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I stumbled across an article Monday evening, and thought I would share. It is not really a trading thing, but it is related to this week's Animal Crossing New Horizons (ACNH) turnip project my kids are doing. In the game, you can purchase a ticket to visit another island. Ally Bank has partnered with Nintendo to create an island where, for a limited time, you could visit and sell your turnips for 1,000 bells (island currency). Here is a link to the article describing the process:
Personally, I think it is a brilliant cross-over marketing initiative by Ally Bank, to attract new potential clients, especially given the wild popularity of this game. Suddenly, they are the coolest bank for a certain demographic. The promotional price of 1,000 bells is over (ended Tuesday evening), but I'm sure they still getting plenty of traffic. As an business owner, I thought this was a brilliant bit of marketing.
Turnip prices (and other notes) will be posted this afternoon. If your interested in what I'm doing with turnips, just go back to my Monday post.
The kids and I decided to liquidate our turnip positions yesterday afternoon/evening. I'm guess we flooded the market and caused a panic sell off this morning, as the price is now down to 106. I am wondering if the game developers built this into their algorithm.
Nothing Surprises Me Any Longer
I should make it a bumper sticker.
I applied my Parabolic SAR entry approach on Natural Gas (NG) this morning, over 5, 10, 15, and 60 minute charts, just to see what it would do (see my post earlier this week for more detail). Entry on Next Bar after the PSAR signal was great for the three instruments I analyzed earlier, but every manual entry I looked at for NG was horrible. Not just 'meh', but horrible. Since it was an energy, I figured it might have some of the same behavior as the other energies. For the record, my wife is the energies person in our office, so I have very limited exposure to NG.
I took the 15 min NG data, and here is what I determined:
Parabolic SAR Entries
Wow! PSAR entry price was, by far, better than any other. I was not expecting that. It totally explains why every entry I had was horrible. Those -$800k differences are real.... I double-checked and it matched what I was doing manually.
The lesson here is: Do the analysis for every timeframe and instrument when using PSAR (or really any other entry method). I will, of course, expand my data set to 10 years, to see how it looks over time.
Today's prices in the stalk market. This week looks like a 'large spike' kind of week. Turnip Prophet shows the probability of the high and low of prices through the end of the week:
BTW....if you say 'turnip prophet' out loud, it almost sounds like turn-a-profit.
I want to share my favorite part of TASC magazine (sorry @kevinkdog .... still love your column!): Trading Liquidity Futures
The image above was in one of the recent issues. I will not try to explain how TASC determines this monthly index (they include a lengthy explanation in each issue), but I have found it useful for identifying instruments that I might not otherwise trade. This is how I started working with gasoline, a futures contract I would not have considered. The interesting value to me is the 'Contracts to Trade for Equal Dollar Profit'. This tells me, in simple terms, how hard my money has to work. For a smaller trader, I need to pick and choose sometimes, and this may give a hint at some opportunities that I may be overlooking.
That's it for tonight. I hope you find this useful.
The problem is of the top 5 or 6, most are US Interest rates, and those are not particularly good to trade outright, even with the liquidity. US 30 year bonds, for example, always have a minimum 1 tick spread, so if you enter with a stop/market order, you are usually down $31.25 as soon as you enter.
For me, the top of this list is not so important....i.e. I'm not looking for top liquidity, but rather some that have moderate liquidity, but a fairly low Contracts to Trade for Equal Dollar Profit value (that's a mouthful). Most of my current strategies are using limit orders, so I avoid that bid/ask slippage. I have not developed a strategy for interest rates (yet), but I'm guessing it will be something with a long time horizon.
Fat Fingers
Well, the analysis with Parabolic SAR from yesterday was wonky because I fat-fingered the formula to put the correct PSAR value.
Anyhow, it is corrected now, adding NQ and EC to the analysis. Next bar at open still wins in the long haul.
I have been working a strategy with PSAR entries, so this analysis has been critical. I am at a point where I am ready to write the strategy, as it has passed feasibility testing and it has some potential. The idea is fairly simple, but it has some complexities in setting stops.
that was my first thought as well being a small time player I need low contract size for the time being. KJD is a heavy hitter so he cares more about liquidity and tradability.
