I think a short spurt over 1.24 is also in it's place - but again - just to test stops. Of course this would be followed by the matadors swinging their red cloth, uncovering their swords. :eek: edit: (just went for a smoothie, and 'pop' there we went) For the moment I have favoured shorts with my bias towards this for near term trades; we could get stuck if the "bull matadores" don't have bigger balls than the bulls. Then it's like last friday.
I couldn't wait any longer and got out with +4 pips after almost 110 minutes!!! I didn't want to get caught by the swords
That's what I'd call risky with this type of action, friday and all - but the good thing is getting that profit, right ... ? Just wait and see - forget about previous moves, previous trades and look for COMPLETELY NEW SETUPS - which must be PERFECT. Take a well earned break, remember how most soccer goals get scored ? Sure - just after you've scored you lower your guard and get one in the face. Securing the profits with a cool head is paramount, and taking a little break - even away from the screen - watching Bloomberg or something is the best way. Today is all about hurting. [16:16 USD/JPY: Dollar Crisis Talk May Weigh On USD/JPY] San Francisco, Oct. 1st: There has been a buzz in the press over the last couple of days, touting the risk of a dollar crisis. The usual factors for USD weakness have been cited including the ongoing US trade and budget deficits. The possible source of a USD sell-off is expected from various sources though many of the latest reports focus on Chinese press reports on concerns that China holds too many US treasuries in their foreign currency reserves and needs to reweight currency holdings to the JPY and EUR. Further warnings over possible USD weakness revisit the theory that some oil producers will shift assets to the EUR or move towards increased pricing in EUR. Also revisited as a dollar-negative theme are reports this week that Russia will increase the amount of reserves it holds in EUR. This was seen aiding USD weakness yesterday though many traders also blame it on last minute flows for the fiscal half year end in Japan. This may help to cap USD/JPY in coming sessions, with USD/JPY continuing to hold in a tight range today, around 110.15-55. edit: Most traders are not brainiacs with super-sensitive abilities for analyzing every small piece of news or movement in the markets. They react to popular talks and beliefs - then there are those who start getting hurt which brings on more carnage. Fundamental moves are real simplistic I think, and should be taken literally as positive/negative. Some big players may make dents in moves, but mostly traders run scared when facing big resistance. The best kind of self-defence, and key to a long life - running - staying unhurt. If you fight like Mike Tyson, you're going to get hurt like Mike Tyson. edit2: lunch time and we have to wait for some more action - which given the friday - may not get here in time.
Yes it's already Friday afternoon in NYC and with this choppiness, I don't think there'll be any sustained move in either direction. I took my little # of pips since I invested so much time in them I only slept 3.5 hours last night. I'll hang around another hour or so and then go back to bed.
Yes, fridays are exhausting for a variety of reasons; end of the week after a tireing days of choppiness, losses and lack of sleep only can exacerbate bad trading judgements. Being at the top of one's game is always required when going into a trade. Otherwise, it's like trading on beers - and one doesn't feel the hurt so much. Staying up watching a precarious position is sometimes called for, but it really signals a lot about how markets are suiting oneself and and one's strategies. No need to always stay in a trade even if losses have been mounting. Much better getting all the rest neede, feeling relaxed and getting that extra effort and time into analyzing the market's next move beyond some point - not necessarily from the current price level. Many setups are worth entering only beyond a specific move - when it seems plausible with regards to a proven system. [16:23 FX OPTIONS: Lots Of EUR Call Buying, But Breakout Not Confirmed] New York, October 1: The sharp rally in most currencies yesterday has gotten the options market clearly more interested in buying upside strikes. Vols have rise slightly, though the front end of the option curve has seen selling. This weekend"s G7 meeting is helping to limit any vol slide, but few see any bounce as the week moves to a close. There is some interest to buy options with maturities outside the US elections, so mid-November maturities are clearly of interest. One account bought EUR 500 mln of mid-Nov. 1.2435 calls and many other strikes have been bought with outstrikes between 1.2300/50. There are large option barriers at 1.2400 so with option triggers on both side of the market spot is frozen, but could easily see a move covering both sides of that range and inflict pain on both bulls and bears. The option market still needs to see spot rally above 1.2550 for any "green light" signaling a sharp upward appreciation in currencies. 1-month EUR/USD vols rose 0.15% to 9.0% and the Risk Reversal rose 0.1% to 0.4% reflecting the increased interest for EUR calls. 1-month USD/CHF vols rose 0.25% to 9.75% and the RR fell 0.05% to -0.3% favoring CHF calls. 1-month GBP/USD vols rose 0.1% to 7.85% and the RR is steady at flat (no bias).
There's one more thing about Friday. I usually feel compelled to make profits so I can feel good about myself over the weekend. This is also true for the days before I go to vacation. Whenever there's a break from trading, I'm very careful during the last day since I know that I have these temptations. Lack of sleep is getting me now. In a way I'm glad, otherwise I might be tempted to trade. The overnight short worked fine. This morning's two trades are at breakeven.
The continued slow chopping favours a bounce upwards as time passes. The next sessions will surely have some of that in store, barring big surprises with G7 (mostly an expected Bush parade?). [17:39 USD: Central Bank Treasury Purchases Decline As US Yields Fall] San Francisco, Oct. 1st: One key factor seen stalling a USD fall in the face of twin deficits has been the foreign demand for US assets, including the treasury demand from foreign central banks. But the latest data, including custody holding data released from the Fed last night, suggest that demand is waning as US yields fall. Demand in August was particularly strong due to high yields and the large US bond auctions. US Fed custody holdings rose from $1.239 tln on July 28th when US ten year bond yields were at 4.617%. Total holdings by September 1st were at $1.288 tln, up $49 bln. However, rates by September 1st had dropped to 4.113% and as a result, from Sept. 1st until Sept. 29th, Fed custody holdings only rose to $1.291 tln, up only a meager $3 bln. The fall in yields has clearly dampened demand for treasuries and in turn, is a clear factor weighing on the USD. USD/JPY trades at 110.37 currently, remaining little changed this afternoon. EUR/USD holds at 1.2400.
I guess I should trade what I ponder sometimes, but I'm busy coding on some new systems ... fridays suck normally anyways. At least Sun released the Tiger Java 5.0 system, so I'll try getting that into my JBuilder environment.
I managed to avoid looking at charts since Friday. Actually, it's been a long time since I coded new indicators/systems. I believe I have all the tools I need--and they are very simple. The most complex part of the "system" is myself. My own "madness" shows up once in a while and it's like an unexpected spike in the chart that causes a big slippage in your stop. I can easily see these madness spikes in my equity chart. I had a relaxing weekend with occasional thoughts about how to prevent these madness spikes. First of all, my trading has no directional bias based on economic numbers, news and "published" resistance/support levels. For EurUSd futures, I let the price, volume and (sometimes) US bonds determine the direction for me. My madness usually shows up in the form of overtrading and mostly during strong trending days. I noticed that some events trigger me losing my directional neutrality and I start trading against the obvious trend. These events are 1) Missing an overnight move 2) Abandoning a trending move early with 15-20 pips profits that keeps on moving in the original direction all day long. To prevent going against the major trend (or trying to pick bottoms and tops), I have to rigidly follow my adaptive MA and not take trades against it. This means that I'll sacrifice 15-25 pips from tops and bottoms. But usually we never have "V" shaped bottoms and tops. The price yo-yos several times up and down in seemingly random fashion meanwhile volume and bonds will clearly point to the upcoming direction. What I wrote above was the easy 10% part, picking the entry direction. However, this should cure most of my occasional madness. Of course, how much to risk (# of contracts) initially, scaling-in and exits are also very important parts of the system.
Sometimes when I enter in a trade I am very confident it will go my way and reach my target. Those times I will sit through volatile movements without a worry. I watch the market still, to see if some big move is brewing - someone going for some stops or similar - you never know. But as time passed and the reasons for me entering my trade still are there - and I still could enter at new/current level with a clean conscience - I will be very calm towards the normal smaller fluctuations. This used to be how I traded initially - but watching and trying to learn more about the flow in EuroFX and seeing spread/differences between spot-dealers and CME futures to try and understand what kind of pressure was mounting. Also trying to predict what type of traders got into trades is important to me. If it was part of a larger order, I will be looking for further pressure in the direction of the big trader. Having some kind of "stop-alarm" where watching subtle changes in volume and hints to who gets into new trades at which levels - and trying to see understand what has been traded before makes me decide for or against the continuation of the trade is part of when I get some passive cardiovascular workout. When I started EuroFX I was very strict with not trading more than a few trades per day - almost like I remember experiencing small details in nature as a kid, eager to learn any new fact or discover something to watch, smell etc. If you remember how you looked through mundane details with a gluton mind as a kid - stuff you now hardly remember doing and routinely ignore as unimportant information - then you can relate to how I was observing the EuroFX book and trades initially. I realize that I cannot "deprogram my mind" into the novelty I experienced and was observing at first, but I still think I can take the some of the best information I was pondering back then and embedding it into a strategy with some similar rules I applied initially. The most important one - taking profits and not letting a trade go negative when it has ok profits is the one which saves my neck most times. Most times your trade will fluctuate between profits and loss several times - depending on stops etc. The shit hits the fan when it starts getting a defined reaction and is leaving the micro-range where you entered (as most of the action is confined into micro-ranges for very small time periods) - and on top of that leaves the range in the opposite direction of where you were trading. Trying to decide when it's going to leave is most times extremely difficult as the move comes very sudden most times - triggering some light stops. Therefore I find it much easier to say that I will not normally allow a trade which has started to show profit - turn into losses. Better exit quickly - watch what happens and possibly re-enter at a better price, or take a pause - DO NOT TRADE OTHER DIRECTION as first action - analyze first, take some time; with important questions like: "why did the trade start to falter", and "what is happening now" to be answered first. Well, I had a strong conviction that the 1.2355 level would hold before the european open with some good defense there and some lgihter defenses easily been overcome on the way down. Some ok 12 tick profits was booked on something I was planning on seeing to possibly around 1.2395, but I will prefer to sleep through most of the mornings action. Letting traders get into trades before one takes a decision yourself makes it much easier to relate to varying markets. I let the trade roast for some considerable trade - so I won't call it a scalp - although the light profits booked - but had a 1.2395-ish target - which I won't shepherd right now. Since it was kind of a "position trade" it was also micro-size for me. Coding on some new patterns and signals for my charts and T&S scroll - along with something which resembles a bar-code scrolling as a novelty which I will test for "feel" to order-flow. Trying to calculate some intermediate "open interest" into a visual and fast-moving information display is very appealing. Well, EU-open soon - time to hit the sack. 03:40 .. At least I have the 30+ deg. Celsius to look forward to every day, although I absolutely hate it for Christmas time. :eek: