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Look at the attached GIF file and you will see just how good the bonds are -
even on a day before First Friday and the expected volatility and price
movement from the employment numbers.
In terms of 'reading' the market, all that had to be done was to let the
market open, look at the size and direction of any gap, pinpoint the
previous day's high and low and then see how it moves, bearing in mind other
sensitive support and resistance points.
If your only trade was to take the totally obvious, and slowly formed Double
Bottom (with the second part being what I have called a Doji Sandwich) you
could hardly avoid making 20 ticks. For those who might ask, "Might you
not have reversed on what was possibly a Double Top on the intraday high?"
let me answer by saying, of course you would have watched closely (staying
long) but since there wasn't a reversal pattern and the market moved
through, you sailed along with it (or if you weren't, you certainly went
long then!)
In this case, the market did not look back until it reach YH, when you would
have taken your profit, against however many contracts you normally trade.
There was really no retracement to add to your position, so you would not
have done so - nor was there any risk to your initial stop (or even a
properly placed trailing stop).
Life on the bonds is not always quite as straightforward, But, be assured,
it does move mostly with a measured tread, is readable - given some practice
and experience - and it is still the most liquid market with an affordable
range that there is, in my opinion, for day trading (if that is what you are
prepared to do to earn a crust!)
But, be further assured, the T-Bonds ain't dead in any sense. Watch it at
7.30 am Chicago time today and you will see a Phoenix, if you think it
is....
Bill Eykyn
www.t-bondtrader.com
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