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Using Predictive Analytics for Fixed Income (Bond Yield) Trading

  Using Predictive Analytics for Fixed Income (Bond Yield) Trading Bond Markets are much bigger than the Stock Market in terms of Volume. The movement of Bond Yields also impacts the Stock Markets. As can be seen in last couple of days that US bond yields have been moving in upward direction, with the benchmark 10-year Treasury yield reaching a three-month high which has impacted global stock markets move in downward direction. In this post, I share some examples on How Predictive Analytics can help us predict the direction of the Bond Yield as well as the likely Quantum of the movement next 1 month (22 trading days). Two matching patterns are identified that are nearest to the current pattern. i.e. One record above the current pattern and one record below the current pattern. Example 1 For Sep-17-2024 The US 10 years Bond Yield matched the pattern of April-11-2008 of US 10 Year Bond Yields and March-14-2016 of US 30 years Bond Yield. All other parameters indicated that Pattern of Sep-
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Why I still want to trade in Derivatives, when 91% of the traders are in losses?

  SEBI has published a report that states 91% (7.3 million individual traders) made losses in Derivatives Trading in the year 2023-24. I think Most of the traders are aware that majority of traders will lose money in derivatives but they still continue to trade that includes me. While most of the people have their own reasons to trade, Here I share my thoughts on why I continue to trade in Derivatives. I have passed through losses in derivatives but I shifted my focus to Equity and again came back to derivatives with below details. Approach – I avoid intraday trading and zero DTE. I am aware I am trading against large traders and their algorithms that I cannot beat in speed or for small gains. I keep analysis and execution parts separate. I prefer to trade manually so I take less  derivatives positions with positional reasons but some times exit on same day if data is suggesting. I always hedge my positions so there is no big gain or  loss at any time. Asset allocation - Although many
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Location: India
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Unknown Unknown

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  "There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know." - Donald Rumsfeld. It is that unknown unknown that makes me buy long term put options to hedge my portfolio. Although long term options are highly priced and bleed a lot with passage of time so I don't hedge my portfolio fully, but I hedge it partially. It is one battle that I enter to be prepared to lose. sometimes, The market provides an opportunity to compensate for the hedge. I had bought 22000 and 21000 of September 2024 expiry put options in the month of April 2024. It was fast losing money with passage of time but the pre and post Indian election volatility provided me an opportunity to close both the options in green. I also got an opportunity to buy December 2024 expiry after few days. 1
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Location: India
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Patterns based prediction using Predictive Analytics for Nifty and Bank Nifty as on EOD price data on 30-May-2024

  Patterns based prediction using Predictive Analytics for Nifty and Bank Nifty as on EOD price data on 30-May-2024 Markets have been falling since last few days because of anxiety on election results outcome on 4th June 2024 which is two trading days away. For Nifty the matching pattern identified is from 1 Dec 2005 and 15 Dec 2005. While 1-Dec-2005 hit all time high on next trading day, the 15-Dec-2005 hit all time high in next 2 trading days. For Bank Nifty the matching pattern is from 23-Nov-2017 and 21-Sep-2021. While 23-Nov-2017 hit all time high in next 2 trading days and 21-Sep-2021 hit all time high in next 4 trading days. Note- This is a complex and dynamic scenario. The international markets and FII data are not supportive. 2004 election outcome experience. There are chances of my model missing out on the prediction. I have right to be wrong. Please do not take any trading positions based on this. This is not a trading recommendation. hashtag # PredictiveAnalytics hashtag #
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