FT has been trading full time from home for two years, with nothing but four kids and a beach to distract him .
He fills his spare time with weight training and rugby, though more coaching than playing these days.
FT mostly trades the forex markets and although he plays FTSE on occasions his bread and butter market is £$.
He likes to think that his technique is evolving but still hasn’t the temperament or money to back the big calls. He prefers to trade between 1 and 3 times a day, aiming to take regular small gains, but feels part of the evolution is in not dealing if the conditions don’t feel right.
Looking Down Below For Some Action
Morning folks,
Today’s one of those, occasionally useful, days for catching up on some research, playing around with some charts, or even earning a few brownie points for spending time with the missus. In short, unless you’re very confident on your trade, find something else to do; it’ll probably save you money.
Readers of Friday’s blog will have seen that I shorted GBPUSD on the breakout, but, after early gains, was cruelly stopped out by a rogue spike. But for that spike, I’d still have been £3 short and sitting here now with a grin as broad as John Prescott’s arse. Sterling’s now over 200 pips lower than where my trade closed, and looking to test $1.80. The thing is, that’s a big round number and the Dollar remains way, way overbought in the short-term. Some mischievous toads might take advantage of a quiet day to push the price below $1.80, just to see what action it triggers. I’m not against the price moving lower in due course, but I’d treat such a move today like a politician’s promise. Friday’s trade gave me £107 profit, but it could have been so, so much more. Still, that’s trading.
I also opened a £1 short bet in FTSE at 5625, late on Friday, but closed it this morning at 5594. At that time the price was sat at the bottom of last week’s uptrend line, and just at the moment I’m trying not to argue with the trend. I came across an old market saying over the weekend which was a useful reminder, “In trading, being right too early is being wrong.”
Ploughing through a few charts this morning I came across this one, which aroused my interest:
Just like Sterling the Aussie Dollar has been hammered recently. Falling commodity prices, a slowing economy and traders closing out carry trades have all hit the Aussie; the final straw was the weekend hammering in the Tri-Nations rugby at the hands of South Africa! The market’s expecting a cut in Aussie interest rates tomorrow and the AUDUSD rate is balanced precariously on a support line that’s held for the past year.
I haven’t got a Scooby Doo whether the price will bounce from here, or drop below support and free fall to the next level, which looks several Dollars away. But what’s interesting is the Relative Strength Indicator (RSI) divergence; the RSI is becoming less oversold even though the price is falling. This could be a bullish sign, though I’d want to see some confirmation from the price chart first; something like a ‘Hammer’ or ‘Engulfing Candle’.
I’m doing nothing ahead of the interest rate decision, but I’ve made a diary note to have an early look tomorrow. I know there’s a few of you out there that regularly trade the Aussie; have you got a view? Am I barking mad, is it dependent on the next move in gold, or worth a punt in either direction?
Finally, there’s further evidence that the credit crunch is really hitting home in the UK:
Happy Reading
September 1st, 2008 at 1:34 pm
Short AUD/USD all the way for me. In fact, I’m so convinced of it that I’ve gone £2/pip short (a large size for me…!!). So I’ll probably be wrong…but I think it will be very hard for AUD to go up, especially with gold and oil seemingly on the way down and the almost inexorable strength of USD. I broke the habit of two months and decided to put a small long gold position on before I went out to work this morning, partly as a hedge against all the anxiety about oil and from a sense that USD is looking overbought, but came back in just now to find it cruelly stopped out. Just shows that it pays to stick to one’s guns…
September 1st, 2008 at 7:03 pm
Hi FT,
No view on dollars, be they Australian or American or for that matter the pound or the euro. Not my bag I’m afraid. I could be missing out big time as there seem to be a few of you out there who are doing very well on the currencies, apart from the rogue spike of course (had a few of those in my time……….trading that is.)
No, I’m sticking to the indices and it looks like I’ve got back at just the right time as all of them, apart from FTSE at the moment, are on or are turning to a ’sell’ by my numbers. It’s been a good couple of days for me since getting home on Thursday, just looking forward to a ‘real’ trend starting.
So, poor old Darling could be ousted for telling the truth. I suppose politicians are so used to lying through their teeth that they’ve accepted it as the norm. Must have been a bit of a slap in the face for Tosser Brown and his chums. If they all told the truth I for one would have a lot more, well a bit more, respect for them. Maybe helicopter Ben and Hanky Panky Paulson could learn something.
GP
September 1st, 2008 at 7:07 pm
ft, what do you think about the USD/JPY over the next few days or weeks, it has broken its 45 day moving average. it gets me wondering cos i have been short the dollar £3/pip since 110.09 and cant wait for it to hit its 180 moving average at 105.60 but am watching with tight trailing stop to protect my profit.
September 1st, 2008 at 7:57 pm
hey, welcome back Gazza. I’m hugely impressed that you persuaded the equity markets to hold on till you were back at the desk. I really thought they’d started without you, and paid a couple of hundred quid to find out I was wrong! I’ve been writing calls, but haven’t taken out a proper short yet.
Yep, I thought it was refreshing to see a politician telling the truth, but wonder if it’s all a bit, “don’t blame me, it was the bloke before me.” The papers would just love it if someone called Balls took over at the Treasury, wouldn’t they?
September 1st, 2008 at 7:59 pm
Hi Charles,
just off for a bit of family time. was looking briefly at $Y earlier today; debate over whether it had broken a short term head and shoulders,sending Yen weakr. All complicated by resignation. I’ll have a look in the morning and get back to you.
September 2nd, 2008 at 6:04 am
RBA cut by .25%. Reaction rally didn’t hold. I was a late arrival at the party but sold £1 at 85.07 at just after 6 o’clock!
September 2nd, 2008 at 6:47 am
WaHey! That was worth getting up for. Stop loss now trailed down to 84.55, locking in just over £50. Yes I’ve missed out on the bigger Cable move, but I’ll cope.
September 2nd, 2008 at 6:56 am
Hey Flash,
your £2 bet’s looking good this morning.
September 2nd, 2008 at 8:20 am
stop down to 8385 to lock in £120.
September 2nd, 2008 at 5:28 pm
Short AUD/USD oh yeah. very nice indeed. That must be a nominee for the ‘obvious trade of the year’ award!
Monster, monster day for me, being short GBP/USD, short GBP/JPY , short EUR/JPY (although I missed a fantastic opportunity to close out when it dropped right down to 15700 earlier today, looking at the chart) and short AUD/USD for the last few days. Just letting them run now, but have already locked in over £1.5k of gains combined just on the cable and the AUD/USD trade - you might recall that I went short cable at 18300 and now up to £2.50 a pip on that one…very nice.
Dow longs shot into the stratosphere earlier but looking a bit wobbly now - but I’m holding on. Missed out on most of the major gold move (have to go to work and earn some other money!!) which was a shame, as I’ve been calling it for weeks - just have left a small short in gold in place on a Dec future from 822 - I think it may come good over the next few weeks as everyone adjusts to a much higher dollar and a lower oil price. Disinflation! Disinflation! And BA long from 222 and all my various financials _ Lehman, Ambac, Barclays, and HBOS looking very very healthy indeed. Have locked in a chunk of profit with stops but am happy just to let all of these run for now. FTSE is bound to be difficult over the next few days with all the commodity/resource/oil stocks taking a hammering and all the recessionary hype but I’m targeting it to go much higher before it drops, hence holding to a long position.
Charles, for what it’s worth, I think - although I need to look at the chart properly - on balance I’d still be long USD/JPY, but I’d hesitate to go in at these levels. Might take a small short back to the 10800 level and then go long again if it drops below there. USD is on a roll and unless there is some really bad data to come (entirely possible) I think it could roll much further, especially against EUR.
Off out to celebrate with a nice dinner!!