I don't really understand those stops, especially the first one, it's only 1% or so from your entry. There is no trend on earth with such low volatility that it cannot retrace at least 1% on pure noise. Let's say gold goes 1450 to 2200 (for example) that's a 50% rally. Do you really think you can ride a 50% up move without any 1% or even 5% corrections along the way? Stops should be placed at levels which, if reached, show that you are most likely wrong. Gold ticking to 1850 proves nothing at all other than that any market can go up or down 1% at any time for any reasons (or no reason at all). Setting a stop within the bounds of typical market noise just doesn't make sense.
GoC, you are absolutely correct and thanks for pointing this out. The reason I put the stop at 1850 was because I was over-leveraging myself, in hopes of a quick up move above 1920 or so, without any significant retrace at all. 1850 stop was not meant to ride the trend. Its objective was to take me out quickly, if price doesn't move in my direction immediately. Sorry, I was not articulate enough. As it turned out, when EURO cleared 1.3837 level, which was low for the last 5 months; I thought that at that moment, being short Euro was a better trade than being long gold. I closed my gold position at 1882 to free up capital to short Euro. Within next 15 minutes, Gold dropped like a stone, and it was pure "luck" that I did not take any heat on the gold trade. I have not re-entered Gold yet, I will be looking to re-enter sometime on Monday/Tuesday. After the stone-drop move today during London session, I am scared by the volatility in the Gold. Maybe its a signal of short-term top - I don't know. Maybe, market is saying that its expecting margin increases - I don't know. Counting, during the last 14 days, Gold has fallen 7 days and risen 7 days. The falls as well as the rises have been pretty large moves. Its in a longer term uptrend, but volatility at least at this stage is quite large.
EURCHF at 1.2035 - the lowest point since the Sept 6th earthquake. U.S. stocks are hanging in there. It'll be interesting to see how close the rate gets to CHF 1.20 if stocks fall apart in the last hour.
What do you think about going long close to 1.20 ? It seems it is a risk-free trade with only upside. The potential risk being that sometime catastrophic happens when you are in the trade. e.g. Greece defaults, Germans declare no more money for bailout, whole ECB resigns etc. etc. Then EURCHF will break 1.20 in no time.
It seems that is way to early for the SNB to even consider giving up. There is no end to their capacity to sell francs
True, it is too early. At this stage, they will give up only if they realize that Euro is breaking up - at that point maintaining parity loses all meaning. But what is the probability of this happening now - Very remote in next few months, imo. As and when Greece does default, it should lead to a sharp move down in Euro and then overtime a massive rally - as Euro will emerge more stronger.
I like your trade idea. Was thinking of making a small bet but the bid ask spread now for EUR CHF is rather big. I hope CHF rallies so I can put in on tomorrow
I assume everybody has read Randy McKay's interview in Market Wizards II about how he made millions in the 70s betting the British would give up on $1.70 as a ceiling on GBPUSD. All his trader buddies were shorting the hell out of GBP at $1.70 because it was a "risk free" trade. He just kept accumulating GBP knowing eventually the BoE would give up. One morning he woke up and GBP was trading at $1.7050 and he knew he had won. A month or two later, it was at $1.90. I agree it's probably too early to bet on the SNB giving up, but when necessary, give up they will.