Emini Trading Blog

Archive for the ‘Trader 1 "Bob Bright"’ Category

Busy morning for our aggressive trader, Bob. On the other hand, our fearful trader J.R. is feeling frustrated, a little down after seeing two large moves and regrets missing “all those easy points”. The Existing Home Sales report was much better than forecast. This, along with Bernanke’s “growth in the near term” comment has spurred markets higher.

Our aggressive-inclined trader “Bob” has been busy. He took, of all things, a sell-side entry at the open near 1015.00. Feeling a bit flush from yesterday’s gains, he had a hunch Existing Sales would disappoint and liked selling at Monday’s high. So, he enters by selling five contracts! To give the trade space, he placed his stop two points above the high, at 1018.00. For a few minutes all seemed fine. He moved his stop to 1016, after price dropped to 1011. This minimized his risk to a loss of $250. Which traded shortly thereafter. Now down $250, Bob is eager to catch up.

J.R Down, our fearful type trader meanwhile, has silently asked himself the last couple of days “what is wrong with me?”. He wanted to buy after the huge run up. But, needed price to retrace down further before he would. This never happened. Yet, from the minor move down, price has now traded up to within one point of the day high. Wondering if he will ever get this right, J.R. waits and watches.

So, how did our fictitious aggressive trader “Bob” fare? Quite nicely on this trending day. Very near the close he moved his stop up to 1005.00 which was reached just before 16:15. Gain of five points ($250) on the final contract means he finished the day with a gain of $2150 (21.50% of 10,000 equity), less commissions on eight contracts.

This shows how great an impact matching the style of your trading to the behavior of the market can have on your profitability! Certainly the right day to trade for the bigger move. Bob feels more than satisfied at first. But then, he starts to feel uncontrollably excited about tomorrow. Will he be able to hold on to all he has earned? Tomorrow we will see!

In the way of known news announcements that could move the markets, the National Association of Realtors will release their Existing Home Sales report in the morning at approximately 10:00, EDT. Earlier this week, the U.S. Commerce Dept. reported an unexpected drop in Building Permit applications. However, in view of the deep plunge in real property values, perhaps the forecast 5.1 figure will be realized. Even if it isn’t, it seems the current state of the market could overpower a slight miss. After today’s push higher (beware of lighter and lighter volume), despite further unemployment pressure and corporate warnings (see: Sears), a retest of the 1016 highs seen last week appears to be the only cap in sight.

Our more aggressive trader, “Bob Bright” has had a nice day trading the e-mini S&P, thus far. An aggressive entry on the buy-side before 10 a.m. (all times, EDT) was a nice trade, long from approximately 1001.00. As an aggressive trader, Bob entered with four contracts, despite the high price of his entry, relative to the day’s range at that time. With his personality, looking for the big move so he can “make some real money”, he took profits at +two points for a profit of $200. The remaining contract’s stops were moved to break-even (he is focusing on controlling his aggressive nature), which was reached. Frustrated because of the “small profit” (2% of 10,000 equity), Bob entered long on the pullback, buy filled near 1000.00.

He now feels compelled to make up for his last trade outcome, so he now trades six contracts. Using a three point stop, he risks over 10% of his account equity but, again is looking for the big move. Once price moved in his favor, he takes +two points profit on just one of his six contracts (a gain of $100). This time his aggressive trading personality works in his favor, as price rises to new highs. He looks to take profits near Monday’s high, which has been reached. However, he gets more aggressive thinking more is to be made. So, he takes profits at 1005.00 with only one of his remaining five contracts (gain of $200).

Hoping for more, he leaves his stop way back at break-even, risking unrealized profits. So far for the day however, the more aggressive trader type that we refer to as Bob Bright, has a realized profit of $500 and is still long four contracts from 1000.00. Things are looking great today for Bob and we will check in as this trade continues.