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Was seriously considering going long gold futures last night but laptop has stopped working, actually I think it may be a software issue but I'm thinking a new desktop would be good just for business stuff, it would be nice to have a faster processor, solid state HD, more memory etc etc

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Was seriously considering going long gold futures last night but laptop has stopped working, actually I think it may be a software issue but I'm thinking a new desktop would be good just for business stuff, it would be nice to have a faster processor, solid state HD, more memory etc etc

 

After a marathon session on Google last night and into the wee small hours this morning I've discovered what the issue is with my laptop, I'm using an Intel based Macbook, with Bootcamp into Windows 7. Since I'm using 32 bit windows it could only access 2.72 GB of my 4GB internal memory. That doesn't sound so bad but of course using Windows 7 and other trading apps is memory intensive, particularly Multicharts (the main system I trade with). I managed to find a workaround on a Russian website that now means I have access to 3.72 GB of the internal memory and wow what a difference it makes! I was always slightly confused why Multicharts always seemed slow and sometimes crashed, it is supposed to be one of the top trading applications on the market. It used to take forever to load, was very slow when making changes on charts etc, now it is super fast - fantastic! (I think due to the previous issues the hard drive was being constantly accessed as virtual memory and this was slowing things down.)

 

There were a few occasions previously when I would be in a trade and the system would just crash - that does not inspire confidence when trading. Everything seems so much better now but I'll need to see whether that remains the case when the data is streaming into the app during the live market on Monday.

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I swapped out about 5% of my physical gold position yesterday for April calls in GLD with a strike of 170, I reckon gold should more higher from here.

 

I been using Multicharts again today, trying out different set-ups for different types of trading/different instruments and am absolutely stunned with the increase in performance.

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Runup_zps3f1a10af.png

 

 

It can be useful to contrast equities against currencies, in this case the NASDAQ with AUD/USD, AUD/JPY, EUR/USD from July 2012 until now. Historically AUD/JPY has been reasonably well correlated to US equity markets. We can see in this chart the NASDAQ rallied fro August to September, AUD/JPY didn't go with it. The NASDAQ came back down and from mid November on all of them are seem to have been following the lead from AUD/JPY.

 

 

Now here's a further chart, zoomed in, covering December until now. We can see they all pretty much converged at this point with perhaps the exception of AUD/USD.

 

Burst_zpsf9022201.png

 

 

 

Next we have various equity futures, NASDAQ, S&P500, Dow Jones 30, Russell 2000 from 22nd December 2012 until now;

NQlagging_zps35fb5793.png

 

 

All of the equity futures have exceeded their initial start of the year highs, apart from the NASDAQ, I think that means equity futures go higher on Monday.

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The Dollar Index - May 2012 until now

DX-1_zps4893d200.png

 

 

I've been thinking for some time that it's going lower and I think that may happen soon. I talking about going long gold futures previously, my system problems stopped me from doing it but that resolved now.

 

I sense we are winding up for big moves in lots of markets soon. Broadly dollar down, gold and commodities up, equities up and bonds down.

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A potential trade idea...

 

This following chart covers from May 2012 and is;

 

Gold futures on top

Dollar Index futures in the middle

At the bottom is the notional value of a Mini-Gold future and Dollar Index future added together (achieved by going long each contract)

LongGOLDlongDOLLAR2_zps89022189.png

 

 

What's interesting here is that, were you only looking at the top two charts you could ascertain that Gold was going through a phase of outperforming the dollar from August until the start of October however by including the chart at the bottom it's more easy to discern that in fact that Gold has been outperforming the dollar since July onwards (on the bottom chart there was a lower high confirmed at the end of June).

 

As mentioned previously I've been considering a long in Gold futures however it would appear a more measured (and less risky) approach would be to engage the market by going long a Mini-Gold future AND a Dollar Index future. It's nicely balanced in the sense that the notional value of a Mini-Gold contract is $83,500 and the notional value of a Dollar Index contract is $79,600. It appears as though a higher low on the bottom chart may be about to form, suggesting an opportune moment to get into the market using this trade. I'll watch to see how this scenario develops for now.

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I bought March 155c and 160c - since I like "in the money"

 

Out of the money imposes a strong time limitation,

but if you want the gearing and you get your timing juts right, it can work

 

The present timing seems favorable, I agree with that - and the Futurist folk, are talking about financial disruptions

in March and April, so your timing may work out - And anyway, options are good in volatile times, since I cannot

guarantee that volatile stocks will drive gold higher

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Equity futures were all one way today, with the Dow Jones particularly strong. In order to try and exploit this I went Short NASDAQ 100 futures and long Dow Jones futures, looking for the difference in performance to continue;

 

 

NASDAQ 100 futures on top and Dow Jones futures below (with the value weighted spread in the middle)

NQYM_zpsa1508b25.png

 

 

The NASDAQ was going up in a strong trend, I thought it would crack before the close, accentuating the difference in performance for the day between the NASDAQ 100 and Dow Jones futures.

 

Got into this at 5.30pm and although the spread fluctuated back and forth it didn't continue lower as per earlier in the day, got out before the close for a flat trade. This is a new type of trading I'm exploring where I'm not using stops close to the price. I do have stops but they are 50 - 100 points away from the price of each future, and are simply in place in case I get a power outage / phone lines go down etc.

 

Although the trendline was broken in the NASDAQ it wasn't in any meaningful way therefore this trade didn't act in the way I thought it might.

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NASDAQ 100 futures on top and Dow Jones futures below (with the value weighted spread in the middle)

sr_zpsae85ed93.png

 

Shorted the NASDAQ 100 Dow Jones spread again today, the trend was down. Typical quiet Friday trading - not much - took a small profit before the close.

 

Does everyone understand what I'm doing here? Red/Green marker on futures charts (black/white candles) indicates going short/long the future. Whereas the chart in the middle, the black line is the spread between the two. Red marker on that indicates selling the spread, green marker indicates buying it.

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  • 2 weeks later...

Over the next few days I'll be trialing a new idea I have for trading futures spreads, so far it looks interesting. At the weekend I'll go back over 100 days (or perhaps more) to check consistency.

 

 

There were a couple of trades yesterday (both SIM) and both were good trades;

 

Setups_zpsf71cfbe3.png

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Another profitable trade on SIM, I went long the NASDAQ DOW futures spread;

NASDAQ on top

DOW at the bottom

Spreadem2_zpsecd92d08.png

 

I previously always scoffed at using a SIM account, always trading my live account, and only ever used the SIM to try out the occasional new idea or order type, I never took the SIM seriously. As a result the balance in the SIM account was steadily depreciating however now it is steadily appreciating it does appear to be pretty useful, when it's used properly. If I can see consistency here I'll switch back to trading my actual account.

 

The black line is the spread, the green/red is buy/sell.

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where do you get a SIM account

 

Many brokers offer SIM / paper trade accounts so you can assess a strategy or practice execution and order entry types. I would avoid getting a Forex account since most are foxes offering absolutely ludicrous leverage (eg 400-1) to the many lambs out there.

 

I trade futures through Mirus Futures but they are a futures only broker, their data provider Zen-Fire provide the SIM account feature.

 

I wouldnt use a UK broker either, they are way overpriced compared to US brokers. I also have an old ThinkorSwim account but they no longer accept new UK customers, their platform is excellent and there is paper trade feature on that that I've used to test OCO brackets and trailing stop orders. I'm sure I posted something a while ago, something that allow access to their platform. I'll see if I can find it later.

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