Hi Jeff,

If your following the strategy of my Bond trading we understand that is fairly mechanical. As I wrote earlier, the same methodology does work in the 5 year as well. We know the critical numbers in advance ... they never change ... -00, -08 and -16 and -24. _08 and -24 being more critical numbers in trading the 5 years than the 30 Year Bonds. The 5 year is a more volatile market than the 30 and is therefor more difficult to trade. It requires a little more risk I think than does the Bonds which is why I trade the bonds and leave the 5 years be.

As you know, Jeff, I am not a fan of trailing stops and particularly here in the Bonds and 5 year. We'll talk about that in a webinar soon. With all due respect to Erich and surjs' comments ... what works in regular position trade markets will not work here in the mechanical approach.

Since the entries and targets are givens, we need not follow along with the price flow as we might be want to do in a "normal" position trade. Lets start with what we know and see if that produces answers. We know that once a long trade has moved above any of the 4 base numbers ... 00, 08, 16, 24 ... we are going to block the market from coming back below that number. By example, we buy at -21, in no event do we let the market break -16 so our stop is likely -17, a move above -24 when it occurs is reason to roll the stop to -23 at worst case and depending how far above -24 it has gone, maybe we move the stop to -25.

You get the picture. So now we have only to contend with the gaps above -25 to -00. We probably can make some sense out of saying once above -27 or -28 I will not let it back up on me so I'll place my stop at -28 say once we have broken above there. So now I know if I enter a long trade buying the break above 16, I'm shooting for a fill at -19 to -21, I am going to roll my stops to 17/19 as it beaks 21, to 23 as it breaks 24/25 and to 27 as it moves above 28/30. You can do the same interpolations on the break of -00 buy and in reverse on the sells.

This makes the need for trailing stops uneccessary the roll points for stops are predetermined. This is my preference. In your situation, being unable to watch the intraday price flow, you either have to get a broker to delegate to OR you have no choice but to use the trailing stop. In this case you can still use the trailing stop but you need to do some back checking and experimentation with the best increment for the trail. .025 is too little, .030 is too fat, .035 is probably it. So now you know that you are always going to have a minimum of $110 at risk in any open Bond or 5 Year open trade.

Make sense?