Thursday, August 21, 2008

ER2 Migration and Re-defining the Edge

If any of you have read "Who Moved My Cheese" by Spencer Johnson then you'll have a bit of an idea of what it's been like for me over the past couple months (and incidentally why I haven't been posting in the blog much).

The long and the short of it is the emini-Russell contract or ER2 is moving exchanges from the CME to the ICE. So what you ask? Well the problem is several fold: 1) I'm not the only one abandoning the Russell and volume is down significantly, 2) the new exchange doesn't support limit orders. And the last CME contract of the ER2 is September 2008. So needless to say I have re-tweaking my short-term futures trading systems to work more effectively on markets that won't be undergoing such drastic measures - the emini-Dow and the emini-MidCap 400.

So what does all this have to do with the price of cheese? Well let's just say that it has reminded me of how traders must not only be able to find one market edge and exploit it but that they must be able to redefine their edge when market changes occur - such as this one. Brett Steinbarger of Trader's Feed has done an excellent job of describing this in his books and on his blog. Basically it means you have to always be hungry and never satisfied with yourself in the market. Never get too comfortable.

Back to re-defining myself.


Type rest of the post here

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