Thursday, February 18, 2010

Thursday, February 18, 2010

This morning at 6:30 AM we had a couple of high-impact announcements.  Unemployment Rate and Producer Price Index.  I was a bit anxious going in to this trade because we have had a couple of announcements lately where one was good news and another was bad news and the market went all over. 

Regardless, I determined, based on movement before the announcement, to straddle it and go for a conservative 2.0 profit target on 5 of my 6 contracts and a 3.0 target on 1 of the 6.  The news was "clean", meaning both announcements were bad news - and the market dropped.  It was beautiful thing to have a nice stop loss in place and also to be filled nicely and have the market move in my favor the whole time.

One thing to note, I set up my straddle, with a buy above market price and a sell below market price.  When my sell order was filled, my stop loss ended up being at the same place as my original buy order.  I couldn't just 'click' on the trading pad or it would delete both orders.  So I went up to my working orders area (upper right hand side of GS Trader - Global Futures) and selected the original buy order, and deleted it up there.  That way my stop loss was still in place, and it was still tied to my profit target (when the profit target is filled, the stop loss goes away.  Had I left both orders, and had the market moved against me and stopped me out, it would have also gotten me into a long trade at the same time.  Just an interesting point to make.  This rarely happens, but it's good to know multiple ways to manage your working orders.

It became apparent that there was likely no way that I would ever be able to reach my 3.0 point target, let alone my 2.0 point target.  The 2.0 point target was sitting right on a prediction line.  And, as we know, the prediction lines are golden - often acting as a major resistance level.  So, in order to get filled on all my contracts, I moved both up to a total target of 1.75 points.  I was filled in just under 3 minutes and was done trading for the day.

There was another announcement (Philly Fed) at 8:00 AM, but I was satisfied with my trades and profit.  I actually sat and watched it, but decided not to trade it.  If I had, I likely would have straddled it and gotten into a short (on the low wick of the announcement candle), only to have the market move upward.  I'm glad I didn't trade it.

I love good, clean trades like the trade today.  I can easily shut down my computer now and get on with my day.