Manuel Ochoa
Submitted by Moderator:
Where do you decide to takes profits in swing trading?
manuel ochoa:
I decide to take profits in near recent highs and lows.
Submitted by dankur:
Manuel: I noticed you felt at the 1272 area the S&P’s were overbought and at a saturation level. You set a mental stop at the top of the range 1290. Then you took profits at around 1266. Wouldn’t this create an adverse risk/reward scenario? Also, what were any additional reasons for exit and entry?
Manuel Ochoa:
Good question. Once you first initiate a trade, the risk-reward ratio is usually within your minimum level; however, after you put a trade on the market, the risk-reward ratio may change on you and you have to adjust to this. You can’t impose your ratio on the market. Learn to adjust it even if this means taking small profits sometimes.
Submitted by robinp:
Manuel, which futures and time periods do you trade?
Manuel Ochoa:
I trade almost all the futures markets in the world in multiple time frames.
Submitted by Moderator:
Dear forum visitors: We’re experiencing some technical problems right now, but we expect to have things going soon. Thanks for hanging in there, and keep sending your questions.
Submitted by bunes:
Manuel, What is a typical profit objective you use on the S&P futures contract? Thanks, Michael.
Manuel Ochoa:
The average profit is about 15 dollars per contract. However, this can vary depending on volatility. Bigger volatility means bigger profit targets. That’s the key, adjust to the market.
Submitted by Moderator:
Welcome to the tradingmarkets.COM Live Forum, featuring Manuel Ochoa.
Manuel is a hedge fund manager who began researching and developing trading strategies and models while he was still a student at the University of Southern California, from which he received a BS in Finance in 1990. ManuelÃs market commentary, “Financial Futures Insight,” appears every Monday, Wednesday, and Friday at 5:30 p.m. EST on tradingmarkets.COM. In it, he talks about what heÃs doing in the T-bond, S&P 500, and currency futures markets, and whatÃs making these markets tick. Manuel has enjoyed great success trading both his hedge fund and his personal account since launching his career immediately after graduating college. He has been profiled as one of the hottest new traders in Futures magazine, and one of his funds was ranked third by Mar Hedge for its performance in 1997. He continues to develop trading systems and portfolio diversification and risk management models. Today, Manuel will begin the forum by discussing swing trading in the financial futures markets. To ask a question, simply type it in and hit the “Submit Question” bar–that’s all there is to it. You also can create a short subject heading for your question in the title space (it helps if you do). Past questions appear in the left-hand portion of your screen for easy browsing. This is a moderated forum, so we ask that you respect the other guests and our featured speaker. We try to get as many questions as we can, so please be patient. Shortly after the forum is completed, it will be archived and available for review.
Submitted by Trial User:
I have started to intraday trade the currencies. Is there a general rule of thumb for an average target profit (i.e. ticks) for the SF, CD & DM?
Manuel Ochoa:
If you are a trend trader, trail your position. If you are a counter trend trader, then bigger volatility means bigger profit targets.
Submitted by Moderator:
Manuel, can you describe what swing trading is?
manuel ochoa:
Swing trading is short term trades with profit targets. The idea is to make a little money on each trade instead of trying to make a lot on just one.
Submitted by LowellT:
How do you determine your target for swing trading?
Manuel Ochoa:
Recent highs and lows.
Submitted by bunes:
How many trades a week does swing trading typically generate? Thanks!
Manuel Ochoa:
In S&P’s, maybe one or two per week.
Submitted by Trial User:
Do you use news reports when making swing trades? Or are they based upon models?
Manuel Ochoa:
Sometimes I use one or the other, and sometimes I get an alignment and I use both.
Submitted by phil:
Manuel, how do you analyze the markets? What kind of information do you keep an eye on?
Manuel Ochoa:
Economic reports are studied and we see how the markets respond to them for clues. If the bonds, for example, rally on a bearish employment report, that is a clear sign that the market is temporarily oversold.
Submitted by manuel ochoa:
hello
Submitted by Trial User:
Which time frame do you think works best for swing trading the currencies–5 min. or 30 min? Thanks.
Manuel Ochoa:
30 minutes. Since you are a screen trader, 5 minute ranges don’t give you big enough profits to cover your commissions and slippage.
Submitted by dankur:
Manuel: Can we go a little further into some strategy? I will give an example: Yesterday, in the S&P’s we rallied from 17.10 to 49.4 without any retracements or time correction.The market hung high with shorts taking their lumps. Then we preceded to nail a 50% correction (after setting off the 1233 sell stops). How would you take advantage of this trade without adjusting your numbers intraday? Do you take these type of trades?
Manuel Ochoa:
I don’t use intraday data very much, but if I were in this trade, I would definitely be adjusting my profit targets.
Submitted by Trial User:
When you say you use recent highs and lows, how recent do you mean? What time frame (the current day, last 30 min, etc.)?
Manuel Ochoa:
Whatever time frame you are looking at should also be used to figure out profit objectives.
Submitted by Johna:
Manuel, would you describe your approach as systematic or discretionary?
Manuel Ochoa:
A blend of both. Sometimes I do use one or the other. The best traders in the world use a little of both to get that extra edge.
Submitted by shashiag:
Hello. Do you think there should be minimum money requirements expected of taders participating in futures trading? What portion of one’s investable funds do you think should be used for trading futures? Thanks.
Manuel Ochoa:
Yes, and it depends on what markets you want to trade.
You shouldn’t allocate more than 15% or your portfolio.
Submitted by pallottadent:
What indicator tools do you utilize in your trading approach to initiate a position
Manuel Ochoa:
I mainly start by examining how much a market has moved in the last couple of days and determine if we are in a trading range. If we are in a trading range then I take a position counter to the last couple of days’ price movement. The key is to determine whether we are in a trend environment.
Submitted by zzcan2:
Have you ever used your techniques in non-financial futures?
Manuel Ochoa:
I do trade non-financials and use these techniques but not as much.
Submitted by Trial User:
What would you use for an entry and exit signal for the S & P’s?
Manuel Ochoa:
Very generally, go long when they are falling and go short when they are rising. Exit your positions at recent highs and lows.
Submitted by Trial User:
Manuel, can you briefly explain the difference between systematic and discretionary for those of us unsure about what these terms mean?
Manuel Ochoa:
Systematic traders rely only on formulas to make buy and sell decisions. Discretionary traders use their judgement on whether a market in going up or down based upon economic reports.
Submitted by bunes:
What’s your typical hold period for a contract you’re trading on a 30-minute time frame?
Manuel Ochoa:
Two or three hours.
Submitted by bean:
Manuel, do you find it useful to combine shorter-term and longer-term approaches?
Manuel Ochoa:
Yes. The two complement each other. I discuss this a lot in the new guide that tradingmarkets is putting out.
Submitted by Moderator:
We’re getting close to wrapping up the Live Forum. We’ll be able to answer just a few more questions.
Submitted by chuck:
Manuel, do you think futures options are a good alternative to trading futures outright?
Manuel Ochoa:
No. You are better trading contracts. You don’t want to pay the premium that the options have. Traders use options a lot because they don’t have enough captial to trade contracts. In the long run you are better off waiting until you have enough capital to trade contracts.
Submitted by Moderator:
MANUEL–
DON’T POST THIS. I’ve just put out a message saying we’re wrapping up the forum soon. A few more questions and I’ll send you the closing message to post. Mark
Manuel Ochoa:
ok
Submitted by Moderator:
This concludes our Live Forum for this evening. Thanks to all our participants and our trader/host Manuel Ochoa. If your question wasnÃt answered, donÃt worry, youÃll have many more opportunities in future forums.
This forum will be archived shortly for easy review. Remember to watch for ManuelÃs “Financial Futures Insight” commentary every Monday, Wednesday, and Friday.
Manuel Ochoa:
Thanks everyone.
Submitted by dankur:
Manuel: Can you provide some futher insight as to what technical factors influence your decisions in taking trades in the S&P’s, for example, retracements, saturation areas, S/R levels? Thank you.
Manuel Ochoa:
I would say a combination of retracement areas and S/R levels. The trick is to quantify them so you dont have to think about this every day.
Submitted by Moderator:
Do you use stops in swing trading the same way you would in trend trading?
Manuel Ochoa:
Stop placement is the same only for stop losses when you intiate a position. After that you usually don’t trail your stops in swing trading as you would in other types of trading.