Monday, March 21, 2016

Monday, March 21 Nikkei 20-Minute "Kanpai" Trade

Last Thursday, I reported about the first 20-Minute trade on the Japan 225 (Nikkei Index). So I decided to give it a try again today.

The rules for the trade are pretty simple, but the key is to be ready at 8pm EDT sharp, because this trade can get away from you fast.

Today was no exception, and I almost missed the boat. For more information on my ground rules for taking this trade, click here.

To be honest, I wasn't crazy about the setup . There wasn't a big move in the US Indices, and the E-Mini S&P 500 (/ES) futures were traveling sideways going into the 8:00pm hour. So I pulled up /ES futures on the one minute charts, and pulled up the Nadex Chart for the Japan 225 Index on the one minute charts.

First the 1-Minute Chart on the E-Mini S&P 500 Charts:





















As soon as the 8:00 hour arrived, the /ES started making a move to the upside after a couple of Dojis. Now it was time to see how the Nadex Charts reacted:


















The Nikkei moves a little more violently. At 8:03, the Japan 225 was already moving up very quickly. The best OTM BUY strike was 17906 $34, and I took it. If my reaction time had been better, I might have gotten it cheaper, but I wanted to be a little cautious.

Since the US Indices closed flat today, I wanted to make sure the rise in the Japan 225 wasn't a "head fake". But with the /ES continuing on its climb, I decided to jump in. Two minutes later, the market had blown through my OTM strike price and $38 in profit was on the table.

I debated holding this contract until expiry, but decided to take profit. There were still 13 minutes left in the trade, and in my view, anything could have happened. The market pulled back a little bit, but ultimately rose again and settled ITM at 17955 at the 8:20 Expiry.

If the E-Mini S&P 500 Futures had not made a steady to the to the upside, I would have backed awayfrom taking this trade. But it moved, the Japan 225 reacted, and the OTM trade was there for the taking.

I am going to continue taking this trade if I like the setup, and will be posting results and fielding questions on "Trading the Probabilities", a new Facebook Group I have set up that covers trading strategies I follow.

The Purpose of this Blog


The Inquisitive Trader will be used  to share my experiences as an investor getting back into trading the markets. In June 2014 I joined the staff at TradingPub, and I am responsible for helping to book speakers for free webinars. Each week, I am exposed to a wealth of information from leading industry experts who teach how to trade the financial markets. When I come across interesting trading strategies, I will summarize my thoughts and share a link to the archived webinar. As I develop my own trading plan, I will also share some of my personal successes and failures. Responsible comments are welcome, but to avoid flaming posts and spam, I will be moderating all comments. I hope you find this blog useful, and wish you the very best on your journey trading the markets.

Disclaimer

The opinions expressed in this blog are solely those of the author, and should not be construed as trading advice. I am not a registered or certified financial planner. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. All individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein.

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