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Bondfutures

Why Is the T Bond Heading Down?The downward pressure did not start with the Liberation Day tariffs on 2nd April. Based on the 30-year long-term bond price chart, the market peaked in 2020, then broke below a major support line—established since the 1980s—in 2022. Since that break, US bonds have been on a downward trajectory. So, what happened in 2020 and 2022 that set the bond market on shaky ground? Why is the recent tariff shock just a continuation of developments that began back then? And where are bond prices heading next? This goes beyond investors offloading its US Treasury holdings after 2nd April. U.S. Treasury Futures & Options Ticker: ZB Minimum fluctuation: 1/32 of one point (0.03125) = $31.25 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Trading the Micro: www.cmegroup.com
CBOT:ZB1!Short
by konhow
3 Standard Deviation Setup on Micro 10-Year Yield FuturesIntroduction The Micro 10-Year Yield Futures contract has caught the attention of many traders recently, as its price action reached the upper 3 standard deviation of the Bollinger Band® in the daily time frame. This rare occurrence presents a potential mean reversion setup, where the price could revert back toward its historical average. This article explores what mean reversion is, why it matters in trading, and how the 3 standard deviation Bollinger Bands® setup may indicate an opportunity to short this market. We’ll also discuss key price levels, contract specifications, and a potential trade setup for shorting Micro 10-Year Yield Futures. What is Mean Reversion in Trading? Mean reversion is a trading concept based on the idea that asset prices fluctuate around a central value or mean over time. When prices move too far away from this mean, they often correct or revert back toward that average. This is particularly useful in markets that experience high volatility or extreme price movements, as those extremes tend to reverse at some point. In simple terms, mean reversion strategies involve selling (or shorting) assets when they are significantly above their historical average, with the expectation that prices will return to normal levels. Conversely, buying when prices are significantly below the mean can also be a valid strategy. The 3 Standard Deviation Bollinger Band® Setup Bollinger Bands® are a popular technical indicator used to measure volatility and price extremes. The bands are plotted a certain number of standard deviations away from a moving average. The further away prices move from the average, the more extreme the movement. Reaching the upper 3 standard deviation Bollinger Band® is a rare occurrence that suggests extreme overbought conditions. Historically, when an asset reaches this level, the likelihood of a price pullback increases, as market participants may see it as an unsustainable level. In the case of Micro 10-Year Yield Futures, the recent rally has pushed prices to this rare zone, setting the scene for a potential mean reversion. Key Price Levels and Resistance Zones As the Micro 10-Year Yield Futures price approaches extreme levels, there are two key resistance zones which traders should be aware of: 4.174-4.021. These levels represent areas where selling pressure might intensify, pushing prices down and aiding in the mean reversion process. Traders looking to capitalize on this potential mean reversion setup can consider initiating short positions within this resistance range. These resistance zones act as psychological and technical barriers, providing an opportunity for traders to place their entries. Additionally, these levels help to manage risk, as they define a clear area to set stop-loss orders just above the upper resistance. Contract Specifications and Margin Requirements Understanding the specifications of the Micro 10-Year Yield Futures contract is crucial for traders looking to execute any trade. Here are some of the key details: Tick Size: The minimum price fluctuation is 0.001, which equates to $1 per tick. Margin Requirements: Margin requirements vary. Currently, the initial margin for Micro Yield Futures is around $320 per contract, making it accessible to a wide range of traders. Check with your broker for specific margin amounts. This knowledge is essential in calculating potential profit and loss in dollar terms, as well as determining the appropriate position size based on your available margin. Trade Setup Example Let’s now move on to a practical trade setup based on the discussed conditions. Entry Point: Shorting Micro 10-Year Yield Futures within the resistance range between 4.174 and 4.021. Stop Loss: A stop should be placed just above the upper resistance, say around 4.175, to protect against further price appreciation. Target: The target for this mean reversion trade would be around the mean of 3.750, where prices are expected to revert based on historical behavior. Reward-to-Risk Calculation: If a short entry is made at 4.021, with a stop at 4.175 (154 basis points risk) and a target at 3.750 (271 ticks potential gain), the reward-to-risk ratio would be approximately 1.76:1. A higher entry point closer to the upper resistance at 4.174 would significantly improve the reward-to-risk ratio, but it also increases the likelihood of missing the entry if the market reverses before reaching that level. In dollar terms, each tick (0.001) is worth $1, so the 154-tick stop loss represents a risk of $154 loss per contract, while the potential reward of 271 ticks equates to $271 worth of gains per contract. Risk Management Considerations Risk management is a critical aspect of any trading strategy, especially in futures trading. While the 3 standard deviation Bollinger Band® setup provides a compelling case for mean reversion, it's essential to manage risk carefully to avoid significant losses. Stop-Loss Orders: A well-placed stop-loss is crucial to protect against unexpected market moves. In this case, placing the stop above the resistance zone (around 4.175) ensures that risk is controlled if the market continues to rally instead of reversing. Position Sizing: Given the volatility of futures contracts, it is important to adjust position sizes according to the trader’s risk tolerance and available margin. Overleveraging can lead to large losses if the market moves against the trade. Moving Averages Can Shift: It’s important to remember that the moving average (the mean) can change as new data comes in. While the target is currently around 3.744, this level may adjust over time, so traders need to monitor the mean as the trade progresses (which is why we have set the target to initially be slightly higher at 3.750). Resistances as Reinforcements: The resistance zone between 4.174 and 4.021 can act as reinforcements to the mean reversion. Traders should observe price behavior at these levels to confirm rejection signals before entering the trade. Conclusion In conclusion, the Micro 10-Year Yield Futures contract presents a unique trading opportunity as it has reached the rare 3 standard deviation Bollinger Band® on the daily time frame. This extreme price level indicates potential overbought conditions, making it a candidate for mean reversion back to the mean at approximately 3.750. The trade setup involves shorting within the resistance range, with a well-defined stop and target, and offers a favorable reward-to-risk ratio. However, as always, caution is advised, and traders should manage risk effectively using stop-loss orders and appropriate position sizing. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CBOT_MINI:10Y1!Education
by traddictiv
ZT1! P-Modeling Pt 1. 2 Year T-Note Futures. Extreme CajunZT1! 2 Year T-Note Futures Extreme Prediction Modeling Architectures The following is an very experimental Extreme Long Range Prediction Model, using quantum graphing decoding protocols that were developed to tease out very complex long range modeling architectures... This has mostly common sense schematics outlined.. Find the 2 year cycle patterns. Decode the Matrix Residual from those patterns. Copy/Paste correct residuals into hyperspace. Gather Geometric Support thru Regression/Vector blueprints of ecosystem. Post idea and wait... I do not expect to be right. Fully.. But, this is potentially a full ecosystem reset ... Laugh now... Cry Later.. Doubt is an illusion to the truth... Doubt now, Laugh Later.. Failure is a necessary component of success. ;) Welcome to the Hyperspace and thanks for pondering the unknown with me, Glitch420
CBOT:ZT1!Short
by Glitch420
EURO - Where the money goes!Here you can see where the money from the euro area flows, among other things. Nobody talks about it and the media sell the "EU people" once again for stupid and tell corresponding fairy tales. The high of the Euro in the third week of February marks the low of 10-year British government bonds. The first of March low in the euro with 1.2124 marks the blue 1 high and the depreciation of the euro in the last few days can be seen nicely as a circled blue 3. In my opinion, no solutions can be brought by the ECB, because this central bank is the largest bad bank of all time. Full of government bonds issued by the "South&Western-States", which have no chance of sustained recovery in the corset of the Eurozone, this zombie portfolio will burst with full force. The only chance to save the EURO for a few more years is the introduction of EURO-Bonds and the Banking Union. This then throws the "German Volkssturm" as the last reserve, with the same outcome as in 1945. The only alternative to Safe your money, in my opinion, is not government bonds but are to be found in the equities segment. However, as the large capitals are focused on bonds, they seek out the most liquid assets such as USofA or UK bonds. The idea published here serves for the time being as illustrative material and has yet to establish itself. Greetings from Hanover Stefan Bode P.S. Fuck the EU or how did the Victoria Nuland - in the conquest ehm overthrow ehm democratic election of Ukraine by the US - so beautifully 2014 expressed?
OANDA:UK10YBGBPLong
by StefanBode