For additional information on using the Bond Breakdown for your self-directed trading, please refer to the bottom of this email for a brief explanation.
Most successful traders use a mechanical trading system
- It automates the entire process and provides answers for every decision a trader must make while in the markets
- Having a strategy that tells you precisely what to do allows you to build confidence, consistency, and discipline.
You need to know
- What markets to buy or sell
- How much to buy or sell
- When to buy or sell
- When to exit a losing position
- When to exit a winning position
- How to buy or sell (Options or Futures, Micros, Minis, or Full Size)
When managing a trade, position sizing is the most overlooked yet critical in increasing your chances of remaining in the market long enough to catch the next trending market.
Technical Spotlight – 8/15/23 10yr Treasury Notes (September)
Technicals: The trend following trading system is Bearish
Trend Activation Date: May 19
Bear Trade Trigger: 114-11*
Bear Trade Neutralizer: 112-100* A closing settlement above neutralizes the current Bear trend
Last Settlement Price: 110-060
Seasonal Trend in Play: None
Support: 110-000***
Resistance: 113-050**, 114-000**, 115-020***, and 116-090 is your first major resistance level. Contract highs of 117-015 act as major three-star resistance.
Initial Margin $2,425
Maintenance Margin $2,250
First Notice Date: August 31
Last Trade Date: September 20
Technical Spotlight – 8/15/23 30yr Treasury Bonds (September)
Technicals: The trend following trading system is Bearish
Trend Activation Date: May 16
Bear Trade Trigger: 129-10*
Bear Trade Neutralizer: 125-12* A closing settlement below neutralizes the current Bull trend
Last Settlement Price: 120-22
Seasonal Trend in Play: Buy September T-Bonds on June 22 and sell on August 23 has worked out 14 of the past 15 years.
Support: 120-00**
Resistance: 126-00**,128-14*, 129-29**, 131-02**, and 134-00-134-15 as your next pocket resistance.
Initial Margin $4,620
Maintenance Margin $4,200
First Notice Date: August 31
Last Trade Date: September 20
How to use the Bond Breakdown
The Bond Breakdown is a technical system that uses end-of-the-day settlement prices to identify “buy,” “sell,” or neutral positions described as “flat” by analyzing hundreds of data points. The system removes the human element by giving the reader actionable trading ideas that attempt to position for new trends in the market. The system will keep track of the hypothetical open trade equity as reflected in the day’s settlement.
How the system works
To establish a “long” position, the settlement must close above the “bull trade trigger.” At that point, the “bear trade trigger” will act as a protective stop level.
Conversely, to establish a “short” position, the settlement must close below the “bear trade trigger.” The “bull trade trigger” will be a protective stop level at that point.
Remember, the system will not flip directly from long to short but shift to the sidelines, reflecting a “neutral” position for at least one day before establishing a new signal.
Risk Management
Although protective buy and sell triggers are listed, we suggest using stop losses that you are comfortable with financially and technically for risk management. Please consult your broker or the trading desk if you have any questions.