Setup

Planned to get short at a rejection from 82s on volume and aggressive delta back towards the weekly value area low. Stand off between buyers and sellers between 78s and 84s confirmed short sentiment for me. Got short initially at first sign of weakness during cash open, probably too aggressively. Still convicted in trading idea, which is why I will give this majority of P&L. However, if 84s breaks to the upside, this setup will be invalidated.

Intraday Fundamentals

Hong Kong leader has withdrawn extradition bill, leading potentially to stop in protests. Result was a 4% rally in hang seng and global equities. Risk on sentiment this morning confirms short bias in FGBL. However, there are several PMI figures coming out for Europe, Germany and France that could kill this setup. Need to see a break of 76s to confirm downside sentiment.

Trade Execution/Timing

1. First trade execution was a bit pre-emptive after 3 minutes of cash open, leading to a stop out. However, entry was within AOI and risk parameters.
2. Second entry I was properly watching the order flow and waited for offers to hold aggressively against buyers. The area where sellers got extremely aggressive on the delta and from a volume perspective was between 78s-85s, not letting buyers get 86s (perfect point for setting the stop)

Order Flow Read

Aggressive selling at the 82-84s level as expected, showing some exceptional resilience on the tape. Every attempt from buyers to break to 86s was stopped by aggressive sell side-involvement. The delta was also dark red showing that sellers are willing to take any price here. Need to re-watch the tape especially for this trade, as the Bund order flow has always been confusing to me. However, I was able to recognize the likely reversal point at 82s-84s which has definitely been a great improvement. One ticker at the highs gave me even more conviction in this A+ setup. However, this can only be rated as a Playbook trade, once the trade idea has played out as expected.

Trade Sizing

Entering with standard clip 4 lots due to decreased risk in FGBL because of smaller ATR than risk assets. Need 10 consecutive days of positive expectancy before increasing this to 6 lots.

Trade Management/Exits

2019-09-04 04:10:15
Took 1 lot off after target at 56s has been hit followed by 8 tick rebound. Wanted to give trade to develop, so took 1 lot off only after threshold between low and target was extended to the upside. Its very likely that if you see buying straight after a huge volume candle, you should get at least out of part of your position. Holding two lots for ultimate target, if nothing changes fundamentally and 3rd lot for target at weekly low. Currently in pullback mode, which I will tolerate unless a hold above 72s.

2019-09-04 04:46:32
Got out of full position after re-entry at DT short when expecting downward momentum to continue. Reshorted at 73s and hit final stop at 77s. Potential for re-entry still there but staying put for now.

2019-09-04 05:03:11
Accidentally left buy order in market, which was triggered. Trailed stop with 1 tick trailing stop.

Lessons learned

• Trade went to 178.20 on the downside after getting stopped out
• Trust the delta even when trade is going against you and look for potential places to add rather than to get out on a high conviction trade like this.
• Once in a long-term short, only get out if you have a reversal on the bigger picture delta, as 3 minute bars do not mean anything in the long-term.

Positives

• Precise trade execution, noticing the sellers stepping in at my pre-determined stalk zone
• Reading the tape to identify sellers, time and sales has been extremely helpful to time trades and nearly got me into the real trade once sellers held an offer at 66s after a flush of the lows
• Trade management was a bit aggressive but given the picture on the 3-minute it looked like Bund was ready to reverse

Pre-trade hypo

Attempt 1

Attempt 2

Exit