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  • #2,461
  • Jul 14, 2011 3:13pm Jul 14, 2011 3:13pm
All the Bernanke talk about QE3 and raising inflation since 2010 renders tomorrow CPI very interesting. Lower number might ignite another round of usd selling. AUD long would be a nobrainer imo taking into consideration new highs on gold.
  • #2,462
  • Jul 14, 2011 3:17pm Jul 14, 2011 3:17pm
damn, i was stacked last night, but peruvian whisky entered the equation and I got wiped by the spike at 4257
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  • #2,463
  • Jul 19, 2011 4:14am Jul 19, 2011 4:14am
Mmmm... Gotta lurve that stop run Baabbyyyyyy!!!!!!
  • #2,464
  • Jul 21, 2011 1:35pm Jul 21, 2011 1:35pm
Guys, I think it is not a good idea to discuss about the book on this thread. Why cant we have a seperate dedicated thread?

Also, not sure how FF Admins will react to DS' book being promoted without their approval. They might end up locking him to Commercial section so better yet to not discuss about it.
  • #2,465
  • Jul 21, 2011 2:30pm Jul 21, 2011 2:30pm
Good point. Removed my post just to be cautious.
  • #2,466
  • Edited 9:32pm Jul 25, 2011 9:08pm | Edited 9:32pm
Woah anyone watching the USD/JPY?

IFR:
USD/JPY spikes to highs of 78.75 - in a blink of an eye, from sub 78.00 - on speculation of BoJ/MoF intervention and back down at 78.35 - no confirmation.

I had shorted into the stops below as the two speeches essentially said we were going nowhere and damn near stamping the approval on our own debt rating downgrade. Once the barrier was tripped on investor selling I knew the stops below would be free money. The stops didn't seem to trigger as I expected. Once price started showing signs of going parabolic I cut the trade and price just exploded. I feel like I dodged a bullet just now.

IFR:
Although some players saw this as possible intervention, this does not look to be the take in Tokyo with no one actually confirming action. Dealers do note that the market is extremely nervous and the lack of liquidity seen today makes it prone to move in volatile fashion. There is the possibility of BoJ price checks at the lows. USD/JPY has since steadied at the current 78.20/25.

This leads me to wonder what the price impact of a failed stop hunt can be. What if you were pushing price and you suddenly find yourself unable to meet your targets and effectively fill your orders cheaply. Does everyone rush for the exit knowing that there are probably other leveraged players finding out the same thing? They were after all pushing into heavy bids. The price impact may not have been much shorting into the stops but exiting into weaker limit orders above would cause a large market impact? Just thinking here, that was intense.
Cautiously optimistic. . .
  • #2,467
  • Jul 25, 2011 10:10pm Jul 25, 2011 10:10pm
Quoting Tact1cal
Woah anyone watching the USD/JPY?

IFR:
USD/JPY spikes to highs of 78.75 - in a blink of an eye, from sub 78.00 - on speculation of BoJ/MoF intervention and back down at 78.35 - no confirmation.

I had shorted into the stops below as the two speeches essentially said we were going nowhere and damn near stamping the approval on our own debt rating downgrade. Once the barrier was tripped on investor selling I knew the stops below would be free money. The stops didn't seem to trigger as I expected. Once price started showing signs of going parabolic...
Heya Tact1cal,

That's the third time I've seen these spikes after a noticeable downside attack and it's making me play this pairing very cautiously. I would say with the failed stop-hunts, the hunter has to go through the work of mowing down the orders shielding the stops. If after all that, something comes up and they can't continue, forcing them to exit - then provided it's not some sentiment changing/macro event, I'd say it leaves the stops very vulnerable for further attack.

Intervention wise, the threat is becoming increasingly legitimate, but I'm thinking 76/75, especially the psychological impact of breaching the May Low's, will be the straw that breaks the camel's back. But hey..if G7 wants to put some money in the pot then...

Regards,
xXTrizzleXx
  • #2,468
  • Jul 25, 2011 10:12pm Jul 25, 2011 10:12pm
Quoting Tact1cal
Woah anyone watching the USD/JPY?

This leads me to wonder what the price impact of a failed stop hunt can be. .....
Think about how a market maker will participate in the market when price is approaching a crapload of stops on his book and what he has to do if price reverses before hitting them. Similar scenario with the predatory traders trying to run the stops.

When i'm looking to enter the market on a potential reversal i find it difficult to decide weather to

a. wait for the stops to get hit and enter at a better price with a tighter stop

or

b. enter just before the stops and use a more liberal stop

For the moment i usually use option a but in theory i'm missing all the potential good trades when the hunters become the hunted. My primary reasons for using a is the risk:reward improvement and also the fact that you don't have as much liquidity sitting under you entry price for the market to target again at some point. I think these are the types of scenarios which make order flow a descretionary trading system because each situation needs to be analysed independantly.

I think maybe option b is better for trading longer term trades and option a is better for the short term trades.
  • #2,469
  • Jul 26, 2011 3:48pm Jul 26, 2011 3:48pm
What happened on GBP today with GDP was the one clear example of price inefficiency to me.

I dont short GU and GJ these days for Debt limit issue for the former and reasons posted in last 2 post by Trizzle and Tactical for the later.

This leaves me with Gchf.

There was a rumor of a weaker than expected GDP and i was short at 3125 for it and i believe many other did for the same reason. GDP came out exactly as expected and even though i had my stop moved to be 3 mins before the announcement i was taken out at a small loss cause of slippage.

Now there was't any fundamental reason of that spike i.e if it was not for the rumor, price would have move barley 10 pips up as the number came out just as expected.

But because the spike occurred just cause of market spanking traders for believing and acting on the rumor, i simply saw the price hanging above 3150 as in an inefficient state.

Well i went short again at 153 and price moved down to where it should have been in normal circumstances i.e a no rumor scenario. Though it stopped me out at BE again as i was looking for a bigger move.

Just some thoughts i wanted to share.
.
  • #2,470
  • Edited 6:33pm Jul 26, 2011 6:19pm | Edited 6:33pm
Quoting nasir.khan
There was a rumor of a weaker than expected GDP and i was short at 3125 for it and i believe many other did for the same reason. .
Assuming the number was lower as per the rumour what was your plan for exit? do you exit as soon as the number comes out or hold?

I don't like to follow the rumour first of all because it's a rumour and secondly because many of the participants who short on the rumour buy the fact as soon as the release comes out reducing the possibility for a fat tail.

Before i saw the rumour my plan was to short or long after the release on a certain deviation (based on historical reactions) of the gdp number. After the rumour i lowered my deviation (meaning i would need less of a deviation for a long and more of a deviation for a short) to account for the participants who were already short before the release. If the figure was lower than forecast but higher than the rumour i was looking to fade a spike down. As it turned out it was not enough deviation for me to take the trade.
  • #2,471
  • Edited 9:37pm Jul 26, 2011 9:27pm | Edited 9:37pm
Quote
But because the spike occurred just cause of market spanking traders for believing and acting on the rumor, i simply saw the price hanging above 3150 as in an inefficient state.
Nice observations nasir, smart play too! Those are actually some some of my favorite types of news trade. Where the market feels the need to price in information(not necessarily a rumor) but the information is voided instantly causing an immediate correction. I'm not sure if you watch oil but maybe a month ago when OPEC didn't agree on the extra supplies and the market shot up on the news then the Saudi's came out the next day and said they would take care of causing price to suddenly be at discount levels and shoot back down. I wished I was a futures trader that day. Such a sweet trade.

I can recount a couple of times where a rumor sparked similar discount buying too. Here's one of my favorites. A couple months back around the time we were slamming through barriers before the large correction. I remember a rumor coming out that hedge funds would be exiting their positions soon. Price made a large spike down on the rumor but was stopped dead in it's tracks. by what seemed to be some VERY determined options and stop hunters. As they continued to absorb the liquidity it became clear that the hunters were very serious and price spiked the other way and knocked the barrier out. It was an interesting situation, almost seemed like rumor mongering.

Occasionally reality will throw hunters a test of their resolve, these are some of my favorite stop trades. Monroe posted a pretty sick example not too long ago. I believe it was on the back of that one no-name(greek?) politician that caused a awkward change in sentiment. pushing price revealing their buying interest.

Ok I'm ranting now. . . I really enjoy these scenarios though, the market is so fascinating.

Quote
Think about how a market maker will participate in the market when price is approaching a crapload of stops on his book and what he has to do if price reverses before hitting them. Similar scenario with the predatory traders trying to run the stops.
A failed stop hunt for the counter party of the stop hunt is a dream come true I imagine. It allows them to provide the liquidity back to the hunters giving them the opportunity to not only even out any inventory imbalance that might have built up as a result of the hunt but it puts the liquidity they provided into profit as price runs up the opposite direction allowing them to book profits providing the hunters back their own loss as they demand liquidity exiting their positions.

Quote
a. wait for the stops to get hit and enter at a better price with a tighter stop

or

b. enter just before the stops and use a more liberal stop
I personally think making these decisions come down to experience and analysis of market conditions.

Quote
then provided it's not some sentiment changing/macro event, I'd say it leaves the stops very vulnerable for further attack.
Definitely, the spike seemed to be psychologically damaging to the hunters as price did not make a gun back for the stops further below until much later. It was actually really interesting the way the stops were triggered. A big reason I cut the trade too. It looked like the stops being triggered were being absorbed. It wasn't you're usual instant price spike. The price impact was also very small compared to what I was expecting. I definitely knew something was wrong when there was a failure to make a further push lower. Some more rumor reading later on revealed that a bank might have been pushing a 500MLN buy order at the time, crazy stuff, who knows though.

Quote
Intervention wise, the threat is becoming increasingly legitimate, but I'm thinking 76/75, especially the psychological impact of breaching the May Low's, will be the straw that breaks the camel's back. But hey..if G7 wants to put some money in the pot then...
I've been upping my research on the USD/JPY since the debt ceiling started coming into to play. If things somehow resolve amicably in the white house(LOL). There's a no brainer short term long on the dollar if they can keep their AAA rating. If the the rating is lost or if the market at some points feels the need to price in a potential default I expect this would bring some quick momentum. My current study on central banks shows that above all else, they HATE momentum.


-----------
Here's a link to quick read on interventions I stumbled upon recently. I thought I'd share for anyone looking to glean some information. I'm not sure if it's been posted already. It wasn't in my library of pdfs though lol.

http://research.stlouisfed.org/publi...0Neely.qxd.pdf
Cautiously optimistic. . .
  • #2,472
  • Jul 27, 2011 3:10am Jul 27, 2011 3:10am
Quoting havaiana
Assuming the number was lower as per the rumour what was your plan for exit? do you exit as soon as the number comes out or hold?

I don't like to follow the rumour first of all because it's a rumour and secondly because many of the participants who short on the rumour buy the fact as soon as the release comes out reducing the possibility for a fat tail.

Before i saw the rumour my plan was to short or long after the release on a certain deviation (based on historical reactions) of the gdp number. After the rumour i lowered my deviation (meaning...
That depends on where price was before the announcement i.e how much the price had discounted the rumor.

As we know Gchf dint had a slow and steady trend down before the announcement and was just spiking up and down, so it meant that the rumor was't really priced in. So i would have hold the trade until 3060 support for some 70 pips.

On the other hand if i had sell on 3125 and price was on 3060 already before the announcement than it would have meant that the rumor is discounted BUT i still would have hold my trade for some 1-2 mins to see if price goes hunting some stops below 3050 and i could get in a long position there for STRBTF.
.
  • #2,473
  • Jul 27, 2011 3:24am Jul 27, 2011 3:24am
Quoting Tact1cal
Nice observations nasir, smart play too! Those are actually some some of my favorite types of news trade. Where the market feels the need to price in information(not necessarily a rumor) but the information is voided instantly causing an immediate correction. I'm not sure if you watch oil but maybe a month ago when OPEC didn't agree on the extra supplies and the market shot up on the news then the Saudi's came out the next day and said they would take care of causing price to suddenly be at discount levels and shoot back down. I wished I was a futures...
Hey thanks Tactical.

Anyone thinking of selling some CHF for Risk-ON rally that could follow after Debt issue gets solved? Its too early but i just opened some longs.
.
  • #2,474
  • Jul 27, 2011 3:41am Jul 27, 2011 3:41am
Quoting nasir.khan
Hey thanks Tactical.

Anyone thinking of selling some CHF for Risk-ON rally that could follow after Debt issue gets solved? Its too early but i just opened some longs.
.
I'd sell euro because it has the biggest risk after the US debt is solved. Why selling the strongest currency instead of the weakest?
  • #2,475
  • Jul 27, 2011 3:49am Jul 27, 2011 3:49am
Quoting nasir.khan
Hey thanks Tactical.

Anyone thinking of selling some CHF for Risk-ON rally that could follow after Debt issue gets solved? Its too early but i just opened some longs.
.
Got my eye on U/Chf for the bounce when the debt ceiling BS is over but as of right now, still shorting the xx/Chf pairs. Also positioned long on Chf/Jpy. It'll be interesting with intervention looming.
  • #2,476
  • Jul 27, 2011 4:47am Jul 27, 2011 4:47am
Quoting Sauron
I'd sell euro because it has the biggest risk after the US debt is solved. Why selling the strongest currency instead of the weakest?.
Problem with selling Euro is that a solution of debt problem will trigger some healthy risk on rallies and you are guaranteed to make money in CHF shorts in risk-on environments. But Euro almost always goes up whenever there is a good news about US economy cause of the risk appetite. and i am not sure if market will just suddenly turn it head towards Euro after debt issue gets solved and starts selling it.

I mean yeah it could,.. but i am not sure as i think that Euro going up on the risk appetite is a more certain scenario for me.
.

Quoting EmeraldEyes
Got my eye on U/Chf for the bounce when the debt ceiling BS is over but as of right now, still shorting the xx/Chf pairs. Also positioned long on Chf/Jpy. It'll be interesting with intervention looming.
I knew you would be, I was short too from last weeks top but closed them. I have my longs and stops are moved to BE, i know its way to early but their is no risk on the table now anyway.
.
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  • #2,477
  • Jul 27, 2011 4:56am Jul 27, 2011 4:56am
Quoting Sauron
I'd sell euro because it has the biggest risk after the US debt is solved. Why selling the strongest currency instead of the weakest?
wow...now tell me...how they're gonna do that ? Or you think that raising the ceiling is the solution ?
  • #2,478
  • Jul 27, 2011 5:11am Jul 27, 2011 5:11am
Quoting lumesh
wow...now tell me...how they're gonna do that ? Or you think that raising the ceiling is the solution ?
I meant that they will probably raise the ceiling and for 1-2 months the markets will switch back to the euro crisis. But long term there's no solution other than some kind of default for US, Greece and Portugal.
  • #2,479
  • Jul 27, 2011 5:20am Jul 27, 2011 5:20am
The US won't default for a long time. Dollar is on sale, euro has been marked up. Fun times next week for us.
  • #2,480
  • Jul 27, 2011 5:45am Jul 27, 2011 5:45am
Quoting EmeraldEyes
The US won't default for a long time. Dollar is on sale, euro has been marked up. Fun times next week for us.
Call it as you wish, if the US will be downgraded the cost of borrowing to sustain more debt will go up. I also see a political crisis in US, with republicans blackmailing an inept Obama.
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