Hubert Senters here.
This is a follow-up video that I did with Steven Brooks and is members or viewers. So this is the bonds, sneak attack trade and the open range breaking out on index futures.
So the first thing I do on the bond sneaking that trade as I first want to figure out which way I think it’s going.
So this is the 30-year, this is the daily, this is the 60 and then that’s the 10. So in this case scneario the down is below the cloud.
So if the price is below the cloud I mainly want to focus on shorts. I just have to have one of these two charts to agree with the daily chart and I don’t really care if it’s either the 60 or the 10. But one of them has to be a long with it.
So with that said then I would go ok. In this case scenario I would want to short the market. And I could do that with either the 30-year or the 10-year note. Either one of them will work.
The parameters are very close so let’s go over the parameters for each one of them. Now, once again this is a futures account so you will need a futures account in order to do this.
Yesterday, it worked fine. I didn’t do it today because it’s Friday. I usually take off Friday on the trading day usually not always but I did.
So in this case scenario the first thing I want to know is number one which way do I think it’s going? This is the 30-year bond. I think it’s going lower.
So what I would do is I find the 7:20 AM time frame. And it doesn’t matter what time chart you use because we’re doing a price action trade.
So I would go 7:20 and also we’re also going to do a vertical line at 8:20 so there’s my block of time that I’m looking at.
I’m going to zoom in and this is a 1-minute chart so that’s fine so from 7:20 to 8:20 I let the thing trade. And then I will put a horizontal line for a breakout above the high if I want to go long.
In this case, I wouldn’t. I would do the short because I think the markets going down based upon what Ichimoku is doing. And then there’s the short. There it is.
Then all I do is I would do a short on the 30-year at $168 24/32 I would risk 5 ticks. And then my target would be $32. Now, the only thing about doing it on Friday a lot of times the markets will reverse on you.
So in this situation your stop would be about right there and then your target if you short it at $168 25/32 you’d be going for $167 25/32.
And in this case, it did not work but that’s ok. It’s called trading. So entry 5 ticks stop loss and then I’m looking for it to go to $167 25/32.
For the most part if it hasn’t hit it especially on a Friday by about noon I’ll cover the trade because I don’t want to take the risk over the weekend.
The cool thing about futures is the only risk I’m going to have associated to a gap on an interest rates future on a 10-year or a 30-year is an hour from 5 to 6 because that’s when they’re closed.
And then also when they close at 5PM on a Friday they don’t open again until Sunday at 6PM. So I got a little bit of risk there.
That’s why I’m talking about Friday because it’s just another tip for you. Now, if we go back and we look at yesterday’s.
I’m going to remove the lines here because that was a picture of one that didn’t work because you need to see the ones that don’t work as oppose the ones that just do work.
So we go back here and we’ll look at another one that is today. So I’ll change this time frame to a 5-minute time frame. It will not matter on a 1-minute or a 10-minute because as long as it will go into $20 the visible even. You should be fine.
You could do a 1-minute, a 4-minute, a 5-minute, a 10-minute or a 20-minute chart. So in this case scenario, yesterday’s work like clock work.
So once again, I thought it was going down because all of the factors were pushing it lower and my Ichimoku on a daily and or a 60 or a 10-minute will probing lower.
I draw my lines at 7:20 and to 8:20 and then I waited for it to break here at $170 14/32 so we would short it at $170 14/32 and then the target would obviously be down here at $169 14/32.
And as you can see on this one right here worked fairly quickly and then there’s the target. So you’d risk 5 ticks to make $32.
For the math purposes it works this way. You’re going to risk $156.32 to make at least a thousand. You don’t have to do that.
If you don’t like my procedure or my checklist or my recipe for this you could risk $150 and say hey, I want to go for $300, $400, $500 or $700. This is just my recipe for that trade.
Now, let’s go over and do the 10-year note. So the 10-year it’s slightly different. Instead of using 5 ticks stop loss you are going to use a 10 ticks stop loss it;ss because these things trade at 164 and the bonds trade in 130 seconds.
Don’t let the fractions freak you out. It’s not a big deal so same type of set-up. Let’s go over here. I know this one didn’t work because the 30-year didn’t work but the day before it worked just fine.
So once again, we’re going to go 7:20 and I already know the direction is lower because we’ve covered that earlier.
These are more methodical and slower so if you’ve never traded bonds that would start with the 10-year note. And now, this is going to be 8:20 AM EST.
And you can also see there little tighter in the range so right there it is. You would short at $137 1.0 so it will be $137 even right there. I would use 10 ticks stop and I would use 64 ticks as a target.
In this example is one it didn’t work. We can back up until tomorrow. And this will give you an example of one that did work.
I think it’s really important to be very even with it because heads up, you’re not always going to make money. That’s impossible. Let me change this to a 5-minute chart. It will be a little bit easier for us to manipulate at that.
What we’re trying to look at. And then I have an indicator that makes stuff way easier. Just plots it on the chart but you don’t have to do that stuff. Manual is good because it teaches the concept.
So 7:20, there you go. And then you’ve got 8:20 which is going to be right there. And then the same thing this one’s going to work because I know yesterday’s worked because we didn’t like trading.
There is the high. Here is the low. So when this hour of time because all I’m doing my calculation on. If it breaks $137’14 so it trade a short trade at $137’14 even will be the sell.
And then I’m just looking for basically 64 ticks or a full point lower is what I’m looking for in order to make that money. This trade it will be here at about $15 of tick instead of $32 of tick.
Now, let’s move on to the index open range breakout trade. So first we’re going to start with a 2-minute chart @YM.D so I have a 9:30 open and a 4:15 close.
And I’m going to let that market trade for two solid minutes so one bar and then I draw the lines right there at $30, 303, $30,233.
Now, if you’re aggressive type you could short immediately at a break of $30,233 so as soon as it goes $232 you would short it.
I use a 20 tick stop loss and then I roll out of it about every 10 to 20 ticks. Out a half, out a quarter and I trail my stop loss so in this case scenario you would do that.
Now, if you did get the first one looks like it worked out halfway decent today. I tend to go on the second break.
So in this example break and then it came back up and you see this candle it actually got up here above the range again and then broke down the second time so I would go on this bar because I’m just a little bit more conservative.
Stop would be 20 ticks and then I would take off half when I’m up about 10 ticks and then I move my stop to just close to break even as I can.
And then I would be out a quarter down here up plus $20 and then eventually I would either be stopped out if I’d never move my stop again or I re-trail my stop and lock in some profits.
Hopefully that helps you. It works on both the long side and the short side.
Good luck. Hope it helps. See you on the next video.
Hubert.
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