After reviewing my short position i notice a few interesting things that are happening in the markets that i wish to share. Fundamentals US CPI high US retail sales high FOMC unclear on voracity of rate cuts (if anymore) I think we have a stalemate in terms of policy and economic reasoning. Can the fed cut rates in the face of inflation? Can they cut rates and have credibilty with those that hold Petro-dollars or have balance of payment issues with the US. Therefore I think they have boxed themselves in the corner, with nowhere to go. This creates uncertainty. So how can the markets plan for uncertainty? The markets plan by selling off to reduce risk. So investors will take risk off the table, and cull positions such as carry trades, which are normally the 1st to go. Technically, since the november stock market rebound, the GBP/JPY cross has run into considerable headway at the 230ish level. So, as a proxy for the carry trade if it cant make advancements in a bullish environment, how will it fare with a shift in sentiment? The pound has been sold recently due to BOE cutting rates, and dollar strength. USD/JPY has risen 600pips from its low point. But equities, JPY, Dollar all have consistent relationships which are a bit misligned at the moment. I favour JPY strengthening. Next week is also pivotal for the GBP with lots of economic news, the most important being the CPI and Bank minutes. This could serve to weaken the £ further. Next week in GBP/JPY trading could be like the 2nd week in Nov, where GBP/JPY closed down 700pips in a couple of days, amid further market turmoil. It looks to me that 213 might arrive in the 1st 2 months of 08. So I will look to sell rallies.
Which broker ensures safety of funds? As far as 2 -3 spread, there are plenty. MB, EFX and many on the currenex platform.
"Safety of funds" - I mean you dont put your money with a broker which doesnt have a minimum of $10mn capital. Realistically, though paying an extra 5 pips on the spread is marginal if you get a good service and you are looking at big pip targets. If you are scalping the spread is a crucial factor in your success.
""Safety of funds" - I mean you dont put your money with a broker which doesnt have a minimum of $10mn capital." That might be reassuring at best but next to meaningless in the grand scheme of things. Plently of good 1 - 3 pip brokers have excellent service too ... including mine. I hear a lot of people say the same "I don't mind paying an extra 5 pips because I have big targets". That's pretty ridiculous. Say you lose your first trade for 100 pips then you hit one for 200 (which seems how your trading goes) you profit 100 pips but give away 10% for that 10 pips you throw away. 5% on 200. 5 - 10%??? You have no problem giving away 1000s every year? You don't mind paying $500 per mil to trade? PT Barnum was right.
Went short from 209. 04, probably should have taken profits around the 228.50s area but here we are around the .70s. My trailing stop is .74 The price was stopped dead in its tracks on the 228.38 pivot I have on my charts. ADX is low so, I'll wait for some more momentum to build up to to further position myself. I am expecting an extremely volatile week. I hope I"m right. GL and GT to all!
Matt nice trade, I wasn't up early enough to catch the short up there. You should be good for a move to about 226.90, although it may take a couple of days to hit there.
Goldman thinks short GPY.JPY is a good trade for 2008. I tend to agree and will sell on bounces. The housing market in UK is next to crack.
I am still holding my short from 228.8 so up over 200pips so far. But i can see this going to at least 224ish near term. So a stop on entry makes this a cant lose trade. Its taken a few days to get down here though.
Closed off my short for 250 pips at 226.30. I do think the cross will go lower. But thin volumes, triple interest day, and GU going under 2 per $ was a good take profit sign. I still look forward to selling rallies. Maybe the quarterly GDP data will give the £ a boost tomorrow.