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.
What! A Sterling Rally?
Hi folks,
At the time of writing I’m long of Sterling! Yep, I probably am mad, but this morning I ditched the bigger strategic plays for some hard and fast trading. So far I’ve sold GBPUSD once and bought it twice. Part of the reason for this is to distract me from joining in and selling FTSE down at the 5500 mark.
First off, the forex trades are all pretty meaningless; they’re paying for breakfast rather than dinner. I’m just trading what I see, and what I’ve been seeing this morning is a reluctance from traders to bash Sterling in any meaningful way.
My first trade was to sell GBPUSD at $1.7702. This was on a small bounce following the better than expected CIPS Services number. The bounce didn’t hold and I was soon in the money. But, but, but unlike previous days the rout failed to take hold. I scrambled out of my trade for a miserly £49 profit.
I wondered whether this was a sign of traders taking a few profits ahead of tomorrow’s UK and European central bank meetings, and Friday’s US payroll data. I decided to watch the price action on the upside and when $1.7710 fell victim I bought GBPUSD, just in a fiver, at $1.7713. As the price pushed ahead I let £1 go at $1.7726 and brought my stop up to breakeven (there’s no place for heroics when trading against the trend). I was stopped out as the price dropped back, but significantly the price didn’t make new lows.
Check out the chart, granted it’s one for the brave or stupid, but there might just be a breakout if enough traders have the same idea about taking some profits. As a trader I find that sometimes testing the boundaries in small size keeps me in touch with the market mood.
My third bet was a £5 long on GBPUSD at $1.7723 and at the moment I’m long of £3 with my stop loss at break-even, having sold £2 at $1.7740. The sum total of notes in my back pocket today is £92, but it kept me out of mischief.
Was yesterday the crucial turning point in equities? The S&P stuck its nose through 1300, but failed to hold the level, and the Dow took one look at 11800 and ran for the hills. So why, when I spend my trading life talking bearish on equities, have I been deliberately avoiding opening a short position?
Well, firstly, I reckon there’re enough bulls out there that’ll look to test the upside again. The 5500 level’s been doing a reasonable support job, and coincides pretty much with the 14 and 21-day moving averages. I’ve been suckered into early positions enough times to occasionally remember to be patient.
Secondly, we’ve potentially got a couple of big days ahead; I don’t expect any excitement from the UK, but tomorrow’s ECB press conference, and Friday’s payrolls could be market movers in either direction.
As a token gesture I increased my short in HBOS; with the original short now 20p onside I sold £2 at 300.2p, taking my short to £5.
Happy Trading
September 3rd, 2008 at 12:45 pm
If anyone fancies a laugh, check out the chart now. A short while before the predicted breakout there’s a little ‘dangly bit’. That’s where I was stopped out in my balance at break-even. And in rushing to get the blog out I missed the chance to re-enter the trade. Bummer!
September 3rd, 2008 at 2:27 pm
After giving the market a head start I’ve had another go at buying cable at 1.7779, stop at 1.7750.
September 3rd, 2008 at 2:38 pm
halved my bet, as standard, at 1.7789. stop still at ‘50.
September 3rd, 2008 at 2:45 pm
Pah! A trade too far. Kicked out with the trash at ‘50 for an overall loss on the trade of £95. So, a pretty nothing sort of day in the end.
September 3rd, 2008 at 3:06 pm
aargh. should have stayed short like me…volatility on the Dow today is pretty nasty though, isn’t it? Still maintaining my long dow, short gold, long USD view though….
September 3rd, 2008 at 4:16 pm
I try not to get wedded to a view. sometimes it’s worth losing a scrap to keep challenging the view. I opened a small short in FTSE at 5533 when it failed to recapture 5550.
September 3rd, 2008 at 4:35 pm
yeah, I know…I”ve been really obstinate in sticking to my guns over the last few weeks and it’s generally paid off, although if I’d closed out some of my currency bets before today’s mini rally, and some of my dow longs yesterday then I’d be sitting on a pile of cash - but I’m trying to hold on despite the volatility. I think the overall macro call is that equities - partic some of the financials and large cap consumer stocks - will rise, although we’re getting plenty of pain on the journey. Ambac, HBOS and Lehman have been monster trades for me so far and they could well go much further, I think.
September 4th, 2008 at 2:41 pm
There you go…took a bit of time but I did say long USD was the way to go…
on the other hand my dow longs have taken a caning this afternoon
September 4th, 2008 at 2:57 pm
Yeah, it’s been one helluva reaction to a pretty neutral interest rate day! Lost £20 on an option position, but made some back on a small euro$ short trade, and plenty back on my short HBOS. My regret was not putting the FTSE short on again this morning.
September 4th, 2008 at 3:21 pm
all but 1 of my HBOS stops triggered - haven’t lost anything but have given up some tasty gains - however my HBOS longs from 260 and 275 are still standing for now - haven’t managed to find time to check what’s triggered quite such a vicious sell-off - other than general recessionary gloom…
EUR and GBP headed south as I predicted - what I’ve lost on the long equity positions I”ve made up for on the short EUR/JPY, GBP/JPY and EUR/USD positions, plus gold…
but a very hairy and unpleasant market this afternoon, unless you were outright short.
And now crude is taking a dive!!
Must look into this options business - FT can you do a beginner’s guide?