Friday, 9 March 2012

Volume's Down

Euronext announced its volumes for the last year showing roughly a 20% reduction in European volumes and about a 10% reduction in the U.S. Is it "permanent"? Well, we have the banks' prop desks being wound down, MF Global fiasco and investors being wacked a la 2008, flash crash etc. So the gravy train for the now commercial (not owned by locals) exchanges has slowed down. Not stopped.

This is even with the added activity of the HFTs and LFT algos.

The fiasco on whether to call the Greek default a default or not, reinforces my view that, with probably one or two exceptions, anyone trading on an unregulated exchange is taking a huge risk in not only counter-party risk but in risking a changing of the rules part way through a transaction. I'm referring to whether the Greek default will force the payment of the credit default swap contracts that some owners of the Greek debt had bought to protect their Greek bond purchase or whether the powers that be can say that there is no default when there clearly is.

From my point of view, business is better than ever. Yes, the rhythms have changed but the same methodology I have used keeps on working because some things don't change: identify the trend of the chart I'm watching and then trade the pullbacks.

Today's chart is the DAX in the London morning. It's exactly the same trade I have shown many, many times over the years. 1 contract made 32 points, over 750 Euros after commish. I was done for the day and went with Mrs EL for lunch at Heston Blumenthal's award winning restaurant in Knightsbridge, London.


  1. Tom, where did you draw your Fibs from? What did you use for high and low? I can't seem to match it. thanks!

    1. I used the Highest high on the left and the lowest low next to the up arrow

  2. Hi EL,

    Do you still use MOMdots when you trade? Do you use them in your algos?

  3. Yes, but I don't need to draw them in ads I know where they are. I use them in some algos as exits.