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(02-08-10) Live Trade and EUR/USD market analysis.

Posted 02-08-2010 at 11:11 AM by Ektrader [Show Appreciation] What's This?

Hi Traders,

Thanks for taking a look at my blog and seeing what I'm doing.

Saturday I decided to make a video on what I thought the EUR/USD would do today. I didn't post it originally because I wasn't sure if or how I was going to trade the move. I had already positioned myself for the move in the options market buy selling a PUT spread on the Russel2000 (co-related to the S&P and the Euro). So I decided to wait to see if I would actually make a trade first before I decided to realease such BOLD and COCKY predictions

Well, I ended up positioning myself in several ways and fortunately for me they were all profitable. I bought EUR/USD mini lots (which I'm still holding), S&P futures contracts (seen in video) and sold a PUT spread(which I bought back for a profit). It just feels good to have a good morning trading.

The first video is of my thoughts of Fridays action and what I thought would happen today. The second video is a live trade I took of the S&P e-mini futures which basically was giving the same signals from a volume perspective. proper volume analysis can be used with any style of trading and is the only true indicator of future price moves. It can be used by itself or in conjunction with all the other indicators that are out there. Anyway........ I'm done for the day and ooking forward to tomorrow. Thanks again for reading and Happy Trading To ALL.

Ektrader

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	I have a question, would Profit taking create, High volume? (As a result, consolidation takes place)
	Posted 02-08-2010 at 03:59 PM by larryfolson [Show Appreciation] What's This?

	Hey Larry, I assume ek will agree when I say that yes, profit taking will create large volume. A good example was last friday, where late in the day there was sharp movement against the predominent directionof the market on high volume, which was likely profit taking.
	Posted 02-08-2010 at 04:03 PM by talolard [Show Appreciation] What's This?

	Quote: Originally Posted by talolard Hey Larry, I assume ek will agree when I say that yes, profit taking will create large volume. A good example was last friday, where late in the day there was sharp movement against the predominent directionof the market on high volume, which was likely profit taking. Thanks!
	Posted 02-08-2010 at 04:04 PM by larryfolson [Show Appreciation] What's This?

	EK, Have you found whether it really matters if you use the Dollar Index (/DX) or the Euro FX Futures (/E6) when using them for Volume Analysis to aid in your EUR/USD trades?
	Posted 02-08-2010 at 04:47 PM by DREBG [Show Appreciation] What's This?

	I normally use the /6E Euro because I'm essentially looking at the same thing, but no, it doesn't really matter. Ektrader
	Posted 02-08-2010 at 07:53 PM by Ektrader [Show Appreciation] What's This?

Quote:

Originally Posted by talolard

Hey Larry,
I assume ek will agree when I say that yes, profit taking will create large volume.
A good example was last friday, where late in the day there was sharp movement against the predominent directionof the market on high volume, which was likely profit taking.

In my opinion (although no one knows for sure) There was a combination of buy programs and profit taking. Although I did pretty well today. I was expecting a larger rise out of both the EUR/USD and the S&P markets today. This is a sign that there is too much selling left in the market so it won't go up under that pressure. The daily spread in both markets was low and the volume was average. That makes me still bullish but I have to wait for better timing. If tomorrow closes lower and the daily price spread is wide. Thats an obvious sign that the SHORTS are pouring in and the market will move lower. It's a wait and see at this point.

Ektrader

Posted 02-08-2010 at 08:05 PM by Ektrader Ektrader is offline

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	EK, how do you play a bear put spread? You profit when price falls right? Can you explain the whole process in as realistically as possible? Thanks
	Posted 02-08-2010 at 09:03 PM by forexer [Show Appreciation] What's This?

Quote:

Originally Posted by forexer

EK, how do you play a bear put spread? You profit when price falls right? Can you explain the whole process in as realistically as possible?

Thanks

In short (because I'm not a math guy) I buy a put and sell a put and collect a premium because the put I sold cost more than the one I bought. In this case, I collected a premium of $2400. I make money if the market rises. my plan was to hold for a few day and hopefully make $300 or $400 and buy it back but I exited the position today because the market wasn't rising as explosively as I had hoped. The market gapped up this morning and that ruined everything so I bought the spread back for $2100. As usual, I was sexually assaulted by the market maker and recieved only $175 after commission and an a bad fill

I did well on my other positions though.

Ektrader

Posted 02-08-2010 at 11:12 PM by Ektrader Ektrader is offline

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Hi Forexer

Here is a vid on bear put spreads.
Basically, you are buying a put option, and also selling a put option with a lower strike price. You use this stategy when you think the price is going down some, but not all that much.

An example- the stock is $100.
You buy a $100 put.
You sell an $80 put.

The money you collect from selling the $80 put helps offset the cost of buying the $100 put. This means the stock doesn't have to drop as much for the option to be profitable (for it to cover the cption costs).
The trader in this situation wants the stock to drop at least enough to cover the costs of the option (and hopefully more), but not so much that he has to pay on the $80 option he sold.

http://www.informedtrades.com/338683...ut-spread.html

Cheers
Tek

Posted 02-08-2010 at 11:16 PM by Tekmnd Tekmnd is offline

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	Opps, I came in late, EK beat me to it, and you were talking a Bear Credit Spread and I posted a Bear Debit Spread. Opps Tek
	Posted 02-08-2010 at 11:18 PM by Tekmnd [Show Appreciation] What's This?

Quote:

Originally Posted by Ektrader

I did well on my other positions though.

Ektrader

I thought a bear put spread is supposed to make money when the market falls?

You usually buy the put at a higher price and sell the one with the lower price. The premium you recieve is less than what you pay out but if the spread is larger than that net premium paid then you profit because when you buy and sell a same put, it's a hedge and the buy put has a limited risk but the sell out has unlimited risk. The unlimited risk for that sell put is offset by that unlimited gain for that buy put.

What Tek said was the text book approach. Options are damn confusing, messing with my head.

Posted 02-08-2010 at 11:38 PM by forexer forexer is offline

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Quote:

Originally Posted by Tekmnd

Opps, I came in late, EK beat me to it, and you were talking a Bear Credit Spread and I posted a Bear Debit Spread.

Opps
Tek

I came in later! What is a credit spread? Is it you get credited right at the transaction of buying and selling the put? You then buy the put at a lower price and sell the one with the higher price? You want the market to be bullish in this case? Then why not do a bull call spread?

Posted 02-08-2010 at 11:41 PM by forexer forexer is offline

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