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Avoiding Account Killing Freight Trains


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Avoiding Account Killing Freight Trains

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  #1 (permalink)
 drunkcolonel 
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Hi friends,

I've been watching a number of instruments to get a feel for what works with my personality, and the other day (7-2-2021) for ZN, around 8:30AM eastern, ZN went nuts (see screen shot).

That's a crazy amount of price action within a 1 minute candle, moving so fast as to not be conducive to human interaction/trade management (at least for me).



In general, I've been watching Treasuries because I like the relatively slow price action. I like watching paint dry. But moves like this make me wonder. Was this news driven? Did the Fed start flapping their gums around that time or was Non-Farm payroll out? or some terrible employment number? Was there anything at all that should have told me as a treasury trader --hey, don't be in the market at this time --crazy break-neck volatility ahead?

Any wisdom shared on the mood swings of the treasuries is greatly appreciated! Really, in reading more and more on these forums, it seems key to figure out when *NOT* to trade.

Thanks everyone

Curt

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 58LesPaul 
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Best to stay away from the open until you learn how to trade it. 8:20ish to 9:15ish can get crazy so just watch the price action and then wait for your setup.

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 matthew28 
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drunkcolonel View Post
Hi friends,

I've been watching a number of instruments to get a feel for what works with my personality, and the other day (7-2-2021) for ZN, around 8:30AM eastern, ZN went nuts.
................
Was there anything at all that should have told me as a treasury trader --hey, don't be in the market at this time --crazy break-neck volatility ahead?


Looking at my journal for July 2nd.

The jobs report at 8:30am. expected to add around 700k of jobs and actually added 850k, so more than expected.
Use a calendar so you know what is scheduled news wise. The one above is Econoday:
https://us.econoday.com/byweek.asp?cust=us

Also subscribe to the Bloomberg "5 Things to Start Your Day" email. Especially handy if like me you don't live in the US.
I copy it in to my journal each day. Again from my journal that day:

The news letter emphasised that the news event was regarded as important. Also worth noting that the Bond markets were closing early with the Independence Day weekend.
Sign up here:
https://www.bloomberg.com/account/newsletters/markets?source=NLshare

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 bobwest 
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drunkcolonel View Post
In general, I've been watching Treasuries because I like the relatively slow price action. I like watching paint dry. But moves like this make me wonder. Was this news driven? Did the Fed start flapping their gums around that time or was Non-Farm payroll out? or some terrible employment number? Was there anything at all that should have told me as a treasury trader --hey, don't be in the market at this time --crazy break-neck volatility ahead?

I agree with the prior posters. Essentially, some kind of unusual action was not beyond a trader's ability to anticipate... you can't tell what will happen, you can't even tell if anything will happen, but there are danger zones that you should always be aware of.

For one thing, the daily activity of your instrument will generally have its patterns, or maybe "semi" patterns. I'm just talking about things like heightened activity at the open, or, for some instruments, going into the doldrums around mid-day, or picking up near the end. These may not always happen, but your instrument may have a tendency to repeat them, and if so, you should be aware that the paint may dry at a different pace at some times.

The thing that seems to have caused this spike was a long-scheduled news event, the jobs report. News events are not always random or unexpected. Government or industry reports come out at scheduled days and times, and the good ones, in terms of ability to suddenly affect markets, are usually at 8:30 Eastern, or the best one -- Federal Open Market Committee announcements or reports -- at 2:00 Eastern on certain months. Another common time, for less important ones as a rule, is 10:00 Eastern. If you check a schedule of events ahead of time you will not be surprised when the train comes. It may not come, of course, but when it does, don't find yourself uninformed.

There are a bunch of free event calendars on the internet. Always check one before the day begins.

There will be random, unanticipated news events too, but the scheduled ones are easy ones. You should not get surprised by them again.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
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lightsun47
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Do you check economic news calender BEFORE you start trading for the day?

It's mind boggling how many people are asking about this these days without even knowing how news affects the markets.

Stay away from yellow / red folder news. Check Forex Factory news calender everyday to make sure you are not into any open positions UNLESS you are trading the news / holding your positions for long term.

Sent using the futures.io mobile app

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 drunkcolonel 
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Thank you so much for all your advice!

I try to learn in my few spare hours when im not working.

lightsun47:

Right now I've just been searching for what instruments "vibe" with me and my style, which is still under development. I use Sierra chart for it's replay capability and I have a delayed data feed which I can watch (sometimes) to get a feel for the rhythm of instruments and their price action. Thank you for the Forex Factory tip. I'm looking at this tonight.

bobwest:

This is the strange thing. I know I'm still missing pieces of the puzzle and thank you for your thoughts. Sometimes, nothing ---sometimes, something. I think you phrased it well. It is the danger zones I do not know about. It sorta goes back to that saying, of learning of others mistakes and experience. I'm too old to not to ask fellow friends how to navigate the rapids. I will add that you are right about patterns and "semi" patterns. This is the "feel" or "rhythm" that constitutes the "personality" of the instrument.

matthew28:

Big thanks, my friend. I had no idea about econoday. I also signed up for the Bloomberg newsletter, so thank you for this. I suspected "news" but I did not know where to look to get fore-warning.

58LesPaul:

Thank you for your mention about "open". To me I've always thought in terms of stocks, but bonds and treasuries are different animals and i never thought of this.


Thank you everyone for taking the time out of your day to help me.

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 matthew28 
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drunkcolonel View Post
58LesPaul: Thank you for your mention about "open". To me I've always thought in terms of stocks, but bonds and treasuries are different animals and i never thought of this.

Sticking with Eastern Time, the US Treasuries pit "open" was at 8:20am, the US Equity Index pits at 9:30am with the stock markets.
The pits are now closed (not sure if the S&P open outcry is still active without checking, but if so the volume traded is almost nothing), but with the equity index futures like the ES or NQ there is still a big increase in volume at that point.

The Treasuries are a little different though and when I used to look at them there could be little reaction at 8:20am, especially if there was important news scheduled for 8:30am. I remember a Treasury trader educator (John Grady, No BS Day Trading), saying that Treasuries were good markets to trade for 8:30am news because they were fully open at that point so traders and liquidity were present, unlike the equity index futures which can still be thin prior to the main trading from 9:30am.

Forgotten what my point was now, so just extra back ground info off the top of my head

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