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.
Dollar Strength Continues Ahead Of Bailout (II) Vote
Hi folks,
And so we await another bailout vote, and if this one goes to plan we can spend tomorrow waiting for yet another bailout vote. In the meantime the FTSE’s full of autumnal vigour. And the inconvenience of US manufacturing registering the sharpest one-month decline since 1984 hasn’t deterred traders from piling into the Dollar. I’ve been caught with an awkward position in my shorts, but consoled myself with a small profit in the forex market.
There’s been a few snippets of news today, but the only real story in town is tonight’s bailout vote. If you’re due a coffee break, I’ve just finished a piece looking at the first failed bailout and what to expect next (The Bailout Is Dead, Long Live The Bailout).
If any of you are new to trading can I recommend reading the piece on trailing stop losses (Trailing Stop Losses. Like Female Bodyguards); if your a seasoned old sage like me I hope you’re better at sticking to your stops than I was yesterday. I stopped out 2 of my 3 short trades early yesterday morning, but didn’t believe the bounce so kept one short position open. That one small position wiped out all of Monday night’s gains and added a drop of red ink for good measure. It’s looking a whole lot better this afternoon, but that’s not the point. The point is that my lack of discipline let a very big (by my standards) profit disintegrate into a loss.
I was too tied up in writing the article this morning to get to grips with the huge (again) Dollar move. Just like the other day, I’m not good at joining the party once it’s been going a while so I sought refuge in a quieter market, the EURGBP currency pair. The trading range of this pair is designed for those with a dodgy ticker; it’s not much of a mover, but if you catch it right it can give some low-risk profits.
If you check out the chart I wasn’t very ambitious, but with a fiver underwater in the FTSE market I wanted a higher probability trade. I waited for the break back above £0.79, but also for the break above the pivot point at £0.7917 and the ‘21-24 area where it had struggled a bit. I went long in a tenner when the price ticked back to £0.7921 and took profits on half my bet at ‘32, bringing my stop loss up to break even. After that I let scraps go at ‘38 and ‘31 before losing my final £1 at breakeven. Total profit was a safe £109.
News in brief:
HBOS is the day’s top dog, rising 17% after Standard Life, a major shareholder in Lloyds and HBOS said it was happy with the original terms. My guess is that being Scottish, it’s a bigger holder of HBOS than Lloyds.
Most of the day’s economic numbers have been awful; the European PMIs were lower than expected this morning, and the US ISM registered the sharpest 1-month fall since 1984. The odd-man out was the US ADP employment change, which showed a fall in jobs of only 8k, compared to an expected 50k.
Xstrata pulled out of its bid for Lonmin, blaming current credit conditions.But it cheekily used the consequent sell-off to up its stake to 24.9%, making it damned difficult for anyone else to take their place.
I’m off for a break now, it’s likely to be a long night.
Happy Trading
October 2nd, 2008 at 11:30 pm
Hi FT
I have been the mega bear for ages - howvever reckon if they get this plan through there could be reasonable bounce - fair enough however believe it or not I have been looking at the 1929 - 1931 - charts the last time there was a comparable financial crisis and there was still another massive drop after the initial bounce, maybe a trigger would be a very big bankcruptcy outside the major banks - got a feeling we are going to totally uncharted territory - who knows?
October 2nd, 2008 at 6:09 am
GE, as a financial in disguise, had a pretty bad day yesterday and the automakers also dabble in financials so there has to be a risk there.
GP
October 2nd, 2008 at 7:05 am
Morning guys,
I stayed up till 12.115, but when some media geek said,”and we’re expecting the vote in the next 2-3 horurs’ I called it a day. I closed out part of my short on FTSE and set a limit to sell if below 4900 (just for o/n).
Yeah Simon, I’ve seen a few bits of bullish research recently, one piece was looking at price action whenever the VIX had hit a certain level, another was looking at numbers of days and percentage falls.Some are looking for a big spike up!
Not sure what time Friday’s vote is, but I guess we get a more determined bounce if they get that one through.
Trouble is, I reckon all the focus has been on the banks, and not the real economy behind them. I reckon the best I’ll manage is a neutral position at this stage.
Hi Gazza, yep, I can’t remember whether GE and GMAC got on the protected specieds list.
October 2nd, 2008 at 8:12 am
yes, I stayed up too and went to bed thinking that perhaps the dow would rally even more on the news - but in fact it pulled back - I guess if Friday’s vote is positive then we could well see a bigger reaction. The real action in my trading has been in gold and USD - USD really pushing against EUR and GBP overnight and gold off another $5.
October 2nd, 2008 at 9:57 am
I too watched some of the news last night and couldn’t help but be amazed at the attitude of some of the speakers supporting the bill. Their whole argument seems to be about Armageddon or the apocalypse but no one seems to be able to explain exactly what this will look like.
One guy was banging on about the fall seen in the markets after Monday’s vote and how it was affecting peoples pensions, 401k’s etc. Don’t recall the banks being too bothered when they put all this crap together. Also, don’t ever recall seeing any of these financial risk warnings that’s says ‘The Market can go up as well as up’!! Comes back to the banks original suppersition that house prices would rise forever.
GP
October 2nd, 2008 at 2:47 pm
Very tasty move in gold this afternoon….
October 2nd, 2008 at 3:06 pm
Yeah, you must be coining it in this afternoon Flash.
October 2nd, 2008 at 3:21 pm
yup. very nice. making back some of the mistake that I made by not cutting my long dow position when it peaked at above 10900 in the night…still, hindsight is a wonderful thing…