I bought the GBPUSD at 1.5552 and squared at 1.5592 prior to the GDP announcement for a trading profit of 40bps or 0.25%.
Monthly Archives: June 2013
I bought EURUSD at 1.3250 at about 9:18pm and squared later at 1.3275 for a trading profit of 25bps or 0.188%.
I saw another opportunity in the USDJPY and also tracking today’s session of Abenomic
I bought the USDJPY at 98.29, but after half an hour, I didn’t see the yen moving the way I saw it.
So I decided to square the trade at 98.34. It is now trading at 98.24.
This morning the technical analysis indicated a possible upside to the AUDUSD, so I bought at 0.9434.
Through the next 3 hours, it was pretty much flatline, I then, made the decision to cut loss at 0.9430 for a 4bps loss.
Guess what?
The AUDUSD is now trading at 0.9362.
I did 8 spot trades and one put option and I made an absolute return of 54.8%.
My year to date absolute return is 81.9% and adding this month’s performance brings the outperformance over my principal to a handsome 136.7%
I am happy that I hit past my 100% target for the first half of this year.
Let’s hope the balance of the year will be equally rewarding. One thing’s for sure, we will continue to experience lots of volatility from here to the end of the year.
Identify risk, respect risk and do not be greedy, you will always be a net winner.
I am of the view that the AUD has been trampled on too much and at the current level of 0.9525, could be an opportunity to place an option strategy.
The lows in the AUD: –
1 June 2013 – 0.9708
3 Oct 2012 – 0.9525
7 June 2010 – 0.8102
October 2008 – 0.6674
The above lows is to give us all a ‘feel’ the AUD.
I do not believe that the Aussie economy is worse off than back in 2008 to 2010.
From Black October, the AUD has powered from 0.6674 all the way up to 1.1075 in July 2011. During the crisis in both the United States and in Europe, the AUD has always been trading between 1.03 and 1.05 despite the declining economic health in China.
Yes, Australia is paying for it today by being to resources export dependent and to China. Today, Australia has a structural and fiscal problem, if appropriately fixed, the AUD should be well back above the parity level.
Currently, the weak AUD is helping the economy, making exports more competitive. What is comforting is that consumption is still healthy and housing is stable.
A few more months below parity and the benefits of the weaker AUD will filter into the economy. I do not believe there’s a need for RBA to further cut rates.
I am considering buying a call option when the volatility is lower.
After last night’s spectacular moves by the EUR and GBP averaging more than 190bps, the current spot is at the 50% retracement level. The market can now make very violent swings given the current volatility.
While I am of the opinion that the non farm payroll numbers will probably disappoint given the earlier poor showing of the ADP numbers, we are going into Spring and the start of new job placements. On the off chance, that the non farm payroll numbers coming in stronger than forecast, we should see USD powering back against the EUR and GBP.
Volatility in equities and forex are high right now, and hedging through the options or CFD market is very expensive.
If one is being prudent to potentially capture either the upswing or downswing, buy a call/put spread option would be a safe bet, as one would WIN either way. However, the cost of the spread option till Monday 10 June is a hefty 114bps. So is it worth it? NO.
Which means, one will have to take a gamble on one side. My advice is to place a stop loss as it is our only protection.
I am deciding to stay out of the market today and instead, spend time with my wife going to the spa and a nice dinner.
Here’s wishing all of you a great weekend. Remember, in the forex market there is always another day of opportunity, so if you don’t feel comfortable…….don’t push yourself.
What a surprise, just when I thought I was going to have to write off this option.
I am truly puzzled, Draghi’s speech last night was not encouraging nor negative, no reason for the EUR to surge upwards like a bat out of hell.
The big move happened during lunch time NY session, which hints to me that it was stop losses, options, and program trading that triggered the EUR and moved it upwards.
I have no confidence in the Eurozone and I feel that it has do to more if the Eurozone is to recover from its recession.
Therefore, I have made the decision to sell the option at 1.3260 this morning and locked in profits of 85bps or 0.64%.
What do I think of the above data?
I believe the data will disappoint, but it may not have a big impact in the marketplace as the EUR and GBP have already retraced to the 61.8% level.
Upside will be limited, however, if the data comes in strong, then, the downside risk is much higher.
Although, I feel and believe the data will disappoint, however, purely from the risk and reward ratio, if the data surprises on the upside, then, the meltdown in the EUR and GBP will be big.
So, I may put on a contrarian trade and place a sell limit order on the EUR and GBP. Maybe, instead of placing two orders, just do a cross, that is, EURGBP.
Anyway, we still have another 3 hours before the data is out and more time to access the opportunity.
Following from my thoughts for the GBPUSD earlier, I went ahead to place a buy limit order at 1.5330, SL at 1.5310, while spot was at 1.5302.
UK Services PMI came out very strong at 54.9 versus expectations of 53.1. Immediately, the GBP spiked up triggering my limit order, I followed the spike till I saw the stochastic peaked and sold at 1.5370, the high was 1.5371, it is now trading at 1.5356.
Locked in a yum yum trading profit of 40bps or 0.26%.
The Panthenon Investment Group 