AUDUSD

I decide to take some off the table with 20 pips profit at 0.8375 before AUD rate decision at 12:30am.

AUDUSD

short from 0.8395, target 0.8342.

Ratio Spread or Reverse Ratio Spread (Backspread)

Both strategies have neutral to bullish bias. But which one is better? Let's analyze. Assume both strategies are credit spreads, which is better one.
Take AAPL as of 05/28/2010 as example, it closed at 256.88 on 05/28/2010.

Ratio Spread

Buys N calls at a lower strike and sells more than N calls at a higher strike.
The maximum profit happens when the underlying closes at the higher strike on expiration date.

Maximum profit point = initial credit + (higher strike - lower strike)
Upside breakeven point = higher strike + Maximum profit point

Here I use 1:2 ratio July calls, notice the margin requirement is $42756.

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Position summary and P/L graph:

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Reverse Ratio Spread

Buy N calls at higher strike and sell less than N calls at lower strike.

Maximum loss happens when the underlying closes at the higher strike on the expiration date.
Max loss = higher strike - lower strike - credit received
Upside breakeven point = higher stike + point of max loss
Downside breakeven point = lower strike

Position:

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Position summary and P/L graph, notice the margin is small, $18900

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Clearly, backspread favors volatile securities, it expects underlying move up dramatically. It has the following advantages:

1. stock moves up beyond breakeven point by expiration.
2. stock moves up modestly early in the life cycle of the trade.
3. market condition causes IV to move up.
4. stock falls sharply and recovers.

On the other hand, ratio spreader expects underlying move up, but not too much and too quickly.

Finally, the probability shows backspread is somehow like bullish straddle:

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AAPL

spike and channel pattern. Downward slope channel is bull flag. It is also forming a potential large bull flag. The minimum target us 258-260.

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ES 05/25

Wedge fails and goes up with measured move.
In daily chart, we should have more up to go.

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ES downside target

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Sugar, Soybean, Coffee and Soybean meal

Sugar is working on its way to the channel top. Seasonal trade favors bull heavily.

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Soybean is at the bottom of trading range, look for bull setup. Seasonal trade favors bull.

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Coffee is between 130 and 140 for some time. Seasonal trade favors one more up before any downside move.

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Soybean meal High 2 is working on right now, it should have one more push to 300 area.

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ES and BP

ES might form a third push down after upward correction.

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BP weekly calmly reached the measured move target.

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EURUSD

h&s bottom in H1 to 1.2710 area or a little lower.

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ES 60mins

still forming a bull flag, another up leg is coming, to 116x.

GLD

spike and channel pattern.

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EURUSD box trade

EU and GU clearly were forming bear flag during early US session.
It's getting easy. Equity market should have sharp rally into close.

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GLD forms bull flag in 60mins

upside breakout soon.

1 tick away from target

it's considered to reach.

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Pull back target

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Market should swing up

to test ES 1170 area.

EMC

classic spike and channel pattern

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Minimum upside target

reward = risk.
Market should have more upside if today's low is held.

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It's getting easy

Sometimes you win small, sometimes you win BIG.

EU has 1.2225 as weekly support; but it should head to 1.2 first, eventually 1.0
GU has 1.4233 as weekly support.

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Support turns to resistance

EU continues to form stair down pattern.
It should drop more during Asian session on Sunday night, unless something big happens over the weekend.

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ES downside MM target

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EURUSD is to 1.2

If there's a short signal, take it and ride the beautiful bear.

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ES 05/14

ES hit the downside MM target to tick, bounce, and hit the upside MM target.
Market is set to run on upside.

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EURUSD and GBPUSD

Those can trade London hours calmly take 200+ pips in several hours from box trade.
In these days, short EURUSD at any short setup, even at 3pm EST.

Just do it!

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ES 60mins chart forms bear flag

2:40pm, chip in shorts.

Downside target, should H2 fails

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ES target

ES might do this up move. It's range day, so it's tougher to pull the trigger.
Anyway, today is another example gap trade is a losing trade.

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Wedge

half at 2 points, half at 4 points MM target.

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Intraday measured move

Intraday MM target works 9 out of 10.

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ES short term target

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GU

spike and channel. Short from low 1 has high probability to success.

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Break out box (Asia and London) trade.

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Funny video on market crash

Mr. Ben Lichtenstein's enthusiastic order calling on market crash of May 06, 2010

Wedge fail?

Theoretical target for wedge target. But today is range day, which should weigh more than pattern.

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Downward slop channel is bull flag

high 1 works almost every time. The minimum target is channel starting area.

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If no test low

then buy break out.
Unlike most people think, today is not a crash down day.

More down to go before up

ES 1085.
Zenfire feed is down.

Market should swing up from ES 110x

10:25am

May potential trade setup

Buy Soybean at the end of May
Sell Coffee at the end of May or sometime in June. High risk, high reward. So ratio call spread credit might be a conservative way to play it.
Sell Natural Gas in May.
Buy EU in May
Sell GU in May

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EUR/USD respects the support at the tick

1.2520, to the tick level. The last 500 pips from 1.3000 is easy to get, no support in between. Now we are in support consolidation zone.
Unlike US stock market, Forex, an unregulated market, behaves more like a regulated market.

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GU

first short trade from 1.5033 got stopped out with -20.
Second short again from 1.5033, and it went very well.

For first trade, day trade signal is not triggered; it did in the 2nd attempt.
Next time I should wait for ALL setups are in sync.

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ES 1 tick shy from lower target

Zenfire data feed has problems from 3:45pm, so that's it.

Sybean reached target

Few days ago, when S was at 990 area, 87% of future traders 'thought' S would go higher. And future traders are supposed to be better than equity traders.

Anyway, 95% of them are wrong.

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2 targets upside

both should be reached.

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Upside target

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This is CRASH

unfuckingbelievable.

Last few bars are untradeable, BID/ASK is going mad.

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