Q: Is it possible to trade a spread between Copper and the SPI?
A: It’s not a recognised ‘spread’ as such but these markets are correlated, so there should be spreading opportunities.
Watch the Sky for a Corn Trade
I came across this chart in my travels. It’s quite an interesting one. It shows the relationship between the time a corn crop is planted and the subsequent yield. Contrary to popular thought, it shows early planting (i.e. early April) has little effect on yield, but late planting (i.e. May or after) has a dramatically [...]
How to be Successful
I just saw a link to this from the SMB site. I saw this guy play in 1988 with Diamond Dave. Awesome stuff. Lots of parallels with trading.
Stops Right There
There are a few ways to approach stop orders – and placing them manually. Each have their positive and negatives. Let’s say you’re the market is trading 45/46 (45bid and 46offered). You have your buy stop at 50. Method 1: Hit the offer As soon as the market goes higher and 50 is the best [...]
That’s how we roll
We have a few March expiries this week. The key to knowing when to rollover to the next month is to:
The Rolling of the SPI
You may be seeing some large numbers go through Time & Sales this week in SPI. These are positions rolling from March to June expiry. Typically this happens in the week or so leading up to the front month expiry. What you are probably seeing is large numbers going through Time & Sales, but not [...]
Market Immunity
Both SPI and bonds hardly moved after it was announced PM Gillard would keep her job today. The last leadership challenge was a positive for the market, although we did then have a leadership change. Still ‘political certainty’ is generally as positive for the market. All in all, it shows how the market can grow [...]
When is a Spread not a Spread
Here is a look at a few trades that just are not spreads.
Why illiquid markets can be awesome
Here is a perfect example of why you should be trading when other are not:
Rate Cut Probabilities
When discussing upcoming rate cuts, you’ll often hear news services talk of the ‘probability’ of a cut or what the market has factored in. For the Australian market, here is how to calculate the probability. The cash rate futures trades on the SFE settle at the end of the month at a price that equals [...]
A Path to Profitability
This article is from the most excellent SMB blog: ” “If I increase my stop then I will start making money.” This just might be the single silliest thing I have ever heard a trader say. No “trading is in my genes” is. I will offer a path to profitability to consider. Look there is [...]
The Best Books for Active Day Trading
Trading From Your Gut by Curtis Faith A really great book on building your instinct and intuition – a skill that is important in active day trading. Amazon link One Good Trade by Mike Bellafiore Probably the best book written on trading in recent years. It is an insight into the world of non-algorithmic proprietary [...]
What are the trading rules you live by?
Here is the answer to the question from Paul Tudor Jones in Market Wizards. Don’t ever average losers. Decrease your trading volume when you are trading poorly; increase your volume when you are trading well. Never trade in situations where you don’t have control. For example, I don’t risk significant amounts of money in front [...]
How Can You Fight Another Day?
Guy, is it common to see day traders having consecutive tough weeks and still find a way to keep coming back ready to fight another day?
One Way to Fix Randomly Wrong Trades
Guy, I am having a tough week. This weird cycle I have since many weeks ago keeps happening and I need to break it. Somehow, I will be up early in the day, then mistakes start happening. I have noticed that nothing is different about my psychology, and my thinking (NO revenge trading etc), but just randomly wrong. What can I do?
Trading the Obvious?
Today’s SPI and S&P are great examples of ‘buy rumour sell fact’. Bullish in the morning after pretty much all the press was expecting Yen intervention. Then there was the announcement (shortly announced to be false). The Dollar rallied, SPI didn’t (as it had already had a great run), then the Dollar fell back as [...]
Q&A: Reading the Market
Question: This type of market (S&P and SPI) may make you think a bottom is around the corner and you be lured into buying at the first sign of reversal. How can we avoid taking the wrong signals?
30 Minutes on Futures
This 30-minute video provides a basic introduction to futures in easy-to-understand language. It is presented by Dan Gramza, a world-renowned futures industry expert known for his teaching and trading expertise.
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