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.
European Bank Rescues Spook The Market
Hi folks,
I have to admit that as a trader I made a bit of a pigs ear of this morning’s opportunities. My list of excuses is longer than the fall in Sterling but, in summary, I made a scrap from short-selling FTSE and missed out on the mammoth Dollar move all together. The various international busybodies certainly knew what was coming when they banned the shorting of financials, and it does beg the question, “Who’s next?”
This was the first weekend in four when I didn’t run a short FTSE position, and boy did I miss out? I did open up a new short position on Friday evening, but took the quick profit to have a relaxing ‘no positions’ weekend. This morning’s double whammy of government bailouts of Fortis and Bodgit & Bingley negated any possible upside from news that the US bailout had been agreed in principle. In the UK RBS shares were slashed by 20%, in Ireland Anglo-Irish shares plunged 40%. Ouch!
This morning I celebrated our wedding anniversary with a nasty bout of ‘man flu’. On top of that I had to search for that Holy Grail, an available doctor’s appointment for a son who’s got something a bit worse than me. All this meant that although I opened a new short in FTSE, there were too many distractions so I closed out at 5000 for an OK, but insignificant profit.
Last week’s rally in the Dow came unstuck at the 21-day moving average, a key trend indicator; today’s reaction was to pile lower again, despite hopes of an agreed bailout package.
I had a different, though equally frustrating, excuse for missing out on the 300 pips available in GBPUSD this morning. I’d already missed the fall during Asian hours, and the sell-off between 7 and 7.30 this morning. By this time the relative strength indicator on all my intra-day charts was showing the Dollar as overbought against both Sterling and the Euro. One of my trading rules is to avoid opening bets when the RSI is below 30 or above 70. I don’t use those levels as a reversal, more a sort of amber light that I’m a bit late to the party.
The trouble was this party lasted all morning and I sat outside, like Billy No-mates, watching all the fun and games going on. Still, once I start breaking my rules I’m on the slippery slope to ruin.
I’m a bit wary of opening new bets after the massive moves this morning, both in equities and the Dollar. Sure, I’m still bearish on equities, and I can see where the Dollar move’s coming from. But whilst volatility can be great for trading if you’re brave, quick or on the beta-blockers, it can also reach out, grab you by the throat and do some nasty damage to your trading capital.
This is a big week for economic numbers (check out the Weekly Wrap) as well as the European Central Bank meeting to discuss not moving interest rates. Also, the talk may be of a done deal for a US bailout, but there’ll be a lot of nervous trade ahead of Wednesday’s vote. In the short term my strategy will continue to be trading FTSE on the short side for small quick moves. I’m also going very long of Lem-sips.
Happy Trading
September 29th, 2008 at 6:00 pm
Ha, Ha, Ha………….they’ve voted against it.
September 29th, 2008 at 6:04 pm
Anyone catch that 700 point drop on the Dow? This was the night to be short.
I closed my FTSE shorts this morning. Sigh. But I averaged nigh on 400 points on them, so a good end to the month and shouldn’t grumble.
Rashly sold some 4300 puts, which doesn’t seem so smart now. Might even be tempted to squander some cash buying out the money calls tomorrow.
September 29th, 2008 at 6:09 pm
Hmm, after closing out a short ahead of the vote, at least I was here to re-open as the vote was going thru on the squawk. Part of the restrained reaction (ie not 1000 points) was the hope of a bit of arm-twisting before the final doors closed. could get livelier now. Happy anniversary love, I’ll be down later!
September 29th, 2008 at 6:22 pm
So what’s the next stage-is it like the EU where it keeps asking the same question until it gets the right answer? All holding up a bit too well at the moment.
September 29th, 2008 at 6:28 pm
Hi FT,
Yes it looks like they will keep asking and twisted arms up behind backs until the nays say yea.
GP
September 29th, 2008 at 7:05 pm
And then there’s always a declaration of martial law and a suspension of democracy — after all, they’ve chucked out just about everything else.
September 29th, 2008 at 7:10 pm
Big figure on the Dow at the close?
On the plus side that was a fairly quick £800 profit. On the downside, I’ve got to keep most of the short live as a hedge against my 4600s! temptation to buy a bit back, and use rally to re-open, but not ahead of the final half-hour.
September 29th, 2008 at 7:28 pm
Hi FT,
I was a bit like you today, sitting on the sidelines watching. At close of play Friday I was £1650 down on my short DOW positions so was pleased when the markets opened this morning to ban £113. Managed to talk myself out of going short on FTSE & DAX. By the time I’d driven to work they had both gone through my trigger points by some way so I decided not to chase it.
The only other index on the ‘trigger’ was the NASDAQ. Shorted £5, and then another £10 and then watched for about 15 minutes as it went one way and then the other, but only ever about £20 down or £10 up. In the end took £10 profit and within milliseconds watched as it proceeded to fall by 70 points. Ho-hum
So with powder dry will look for more opportunities from Wednesday as not able to monitor anything tomorrow. A day of missed chances but at least I wasn’t long and capital preservation is the name of the game.
GP
September 29th, 2008 at 7:34 pm
That’s really the big point isn’t it Gazza? That’s what kept me sane all day, preserving my capital, cos there’s always another opportunity. You might be well off away from the screens tomorrow-I guess it could get very silly.
September 29th, 2008 at 8:12 pm
Hi FT
yep agree £700 up this morning quickly followed by a £700 down in the evening - its not worth all the stress!
September 29th, 2008 at 9:30 pm
Capital preservation absolutely. Stops on my remaining dow long unsurprisingly triggered while I was out - made a bit on the USD move but have closed that out too - the only thing I’ve got left running is a forlorn long position in WM Morrison supermarkets (anyone have any idea why they didn’t tank along with the rest of the market today?) which I expect to get stopped out oretty fast, first thing tomorrow. Am going to sit this one out and wait and see what happens. I have to say I’m tempted to buy a few equities though but got hurt last time I tried to be too clever and buy HBOS so caution is the name of the game. I’m pretty certain Bush will push through a bailout of some sort but so much damage has been done now - and more nightmares to come - that we can’t guarantee markets will respond positively at all. Crazy times!
September 29th, 2008 at 9:33 pm
Still in Shock , biggest drop ever hey, we will have to see how the Japs react to all this after letting it all sink in for a couple of hours, when the N225 opens in a 2 1/2 hours.If they start in the black you could see some what of a come back in the markets tomorrow.With everyone following Maybe in for a 150+ opening in Wall Street at 07.00gmt, Fingers crossed
Best of luck
September 29th, 2008 at 10:00 pm
Damn good job they’ve banned all those nasty, unwashed short sellers. Can you imagine what the indices would have ended at otherwise!!!
Can anyone see the US shorting ban being dropped on Oct. 2nd. ……………………No, nor can I.
They can change the game, move the goalposts or even pick up their ball and take it home. It doesn’t change the fact that the banks have bought this on themselves, not short sellers. Over leveraged and with not enough capital, in a fiat based system, to cover everyones money. They are now beginning to reap what they’ve sowed.
The FED have been helping these banks keep their off balance sheet activities hidden for so long by exchanging their crap for backed up bonds. Even today the FED plowed in another $630bn. Have they not realised yet that it’s not working.
No doubt our man Gordon will have taken heed of the mistakes being made in the states ……………………and then copy them parrot fashion. Open your wallets everyone and let Gordon bleed you dry, this is far from over.
As they say over at Minyanville, this process will go through three phases:- Denial, Migration and then Panic (capitulation). It’s funny that so many people I speak to or have earwigged on conversations are only just beginning to realise the seriousness of the situation, now that it’s plastered over the front page of every newspaper or tv news report. I would say that we may now be getting close to the end of the denial phase.
Hold onto your hats.
GP
September 29th, 2008 at 10:06 pm
Just an inkling I have but I don’t see the N225 starting in the black somehow. But, stranger things have happened.
GP
September 29th, 2008 at 10:49 pm
Hi Datto,
Sorry, it won’t be everyone following. As they say on Dragon’s Den “I’m out” of any ‘long’ trades. If the market does rise 150+ there is only one direction I’ll be trading in.
GP
September 30th, 2008 at 11:04 pm
From Yahoo this evening:-
On the Asian front, Nikkei futures traded in Chicago were down 905 points, or 7.5 percent.
That’s definitely RED
September 30th, 2008 at 11:28 pm
Hi Lads
N225 fiinish 11268 at 9 last night so anything above that is BLACK , If the Japs start trading at an all year low for the N225 you may see a bounce , So i`m hoping N225 to hit 11450 after 2 hours. Thus giving the cheap Wall street a good kick start. Still Anglo irish Bank i think is a no brainer for a long, cant see any of the Irish banks going under, they stopped offering Mortgages a long time before this bull hit the fan. Anyway who knows put keep your eyes on N225 only 30 min to go.
Good Luck