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.
Bank-Heavy ISEQ 20 Gets Slammed
Hi folks,
Early yesterday morning, before a day out of the office, I was worried that the FTSE rally could carry on a bit further (Does FTSE Have Further To Go?). But despite my concerns it just didn’t seem right buying back my short above 5300, so I left for Cambridge with the position open. And what a great way to end the day, rolling in after the close to be greeted with £600 in the profit box. Wa-hey!
My reading of the market hasn’t been too good today; I had an article to crack on with so when FTSE seemed to be holding the 5150 level I decided to cash in my chips and have another look when the US opened. Hah! Within a couple of minutes the line that had held firm all morning gave way to a further 40 point fall. That was nearly close enough to take personally.
After a good opening profit I made a couple of sacrifices to the trading gods. Since the Socialist Republic of American unveiled its bailout plans I’ve been bearish on the Dollar. But this morning I was tempted into a couple of trades in the ‘wrong direction’. It’s another of my faults; too often after missing a day’s trading I’m a bit too keen to get back into the action. I sold EURUSD twice, once in a fiver, the second just in a couple of quid, and gave back £100 of my earlier profits.
Hey! Have you seen the Irish ISEQ 20 Index today? It’s been smashed. The Index has plummeted 18% since Friday’s rally and is even below last week’s level. Blame the banks again. Last week I wondered if traders, banned from shorting the banks outright, would pick on bank-heavy indexes like the Irish 20 and FTSE 100 (Get Those Shorts Off). And today we’ve brought out a piece (Can You Short The Irish Banks?) suggesting how traders might be doing this. Have a read, it’s a short piece and could be profitable.
This afternoon I’ll be looking to re-open a short bet in FTSE but, with the potential for quarter-end fun and games over the next few days, I’ll keep on my toes in either direction. At the moment I’m looking for the Dow to break 11,000 before jumping in.
Happy Trading
September 23rd, 2008 at 1:14 pm
If anyone is wondering what the Irish 20 is, have a look at http://www.paddypowertrader.com/ireland-top-20.php
September 23rd, 2008 at 3:03 pm
Apparently the drop in the ISEQ today has been caused by the ban on short selling: http://www.rte.ie/business/2008/0923/marketupdate.html
How ironic is that!
September 23rd, 2008 at 5:54 pm
Hi FT, Z,
There’s more than one way to skin a cat, eh.
My other favourite website reckons that the retailers may have to come under the short selling umbrella as soon as they start announcing their results.
And a little teaser for you. What’s the difference between short sellers, who have looked into how badly these banks regulated themselves, taking advantage and selling short and the analysts who put ‘buy’ ratings on companies encouraging people to buy and pushing up share prices.
Also, what now happens to all the people who sold short to hedge their pensions, which were falling into a black hole?
GP
September 23rd, 2008 at 10:03 pm
Hi FT
reckon if things get much worse on the irish banks would not suprised to see trading suspended - howvever as i type i hear warren buffet maybe buying into GS so who know’s !
i fancy a long trade @ the momment - no reason for it but just reckon the old US PPT(plunge protection team) will be in action again soon
cheers
S
September 23rd, 2008 at 10:07 pm
hi there
quick update - yep futues have gone mad up again! i was on the red - and yep the roulette wheel has spun the red!
September 23rd, 2008 at 10:11 pm
Hi guys,
yep, just seen the Goldmans news. Went short early evening, but in line with my earlier comments I took the turn,said thank you and stuffed the notes in my back pocket. I found it quite hard trading today as I feel more comfortable being short, but share the cynical fear that all sorts of official monkey business will continue, especially as the quarter-end approaches. mind you, I can’t bring myself to go long. Yep, i wonder how long before all shorting is punishable by firing squad.
September 23rd, 2008 at 10:26 pm
cashed in the long positions on the GS news - do i now go short? um… i think i will sleep on this one
September 24th, 2008 at 9:47 am
Morning all. Not trading much at the moment - it’s too horrible out there -but spotted this via FT Alphaville yesterday and thought it was worth reproducing here - especially as it comes from Simon Denham of Capital Spreads - one of the powers behind paddypowertrader:
Bears are being punished for being proved right
Sir, Liquidity is the life blood of the markets, as has been shown with subprime debt, where the lack of it has forced banks to value mortgage obligations at prices well below fair value, causing a huge proportion of the current problems. If you ban shorting, how can you buy stock if no one wants to sell? To whom do you give permission to short? Marketmakers? If they have the right to short, then why cannot I have that same right?
Liquidity will now dry up in banking shares, so that any buying or selling will create greater price-action volatility as dealers and marketmakers pass the risk on immediately down the line. Without the ability to borrow stock, marketmakers will widen prices to reflect the increased risk and costs of dealing.
The problem in the markets is nothing to do with short selling, it is to do with liquidity between banks. Quite how banning it is supposed to improve matters is not clear. With bank share prices now propped up artificially, the changes make it even more difficult for Treasury units to adjudicate on the strengths or weaknesses of their counterparts.
What could have been done to limit excessive short selling? A more elegant route might have been to demand that brokers ask for 50 to 75 per cent margin on any short positions, thus ensuring that big shorts cannot be built up with limited resources.
Short selling is not some get-rich-quick scheme. Over the past three or four months, there has been a series of big stock market bounces that no doubt did much to squeeze out any bear raiders.
The problem with all of this is that myopic commentators focus only on the fact that some people are making money as companies’ share prices go down and they feel this is unfair or immoral. Unfortunately, for all the calling of “foul” that rings around Westminster, those with a bearish view on the financial institutions have been proved right - and it is probably this that infuriates these commentators rather than any philosophical aversion to selling short.
Simon Denham,
Managing Director,
Capital Spreads,
London EC1, UK