This page has been archived and commenting is disabled.
Convergence Half Way Done
Since our recommendation to
put the convergence trade on at 11 am this morning, the spread has now
collapsed in half. The daring ones can hold until full convergence, or just
take profits here: after all the only thing worse than free money is
nothing.Just ask BPS, he knows all about no risk, and infinite return.
»
- 5237 reads
- Printer-friendly version
- Send to friend
- advertisements -
Tyler,
Run NH then filter for jpm. Headlines for now in Bloomberg. JPM to close trading units!.
Already posted
Keep up the good work!
Free money Tuesday baby!! Hope this fucker closes below 1040, might roll the dice overnight and see if I can pimp slap the ISM tomorrow.....
Get on your knees central bankers....
Why would a bad ISM mean jack? Hell, it'll be a massive 'rally'.
Is there a set amount of leverage we need to set our AUD/JPY to actually benefit from this trade? Like 50K or 100K per ES?
Yes. Imagine ES went to zero and AUDJPY did too. Your profit on the ES short and loss on the AUDJPY long need to offset.
Has anyone done the calculations on the approximate number contracts of ES vs the amount of AUDJPY which would be appropriate to achieve this goal? 1 ES contract controls $50k of S&P, or is $50/point. At about $10k each pip of AUDJPY is around $1, right? If ES goes to zero, then the gain would be $52500 per contract assuming you started at 1050. AUDJPY is around 75 which is around 7500 pips. So at $1 per pip give or take you would need about 70k of AUDJPY.
I am totally new to all this so please do your own calculations or post yours if you know them to be right.
I think it would be preferable to compare a tick (ES 4 ticks to a point- 1 tick =$12.50) to a pip in the forex. If you are trading a futures contract of the AUD/JPY then it is almost the same and both would use ticks, I belive a tick in the futures contracts for the AUD/JPY is around $11.00 vs. $12.50 for the ES.
If you are trading one (its not really one but its the minimum allowed) forex standard then a pip is $11.88, one forex mini is $1.19 a pip, and one forex micro is .12 cents a pip.
Whatever you use, you probably should have the lot amount equal to the pips you need to equal a tick in the ES. for example a standard lot at $11.88 a pip is almost equal to a tick $12.50 in the ES or as close as you will get.
Thanks Rick. That's a good way of looking at it. So with futures it is one to one, with forex it is one 100k lot to one ES contract, right?
Correct.
Thanks Rick. I'll give this a shot. Tyler, you're more than welcome to way in and confirm this for all us amateurs...
Based on my rudimentary calculations, it depends on the gap and the pip cost (in dollars). I actually made a spreadsheet to attempt to calculate this, and on most days the ratio is ROUGHLY one standard (100k) lot of AUD/JPY to one contract for the ES (last time I tried it was around 9:10).
I'm not sure doing the calculations referenced to zero is appropriate since the pip cost for the AUD/JPY changes based on where the currency pairs are at any given moment.
But then again, my math could be all wonky....
Any help this week (prayers) getting Tenet (THC) closer to ultimate support would be appreciated, and profitable.
HSC redux?
It is holding water as well as....this:
http://t0.gstatic.com/images?q=tbn:jAdEVe1jZDNAAM:http://www.mcnichols.com/products/wiremesh/images/sieve375x375.jpg&t=1
Wow, way to go 33 Liberty, you actually was able to get green buy buying double what everyone and their mom was selling.
Voice over the phone to all troops, "I don't give a %^*$% what it costs, there will NOT be a headline that says 'August Dow closes below 10,000'. Have you got that?"
Before trading this be sure to take a look at a two-week graph and note how far AUDJPY has diverged above the S&P on a slightly longer timetable. TD's Friday trade recommendation was to short AUDJPY / long ES as that gap closed ... but it still hasn't closed. And it's a much bigger gap that the one described in today's posts.
In other words, long AUDJPY / short ES has major blowup potential ... watch out.
Great advice!
Why won't he take a few minutes to run everyone through this trade. I feel like I understand most of it but I'd like to be certain!
Excuse my ignorance, but who is BPS?
just short abbreviation for "basis points"
Article is very interesting,thanks for your sharing.I will visit this site.welcome to my site!.... cheap site hosting
windows web hosting
windows vps hosting