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.
Short Ban Hasn’t Helped The Banks
Hi folks,
What a dull day it’s been so far; we seem to be in a phoney war with the politicians, wary of opening new positions in case they bring in some new rescue plan. Still, I enjoyed the irony of the hedge firm, Man Group, asking to be added to the list of protected species to prevent its shares being shorted by, yes you’ve got it, hedge funds. And whilst we talking about shorting, I’m glad it’s worked so well in protecting the banks’ share prices. Since Friday’s rally HBOS shares have fallen 24%, Lloyds TSB 22%, Anglo Irish 40% and Bank of Ireland 30%. Nice one lads.
I’m finding the markets pretty tricky to trade at the moment; seems like we’re all pretty jumpy and that’s the wrong time to trade. Yesterday I sold FTSE a bit too quickly when the Dow tipped through 11,000. At that point the Dow wasn’t interested and rallied. A week ago I’d have been happy running the short bet, but at the moment I’m keener on closing out for small losses. I lost a few quid, but made it back with interest by opening up new short bets last night and this morning. At the moment I’m flat and not likely to commit myself ahead of the Dow’s open.
I’m watching the EURUSD currency pair for a possible breakout trade. I’m happy trading in either direction, though I’ll restrict my bet size to a fiver. The bigger trend still favours the Dollar, but the more recent move has seen a good recovery by the Euro. I’m watching for a break of $1.4700 to the upside or $1.4633 to the downside. I might miss the trade though, because I want to see at least a 5-minute, and preferably a 10-minute, candle close outside the range.
You can see from the chart that yesterday had a couple of wicked false breakouts, and this morning there were a couple of stray hairs outside the range that didn’t last. In terms of risk management I’d rather miss the trade than get suckered into one of those. Been there, done that, got the blood-splattered T-shirt.
Things to watch out for this afternoon are the Existing Home Sales number from the US at 3 o’clock, oil inventories for petrol heads at 3.30 and the risk of comments from Paulson, Bernanke et all at almost any point in the afternoon. The text of yesterday’s speech was out way before Bernanke had even finished combing hid beard.
Happy Trading
September 24th, 2008 at 10:54 pm
Hi FT
i am getting the feeling this FED bail out plan is not going to be the full bit… i am 100% cash now but looking to short the ftse around 5250 - 5300 for a melt down
September 25th, 2008 at 7:01 am
Hi Simon,
yeah I wouldn’t like to guess how many hundreds the market drops if the bailout doesn’t happen.But I guess it won’t be a clean sell, and not sure we’ll get the luxury of a 5250-300 handle to sell at. The danger is the continued uneasy trend lower where we don’t quite get round to shorting properly because of the risk of 2-300 up on a successful outcome.
Is the most likely outcome a slow political fudge, which costs a lot but doesn’t satisfy th markets? At the moment I’m back to day-trading, nicking the odd profit then retiring back to the safety of ‘flat’.
September 25th, 2008 at 7:31 am
Hi all,
Stay short or, if you’re not short, go short. We’re headed back below 5000. Go with the flow.
And don’t mistake my confidence for prescience.
September 25th, 2008 at 3:30 pm
If I had a hat, I’d take it off to you Simon. 5250 looks on the cards now, perhaps even your higher target.Caught out opening a new short too early, so took the hit and closed out till the new euphoria dies down.
September 25th, 2008 at 4:13 pm
I used to have a hat but I’ve just eaten it.
September 25th, 2008 at 4:20 pm
Not sure I’d sell FTSE just yet - looks to me like we have further to go on the upside. But if gold continues to fall off (as usual I’m short gold - very predictable one track trader me….) I’m guessing the resource stocks, hence a good chunk of FTSE, will get hit - they’ve already come off a fair bit in the last couple of days. On the other hand I reckon bailout euphoria could be good for 200+ more points on the ftse before grim economic nastiness sets in. Noises out of the US seem to be that congress won’t be going anywhere until they’ve agreed a package…
What I’m having trouble working out is what all this means for USD. My guts tell me that there’s even worse to come in europe so I’m finding it hard to buy euros…
September 26th, 2008 at 7:21 am
My shorts are a whole lot happier this morning. Interesting the way the market was bought up in expectation of a deal then sold off when nothing agreed (yet). I suspect we may see a similar pattern as the expectation (surely!!) builds again with a sell off after the package goes through and reality hits home. This rescue is very bad news — the fact that having a rescue is better than not having one does not make it good news.
The downtrend is intact and I’m still looking for FTSE to dip its toe (and then some) back in the 4000 waters. I’d be inclined to take profits around 4900 but wouldn’t be surprised if we go as low as 4500.
September 26th, 2008 at 8:08 am
Hi Ken,
Like you, the remaining shorts I had overnight were nicely in the black this morning and I closed out everything before marching the kids off to school.
I’m becoming a bit sceptical on the effect the rescue package will have on the market when it eventually arrives. Everyone knows the market is getting $700bn dollars but the deal is certainly going to be a lot tighter than the one Hanky Panky scribbled on the back of a fag packet last weekend. As you said, the fact that a rescue package is needed at all is pretty ‘bad’ news.
Also, I have to admit that I made a mistake in a post a few days ago. I said that Hank was allowed to sell his $30m of Goldman shares tax free. That should have read $142m of Goldman shares. I think the term ‘I’m all right Jack’ springs to mind, now it’s just a case of getting his buddies out of the crapper.
GP