Hubert Senters here.
Let’s take a look at a question that Fred Chung asked me in the training room today. I got stopped on bonds the first trade and I just initiated another trade which hopefully, I’ll get a feel on it and it’ll make money as opposed to losing money on my first trade this morning. So Fred was asking me like ‘’why would you go short the bonds on the 30-year when on the daily the price action is both above the turning and the standard line?’’ And that’s a good question Fred. It really is.
So the way I look at the daily chart — I usually give the daily chart a little bit more waiting in my in my thinking when I’m doing stuff like that. So it’s still below the cloud. So the one thing that I look at is this above or below the cloud. It’s below the cloud. So I’m thinking longer term bonds are a short for me.
So I think of an area of strength, so it’s a stronger short and this right here from here to here is a weaker long. Does that make sense? So, yes you can do a countertrend trade when this jumps above the turning and the standard line because a lot of times it’ll try to, you know, jump up to the cloud and then roll back over.
But what I’m doing is I’m actually using a smaller timeframe too and I’m going okay on a 10-minute. The 10-minute is still below the cloud. So, if I get confused or if I kind of lose my way like this is my big map and this is what I’m looking at every hundred steps or so.
So I know the longer term or my big overviewing picture that the bond should be going lower. And then I can let the 10-minute kind of tell me like ‘’alright, which way should I be right now on the 10-minute? Tell me.’’
You should also still be on the short side instead of the long side because the long side on the 10-minute has played out since yesterday. It went up above the clouds been some time that there and now, it’s down below it, bounced back up, overhead resistance and now, it’s rolling back over.
So that’s why. Does that make sense, Fred? I know it’s a little bit of an odd way to answer the question. But I’m more of a trend trader than I am a countertrend trader, so I’m more apt to take this trade than I am to take this little mini trader out here. And that’s why I do it.
Good luck. Hope it helps. And I’ll see you on the next video.
Hubert.
