Day Trading Blog: Trading Plan: FGBL and ZB is highly correlated

Sunday, January 9, 2011

Trading Plan: FGBL and ZB is highly correlated

When trading the FDAX i also looked at what the S&P is doing (reaching important targets and retracment levels) the same logic seams to apply for the FGBL (Bund) and the US Bonds (ZB)

For example it makes more sense to wait on thursday till the 11 am news comes out before making a trade:

30-Yr Bond Announcement
[Report]

11:00 AM ET

On friday we usually continue the uptrend after a sell off , by looking at both instruments (FGBL and ZB) its much more clearer how far retracements can go...

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Trading Rules:

how to trade profitable? with KSE. knowledge, strategy, execution.
Knowledge: You need to buy low and sell high. So I wait for the price to first go to a prior support level on the daily, 4h, 1h chart.
Strategy: Timing is important so I trade when there is a good setup on the dax, s+p, nasdaq or oil market. My goal is to make few trades with high risk reward, that is archived by either holding a trade till the market closes or reaching a level that sets up a counter trade.
Execution: Usually there is only a 20 point risk involved, so I try to get into a prior support level on the 10 min chart and automatically set a stop and multiple take profit targets.
All the little details how to trade better are listed here but I like to keep it simple: just enter the market at prices with a target that it at least 3 times the initial risk.

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