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Before the COVID crisis hit the Fed's plan was to pay down $56 BB in debt next quarter. Instead they will borrow close to $3TT, so yes that's a lot of supply. And, the demand for bonds has been more in corporates than governments, so treasuries have been quite stagnant. Also, the magnitude of long-end issuance was greater then anticipated, and is the reason why you are seeing a bear steepening in the 5/30.
this is why I never have $ P&L on my screen. Only Ticks.
Nice job on the spread trade @tigertrader. I had a profitable day as well.
I want to start looking at spread trading, I may do so over the next few months. It's a different type of trade that I may add to my overall strategy.
My testing and live results on 30Yr directional trades have been doing very well, so I dont see a reason to eliminate it. ... and yup, there's always a better way. agree with you there !
I was always told to keep your max size at about a tenth of the average size on the DOM so that you can get in and out fairly quickly. So If the average is 200 then the max would be a 20 lot.
Hey @tigertrader, I was going to PM you about this but then thought everyone might benefit from the answer if you have time.
Total rookie questions, but after spending a few hours searching around for spread info related to commodities, I'm not finding much. Hopefully you can help.
1. Since you are long GC and short ZB, I assume at a high level these 2 typically move inversely, and not necessarily on a 1:1 ratio, otherwise there wouldn't be much opportunity. Is that assumption correct at a high level?
2. Did you have an opinion on one or the other, GC or ZB, and the other basically acts as the insurance. ie. You maybe thought GC was going up, so you went long, and the ZB short was insurance incase it didn't? Or is it more of a "I know these are going to move, Im not sure which way, but if I do this spread I know one will be a bigger winner than the other is a loser"?
3. What sort of time frame, in general, are you looking at for something like this? A day, a week, a month, more, etc?
Again these are newbie questions, if you have any other resources to point towards, greatly appreciated from someone who likes to learn.
Do you know his approach to trading/which school he follows? I'm looking for an experienced trader in the Bonds to learn the craft, but it's not always easy to find someone credible trading the treasuries who's willing to teach the craft.
Look up John Grady of No BS Day Trading, not saying he's the answer to every and all bond trading question, but that is what he specializes in, scalping bonds. I like his teaching style as well, just calm and collected. He's not all salesman-ish like most people just trying to huck a system or course. There's plenty of free content of his both on his channel as well as the Futures.io channels on YouTube.
