Global Macro Trading Journal

Discussion in 'Journals' started by Daal, Feb 25, 2011.

  1. Daal

    Daal

    The thing is, his approach has ALREADY worked, he is beating the S&P since inception. I don't see anyone ripping on buffett because of 4 year returns
     
    #5061     Sep 13, 2013
  2. Daal

    Daal

    I'm actually fading an anomaly, even since the Fed has provided guidance the front end has followed it, except in this particular period where a lot of people are unwinding fixed income positions. The catalyst that you seem to have missed is the Fed meeting next week, that is very likely to wake people up and get them to feel safe about the front end again. What if they don't you say? Then I will decrease size and hold to expiration, free money only stays out there for so long until reality takes over.

    Now you might say, what if the market turns this mispricing into a gigantic mispricing, I keep coming back to the Fed but it is not easy to have something to stay mispriced when the price fixer says it is mispriced and they will fix the price. It is very unlikely, secondly, of course I have sized my position thinking in worst case scenarios. Its not like I started trading yesterday, if all these unlikely things happen than I will book a loss. What is the big deal?

    You talk about a high level of conviction, I have confidence in the trade but I'm also aware that it is dangerous to be confident in a situation like this because if you don't pay attention to the signs you can get run over if there is a change in thinking by the Fed. But 95%+ of the time everything is likely to go as planned. 5% of the time I will get out at a loss (which is likely to be of the same size as my likely gain)

    The contracts are at 99.38 right now, so R/R is a bit worse. When I posted it was at 99.25, I was thinking 30-40bps downside due unwinding and more lunacy and 65bps of upside (no hikes)
     
    #5062     Sep 13, 2013
  3. deucy28

    deucy28

    #5063     Sep 13, 2013
  4. Daal

    Daal

    Sold 1/4 of ZQ position into this big rally here
     
    #5064     Sep 16, 2013
  5. Daal

    Daal

    Fed said tighter financial conditions were the reason for no taper. Only reason for that were taper expectations and the great unwind of fixed income positions. Fed wants to stop rates from going to stupid levels and killing recovery, funny, once they signaled taper rates were up so much there was no need for taper

    They didn't expand forward guidance but with no taper there was no need for that. Rates down across the board. I think I will sell another 1/4 today and hold 2/4 for the drift up in stocks and bonds that tends to happen over the coming days on Fed surprises
     
    #5065     Sep 18, 2013
  6. Daal

    Daal

    The Fed funds forecasts from this meeting are hard to compare to the ones from last meeting (with forecast materials). Only 17 people attended this meeting compared to 19 (in the last one), I guess some non FOMC voters (but voters in the forecast materials) had more important things to do. Only real news piece of info is

    "Participants expected the funds rate to rise to 1.81% by end-2016, well below participants’ 3.25-4.25% range for the longer-run rate."
     
    #5066     Sep 18, 2013
  7. Daal

    Daal

    I expect this slap in the face by the Fed on bond investors to get markets to align the front end to something closer to the Fed's forecast. Its tempting for me to sell here but I'm keeping 2/4 to see what happens in the next few days
     
    #5067     Sep 18, 2013
  8. Daal

    Daal

    Biggest piece of info today is the confirmation that the Fed will rescue rates as a long as the economy can't stand on its own
     
    #5068     Sep 18, 2013
  9. Daal

    Daal

  10. Daal

    Daal

    Sold another 1/4 into this weakness. Will hold final 1/4 for long-term. If the front end dips again I will very likely buy, maybe even bigger next time
     
    #5070     Sep 20, 2013