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Daily GBP/JPY analysis

  • #8,181
  • Jul 10, 2007 5:46pm Jul 10, 2007 5:46pm
When carry trades sell off it can be quick...like today. Noone wants to pay interest when they can earn interest. Buying could be just as quick.
  • #8,182
  • Jul 10, 2007 5:58pm Jul 10, 2007 5:58pm
Quoting Plutonite
I'm short GU and long GJ at 245.17. call it suicide, I call it heavenly whispers from afar. PS: made 30 pips on AUDUSD and jumped out in exactly 3 minutes. Dirtiest trade I have ever done, I think I'm going to shower now.

Good luck.
Closing the GJ now , 90 pips in ..uh..15 minutes? There are kids risking their lives in sudan every day to get a sip of water, and I made 90 pips on a 50 lot trade in 15 minutes. Thank you God, my gratitude is only a measure of my inability to thank you for what you have given, and what I do not deserve.
</prayer>

Now fellow trader..when the voices from afar speak you better darn listen! I'm closing because although it is clearly going to go up further in the next 72 hours, the next H4 candle will probably be a retest and I don't have the heart to see it go down.

USDJPY and USDCHF longs still open from below (121.28, 1.2003), but I am seriously feeling unclean with this scalping and will shower then go to bed. Let it do it's worst.

Good luck.
Virtue finds and chooses the mean. Aristotle, Ethica Nichomachea
  • #8,183
  • Jul 10, 2007 6:00pm Jul 10, 2007 6:00pm
When you're talking massive moves, interest is honestly the smallest concern. Sure, it's nice to collect positive swaps but if you can make 500+ pips going short, while losing a few pips in value a day to swaps, what would you prefer? What would anyone with an ability to judge the market prefer?

Unless the BOJ suffer a massive brain explosion and raise their interest rate from .50% to 6.00%, the carry trade is not going to end. You will get to go long again at some point and make huge sums of cash from both market price and daily swaps.

The 50 pip swing straight back down in the time it's taken me to write this post should suggest it might be a little early to load the boat at this stage. Tokyo hasn't even had a chance to sink it's teeth into this move yet.
  • #8,184
  • Jul 10, 2007 6:28pm Jul 10, 2007 6:28pm
I would PAY to see the Japanese faces when they get back to their desks today.
  • #8,185
  • Jul 10, 2007 6:37pm Jul 10, 2007 6:37pm
Quoting cesarnc
I would PAY to see the Japanese faces when they get back to their desks today.
lol!
"it doesn't come any sharper than this!"
  • #8,186
  • Jul 10, 2007 6:44pm Jul 10, 2007 6:44pm
With carry traders interest is the king....and they will be buying all the way down and then collecting all the way up. We don't care how much it goes down, because it will come back up with a vengance!! That being said, I was short, but now will re-evaluate for possible long entry, or further quick shorts.
  • #8,187
  • Jul 10, 2007 6:50pm Jul 10, 2007 6:50pm
This actual 4hr candle is something to take a picture of and hang on the wall..

You will tell your grandchildren:

"See this candle, sonny? hehehe... Been there, seen that, traded that motherf#$@%@"
  • #8,188
  • Jul 10, 2007 6:51pm Jul 10, 2007 6:51pm
long @ 246.24 and tightly gripping my rosary ....crazy time to trade ive been up for 27hrs and counting!
"it doesn't come any sharper than this!"
  • #8,189
  • Jul 10, 2007 7:11pm Jul 10, 2007 7:11pm
carry trade are only matter of market atm...the unwind today just reflect matter from us bad news...we dont have see what it goint to do in asian and europe...even tomorrow us market may going more down...if poeple easy carry trade ...the logic not the same in market as spreatd to enter are now very high!Dont forget the world wide fund are now ready to little or massive correction as they have raised very mutch in q1 and q2 without any significant correction!
  • #8,190
  • Jul 10, 2007 7:18pm Jul 10, 2007 7:18pm
@Magic46 - So, you're saying that the average carry trader could handle a 500 pip drawdown? What about 1000pips? 2000pips? I'm sure the couple of hundred dollars racked up per 1 lot trade was a huge consolation to all the carry traders that held their longs when the market dropped right back to 221.xx in Feb/March. How many accounts were blown up by doing exactly what you just suggested?

It is reckless in the extreme to only be able to bet one way on a currency pair or pairs. If you only have one strategy to trade, then eventually you will lose. I completely agree with you that there is an absolutely absurd amount of money to be made by longing the yen crosses, however carelessly adding longs while the market is in freefall is a surefire way to blow up your account and I guarantee you there were a lot of small accounts blown up last night alone.

Money management is key to all trading and that includes taking losses sometimes rather than tieing up all of your margin in a losing trade. It took me a long time to learn that I can make a lot more profit by taking a 100pip loss sometimes than I can by waiting for that 100pip loss to bounce back (numbers arbitrarily chosen... sometimes my stop loss is way wider than 100 pips).

Personally, in this situation, I am looking for the next four hour bar. I expect a retest of the 245.xx level and if 245.00 holds, I will look to go long again at about 245.40 (confirmation of the hold).
  • #8,191
  • Jul 10, 2007 7:47pm Jul 10, 2007 7:47pm
Quoting cesarnc
This actual 4hr candle is something to take a picture of and hang on the wall..

You will tell your grandchildren:

"See this candle, sonny? hehehe... Been there, seen that, traded that motherf#$@%@"
Hehe, I checked the 4h chart and couldnt find another candle like this one. damn, 200 pips long doji. Been there, lost that Im 90 % sure the trend will continue its way after this crap move as if it nothing happened. Just a quick 300 pips dip down to shake out the suckers like me who were confidently and happily holding their longs and accumulating swaps.
We leave no soldier behind.
  • #8,192
  • Jul 10, 2007 7:59pm Jul 10, 2007 7:59pm
Quoting nathbear
@Magic46 - So, you're saying that the average carry trader could handle a 500 pip drawdown? What about 1000pips? 2000pips? I'm sure the couple of hundred dollars racked up per 1 lot trade was a huge consolation to all the carry traders that held their longs when the market dropped right back to 221.xx in Feb/March. How many accounts were blown up by doing exactly what you just suggested?

It is reckless in the extreme to only be able to bet one way on a currency pair or pairs. If you only have one strategy to trade, then eventually you will lose. I completely agree with you that there is an absolutely absurd amount of money to be made by longing the yen crosses, however carelessly adding longs while the market is in freefall is a surefire way to blow up your account and I guarantee you there were a lot of small accounts blown up last night alone.

Money management is key to all trading and that includes taking losses sometimes rather than tieing up all of your margin in a losing trade. It took me a long time to learn that I can make a lot more profit by taking a 100pip loss sometimes than I can by waiting for that 100pip loss to bounce back (numbers arbitrarily chosen... sometimes my stop loss is way wider than 100 pips).

Personally, in this situation, I am looking for the next four hour bar. I expect a retest of the 245.xx level and if 245.00 holds, I will look to go long again at about 245.40 (confirmation of the hold).
Absolutlely correct. You make good points. Money management is key. Thanks for pointing that out. Each trader is different however, and most will lose...yes get margined out, and blow up accounts because they can't handle trading period,,,let alone a 500, or 5,000 pip drawdown.
  • #8,193
  • Jul 10, 2007 7:59pm Jul 10, 2007 7:59pm
What i'd find funny now is if we find ourselves stuck in another ridiculous 40pip range on this pair for the whole asian and london session like we had all week until the last 12 hours.
  • #8,194
  • Jul 10, 2007 8:19pm Jul 10, 2007 8:19pm
Quoting nathbear
What i'd find funny now is if we find ourselves stuck in another ridiculous 40pip range on this pair for the whole asian and london session like we had all week until the last 12 hours.
thats very likely to happen after this wild market.
We leave no soldier behind.
  • #8,195
  • Jul 10, 2007 8:27pm Jul 10, 2007 8:27pm
If it does, i'll be looking to short again in about 12 hours time. The slightest hint of a negative dow opening could cause some fireworks again.
  • #8,196
  • Edited 9:38pm Jul 10, 2007 9:30pm | Edited 9:38pm
Now this is no good!!!

http://mason.gmu.edu/%7Esshrest4/nogood.gif
  • #8,197
  • Jul 11, 2007 1:04am Jul 11, 2007 1:04am
close short, and start long SOUND IS GOOD...
  • #8,198
  • Jul 11, 2007 1:12am Jul 11, 2007 1:12am
I'm tempted to go long here, but my logical brain says to wait for London open and not get sucked in by Euro profit taking.

Will wait and see, even if it means losing some pips.
  • #8,199
  • Jul 11, 2007 1:13am Jul 11, 2007 1:13am
I am hanging onto my short for now, with my SL at 246.45
  • #8,200
  • Jul 11, 2007 1:16am Jul 11, 2007 1:16am
Quoting nathbear
I'm tempted to go long here, but my logical brain says to wait for London open and not get sucked in by Euro profit taking.

Will wait and see, even if it means losing some pips.
yup
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