Comparing two kinds ETFs HYG - ETF of junk bonds and TLT - Long term treasury bonds.

In this picture there are 2 kinds of ETFs on bonds junk (white line) and treasure bonds (blue). If junk bonds is growing up it means that investors are ready for big risk and reward. And vice versa if growing up tresaures bonds it means that investors are avoiding risk. Current  prices on shares   puffed up like bubble. And we see that more and more invesorts are fixing profit and invest in treasures bonds.  

It means that they expect some correlation or down trend. Comparing this two ETFs is good indicators of courage of investors. 

How to increase your analysis on futures emini S&P (ES) and Nasdaq (NQ)

A lot of traders who trade ES and NQ are doing analysis of these instruments. But what if I say that they just follow by others instruments. In this article I'll share with you with some interesting information. Maybe I not pretend to be original but if you know futures and other derivatives have period of circulation with with average period of about 3 month. Sure that a lot of them have more long period. And  there are trading several contacts with different expiried date but with the one basic asset at the same time. But all liquidity is concentrating in the last contract. So despite intraday traders and short - terms speculators always have choice  usually thay use big liquidity in the last contract for active trading. But what about big players who need in long-terms goals for 6-12 months and longer? If they use in futures in their own purpose they receive several problem: 

• If big players use futures in long periods they have to pay extra price (in which include risk free rate) every time. Price of futures is different from  asset on risk-free rate. Because for purchasing futures you use just initial margin but not the full value. You can take a difference between full value and initial margin and put on  deposit  in your bank or you can buy risk free instruments (T-bond for example) and receive extra profit.To avoid this extra profit futures sellers include it in price of futures. Why futures mostly more expensive than assets and price of futures follow to assets price and in  day of expiration of futures both prices the same. For some instruments  price difference between  asset and  futures could be from 2% and more per year (it depend on interest rate of central bank, the higher the rate, the higher difference in price). So big players will lose money for overpay on long distance.
• The second problem is to open positions every time on new contract when old expire. If they have big position they pay  commission once more, and receive slipping during opening, or average price will worse then previous. All of it is addition risk what they want to reduce.

It's a delusion if I say that big players don't use futures. They do it. But for short-terms goals. For hedging, in combination with options and for any other reasons. But nature of futures as instruments is short-term goals. But there are some instruments that were made for long goals. And I will write about them. Some big players bet for the market in general. Thay can  use popular shares which are included in index Standard and Poor 500 or NASDAQ index. Or use ETF (Exchange Trades Funds. An ETF, or exchange traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange).  If you trade emini S&P (ES)  you have to know about  ticker SPY. If you trade NQ you have to know about QQQ. Let's compare ES with SPY and check volumes and correlation between them.

This is 1 day correlation on 1 min bars. As you can see correlation enough big. On other days the correlation usually the same. Arbitrage trading do it.  Now, let's check day volumes on ES and on SPY. This is day volumes on ES. As you can see average volumes per day 1.5-2 Mio contracts. See picture below. 

At the same tame average volumes on SPY is 60-80 Mio contracts,  Despite it trades not whole day but only during pit session. Volume higher more than in 40 times. See picture below. 

This greater volume on the similar instrument indicate that bigger players are represented on SPY. Respectively they push price up and down by their actions and ES just follows by SPY. And despite that ES also has own volume and own's participants (and some of them are very big), ES just follows by SPY.  And the same situation with QQQ and NQ. NQ folows by QQQ. And if you really want to see original volume which can give you information about possibility of price movement you have to make analysis of ETFs during futures trading. This very short resume can save  your money when you will trade futures. 

I wish you more profit and less mistakes in trading!

Classical technical analysis vs Volumetrical analysis

      A lot of traders started trading on the market based on learning learning classical technical analysis. I am one of them. But when I used technical analysis I always doubt about accuracy of my levels.  A lot of traders recommend mutually exclusive rules how to construct them. And there are to subjective points of analysis when you use it. 

     When I started use volumetrical analysis I liked that there are less subjective points of view. And a lot of them different traders can see in the same way.If you know that level of volume of accumulation of the week is good for rebound of the price you will mark them. And there is just 1 exact level which can see any traders, without any "...of my opinion". Very clear and very accurate. 

For sure we can add other levels based on our opinion and based on our own strategy of working. But anyway a lot of them could be similar if you understand price behavior through volumetric analysis.

Below an example of video of Trader from Germany. He is trading  miniS&P contract (ES ticker) and use  Volfix. Look at his analysis and check it now. 

He was basically right with analysis of price development, but price delayed in a balance a bit longer.

He is good trader and is doing a good analysis. But I was surprised that despite I have other tactic of trading and I'm using less time-frame for trading I have the same levels and the same view. You can compare it. 

         But after I understood that if we have one instruments of analysis we can do the same things even don't know what are doing other side. I was passed a lot of trading courses but a lot of them was demonstration how somebody shows how he can trade. And a lot of practice was constructed on subjective opinion which was constructed by great experience in trading. But they  can't share by their brains. And can't explain it, because they see something more that you can't see. 

      In opposite with Volfix you can see the same because no other way to to mark weekly accumulation as for level when the biggest horizontal histogram shows it on our chart. Very clear and very accurate.

Price analysis vs real trading 

If you are good analyst it doesn't mean that you are a good trader. Always remember about it. To be a good trader not enough just understand well price behavior but you must use this knowledge for money making on your account. 

       There are two kind of traders. One of them is checking current situation and place most of trades intuitively. The other one do analysis before placing orders. I don't like to use discretionary trading because is too difficult explain why I did these or those trades after checking next day. For my opinion you can use intuitive trades after years of successful trading. It's like an artist which don't check proportions after huge experience in painting. But when you trade just several months and use initiative trading like base for your trading you are softly killing your account. Even if you have some profit this a question of time. 

       But problem is  that you could be absolutely correct with your analysis and wrong with your trading. Despite good analysis you received losses. Very familiar for a lot of trader. You did right analysis, and price go on by your scenario, but you are out of trade. Causes could be different: you have received stop losses, or wasn't your condition for opening position or you received few stops during volatile price behavior, or you hurried  up with entering. You have to check which cases have the most influence for your losses. And you must work with them. Identify them, understand why you did them, and avoid them in future trading. 

        If your analysis was good during long period before, there are no reasons to deny it when you are trading bad. The problem  could be not in analysis, the problem could be in your trading. You have to separate results of your analysis and results of your trading. And understand  where are you strong. And maybe you will be surprised that not always you did your trades based on your analysis, or despite bad analysis you did good trades. You will understand more when you will separately check results of your analysis and results of your trading. I'm sure you will received more clear answers about your trading and about your current results.

Yesterday i did several wrong trades despite I was right with total direction. 

       First of all I was too overconfident in my forecast. So I hurried with opening first trade. I didn't fix part of profits when I had possibility. Usually, I  fix part of my profit when price  move  in my direction. And third I wasn't lucky with third and forth entering. I received my daily limit stop loss (for my account it's 2%) for the first 30 minutes of trading. And I stopped trading. 

"Shit happens" as said Forrest Gump in movie. But always will be tomorrow. So be ready for good session. But if you afraid to receive losses even don't start the trading. 

P.S. Sometimes markets absolutely unpredictable, and all your scenarios could be wrong. It doesn't mean that you are a bad analyst (although it could be :) but it's means that sometimes predict price behavior is impossible. You should be ready for this when you put your on broker account. 

Forex trading vs Futures trading

I will not explain what is better to trade Forex or futures. I will not explain you that a lot of FOREX brokers trade against you. I just show you a pictures where we compare DOM of GBPUSD and 6b (future on GBPUSD).

As you can see there are about 10-15 pips in average between bid and ask on FOREX market and no spread on futures market. Every time when you opened or closed position by market you will pay extra money for spread. This is not mean that on futures market no spread. It is exist. But only during fast movement and not more then several pips. 

Each overpayment for spread could kill your the best intraday strategies. To win in this game (intraday trading) you need have advantages more than 2 till 1. It's mean that you have to do 2/3 your trades without loss. This is to hard.

So in this way if you want to win you have to use better instruments like futures or bigger time frame  from 1 hour and higher.

Results of public trading account. Conclusions and achievements

As you know I'm showing my account of public trading and its results. If you are Volfix platform subscriber you can check any my trade in Trader Statistic. I'm not a first and not in first ten. From the all public account I took 52 place from 364 with a next result 

I traded intraday and used volumetric analysis for check price direction opening and closing position. For money management I use simple rules:

1) Maximum position size 1 contract per 5000 of funds. But mostly used I understood that it is better solution using 1 contract per 10000 USD of funds.

2) Maximum daily loss limit was not a more than 2%. Several time I broke this rule and I was wrong with it because if I would done all right I would had   better results.

3) My profit target was about 1-2%.

You can check a lot of my trades on my Twitter account: https://twitter.com/TraderVolfix  

I have posted various examples of successful and unsuccessful trades. And if you are understand principles of price action based on volumes profile you can understand how I trade. 

Have a good profit next year!

How to trade on FOREX market with analysis on futures

If you want know how to see big players on the FOREX you can't do it. Forex market decentralized and nobody know real volumes. But you can see volumes on futures where are real volumes.
Because futures and spot markets have big correlation, so big volumes on futures could push price.
Let's check how is trading one of the trader who use futures analysis. And he  places positions on Forex.
First at all he do an analysis of daily chart. He marked  levels where  were accumulated big volumes before and price several time rebounded from them.  He understood price action and expect for rebound. But he  wait  for confirmation.

When price rised he checked that were initial volumes for purchasing. Too risky for opening short position.

When price was tested  level of resistance, was accumulated big volumes and price reversed. He opened short position during price consolidation. It was good trade with good reward.

And this method he use for trading on others currencies.

So, when you use volumetric analysis of futures you can deeper understand  price behavior. Daily volumes are good as levels for support and resistance. Local splash of volumes in this situation could be as confirmation of rebounds or continuation of movement. 

Bellow there are several examples how to trade FOREX with futures analysis:

Follow us and you will know more how to trade with volumes!