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EURUSD

  • #485,801
  • Jul 11, 2011 9:46am Jul 11, 2011 9:46am
4005.7... come to daddy
  • #485,802
  • Jul 11, 2011 9:47am Jul 11, 2011 9:47am
Quoting dptrader
Hi guys,

what do you think about hedging a bad eurusd position opening an US dollar index order?

Thank you
Just a couple of general comments about using hedging, rather than just swallowing the bitter pill of accepting a bad trade.

Whenever someone hedges, they have to pay attention to "basis risk." That's the deviations from perfectly correlated movement. Here, EUR is a big component of the dix, but not even the majority of it (it's real early for me, and I've been up a while, so I think thats the case (40%?)). So long the EUR and short the DX has lots of basis risk. Also, the USD is responsive to the political shenanigans on this side of the Atlantic, while those on the other side are (probably) what's driving the EUR just now.

That said, at least dix as a "true" hedge, rather than just going short the same thing against a losing long position.

This probably doesn't help you all that much, but think about how bad you'll feel if your hedge bits you in the a$$ as well.
  • #485,803
  • Jul 11, 2011 9:47am Jul 11, 2011 9:47am
1.4000 now....

will be funny
Hero calls followed by margin calls...
  • #485,804
  • Jul 11, 2011 9:48am Jul 11, 2011 9:48am
USDX @76.09
  • #485,805
  • Jul 11, 2011 9:48am Jul 11, 2011 9:48am
Quoting OldQuant
Yep, it looks like this is a real fundamental-driven reval move. Maybe, with the news of the big meetings, more people are beginning to think that if the emperor isn't wearing clothes, his wardrobe is getting more and more risqué.
Very true and I think is translating very well in TA. Todays move more than wide (it has been a nice perpendicular day down and the range is good but not crazy out of the mean ...yet )it is traversing very strong (or at least important) supports like air.

Markets are sending a very clear message to the politicians...very similar than the prev "last minute urgent EZ/EU meetings" since the debt crisis started...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #485,806
  • Jul 11, 2011 9:48am Jul 11, 2011 9:48am
Quoting Venice
I'm sure a lot of people will buy at 1.4000.

The real question you should be asking though, is will the buyers exceed the sellers.
I really hope this is a new 60 day trend and not some new 20 day BS@@
  • #485,807
  • Jul 11, 2011 9:50am Jul 11, 2011 9:50am
closed a nice short at 1.40....Im sure itll fall off a cliff now...but hit my daily 1%....1.125% actually...Weeeeee
  • #485,808
  • Jul 11, 2011 9:50am Jul 11, 2011 9:50am
Quoting OldQuant
Just a couple of general comments about using hedging, rather than just swallowing the bitter pill of accepting a bad trade.

Whenever someone hedges, they have to pay attention to "basis risk." That's the deviations from perfectly correlated movement. Here, EUR is a big component of the dix, but not even the majority of it (it's real early for me, and I've been up a while, so I think thats the case (40%?)). So long the EUR and short the DX has lots of basis risk. Also, the USD is responsive to the political shenanigans on this side...
And the fact that he asked the question, tells me its a bad trade alone,
  • #485,809
  • Jul 11, 2011 9:51am Jul 11, 2011 9:51am
1.40 about to blow away
  • #485,810
  • Jul 11, 2011 9:52am Jul 11, 2011 9:52am
What's goin on with gold/silver
Don't get mad, get even!
  • #485,811
  • Jul 11, 2011 9:53am Jul 11, 2011 9:53am
1.3999..... going on.....
  • #485,812
  • Jul 11, 2011 9:54am Jul 11, 2011 9:54am
Quoting stulic
What's goin on with gold/silver

lol, nice, love these markets...
Look Sharp/Trade Tight
  • #485,813
  • Jul 11, 2011 9:54am Jul 11, 2011 9:54am
Quoting PayTheLimit
lol, nice, love these markets...
dax, sp500 , silver...free cash all over the table...

nice monday.
Hero calls followed by margin calls...
  • #485,814
  • Jul 11, 2011 9:55am Jul 11, 2011 9:55am
Quoting OldQuant
Just a couple of general comments about using hedging, rather than just swallowing the bitter pill of accepting a bad trade.

Whenever someone hedges, they have to pay attention to "basis risk." That's the deviations from perfectly correlated movement. Here, EUR is a big component of the dix, but not even the majority of it (it's real early for me, and I've been up a while, so I think thats the case (40%?)). So long the EUR and short the DX has lots of basis risk. Also, the USD is responsive to the political shenanigans on this side...
I always thought of hedging as hedging risk. most people here think of correlations rather than risk. and when you try to offset risk you look at correlation being part of it. the whole point is to lower the risk or add the risk to get the risk premium ratio....

I guess it doesnt matter as people here dont look at it that way anyway.
  • #485,815
  • Jul 11, 2011 9:55am Jul 11, 2011 9:55am
Quoting sisse

Markets are sending a very clear message to the politicians...

sisse
yea, get it sorted...for christ sakes...
Look Sharp/Trade Tight
  • #485,816
  • Jul 11, 2011 9:56am Jul 11, 2011 9:56am
Quoting walkman
somebody will buy at 14000?

i think it will bounce atleast 10 pips
Think r/r for a minute. Think that there might be a few stops below this big psychological number? Is 10 pips worth the risk of hitting an air pocket?
  • #485,817
  • Jul 11, 2011 9:56am Jul 11, 2011 9:56am
Quoting Larseg
I really hope this is a new 60 day trend and not some new 20 day BS@@
Absolutely... I'm ready for a 500+ pipper. It's been a while, for sure. lol

Ken should be rocking a solid position around there though (700-800 pips) if I'm not mistaken. To much consolidation & waves for me to try that right now Retraces have been brutal as well. lol
  • #485,818
  • Jul 11, 2011 9:57am Jul 11, 2011 9:57am
Quoting darimik
I always thought of hedging as hedging risk. most people here think of correlations rather than risk. and when you try to offset risk you look at correlation being part of it. the whole point is to lower the risk or add the risk to get the risk premium ratio....

I guess it doesnt matter as people here dont look at it that way anyway.
yea, most people on this thread have no idea what a true hedge is, dont even wast your time mate...
Look Sharp/Trade Tight
  • #485,819
  • Jul 11, 2011 9:57am Jul 11, 2011 9:57am
Quoting PayTheLimit
yea, get it sorted...for christ sakes...
didn't they say something like "no worries, we sorted it out for good" a couple of times already?
  • #485,820
  • Jul 11, 2011 9:58am Jul 11, 2011 9:58am
Quoting darimik
I always thought of hedging as hedging risk. most people here think of correlations rather than risk. and when you try to offset risk you look at correlation being part of it. the whole point is to lower the risk or add the risk to get the risk premium ratio....

I guess it doesnt matter as people here dont look at it that way anyway.
Agree darimik, most posters in FF has prostitute the term hedging and they usually mean scaling in and out on the same pair (usually closer to gambling strategies than a proper risk control statregy... and nothing to do with actual hedging)

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
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