold this position for a few days, maybe even until the end of the week to profit from any correction / pullback in the uptrend. With such a tight stop loss, am I being rather silly by holding a position before the open?

Maybe I should cover before the open....

 

[brutusdog]

have the reasons you entered the trade changed, if not then why get out?...

 

[lurkerlurker]

Hi brutus

Hopefully you can give me some advice on this before the open.

I sold in the June Future at 13309 because of a moving average crossover, MACD and RSI indications, 10 minute candles confirming 1 minute, and because the level was quite close to the all time intraday high - so I would know pretty quickly if my bearish sentiments were wrong. It would only take 30 tics to make a new high, which would cost me a chunk of change but nothing too serious that it would blow my account or anything. Given the potential upside to this trade (a correction down into ~13270) I deemed it to be a good setup with acceptable risk reward.

Now I am worried because my position is now 10 tics against me, plus a 7 tic spread. I am now worrying that a temporary spike at the open could blow out my stops before the market heads south without me. Not too sure whether to cover at a loss and try and get back in around 1500 when the trend is a little clearer, or to stay in and risk the spike.

My reasons for entering the trade haven't changed, but I'm not prepared to widen the stop. If my stop is hit, even if the market only stays there for a few seconds, the Dow will have hit a new high and I probably have no business being short anyways...

Not too sure what to do here - last Tuesday's messup with the cancelled limit order has shaken me a little. I'm pretty unsure of myself at the moment. I think my reasoning for taking the trade was sound...but what do I put in my trading journal if the market stops me out with a 30 tic loss and then heads south without me, when I knew that was a likely possiblity?

Not too sure what to do here 'dog.

Advice and suggestions apprecaited.

 

[firewalker99]

have the reasons you entered the trade changed, if not then why get out?...

very good... and concise

trying to stay objective here but so far European markets haven't been able to make much headway... so for the first time I might be starting to get a short-biased mind after all! but let's wait and see..

 

[lurkerlurker]

Postscript - in the futures market all morning, the resistance level at 13320 has been tested twice and it has held. Support at 13300 has also held. Since the market isn't going to stay within a 20 point range all day, one of those levels is going to be violated. Also, I've been looking at the CBOT YM order book, and since I am not used to reading level 2 that is messing with my established rules, patterns, and confidence of interpreting price and charts. Every time I see a bunch of buy orders at my entry price, I panick that I've just sold a low....

 

[brutusdog]

fwiw if the price makes a new high and you dont want to be short your stop is in the right place. prehaps you should look at reducing your stake size next time if your unsure about holding a position maybe you feel you have too much risk? also why use a 1 min chart if you want to hold the trade for days? its such a short time frame you might become negative on every bar that go's north. just my opinion hope it go's the right way for you.

 

[lurkerlurker]

very good... and concise

trying to stay objective here but so far European markets haven't been able to make much headway... so for the first time I might be starting to get a short-biased mind after all! but let's wait and see..

Yes, I know London is closed, but the Euro markets pull us along by the nose in the mornings anyway. The FTSE seems to follow the DAX. The DAX is up 1 and the CAC is up 4. Maybe the bears are coming? Oh, by the way, this is my first futures position held before the open of the cash market - so beginners nerves I think. I've only ever traded cash contracts on the indices, settled at the close. I've held a few non volatile equities overnight for a few days, but that was nothing. I'm getting panicked, so I'm not going to do anything. I wasn't emotionally invested when I put the trade on, so I will trust my prior judgement.

I'd rather write "called market direction wrong, premature entry, wait for confirmation" than "panick exit, 20 pip loss, 60 pips missed".

Wishing you all profitable trading this week.

 

[frugi]

Every time I see a bunch of buy orders at my entry price, I panick that I've just sold a low....

By 12:00 or so our time, there will almost always be orders to buy and sell several contracts at every price level at least +/-10 pts each side of the current price (except before news when the depth may thin out) so don't worry about it. If the DOM does not feature in your methodology then ignore it is my advice.

 

[lurkerlurker]

fwiw if the price makes a new high and you dont want to be short your stop is in the right place. prehaps you should look at reducing your stake size next time if your unsure about holding a position maybe you feel you have too much risk? also why use a 1 min chart if you want to hold the trade for days? its such a short time frame you might become negative on every bar that go's north. just my opinion hope it go's the right way for you.

Thanks for your prompt reply. Yes, perhaps my stake is a little big - the wise man says to reduce stake size after a loss I believe. I ended last week down after bad losses on Tuesday - I managed to cover a good proportion of the losses on Thursday / Friday, but still ended the week down. If I was being completely honest here, I should have traded half this stake size earlier, and added the other half after the cash market had opened provided I hadn't been stopped out. This isn't too large for me under normal circumstances, but I usually scale the second half in within 5 tics of the first, usually on a pullback. Not only that, this is my first time trading an open. I am trying to work with longer timeframes here, so overnight positions mean you are in the open a few times. I should get used to it. My stop is in the right place, and if the market jumps 25 points at the open and hits a new high, I'm on the wrong side anyways. Well, you know what my position is, so we shall see how this plays out.

Thanks for your advice.

Oh, the timeframe thing. I am used to day trading with 1 minute candles. I am working up to larger timeframes, but I suppose I should keep my eye on the 10 min, with 1 hour confirming longer term trends, and 1 min to identify potential reversals / short term stuff. I'm thinking that the 1 min chart says sell, and the 10 min chart says buy!

 

[lurkerlurker]

By 12:00 or so our time, there will almost always be orders to buy and sell several contracts at every price level at least +/-10 pts each side of the current price (except before news when the depth may thin out) so don't worry about it. If the DOM does not feature in your methodology then ignore it is my advice.

Thanks. I'm not used to depth of market stuff- I've been profitable plotting indicators on candles and reading the price. I should leave the orer book alone. Oh, and coming up to the open, the contracts are more evenly distributed now. The buy side looked like this earlier, and scared me:

YM

BUY ORDERS

QTY PRICE
4 13117
6 13116
18 13115
5 13114
....
22 13110
187 13109
30 13108
...

 

[lurkerlurker]

Moment of truth soon enough. High tested again, resistance held (1407 BST). Pattern of higher lows however. Not much to do now, except wait for the open and try and get out if there is a sudden upward movement. I do not want 15 points slippag

Rant over.

 

[lurkerlurker]

Pretty violent opening...

 

[lurkerlurker]

Fell on my sword a bit there. Stopped out @ 13339.

 

[lurkerlurker]

Great bloody start to the week that!