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Dovishness in the minutes of the Fed's July policy meeting softened the US dollar, and gold is climbing back towards a test of key resistance partly on 'stranger and stranger' developments in Washington.
Squawk / 07 June 2016 at 6:31 GMT
Consultant in Derivatives and Commodity Specialist / Manor Derivatives(Consulting) Ltd
United Kingdom
almost an inverted hammer on sugar.......looking to see if any downside follow thru today! WOW was that on cable move for real, futures has it moving up to 1.4669 before reversing sharply again!
1y
fxtime fxtime
ref cable....looks real but why it went like that I haven't a clue....one major fat finger trade?
1y
fxtime fxtime
it needs a strong shake out sugar as too many bullish punters so agree market is ripe for follow through
1y
fxtime fxtime
Looking at tick the cable move looks more like a stop hunting move and was probably a bloomin' successful one at that LOL.
Need to watch the close values tonight as 1.45+ implies a bullish move
and a close below 1.44150 is fun for the bears.
1y
Neil D Neil D
just shows how scary even big mkts can be when other factors start to mess.........yeah am not sure which way to go on that one now
1y
fxtime fxtime
Loon looks a safer punt as a short imho
1y
Neil D Neil D
Pity really those types of moves f**k up the flow! Am gonna keep selling if it rallies further cos I think this vote is gonna be so close!
1y
fxtime fxtime
Perhaps we should also watch the Yen pairings? Japan will intervene but the eurjpy seems the best paly....usdjpy is just too messy as Yellen keeps faffing about with her dot plots to get a good dollar trade so euro dithering and japanese intervention might be best so long eurjpy?
1y
Neil D Neil D
I dont have access to the non-dollar pairings as I only trade futures, but what you say prob makes sense
1y
fxtime fxtime
Have you read Patrice ref a PUT on Sugar? I wouldn't disagree with the trade bias but perhaps i would try and reduce cost basis and enhance returns but the underlying trade I agree with and it fits with your view on sucre :-)
1y
Neil D Neil D
Yes its prob an excellent trade........due a correction, I have sold futures this morning but am only looking for 50 pts as the trend is v strong
1y
fxtime fxtime
Do you use options? Or play the spread between near and far dated futs? Or simply prefer a directional trade? Sugar has a ROC value that is just daft IMHO. Arb trades abound on this market :-)
1y
Neil D Neil D
No options, havn't checked yet whether I can access those in the SIPP, so i tend to just trade directionally- you mean arb between raws n whites?
1y
Neil D Neil D
it may well be worth selling the N/V spread as there must be a shedful of longs to roll out
1y
fxtime fxtime
arb for near and far dated or you can build near deliverable and $index but your shed full of longs sounds a better punt to trade off....normally I seek premium via options using theta decay curves.
1y
Neil D Neil D
rocket scientist lol
1y
fxtime fxtime
eg selling an OTM call 2 std dev away strike price as unlikely to be reached near term as we already trade at a price distribution extreme therefore higher confidence factor for a drop. Any drop as I sold a Call to open ensures i get the premium available and over weekends etc I gain additional premium as time decay occurs constantly and only accelerates in my favour as it nears term. A synthetic option such as this requires less margin and gives a better b/e too :-)
1y
Neil D Neil D
to be fair I havnt seen any COT numbers so I dont know exactly how the money is positioned but I can assume that they are still v long of July
1y
fxtime fxtime
LOL....we both trade funds so my guess you must be too LOL....it is down to what we are used to trading and what we are comfortable with for reliability and profit/returns etc. I have never believed that there is only one way to trade.
As for COT...I tend to be hesitant with that report on its own...too many conflicting interests perhaps...eg are commercials hedging or seeking delivery and how many intermediaries are playing especially big finance houses these days....I tend to use the ribbon style charting for the last 6mths of COT for underlying trend and delivery. Sadly the Baltic Exchange is of little use these days for correlation purposes....but the $Index is useful....so agree too many still long in July
1y
fxtime fxtime
Neil...read Oles' comments on Sugar on Patrices suggestion. Definately agree with him :-)
1y
Neil D Neil D
yep that heavy weight fund position could get rattled by trade sources........as for COT I only look for the managed money positions as they are much more one-dimensional. To guesstimate what the trade numbers mean is futile imho
1y
Neil D Neil D
such a vicious mkt........stopped already!
1y
fxtime fxtime
Yikes !! just seen.....perhaps a one touch option is safer LOL. I've been with clients so missed all the fun over the last couple of hours.
1y
fxtime fxtime
ROC gave cable bias and dollar and yen weakness but I missed anymoves for the euro unfortunately.....spread risk on gbp with the usual liquid majors to reduce risk but as a side benefit you compound profits :-)
1y
fxtime fxtime
So +277 banked shown above but I could have made far more if I wasn't so stupid as didn't trade for euro dithering grrrr ....amateur trading LOL.
1y
fxtime fxtime
One last point...cable looks ready to give a long signal at the close tonight!! Should prove interesting as we may get a repeat of the same trade signals as described today.
1y
Neil D Neil D
am not gonna go long of cable up here cos I think it's toppy, and the downside dangers have not gone away
1y
fxtime fxtime
news driven fx pairing at the moment sadly...agree on risks to the downside too but lets see where it closes tonight. Rallies are obviously being repelled but support is evident too. I guess it is down to the latest poll tomorrow? The cable is as fickle as that imho. Sadly todays profits were very small stake sizes on my SB acct because of the general fickleness in the market but a trade signal is a trade signal for me....fundementals and scalping never mix well for me sadly. Today the ROC/BIAS model worked...the only control of risk I have with this strategy is to adjust my stake size....initially very small then scale if need be.
1y
fxtime fxtime
LOL.....how lucky can I be LOL....cable rallies see attached.
1y
fxtime fxtime
I have covered all GBP bias trades as we seem to be stalling now...you might get your drop soon.
Yen may also be coiling for a minor bounce :-)
1y
fxtime fxtime
Cable did stall and fall...you must have done well there :-)
1y
Neil D Neil D
Not as much as I should have ! Now closed for the week, am off to my mate's house in Cornwall.............have a good week!
1y
fxtime fxtime
Enjoy Cornwall...it is raining at the moment in Kernow (Cornwall) at the moment and beware of the roadworks at the extreme end of the A30 as those speed cameras are a real pain even to us locals !
1y
Neil D Neil D
Are you a local boy then?? We are in Downderry up the road from Looe.............
1y
fxtime fxtime
LOL....You are approx 40mins from here. At this very moment I am in Tavistock Costa's making a few ''pennies'' from the ftse gap fill :-) Always like vanilla trades.
I don't think you will get sunburnt today on the beach. How long are you over for?
1y
Neil D Neil D
nice way to trade! am prob not gonna trade this week, cable will be too erratic and poss ftse too
1y
fxtime fxtime
I am usually at some coffee shop in the morning...normally I start opening trades 7-7:30am then after the 40+mile school run and dog walk in the paddock here I check my ftse and fx trades at a coffee shop away from my desk as can organise my day without the phone nagging me). Cable is too tight a range just now so like you I have stepped away but got a euro scalp and overnight a usdcad scalp it seems so profitable morning after all. Enjoy your time off :-)
1y
Neil D Neil D
ah well got rained off..............decided to short cable here! s'thing to give me kittens lol
1y
fxtime fxtime
Normal wave from high to low for bearish moves is 400-470pips on average ranges which is what have seen todate using the dailies....we could see a further rally imho!! As per other waves seen with this pairing after 500pip drops but we are at the mercy of polls with their insanely small representation sampling techniques and 3% error rates so if we drop here it should be fast.
Rain in Cornwall LOL....wait 10mins and it will change....could be hail, wind, sea mist but it will change :-)
1y
fxtime fxtime
My ROC algos are turning neutral on the swissy fwiw. Not much of a bounce today with a possibility that it may turn south again ! Euro may well follow and I had that as the stronger bias across eurusd/eurchf/eurgbp all being covered now as the euro too is turning...tomorrow should be fun :-)
1y
fxtime fxtime
Not sure if this is of use to you?
Working on the 3, 5, & 10yrs rolling data the SP500 (+emini futs near dated) rally or move sideways 53.1% of the time and moves downwards obviously 46.9% of the time. The minimum wave up from a close price is 2.5pts over that period using daily and hourly data. Thus to make the trade profitable and to have a positive sharpe value you need to go long at the close each evening for +2pts and on balance using a 8pt stop you would make a profit over a calendar year. All very mundane I know, however this trade can been dramatically enhanced. But for now consider how many recurring losses have occurred over the last 10yrs?
1y
fxtime fxtime
Currently there have been three consecutive failures eg last Thursday, Friday and Today have all failed on the basic scenario described above. Over the last 10yrs there has been one incidence of 4 consecutive failures...thus a long as near to the closing bell seeking +2 minimum pts/handles at high stake value may be worth considering? Stop remains the same obviously. Equally obvious is how to enhance the basic trade set up to be an income stream etc etc.
1y
Neil D Neil D
Nice prof on cable so far................some manic moves middle of afternoon, at one point it moved 150 points in 5 mins! I will close it later tho as no point being a hero o/n at the mom
1y
fxtime fxtime
Yeah yet another opinion poll...amazing move. LOL I know what you mean about o/n on the cable...LOL.
Currently looking to short eurchf.....possibly scaling a long on eurjpy (small stakes on this pairing) as potential bounce imho. Ref; EURUSD I have set a 2 std dev apart OTM strangle ...really I only need volatility on this pair to make a net profit...written to reduce margin and improve b/e (eg sell call to open and sell put to open at 2 std dev away).
1y
fxtime fxtime
I mentioned a trade on SP500 to run over night as a long. Dunno' if you done the trade but luckilly it is now +5 :-)
1y
Neil D Neil D
Sorry didn't get to read that one............another strange move on cable before the close last night!
1y
fxtime fxtime
Yeah the cable is a bugger for these knee jerk actions....I am bearish but reckon fade the rallies is the safest play if you see them occur
1y
fxtime fxtime
Actually I am as a precautionary order setting a stop if bid order on spot cable day only at 1.41850 just incase we see a mammoth bear squeeze today.
1y
Neil D Neil D
yes its dangerous territory wherever you decide to hang your hat........I love volatility but this has the makings of chaos ahead of the final denouement. I think I'll look to sell above 14250
1y
fxtime fxtime
Makes sense....my auto-stop functions are thankfully pretty aggressive so as long as the spread doesn't become insanely wide I will keep things as they are. The other strained market is the yen imho....definitely one to watch as we could get a major unwinding of positions there (Thursdays meeting) or even the classic swissy intervention move yet again to wake us all up LOL...fun times. I assume you are self employed like me which means even on your break to Cornwall no day is really a holiday :-)
1y
Neil D Neil D
I have a part time job to keep some money coming in, but in all honesty am itching to trade full-time again. Markets are in my blood-you know the feeling! Don't imagine ever not being involved somehow..........
1y
Neil D Neil D
think fTSE getting close to buy levels............certainly if u believe the vote is not a done deal just yet ! are you an IN or an OUT btw?
1y
fxtime fxtime
IN
and will buy the ftse cash mkt at 6000 but want to see some stabilising at current levels before opening sub 6000 eg another hour of basing around here. FOMC tomorrow normally drags everything upwards to the announcement too :-)
1y
fxtime fxtime
Why not trade for yourself full time? Agree this isn't a job you retire from LOL although I am supposed to retire in Sept as I am 55 then but whilst I can access my sipp for revenue I will still trade every day as i do now.
1y
fxtime fxtime
FWIW ...I am chancing a long on the DAX cash mkt at 9528.00 and will scale up at 9585...initial stake is 10% sizing only.
1y
Neil D Neil D
tbh I don't have the capital..............only SIPP which is my main source for trading, so earning is tricky from that until am ready to retire..........which is not yet
1y
fxtime fxtime
Yeah initially it can be hard....say a £10k fund might earn a conservative £1.5k pcm on average but you need to live of that income which makes the account growth hard after any drawings and a duff month just exacerbates things more. Which is why initially I used c/warrants and options and only traded time decay strategies (Theta). Since then though I have worked more to knowing what the minimum pip/point count I can earn per day and reverse engineer that into my stake size to ensure a daily income stream...bizarrely it worked better for me ! Virtually all the posts I do here are for revenue streams and determining what is the fastest rate of return etc etc. The sipp commentary I have posted seemed to be of little worth for site readers so i stopped posting :-)
1y
fxtime fxtime
The ROC trade mentioned above about the swissy turning and the euro has worked as eurchf, eurusd and eurgbp have amassed just over 100pips !! yipppeeeee
1y
fxtime fxtime
Covered ALL euro and swissy positions now.
I suspect eurgbp is about to bounce fwiw.
DAX stop now on b/e...wild marketplace at present so keeping risk control tight even on 10% stake sizing.
1y
fxtime fxtime
DAX moving the correct way and have scaled up. Initial stop moved to +22...a reasonable day so far :-)
1y
fxtime fxtime
DAX covered at 9600 will re-enter at the USA open or if we exceed 9635.00
1y
Neil D Neil D
I wouldn't trade with less than a 50k buffer as I know from experience that trading with small cap base does not instil confidence...........we all need to knw that you're not risking your last dime on every trade. I found a small fund too restrictive as its almost impossible to diversify properly
1y
fxtime fxtime
50k seems reasonable....I tend to operate on slightly less with my cfd acct approx 45k average and 5k on s/bet acct where as the serious balance is held within the sipp.
1y
Neil D Neil D
seems a perfect balance.........all my spare funds are Sipped...........pity as am just having an extension built which requires all spare available cash!
1y
fxtime fxtime
LOL....building works demands excess amounts of cash as there is always a snag that needs resolving....also an ubelievable amount of tea, coffee and a sugar mountain for the builders imho and experience.
1y
Neil D Neil D
yep budgeting this is a friggin nightmare!

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