Hi guys, I have been licking my wounds since I closed all my longs (and there were many!) 2 hours before the September rally took off, but I have learnt a painful lesson and am now back with a new assessment and strategy:
1. The lesson is that it is better to get a one-time 500% return once a year than a 1% return two or three times a week.
2. My assessment is that the 1.2010 era is over for now. It was linked to fears of the EZ breaking apart big time (i.e. not only Greece, but potentially also Spain and Italy). This fear has been terminated by the ECB OMT program. Everyone knows now that the EUR is, indeed, "irrevocable". At the same time, the 1.20 floor has held even through the worst periods and the SNB clearly is not getting ready to abandon it anytime soon. So now no one wants to buy the CHF (i.e. park their money) too close to the floor anymore, because it means guaranteed loss in the future. On the other hand, the EZ-crisis is not (yet) resolved, Spain and Italy have not (yet) asked for help, and Greece has not (yet) left the EZ. All of this is going to happen for sure, but no one knows exactly when and how and what the precise consequences on the FX market will be. Therefore, investors still keep close to the CHF, but no longer at "any" cost. As I see it, this is the first step of stabilization of EUR/CHF away from the floor, and as soon as the next step comes (most likely: Spain asks for help and the ECB actually implements OMT and starts pushing down Spanish interest rates), EUR/CHF 1.21 will be left behind for a next level of stabilization at around 1.22 - 1.23, where it will stay until another next step is implemented. Depending on the precise nature and timing of these steps, I expect EUR/CHF to be at 1.25 by Dec. 2013.
3. My strategy going forward is 80% "buy and hold" and 20% scalping. I would recommend keeping all stops below 1.20 though, because there may be one or two spikes down to the floor or even 1.1990 (bid) when Greece finally leaves the EZ or when some other panic news hit the wires.
The pair is getting rather boring - but good for scalpers raking in 10-15pips in the tight range it's trading around 1.2090 zone.
I still believe there are room for movement in either direction. Some of us wants it to go up, for me I want it to go down below 1.2050 to reload again. Since EURCHF looks like it's trailing EURUSD, I believe when any one country in EZ sneezes, there's a chance for EZ to catch a cold and EURCHF drop. Remember that CHF is still a relatively safe haven for other EZ citizens to shif their fund there.
The small outflow of CHF out of Swiss last week is probably temporary. The EZ crisis is going to be long & there are many opportunities of another drop for us to reload.
And Bluedolphin is right - many of us incl myself did the same mistake of unloading early way before the 100+pip surge. So the lessons learnt, posted by Bluedolphin serves as good reminders for me. But we all do have different trading styles. So good luck everyone...
If ECB surprises us tommorow, we should see an ugly spike down.
What about those brokers which has imposed very low leverage on EUR/CHF pair? Is it still in place?
Today, day 5 october, at between 13h29 London time and 13h41 London Time my FXCM and HotForex MT4 both froozen in DAX30 and US30.
Any of you guys can please verify if same happened in your MT4 and tell me ?
Thanks a lot
Ignored
Hi Luigi,
Jason here from FXCM. If you believe any of your trades were affected by a tech issue on our end, please complete this Trade Audit Form (FXCM UK | FXCM US) to log a case. The Trade Audit Committee can review your case and make the appropriate credit to your account, if there was an error on our part.
Jason here from FXCM. If you believe any of your trades were affected by a tech issue on our end, please complete this Trade Audit Form (FXCM UK | FXCM US) to log a case. The Trade Audit Committee can review your case and make the appropriate credit to your account, if there was an error on our part.
Jason
Ignored
i believe he can't place any trade.... is there any appropriate credit to that? and this is the common answer that we can expect from fcxm....
A Soros-like bet could be to short EUR/CHF, potentially with a smaller long position for EUR/USD as hedge.
Reason:
EUR/CHF is asymmetric, it can go up only a bit, but go down a lot (like GBP). And the attack against the CHF was significantly larger than the one against GBP (27b GBP vs. 160b CHF !!) and Switzerland is a much smaller economy.
25% long EUR/USD should be a suitable hedge IMO, as EUR/CHF will follow EUR/USD moves for much less than 100%.
A Soros-like bet could be to short EUR/CHF, potentially with a smaller long position for EUR/USD as hedge.
Reason:
EUR/CHF is asymmetric, it can go up only a bit, but go down a lot (like GBP). And the attack against the CHF was significantly larger than the one against GBP (27b GBP vs. 160b CHF !!) and Switzerland is a much smaller economy.
25% long EUR/USD should be a suitable hedge IMO, as EUR/CHF will follow EUR/USD moves for much less than 100%.
Ignored
You are right... Swiss is a small but resilient economy. Attacks against CHF Soros-style will have a significant effect on CHF, but with SNB printing its way out defending the floor, the attacker will give up first.
And yes, EURCHF seems to trace EURUSD on a 10% scale.
Also on the reduction of the sight deposits or funds flowing out of Swiss, it will eventually reverse again towards net inflow into Swiss soon. The EFSF and ESM can only help ailing banks/economies to a certain extent, but the psychology of people esp high net worth individuals in EU, is they want a safe haven to place their €. So even if SNB were to tax them to deposit their € in Swiss, they will be happy to do so.
It seems that EURCHF is under constant but slow subtle downward pressure. Every 'spike' up, probably from EURUSD or EUR longs will be met with eventual slow gradual decline back.
Sight deposits out of Swiss have reduced last week, but it's too early to tell - have to wait for next few weeks to see the net in/out flow of cash.
I forsee an eventual drift back towards below 1.2020, but with strong resistance at 1.2050.
