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The WoRmHoLe

  • #3,421
  • Oct 18, 2009 9:33am Oct 18, 2009 9:33am
Quoting qweabc
The OP was obviously trying to sound smart by blatantly ripping off someone else's analysis. There is no such thing as a short squeeze in FX.


I do understand options, as I need it for work every day. Most options traders are constantly hedging their deltas, and I know how this works. All I'm saying is that calling every strong up move a "short squeeze" is misleading. It tends to paint this "omg, there is no supply" kind of picture.
I think we actually agree on some points, it seems.

In my view, short squeezes definitely exist in both the spot and options market, albeit with different characteristics from those seen in the equity or commodity markets, when there could, in theory at least, actually be a shortage of the underlying asset available to cover short positions.

However, the dynamics on the underlying price action are the same, in my opinion, in that participants rush to cover losing positions or square newly formed deltas before price moves further against them. This invariably has the effect of pushing up the price further and, in some cases, creating a degree of panic.

In the options market, we sometimes see a short squeeze on implied volatility (which obviously isn't a tangible asset), as a news event could, for example, cause implied vol in EURUSD options to jump up by 3 figures. This would lead to a portion of market makers, whose books are short vega, to hurriedly buy volatility in the market, which thereby has the effect of pushing up the price of implied volatility further as buyers of volatility far outweigh sellers.

Much like you, I also have a problem with posters on these forums completely attributing big moves to a "short squeeze", a giant "stop hunt" or "big boy manipulation". This is a dangerous type of thinking for a trader to assume.

Anyway, as Azim has said, hope to see you posting a lot more around these parts.

Good luck, Paul
  • #3,422
  • Oct 18, 2009 9:38am Oct 18, 2009 9:38am
Quoting wormboy
hi herzog, it quite fine actually. There are many posters in this forum but not many of them are traders. Paul is a senior trader with vast knowledge that I look up to. So I welcome his views here greatly.
And matter of fact I welcome anyone who is trying to learn/share their trade ideas, yourself included. I was not happy with pakitrader's post as he is a newbie that had been posting conflicting posts every day with no clear cut idea of how he actually needs. He had been doing so in the Cable Thread the whole of last week & the previous week posting...
Hey Azim,

Herzog and myself exchanged a couple of messages, as his post wasn't aimed at me. So we are all good.

Cheers, Paul
  • #3,423
  • Oct 18, 2009 9:47am Oct 18, 2009 9:47am
thank you! In that case, every move is a short squeeze. lol. Hope to read more of your posts. I say, who cares why its moving. Its moving, so get on the train and make some money.

On a side note, any reason why you quit the MM job? I desperately want to quit too. Back in the days when quant trading didn't exist (or wasn't as widespread), a trader was someone who traded. Now, I just sit around coming up with "quant models" and then work with programmers to implement. There is very little of technical analysis/price action/psychology that I get to learn. And I don't wanna work for someone else for the rest of my life.

Quoting gammase1
I think we actually agree on some points, it seems.

In my view, short squeezes definitely exist in both the spot and options market, albeit with different characteristics from those seen in the equity or commodity markets, when there could, in theory at least, actually be a shortage of the underlying asset available to cover short positions.

However, the dynamics on the underlying price action are the same, in my opinion, in that participants rush to cover losing positions or square newly formed deltas before price moves further against them....
  • #3,424
  • Oct 18, 2009 10:01am Oct 18, 2009 10:01am
Quoting qweabc
thank you! In that case, every move is a short squeeze. lol. Hope to read more of your posts. I say, who cares why its moving. Its moving, so get on the train and make some money.

On a side note, any reason why you quit the MM job? I desperately want to quit too. Back in the days when quant trading didn't exist (or wasn't as widespread), a trader was someone who traded. Now, I just sit around coming up with "quant models" and then work with programmers to implement. There is very little of technical analysis/price action/psychology that I get...
Come on, I was just talking about sharp upward moves.

As you say, it's impossible to quantify the reason for every change in price, so the best thing is to follow the money, trade the underlying sentiment as it were, using whatever tools we have that provide us with our edge.

I was working in banking for over 13 years and was increasingly keen to work for myself for a couple of years before I quit. In my case, the catalyst for my resignation was a very close family member falling seriously ill and requiring care for a number of months. This made me reflect on what was important and mattered in my life and gave me the needed push to branch out on my own, safe in the knowledge that I was also doing the right thing by my family.

I agree, the change from the old fashioned cash trader shouting prices across the floor and screaming at brokers to the world of quants, e-commerce and algo trading happened at an incredible pace.

I was on structured notes trading, where I originated, and made a market for, FX and IR linked notes and swaps, mostly all containing embedded optionality. Overall, it was a very positive experience and taught me much about how the market works, but I wouldn't want to return. I may miss the salary and bonuses at times, but I value more the control I now have over my life, something which I would not swap in a hurry.
  • #3,425
  • Oct 18, 2009 10:03am Oct 18, 2009 10:03am
Quoting albchr
Stew..

Good to see you back brother! You've been missed. I agree with your assessment of cable as well.
Hi Chris,

Yeah - I needed to take a break and concentrate on my trading..

Been following your thread too.
  • #3,426
  • Oct 18, 2009 10:19am Oct 18, 2009 10:19am
Quoting gammase1
I think we actually agree on some points, it seems.

In my view, short squeezes definitely exist in both the spot and options market, albeit with different characteristics from those seen in the equity or commodity markets, when there could, in theory at least, actually be a shortage of the underlying asset available to cover short positions.

However, the dynamics on the underlying price action are the same, in my opinion, in that participants rush to cover losing positions or square newly formed deltas before price moves further against them....
Not sure about a short squeeze, I thought the reason the pound went up on Fri was on the positive news and the expectation that the UK will announce it has officially come out of recession this week.

I don't trade fundamentals but find they do explain movements sometimes..
  • #3,427
  • Oct 18, 2009 10:26am Oct 18, 2009 10:26am
Quoting gammase1
I was giving a definition of the term "short squeeze" and how it applies to, and is used in, the FX market, the mechanics of which differ from how the term applies to other asset classes. The VW squeeze was one of the most vicious short-squeezes that I have seen and it caused severe pain, no doubt there.

On your second point, ALL sane option traders, particularly market-makers, will trade their delta position continuously, which they will be extremely happy about doing if they are long gamma.

I was an options market-maker for a large bank...

Hi G,

This is fascinating stuff, but sadly means absolutely nothing to me - what the hell is delta and gamma or vega.

Would love to learn it tho - can you recommend a website or book maybe.
  • #3,428
  • Oct 18, 2009 10:29am Oct 18, 2009 10:29am
Quoting stewrigh
Hi Chris,

Yeah - I needed to take a break and concentrate on my trading..

Been following your thread too.
Then you know how bad I'm doing....lol

Your always welcome to post there buddy if you like.
Ghost Rider - WWTBMD?
  • #3,429
  • Oct 18, 2009 10:42am Oct 18, 2009 10:42am
Quoting stewrigh
Hi G,

This is fascinating stuff, but sadly means absolutely nothing to me - what the hell is delta and gamma or vega.

Would love to learn it tho - can you recommend a website or book maybe.
Hello Stew,

Check out the below link, which defines the likes of "delta", "gamma" and "vega", all of which form "the greeks" that are used by option traders to quantify and decipher the different types of risk present on their portfolios.

http://www.optiontradingtips.com/greeks/delta.html

If it becomes a subject that interests you further, then get in touch and I'll recommend further sources of information.

Cheers, Paul
  • #3,430
  • Oct 18, 2009 11:14am Oct 18, 2009 11:14am
Quoting albchr
Then you know how bad I'm doing....lol

Your always welcome to post there buddy if you like.

Not 'bad' just flat - stick to it you'll pull thru

Thanks for the invit - might just do that
  • #3,431
  • Oct 18, 2009 11:15am Oct 18, 2009 11:15am
Quoting gammase1
Hello Stew,

Check out the below link, which defines the likes of "delta", "gamma" and "vega", all of which form "the greeks" that are used by option traders to quantify and decipher the different types of risk present on their portfolios.

http://www.optiontradingtips.com/greeks/delta.html

If it becomes a subject that interests you further, then get in touch and I'll recommend further sources of information.

Cheers, Paul
Thanks Paul - might pm u
  • #3,432
  • Oct 18, 2009 11:25am Oct 18, 2009 11:25am
Quoting wormboy
That is a good example of what I mean by you being clueless.
This is my first post here and most likely my last one also. We all go through different stages of learning inorder to become good traders and hopefully profitable over a period of time. This learning process is a fact of life and no matter how good you might perceive yourself to be now, no doubt you have also gone through "being clueless" phase. Infact looking at some of your trades last week, some might argue that you are still clueless. Be easy on newbies, if you do not approve of them posting in your thread, thats fine and its your prerogative. But do not be rude to them. Everything you said to pakitrader could also apply to you, you also seek fame and publicity by showing off your wonderful charts and how much money you are making. The slightest hint of someone disagreeing gets you in a very defensive mood. This i speak form personal experience with you last week.
I don't care about the validity of your methodology or how profitable you might be. What i care about is respect for opposing views. Calling names and using the F word neither makes you a superchartist nor right.
By all means defend yourself if you are attacked but keep it civil, learn to respect others and their opinions and also their level of market maturity.
I wish you a profitable week ahead.
  • #3,433
  • Edited 2:33pm Oct 18, 2009 11:52am | Edited 2:33pm
Quoting doubledutch
This is my first post here and most likely my last one also. We all go through different stages of learning inorder to become good traders and hopefully profitable over a period of time. This learning process is a fact of life and no matter how good you might perceive yourself to be now, no doubt you have also gone through "being clueless" phase. Infact looking at some of your trades last week, some might argue that you are still clueless. Be easy on newbies, if you do not approve of them posting in your thread, thats fine and its your prerogative....
You are right. I might have come off a bit harsh on pakitrader, but he barged in by posting people thinking the sterling appreciation last week being a short squeeze, which no one here ever mentioned & he did said that I was pushing people to load shorts, which I obviously did not, so you need to pull the wools off your eyes. I can take it easy but I ain't no fairy.

Yes, I admit I made many mistakes last week, I did not go into hiding, acknowledged my trading mistakes a few times matter of fact. My losses are recorded here, nobody can possibly missed it. But it seems you are really interested in finding my fault. I have had many interactions with newbies here and none of which I had disrespected. You could do the same by at least showing some respect & acknowledging the fact that I do my part to share. And yes, It's easy to pick my fault isn't it since I do share my trades in this thread publicly. And there is no need to mock the charts I plot, unless you have something to offer as well technically. Very easy to ridicule people isn't it when you do very little to share or help.

By the way, I do not post to seek fame & publicity. Sounds sourgrapes for you to say that btw. I have not mentioned how much money I made to anyone here. If you are referring to the argument that I had with Turveyd on the Cable Thread than you will have to read the whole thing again.
That poster called me a liar & had claimed that high timeframe trading are random & stand no chance of being profitable. There is no reasoning that clown so I asked him if he wanted to compare trade results for the past years. I wanted to quash his baseless claims once & for all. He even said that I sat and watched others lose money, in this case he was referring to Navin2007. Just to set the record straight, I have a skype room which I share with many other traders including Navin. And I did reminded Navin to lock his gains before the trade went against him. How is that a bad thing? Some people are so shallow it's unbelievable how they judge people. You are no different by the way.
I have not once went into anyone's thread and claim that I made so much so much pips per day or how much I made in terms of money. NEVER. You need to learn what the word respect means, because you certainly do not understand the meaning of the word by throwing this accusations.
And I don't "show off" charts for no reason, most of these charts are posted before or at the time I took my trades, I post them to illustrate why I took the trade, so again, get your facts straight.

I tell you what, I would want to carry on back to trading matters. This is after all my thread. And since my trades, charts & personality are not up to your requirements & you have not shared or had any useful contributions either, I would kindly ask you to leave & not to post here again.
Thank You
  • #3,434
  • Oct 18, 2009 3:14pm Oct 18, 2009 3:14pm
The freaking nerve of some huh buddy? Come into your house and without fact or basis tell you how to act in it. I may just have to put my 2 voucher to post rule back up in my thread to keep yahoo's like this out.

Hope you had a GREAT weekend bro!

Looking forward to your continued bragging and showing off....
Ghost Rider - WWTBMD?
  • #3,435
  • Oct 18, 2009 5:37pm Oct 18, 2009 5:37pm
Quoting doubledutch
This is my first post here and most likely my last one also. We all go through different stages of learning inorder to become good traders and hopefully profitable over a period of time. This learning process is a fact of life and no matter how good you might perceive yourself to be now, no doubt you have also gone through "being clueless" phase. Infact looking at some of your trades last week, some might argue that you are still clueless. Be easy on newbies, if you do not approve of them posting in your thread, thats fine and its your prerogative....
If you don't have a dog in the fight....Anyway, Wormboy posts sound analysis and I like to check his charts to see if I am doing proper analysis on the gu-so I use this as an educational tool to an extent. I have never been under the impression that Wormboy is seeking glory for his analysis and he never brags when he is right. He always posts when he was wrong and often makes comments that help me to understand things.

Besides, he does not recruit people to come to his thread and post so people are welcome to come and go or even start their own thread. I like this thread because it's full of info and short on garbage like the interactive thread. Now that this thread has been mucked up a little, I am going to go away and check back later with hopes of seeing some proper analysis.
Green pips to everyone!
Mike
  • #3,436
  • Oct 18, 2009 9:03pm Oct 18, 2009 9:03pm
Quoting wormboy
GBP USD

1. short @6347 sl @6425

Added to position.

GBP USD

1. short @6347 sl @6420 (0.1)

2. short @6301 sl @6420 (0.1)

Good luck
Attached Image (click to enlarge)
Click to Enlarge Name: guh1.JPG Size: 67 KB
Thank You
  • #3,437
  • Oct 18, 2009 9:19pm Oct 18, 2009 9:19pm
wormboy, i see you trade during the asian session?
i also wanted to short this pair as my chart is showing a short signal but i usually leave gu,eu and other european pairs for euro session onwards.
may i know why do u trade this during asian session?
  • #3,438
  • Oct 19, 2009 1:26am Oct 19, 2009 1:26am
Quoting herzog21
wormboy, i see you trade during the asian session?
i also wanted to short this pair as my chart is showing a short signal but i usually leave gu,eu and other european pairs for euro session onwards.
may i know why do u trade this during asian session?
Hi herzog

yea, well actually during asian session I don't usually pay much attention because I have to run out to my office. But any session does not really matter to me as long as I get a signal I will just trade it.
Thank You
  • #3,439
  • Oct 19, 2009 2:37am Oct 19, 2009 2:37am
i missed the boat. was supposed to short at 1.63 but overslept!
-____-
oh well. good luck to those who shorted.
  • #3,440
  • Oct 19, 2009 3:41am Oct 19, 2009 3:41am
Quoting wormboy
GBP JPY

1. short @148.53 sl @151.50 tp @145.25 (0.2)

Closed partial.

GBP JPY

1. short @148.53 closed @147.18 (0.1)


Remaining trade

GBP JPY

1. short @148.53 sl @148.40 tp @145.25 (0.2)
Thank You
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