Tuesday, 7 April 2015

Zipper Follow Up

The T-Bond trade from yesterday turned out to be much better than expected. I say "expected" although I can never tell how a trade will evolve. All I can do is enter based on my trading picture that has probabilities highly on my side. The rub is then to try and manage the trade to get the most out of it. Not easy to hold a trade for so long when most trades don't go that distance. It's only possible if you trade multiple contracts and take enough profit as the trade progresses that allows the "luxury" of holding a runner(s) that you are prepared to exit at Break Even if the trade reverses before you can exit this last scale. I must confess that I was not still short at the bottom. The point just below the zipper was the logical exit point for me but there was a re-entry picture to go short again into the gap using that context plus the order flow chart.

This management style is not for everyone. A style where you are all in and all out can be just as valid with the right back tested management rules. The math has to work.

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