Day Trading Mind Traps and US Bonds review and tips for trading the bond market along with a free trial to trading signals and algos
In This Issue
1. Futures 101: Day Trading Mind Traps
2. Hot Market Report: US Treasury Bonds Heading Lower
3. Economic Calendar
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"One way our brain helps keep us safe is to protect us from an awareness of our weaknesses. The brain believes that it is better to be falsely confident than recognize the real risks. This protective mechanism tends to work against us in trading." Kenneth Reid, Ph.D
MINDING THE MIND
The mind can play tricks on us. Intuitive Trading is an attempt to mind read the market, which makes us susceptible to whipsaws. Hindsight Bias causes traders to underestimate the difficulty of trading, while Competency Bias causes us to over-estimate our abilities. These are mental banana peels that set us up for a fall.
INTUITIVE TRADING
Intuitive trading is a natural response to excessive randomness and non-linearity in the market. But making informed guesses is not the same as formulating a rule-based pattern-recognition system that gives a trader a true edge. Without a rule-based plan, intuitive traders expend a great deal of energy mindreading the market, which will not improve your odds of success. In fact, professional traders make a good living exploiting the emotionally-driven behavior of intuitive amateurs.
Click on image below to enlarge
The US 30 year treasury bond market belongs to the "interest rate family" 10 year, 5 year, 2 year notes, the "Ultra bond" and others. All traded on the CBOT exchange.
Daily chart of T-Bond Futures for your review from this morning ( Sept. 7th 2018). We recently got a double RED diamond ( over bought signal) followed by a down arrow ( possible trend down developing signal). Next target is 141.160
Bonds are a very liquid market with a relatively LARGE tick size of $31.25. This market offers different type of day-trading vehicle. Different behavior and
personality. I like to look for set ups in this market and the 10 year notes in different ways. One is trying to "SCALP" the large tick size and the other, which I prefer is to look for "longer day trades " using the 15, 30 and 60 minutes charts.
If you are a day-trader, you may want to watch this market, get a feel for the different type of trading it offers versus Indices or crude oil for example and see if it is a "worthy" market to add to your day-trading markets list.
It goes without saying that bonds are an excellent market for options, swing trading and long term trading as well with 23 hours trading, strong volume and excellent liquidity.
To access a free trial to the ALGOS shown in the chart visit and sign up for a free trial for 21 days with real-time data.
30 yr Treasury Bond Futures Specs
Hours: 05:00 PM previous day to 4:00 PM Central Time
Margins: $2530 initial, $2300 Maint. ( as of the date of this newsletter)
Point Value: full point = $1000 ( Example: 144.16 to 145.16 ). Min fluctuation is 0.01 = $31.25 ( Example: 144.16-144.17)
Settlement: Physical Delivery
Months: Quarterly (March,June,Sep,Dec)
Some of the basic fundamentals to keep in mind when you are considering trading the U.S.30yr Treasury Bonds for this matter:
1. Interest Rates.
2. FOMC Rate decisions and Language
3. Focus in macroeconomics
4. Bond Prices have an inverse relationship to Interest rates
5. Correlation to US Dollar prices
6. Inflationary prospects
7. Geopolitical Stability
8. U.S. Fiscal and Monetary Stability
Our brokers here at Cannon will be happy to chat about the Bond market, other interest rate products, other futures, options, futures spreads and much more!
Feel free to contact us at any time.
Source: Moore Research Center, Inc.
| Date | Reports | Expiration & Notice Dates |
|---|---|---|
| 09/07 Fri |
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Ave Workweek & Hourly Earnings(Aug) 7:30 AM CDT - Nonfarm Payrolls(Aug) 7:30 AM CDT - Unemployment Rate(Aug) |
LT: Sep Canadian Dollar Options(CME)
Sep Currencies Options(CME) Sep Mx Peso Options(CME) Sep US Dollar Index Options(ICE) Oct Cocoa Options(ICE) |
| 09/10 Mon |
2:00 PM CDT - Consumer Credit(Jul)
|
LT: Sep Orange Juice(ICE)
|
| 09/11 Tue |
9:00 AM CDT - Wholesale Inventories(Jul)
3:30 PM CDT - API Energy Stocks |
|
| 09/12 Wed |
7:30 AM CDT - Core PPI & PPI(Aug)
9:00 AM CDT - JOLTS-Job Openings(Jul) 9:30 AM CDT - EIA Petroleum Status Report 11:00 AM CDT - WASDE Report & Crop Production 2:00 PM CDT - Dairy Product Sales |
|
| 09/13 Thu |
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly 7:30 AM CDT - Core CPI & CPI(Aug) 9:30 AM CDT - EIA Natural Gas Report 1:00 PM CDT - Treasury Budget(Aug) 3:30 PM CDT - Money Supply |
LT: Sep Cocoa(ICE)
Sep Nikkei(CME) Sep Nikkei Options(CME) |
| 09/14 Fri |
7:30 AM CDT - Export(ex-ag) & Import(ex-oil) Prices(Aug)
7:30 AM CDT - Retail Sales(Aug) 7:30 AM CDT - Retail Sales Ex-Auto(Aug) 8:15 AM CDT - Capacity Util & Industrial Prod(Aug) 9:00 AM CDT - Business Inventories(Jul) 9:00 AM CDT - Mich Sentiment(Sep) |
LT: Sep Wheat(CBT)
Sep Corn(CBT) Sep Oats(CBT) Sep Rough Rice(CBT) Sep Soybeans,Soymeal,Soyoil(CBT) Sep Lumber(CME) Oct Cotton Options(NYM) Oct Coffee Options(ICE) |
| 09/17 Mon |
7:30 AM CDT - Empire Manufacturing(Sep)
|
FN: Sep Lumber(CME)
LT: Sep Currencies(CME) Sep Eurodollar(CME) Sep Mx Peso(CME) Sep US Dollar Index(ICE) Sep Eurodollar Options(CME) Oct Crude Lt Options(NYM) Oct Sugar-11 Options(ICE) |
| 09/18 Tue |
9:00 AM CDT - NAHB Housing Market Index(Sep)
3:00 PM CDT - Net Long-Term TIC Flows(Jul) 3:30 PM CDT - API Energy Stocks |
LT: Sep Canadian Dollar(CME)
Sep Coffee(ICE) |
| 09/19 Wed |
6:00 AM CDT - MBA Mortgage Purchase Index
7:30 AM CDT - Building Permits & Housing Starts(Aug) 7:30 AM CDT - Current Account Balance(Q2) 9:30 AM CDT - EIA Petroleum Status Report 2:00 PM CDT - Diary Products Sales 2:00 PM CDT - Milk Production |
LT: Sep 10 Year Notes(CBT)
Sep Bonds(CBT) Oct Platinum Options(NYM) Oct Palladium Options(NYM) |
| 09/20 Thu |
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly 7:30 AM CDT - Philadelphia Fed(Sep) 9:00 AM CDT - Existing Home Sales(Aug) 9:00 AM CDT - Leading Indicators(Aug) 9:30 AM CDT - EIA Natural Gas Report 3:30 PM CDT - Money Supply |
LT: Sep S&P 500(CME)
Oct Crude Lt(NYM) Sep S&P 500 Options(CME) |
| FN=First Notice, OE=Option Expiration, LT=Last Trade | ||
* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.
** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.
*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!
