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Category Archives: Trades

These is where we share with you the trades that we have executed. We also track our trades for overall profit/loss reconciliation.

12 Nov @ Australia Employment Data and Unemployment Rate

Every country is looking at economic growth, labour, CPI and unemployment.  Australia is no different.

So at 8:23am, I put on my straddle with the following details: –

AUDUSD   0.7045   –   0.7065   –   0.7085 with spot at 0.7065 and SLs at spot

Employment came out whopping strong at 58K vs 15K forecast and unemployment rate dropped to 5.9% from 6.2%.

The AUD spiked up triggering my stop if bid order at 0.7085.  I sold half the position at 0.7140 and keeping the other half till Asia opens and clients starting coming in in the mid morning.

Unfortunately, the AUD didn’t really move very much more, so I closed the other half of the trade at about 10:30am at 0.7145.

Trading profits was 55bps and 60bps for an average of 57.5bps on $100Mn trade size.

5 Nov @ US Unemployment Claims

I decided to switch my attention to the EUR and at 9:24pm, placed my straddle as follows: –

EURUSD      1.0860   –   1.0880   –   1.0900 with spot at 1.0880 and SLs at 1.0880.

Unemployment claims came out slightly higher at 276K versus forecast of 263K.

EURUSD went up slightly to 1.0893 and I decided to withdraw the trade.

5 November @ BOE Rate Decision

Ok another central bank’s turn to create volatility in the marketplace.  BOE this week was squarely in the middle of the radar screen and of course, we should try and capture the volatility if it happens.

At about 7:54pm, I decided to place my straddle trade with the following details: –

GBPUSD   –   1.5365   –   1.5385   –   1.5405  with spot at 1.5385 and stop losses at 1.5385

When decision came out to hold and inflation targets to be adjusted, the GBP collapsed to 1.5270, triggering my stop if offered at 1.5365.

I decided to hold the position till after the start of the press conference.  Initially at the start of the press conference the GBP began climbing back up to 1.53295 and I thought maybe, I should square of the trade now and preserve my profits.

Then, with more comments from Carney talking about the fact that raising interest rates will be much further out in the horizon, the GBP went south again, and I decided to square off the trade at 1.5255.

Trading profits is 110bps……….RIGHT ON CARNEY!

Now to look forward to US unemployment claims in the next few minutes.

RBA Rate Decision!

Coming into the RBA rate decision, the media was somewhat noisy with the great majority believing that the RBA will not cut rates.  Then again, there are extremist who believe that the RBA likes to catch the market off guard.  The RBA dropped rates twice in 2015 catching the market by surprise.  Then again, somehow, I don’t have a whole lot of confidence in this event, however, as a trader we also need to be there.

Would this have been the case as well?

Instead of my usual straddle, I decided to just place a Stop if Offered on the downside with the following details: –

AUDUSD  –   0.7150 with spot at 0.7172 and SL at 0.7170

As it turned out, the market was wild!!!!!!!!  RBA kept rates on hold and said that it will continue to maintain an accommodative policy.

Within 15 seconds, the AUD gapped down to 0.7110 and then gapped up to 0.7205 and settled at 0.7163.

So my trade got triggered at 0.7150 and then got stopped out at 0.7170.

It’s 45 minutes later now at 12:15pm and the AUD is at 0.7204.

In hindsight, it was a fortunate thing that I only did one leg and not the full straddle otherwise I would have been triggered and stopped out on both trades!!!

So the moral of the story is?  Nothing is guaranteed and nothing is for sure, even the best strategy can be whacked by the market.  What is important is discipline and risk management; manage your trade size and please please place stop losses.

Ok for this trade I made a trading loss of 20bps, but if I had not placed a stop loss, I would not be staring at a 50bps loss.

Later this week it’s BOE, what can we expect?

29 October @ FOMC but no press conference

The amount of noise coming into the last hour before FOMC gave me cause to put in a trade.

At about 1:55am, I put in the following straddles: –

GBPUSD   –   1.5300   –   1.5321   –   1.5340  Spot was at 1.5321 and SL at spot level

EURUSD   –   1.1050   –   1.1073   –   1.1095  Spot was at 1.1073 and SL at spot level

At 2am, it was announced; Fed kept rates on hold but media is picking up the fact that the statement dropped the phrase, “global developments may restrain growth”.

We squared the trade at 2:11am at the following levels: –

GBPUSD, squared at 1.5260 for a trading profit of 40bps

EURUSD, squared at 1.10935 for a trading profit of 115bps

Thank you NEWS MEDIA; CNN, CNBC, WALL STREET, BLOOMBERG………..all of you were great!

It’s a wrap, time for drinks!

Where is the fx market now pre-FOMC?

Looks like the GBP and the EUR have both retraced quite dramatically back to the 23.6% Fibonacci based on the 4H chart.

EUR retracing back from 1.1480 to current 1.1048, GBP retracing from 1.5635 to current 1.5300, BIG moves within the past two weeks.

If Yellen even whispers anything dovish or speaks in generality and vagueness, the market is going to sell the USD, I am sure of it.

In other words, the GBP and EUR are at good levels to do a strong rebound if given the right motivation from Yellen.

This year has been just too much talking by central bankers all over the world, creating uncertain volatility in the fx market.  Rationale volatility is good for trading, however, irrational volatility is bad for trading.  Even Vice Chairman, Fischer is saying that central bankers should begin to talk less!

So will Janet continue to talk to the markets and now suggest a rate rise only in 2016 or is she just going to go into action?!

The truth is why are all on Capitol HIll and Wall Street so afraid that the US economy might run away and that the Fed may be behind the curve?  The United States of America is a developed and maturing country, it’s a dinosaur, even the strongest of growth, we will be lucky to see 5% GDP growth, more like 3% range.

So what’s wrong with letting the economy show more certainty and consistency in the numbers; labor, inflation, home prices, savings, new home sales, new building permits, and retail sales before Yellen raises interest rates.

Even if the Fed ends up being behind the curve and then, Yellen raises interest rates, how will that hurt the US economy?  It can only help since the economy is saying that it is doing well and can absorb an interest rate increase.

My hunch is that USD will take a beating today, let’s see?!

27 October @ UK Q3 preliminary GDP

Moral of the story is not to trade at 6am in the morning NY time and also when one has not had the chance to check the noise in the media.

I am currently in New York by the invitation of Goldman Sachs for a week.

I knew yesterday there was the UK Q3 GDP number coming out.  However, I didn’t know whether the media has been drumming up the impending event or not.

Nonethless, at about 6am NY time,  I decided to put on my straddle trade with the following details: –

 

GBPUSD   –   1.5320   –   1.5340   –   1.5360

Spot was at 1.5340

As it turned out the GDP number was weak, however ,the market didn’t really move that much.  Well, it did move enough to trigger my bid if offered trade at 1.5320 and then after that, it started moving back up, so before I could be stopped out at 1.5340, I decided to square off the trade at 1.5328 for a 8bps trading loss.

Moral of the story is don’t trade when one has not had the time to catch up with the noise in the media.  I am in NY since Monday and will be returning to Singapore on Saturday.

Later today, will be Janet Yellen’s time, what will she do?

22 October @ ECB Rate Decision!

Looking at the CFTC report last friday, it appears that the entire market was just slight net SHORT the EUR.

Since, the start of this week, the the EUR has been staying within a channel of 1.1300 and 1.1380, I suppose while the market doesn’t see any surprises coming from Draghi, one can never know.

The noise in the media was picking up this afternoon and London open, but not in a big way.

I decided to put my straddle trade on just before the press conference with the following details: –

EURUSD  –  1.1295   –   1.1315   –   1.1335

Spot was at 1.1315.

When the press conference started and the first few sentences by Draghi leaned towards a still accommodating monetary policy together with strong jobless claims numbers, it sent the EUR south, triggering my Stop if Offered at 1.1295.  The first 15 minutes it has been hovering around the 1.1225 and 1.1230 level.  Now all of a sudden it dropped further to 1.1180, I believe it’s either stop loss triggers or option triggers.  I decided to square my position at 1.1188 for a trading profit of 107bps.  THANK YOU DRAGHI!

I think this means I deserve to play golf tomorrow morning.  I am also done for this week.

I am still pondering whether or not to close my books for the year.  It just seems to tempting to keep the books open for a few more trades before the year is out.

15 October @ US CPI and Jobless Claims

As this is a sensitive data for the Fed and the world, I decided to put on my straddle on three currencies as follows: –

EURUSD   –   1.1416   1.1436   -1.1456

GBPUSD   –   1.5427   1.5457   1.5497

USDJPY   –   117.90   –   118.26   –   118.56

Core CPI was slightly elevated, overall CPI was flat, jobless claims improved to 255K against forecast of 269K, and Empire state manufacturing came was weaker at -11.4 versus expectation of -7.3.

Overall, USD bias, but the market didn’t move very much.  I took out the GBPUSD order, leaving behind the EUR and JPY order.

Both the EUR and JPY orders were triggered on the Offered side.

I squared the EUR at 1.1370 and the JPY at 118.70 for a trading profit of 46bps for the EUR and a negligible 0.14 yen.

This is what I mean when the event or data is not expected to make the fx market volatile, this strategy of the straddle trade doesn’t really work well.  It needs the volatility.

14 October 2015 @ GBPUSD; Claimant Count and Unemployment Rate

I was wondering the past 48 hours why there wasn’t any noise in the media about the UK Claimant Count and Unemployment Rate since BOE, Carney is focusing on raising interest rates next year and not wanting to fall behind the U.S.

I decided to put on my straddle at 4:25pm as follows: –

GBPUSD  –  1.5285   –   1.5315   –   1.5345

When the data came out it was self cancelling because the Claimant Count was slightly higher but the unemployment rate improved.

GBP hardly moved, so I took out the trade.