What do you trade and how do you trade it?
I trade Forex: 28 major pairs.
Top down (multi time frame) analysis. Monday and/or Friday I look at Weekly and Daily just to make sure I’m on par with the market. Really depends on the fundamentals going on that week or the week prior.
*This is not part of my day to day trading, but I still think its important to mention.
Entries and Exits:
My day to day plan is pretty routine. Look at the market around the NY open. Using a 1 hour timeframe and some SMAs (10,20,50,200) I find the trend coming off London. My signal is a pull back and stall. Then I use price action on the 15m or 5m chart to enter (depends on the pair and the depth of the pull). SL and TP based on Support and Resistance. I only take trades with 3:1 RR.
Risk Management:
- I’m very picky with my pairs for the day.
- After I flag all possible pairs that are trending into the NY session, I scan for correlations to make sure I’m not over risking on the same idea.
- I usually take 1-2 trades a day.
- 2% is the maximum amount I’m willing to risk on a given day. If I have a lot of pairs to trade or conflicting pairs, I drop my size in half or take the day off.
- If I get into a drawdown (every 3 consecutive losses), I drop my trade size to half, but don’t drop down further than 1/4 of my original position size.
- Managing a trade depends on the volatility of the pair. I don’t usually move my stops, TPs, add onto a position, or peel off a position, especially if they are only for the day.
- Swing trades, I manage by price action on a 4hr chart. However, with the recent volatility in the market, I prefer to square off by 4:30pm.
-3 losing days in a row and I take the week off.
-If I have 3 winning days in a row, I half my size for the rest of the week.
Examples from Today
- I took a short on EURNZD around 8:30am at 1.67133 for a 7pip loss (.25%). I closed this early because it started against me and there was a better R:R on GBPNZD that I decided to wait for.
-around 8:45am I shorted GBPNZD at 1.92580. Closed around 2:30pm for a 38pip profit (2.19%). I was up closer to 50pips at 10:30am but it missed my TP by 7pips (got to love it).
-around 2pm I noticed Oil trying to push out of its recent range (Resistance at 63.44). I trade oil using CADJPY and noticed it was really close to support at 86.65. I took a half size long position because of my EURNZD hiccup out of the gate. however, I closed this at 2:30pm for a small 1pip loss (.08%) because it took too long to come off the level.
What do you trade and how do you trade it?
Solid. Great detail too.
Most of the time (~80% of trades) I’m in the options markets. Remainder is in futures, with a pure FX play here and there.
9/10 options trades I’m selling premium against underlyings with elevated implied volatilities (> 85th percentile). I rely on 3 scanners- 1 for core strangle/straddle plays (I’m always on both sides and directionless), 1 for earnings reports due out in < 24 hrs, 1 for covered calls w contracts expy < 3 days.
I get itchy tho and am always looking to scalp anything that I think is primed to move. For example, the 10yr was looking like it wanted to breakout on Tue so I scalped that huge rally today and caught literally the entire move by pure luck.
GameStop is looking interesting to me again, so bought some upside vertical call spreads earlier this week.
Have a pairs trade on right now too- RUT and SPY 30 day correlation completely broke down to crazy lows, so I think there’s an opportunity there. I went 5:3 via M2K:MES looking for that correlation to mean revert. Historical beta is like .8 and it’s plunged to sub .2 in the last 10 or so trading sessions with this crazy run in SPY.
Always scanning for unusual options activity too. I’ll slap on anywhere from 1-3 of those a month. Just made a separate post about 1 new trade I put on today in DISCK. Saw some buyers in HPE too, got in there.
Another go-to trade I like is selling back ratios on the VIX. There I’m usually looking for quick spikes after dull price action.
To round it out, I’m always actively hedging my book by beta weighting deltas to the SPY and keeping anywhere between -100 and 100 deltas at all times. Sometimes I’ll skew that based on what the market is doing, but more often than not I’m short 20 deltas. I’m realistic and understand delta neutrality is a pipe dream, so I just do what I can to be directionless.
So, I stay busy in the markets. 
Holy cow, that freaking 10yr! I thought the run would never end! That monster floated the DXY for all of march.
I am definitely a fan of your market neutral stance. The whole game of trading changes when you stop looking to double your account in a trade and really focus on preservation of capital.
I started my journey trading commodities in college and am a big fan of futures (but what a learning curve it was). What are your thoughts on metals? I’ve been buying physical silver since last April when the gold to silver ratio was just absurd. After studying how silver and gold reacted to past crashes, I decided to jump in. Now I’m looking at this surge in EVs over the past 2-3years really showing its face in copper prices. Talk about a rally!
Hello everyone my name is Tisha… I’ve seen forex trading everywhere and thought why not get into it
Yea, the US10Y has been on a tear since basically Summer. I think it’ll settle in a range before it makes the next move.
This is the way.
Depending when you started, I’m betting they didn’t have the mini/micro contracts, so you were probably sitting on one cheek, white knuckling most trades – as was I.
Buying physical silver is never a bad plan, for the long, long term.
The copper / EV play has been interesting. We’re back @ like 10 or 11 year highs and HG has never traded above 4.5…not sure what happens next there, as I don’t trade copper at all.
Generally speaking, I think XAU would have been > 3,000 by now (easily) IF, and only IF, Crypto was not a thing. Crypto sucked in over $2T in liquidity, of which I think most would have been people hiding out in Gold. Digital assets have funneled a massive amount of capital away from “traditional stores of value”, and I don’t think that will change.
Gold is bouncing off the monthly 20 EMA and you’ll prob see another retest of $2,000 before it goes lower. That might take some time to play out though.
I’d say keep an eye on inflation and rates. You can prob start to nibble here, but, I’d rather play it in the GLD derivatives space with putting on some long premium trades b/c IV is dirt cheap- essentially at yearly lows in the 2nd percentile. There is some call skew currently- that coupled with extreme low IV readings would favor buying call spreads. ITM vs. OTM is your discretion.
For example, the upside JUL 172/177 call spread (expy in 91 days) can be bought for ~ $1 today. Max loss is $100, max profit is $400- 1:4 risk to reward. That breaks even @ $173, and currently has about a 30% probability of profit. Edit.
GLD’s chart is also looking interesting, coming up on some key moving averages.
Hello ! I’m new to Forex trading and BabyPips. Just looking for a good group of individuals that can help me learn to trade.
Hi Michael,
Do you have any tutorial sessions? I’m in the process of learning.
Thanks,
Oh those days were fun.
Thank you for reaching out and don’t be a stranger. Have a great weekend
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My trading journey starts!
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