Technical Analysis Fallacy

i know , good market , mind aint good , besides need to review mm ... might be getting too aggressive unnecessarily , will strive to improve ...

Has someone alese made the observation, that there is not much liquidity in the markets today?

hey mamood, I think its not liquidity problem since the candles are pretty neat ...

edit
another thing I notice is there is hardly one large upmove for euro , any up move is usually driven by gbp upmove ...
well such thing to my believe is that euro hasnt changed its bear direction just yet

Ahh squared now at 1.4090...too much analysis this morning...need to go readjust for a little. Posting a snippet from a very good interview I read recently with a former prop trader/current hedge fund manager. Its regarding a FX trade while working at Goldman Sachs. It highlights a very real possibility in our market, the likes of which we have yet to see in our short trading careers (fti excluded obviously) Reminded me of an FTI post long ago regarding large phenning gaps and stop losses. Enjoy...


Christian Siva-Jothy
Former Head of Prop Trading at Goldman Sachs


I'd been on a bit of a role and got carried away with it. I'd had a phenomenal year in 1993 -
I made well over $100 million and I was a bit full of myself. And 1992 had also been a great year.
Going into 1994 I'd built a very large sterling/yen position.
It was over 1 billion pounds, which was the biggest position I'd ever run. I had put it
on the November of the previous year and was up about $30 million on the position.
People were starting to say "Christian is going to do it again", and it had only moved a few percent.
At this point I had become so confident that besides being long sterling/yen via a mixure of cash and options,
I was also selling sterling/yen puts whenever the cross corrected.
Then during the first weekend in February, President Clinton came out and attaceked the Japanese trade policy.
He threatened them with tariffs and quotas on cars and car parts. The United States gave the Japanese a
real hard time and said, "Look your currency is going to have to appreciate or else."
I remember coming in on monday morning and the dollar/yen had GAPPED LOWER 5% with nothing trading.
If that wasn't bad enough five days later on Friday, UK inflation numbers were released and they were simply awful.
Sterling went into a free fall. It was classic, the market found me.
The long and short of it, is the position DROPPED ABOUT 10% in the space of a few weeks.
I was selling out of the position as fast as I could, but I was selling just to stand still because I was short these puts.
It was a disaster. Markets have a great way of taking it out of you.

So you lost somewhere between $100 and $200 million dollars?

Yes. On day eight of this episode alone I lost about $40 million.


A 5% gap on the EUR/USD would be roughly 700 pips no? Wow. Many other lessons here that were covered in TAF!

@ FTI - was this during your tenure in the Bank's Treasury Dept? How difficult during an event like this, is it to maintain your delta hedge?

Hi MaMood,
Impatience and Lost of focus and decication are begining signs of downfalls.

Beware i can only say, I can bring the horse to the eaters, whether to drink, it depends on the horse.

regards

Difficult day so far. Been in three trades and captured all of 4 pips. Currently in the E/$ short at 1.4075 and just hanging on now. Watching the CAD and the CHF now, too. Watching E/$ reaction to 4059.

Edit: Square on the euro short at 1.4060.

Hi ,
I cannot tell which period he is taking about. There are many many such incidents in the market place.Too many to remember. Sounds no different from the nic leeson story.

Delta hedging is a exposure resolve on positions. in fact no one is completely delta neutral at any given time, except when markets are closed or not trading.The real minefield depends on the traders sigma speed. High sigmas in exceptional volitiltiy is a killer.But there are much strategies to manage that. As synthetic strategies are long swords, short term market volitility should not impact its managing, otherwise the strategies that were used are not best practices. In lay terms, his strategies has risk/rewards ratios to extreme unbalance. probably too much bias and speculation to the model.


regards

Hi gEfx, I don't know whats happening to you, maybe some self examination would suffice.

But for me I am having cart loads after cart loads of pips coming in. some are still on their way.

regards

Yes, I am not in sync today and seem to be spinning my wheels. Glad to hear that you are doing well, fti. Time to call it a day. Good trading to you all.

ai fti sir,
good day for u sir,
me , just no balls to trade ,completely out of tune

Hi mahes,

If there is a problem, take a break.
Check MM, check mindset. Likely problem is MM.
Clear the mind, relax and reboot.

Don't let it get messy, my friend.

regards.

Hello

Well I can see it's a hard day for everyone, I've just took a loss few minutes ago after six days of consecutive winning.
Really war is a painful thing Also I felt inside that the sword I'm killing with will reach me soon.
Now have to recover mindset for tomorrow.

Good luck to you all !

Just got back from a nice long jog to clear the mind and restore the heart. Or is it the other way around - lol. I ended the trading day with about 20 pips, and felt out of sync most of the morning. I sometimes get that way when the market is not keeping up with me - lol! That is why I am done for the day, need time to shrink my ego, which was accomplished during my jog. Looked back at the day and see what I missed but am happy fti was riding the bull. Might check back for Tokyo open but will certainly be here for London tomorrow. Good trading everyone.

Hi ALL,
the last cart load came in.

ok enough today.
Cu tom

goodnite.

regards

a song from the secret songbook.

How did you get the feel and peg that this was stronger than usual move ?

I anticipated the move to 4100 area but I didnt pick up on the stronger bull presence till we consolidated and dropped below 4100.

rookie in training

The latest in TA methodology
I call it "bike ride."
Enjoy this cool drawing.
This is fantastic...
"we could even draw our own conclusions....ja, ja, ja"

Ah retracement begins...............long way.

a little bird told me...........

" Nikkei open strong, up0.4% after yestreday's global equities fall. This triggered EURJPY demand. Traders suspect there will be eurjpy demand for the tokyo fix today. players will watch Shanghai stocks for hints. Exporter's orders expected later in Asian hours to cap upside."

synopsis
the market will be looking to buy euros in early morning trade. However expectaions of exporter selling of yen is expected to cap that rise in later tokyo.

Impressive!
It's amazing to see how people kill time by playing various arts

For the moment, I'm busy making money in AOW battle field, no time to kill.

After a move like that I cant help to think the us$ bull is still with us.

MY eyes will be extra wide around e/u 4080 and 4110 area.