Hi Paul,
This might be right if we were trading equities... but this is forex, so the whole short side only thingy means nothing. If you knew with absolute certainty what the (one and only) risk factor was... you could pick a single direction and currency to trade. In forex you could get news that causes the EUR to crash, the USD to crash, the JPY to crash ... etc and vice versa... this means you cant predict a "safe side" for a currency pair.
It could go mental to the upside or the downside depending on what country the economic/geopolitical development has taken place in. By the same token... you dont know whether something significant is going to happen to cause the whole risk on/risk off (risk aversion model) to shift either way... or whether its is in vogue or out of vogue.,.. coming into vogue or going out of vogue.
Basically, ... there are too many variables, and the fact that you are always quoting one currency against the other... you cant be sure if "short only" is gonna be the safe side forever.
I would guess that 'Joe's' short-only rule stems from the psychological side of things. Many people watching the same major pairs will attach differernt meanings (or give more creedance) to breakouts to the downside rather than breaks to the upside. The market tends to fall more quickly than it rises (say, for a major pair - once you get into the crosses its all relative).
Given that Joe is trying to build big-ass positions on relatively quick and clean moves... it prob makes sense to try and target the types of moves that will be smoother rides. This is obviously easier said than done, but maybe he subscribes to the whole thing about sell offs happeneing quicker and cleaner than rallys.
Either way... apparently he's making a butt-load of cash doing it...
Cheers
MM
This might be right if we were trading equities... but this is forex, so the whole short side only thingy means nothing. If you knew with absolute certainty what the (one and only) risk factor was... you could pick a single direction and currency to trade. In forex you could get news that causes the EUR to crash, the USD to crash, the JPY to crash ... etc and vice versa... this means you cant predict a "safe side" for a currency pair.
It could go mental to the upside or the downside depending on what country the economic/geopolitical development has taken place in. By the same token... you dont know whether something significant is going to happen to cause the whole risk on/risk off (risk aversion model) to shift either way... or whether its is in vogue or out of vogue.,.. coming into vogue or going out of vogue.
Basically, ... there are too many variables, and the fact that you are always quoting one currency against the other... you cant be sure if "short only" is gonna be the safe side forever.
I would guess that 'Joe's' short-only rule stems from the psychological side of things. Many people watching the same major pairs will attach differernt meanings (or give more creedance) to breakouts to the downside rather than breaks to the upside. The market tends to fall more quickly than it rises (say, for a major pair - once you get into the crosses its all relative).
Given that Joe is trying to build big-ass positions on relatively quick and clean moves... it prob makes sense to try and target the types of moves that will be smoother rides. This is obviously easier said than done, but maybe he subscribes to the whole thing about sell offs happeneing quicker and cleaner than rallys.
Either way... apparently he's making a butt-load of cash doing it...
Cheers
MM
DislikedHello, I Have a Theory about joe.
graeme if i understand has only been doing actual trading for relatively short time 2 years if i'am not mistaken.
But has applied to trading the methods he uses in his original business.
Joe if i understand does shorter term trading only on short side.If i assume he has been trading for many years he may have been hurt at some point by market crashes that have occurred fast and unexpectedly.
In these events you struggle to exit /enter and people with open positions long lose there shirt in minutes .There are...Ignored
"If it bleeds ... we can kill it"