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Australian Bear Raid

  • #481
  • Nov 2, 2012 1:41pm Nov 2, 2012 1:41pm
and check out the futures side the wall of fib confluence held closing just below the 618 from the recent hi to recent low
THIS LOOKS TO BE the begining of another leg back down to 1.01225 on AUD/USD RBA just needs to pull that lever
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  • #482
  • Edited 8:46am Nov 4, 2012 2:57am | Edited 8:46am
Hey JP

Fingers crossed for you tomorrow. I was watching the NFP on Friday and was spewing when that rally started. Was nice to wake up though and see it corrected nicely for you maaan from profit to loss that was like a near 250K swing... How do you sleep at night?..

Not sure whether to be extremely skeptical, envious, or inspired... I think I am all of the above in productive quantities.

Keep troopin' champ... One day I hope to hear more about your background and plans for the future.

L8er
Time hides Nothing
  • #483
  • Nov 4, 2012 12:59pm Nov 4, 2012 12:59pm
Quoting CindyXXXX
Hey JP

Fingers crossed for you tomorrow. I was watching the NFP on Friday and was spewing when that rally started. Was nice to wake up though and see it corrected nicely for you maaan from profit to loss that was like a near 250K swing... How do you sleep at night?..

Not sure whether to be extremely skeptical, envious, or inspired... I think I am all of the above in productive quantities.

Keep troopin' champ... One day I hope to hear more about your background and plans for the future.

L8er
Pips are pips...

If you have open positions and experience a draw down with proper money management it shouldn't be any different psychologically for JPLazard as he more than likely uses proper money management when he trades.

You are only looking at his balance, not his PnL in terms of %...
  • #484
  • Nov 4, 2012 4:20pm Nov 4, 2012 4:20pm
Cindy,

Yes if there is anything that I have it is major swings. But this is not to be confused with a drawdown from initial entry rather than account drawdown.

What I mean by this is the peak at 1.0149 to the current price is a drawdown but because I was in at different levels notably heavy at 1.04 and then again at 1.0410 the account is not as volatile from movements. What I have done essentially is find the 'new channel' before a breakdown or unfortunately a breakout above. So that yes my everyday PnL swings like friday's move lower into profit again looks dramatic but the account as a 'whole' the STANDEV is not that crazy or volatile as one might think.

As for sleeping at night I first have to ask myself a series of questions before a major position trade is put on that I know i will be in for months and the Key one is

'Are you picking a level or channel that will hold the 'actual fundamental bias until the next key econ release'. Now I tel myself after going through the numbers yes and then I let the price action over the last couple weeks confirm this as AUD/USD has from the Confluence walls I have mentioned several times (See latest post on AUD/USD as I show the setup for the walls).

If you look at the chart below the red line going across represents the hourly bar where OCT rate cut occured. from that line to the peak last week we were not trading more than a half a percent above that price Not to mention i was in heavy at 1.04-1.0410 so this gives even more cushions for a move upwards on a stop loss basis.
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  • #485
  • Nov 4, 2012 4:31pm Nov 4, 2012 4:31pm
If anything I would be that guy who is the longest term trader of a group. I will say though I am not one of those guys who is a wait and hold or allow the market to go against me with the perception that it will come back eventually. The only way people can build a smaller account is to cut losses very quick, get in and out of profitable trades so that you can meet quarterly targets and increase size in each quarter, than when your account is big enough you can look at position trading for macro swing plays but still keep strict MM and drawdown numbers in your head and most importantly on the chart.

The best advice I can offer someone when you first start out don't look at your daily PnL every hour instead know what the cost of the trade will be, set your stop loss and know if that stop loss is hit how much of the account you will lose. This can all be done with a sheet of paper and a calculator. Then translate that to the charts, the more you look at the PnL in the beginning the more the fear or greed takes over to take winners too early for quick satisfaction or cut losses way too late because the 'Unrealized' perception assumes that you will come back.
  • #486
  • Nov 4, 2012 4:37pm Nov 4, 2012 4:37pm
Trade and Retail tonight these two numbers are the main reasons for the short lets see if the trade balance is continuing to show evidence of a return to norm levels

AND retail will show if the recent cut has alleviated price pressures


sheet attached
Attached File(s)
File Type: xlsx Copy of terms of trade.xlsx   28 KB | 212 downloads
  • #487
  • Nov 4, 2012 4:38pm Nov 4, 2012 4:38pm
Quoting jplazard
Cindy,

Yes if there is anything that I have it is major swings. But this is not to be confused with a drawdown from initial entry rather than account drawdown.

What I mean by this is the peak at 1.0149 to the current price is a drawdown but because I was in at different levels notably heavy at 1.04 and then again at 1.0410 the account is not as volatile from movements. What I have done essentially is find the 'new channel' before a breakdown or unfortunately a breakout above. So that yes my everyday PnL swings like friday's move lower into...
Sorry JP for the word choice. You are right when you say "market swings" instead of "draw down" due to the fact that you are trading longer term and market swings are expected.

Keep up the good work my friend, your posts are always appreciated!
  • #488
  • Nov 4, 2012 4:43pm Nov 4, 2012 4:43pm
Thank you and your post on JPY are always a great insight I am about ready to pull that trigger for a short on futures but waiting on post elections.

Yes the swings are crazy but if you get in at least near the top of the channel than allowing a month or more of a band range does not affect me like those who may get in at say 1.0250-1.03 where their swings up and down being in the middle could drive one mad on a sustained period of time before the next trend move lower/higher
  • #489
  • Nov 4, 2012 4:55pm Nov 4, 2012 4:55pm
Quoting jplazard
Thank you and your post on JPY are always a great insight I am about ready to pull that trigger for a short on futures but waiting on post elections.

Yes the swings are crazy but if you get in at least near the top of the channel than allowing a month or more of a band range does not affect me like those who may get in at say 1.0250-1.03 where their swings up and down being in the middle could drive one mad on a sustained period of time before the next trend move lower/higher
No problem JP! I know that USD and JPY are safe haven currencies but I'm wondering if the fundamental situations in Japan could change the safe haven status of their currency... What are your thoughts? I know this is an AUD thread so if you don't want to talk about JPY I completely understand. If that's the case just shoot me a PM or skype me. By the way, sent you a few messages on Skype but noticed you haven't logged on for a few days!

I agree with you in regards to the market swings as they are expected to occur when holding longer term positions. I'm actually hoping we can get back up to the weekly trend line one more time (1.058) so that I can short the Aussie big time. But at the same time I hope it doesn't for your sake as I know you are looking to close positions if 1.05 is breached right?

Anyways, I am definitely bearish long term on AUD due to global conditions. In a macro view it is pretty simple: China is dependent on the Euro zone and the USA in regards to exporting their finished goods. If USA and Europe are not buying as much finished goods from China due to economic problems / slow growth, then that means China's demand for raw materials are lower. Australia and New Zealand rely heavily on exporting their raw materials to China.

Europe and USA slow growth = Bad For China
China Growth Hindered = Bad for AUD and NZD

That is my "macro view" in a nutshell, obviously people will need to use technicals before entering long/short positions...

Good luck with your trades JP!
  • #490
  • Nov 4, 2012 5:00pm Nov 4, 2012 5:00pm
points of interest for me on the service index report released today

The retail trade and property & business services sub-sectors recorded
particularly sharp falls in activity during the month.
■ A number of businesses in the retail trade sector noted that low levels
of consumer confidence and weakness in nearby property markets,
which had reduced demand for items such as furniture and appliances,
were the main factors dampening activity.

Profit margins continue to be squeezed by strong input price growth
and declining selling prices.
I wonder what could alleviate this hmmmm....

Sub-sectors directly exposed to household spending, including retail
and wholesale trade, generally reported that conditions deteriorated
in October (the activity indices of these sub-sectors) after showing
some signs of improvement in recent months


On Employment and Wages
Only the finance & insurance sub-sector reported an increase in
employment during the month
Banking/Mining is a scary combination to have as main components of growth. Especially when one relies so heavily on the other for success




On input cost and selling prices
The average selling prices index continues to point to heavy discounting
in the services sector

Tonight' Retail number given the above summary should be worse than expected
  • #491
  • Nov 4, 2012 5:06pm Nov 4, 2012 5:06pm
Given this channel I most likely will be out at 1.0445 if we break above AND CLOSE on daily Id rather get out at this level than watch like a schmuck while it trade to 1.05. This is because of the confluence walls I mentioned and after 1.0435 its almost wide open air for a move to test the next walls higher.

As for JPY the strength always confounds me especially when it comes to say the Fukushima incident when the JPY appreciated. i was like what!!!
I later found out from a former colleague that it made sense if you understood it from an insurance or government perspective they were A. hedging their currency risk (insurers) because of the perceived payout there were going to have to make I.e bUY Yen AND GOV was bring home currency from abroad to rebuild infrastructure (gotta love this market with all its many participants)
But yes looking at YEN v Dollar its a toss up personally JPY's bond market could collapse anytime while US has such an unsustainable amount of debt that its amazing Russia or China has not dumped our bonds onto the market in response
  • #492
  • Nov 4, 2012 5:09pm Nov 4, 2012 5:09pm
The true Key is Europe and as long as they print these numbers not much growth will follow for World GDP.

I will say also that Spain's 10yr auction are getting better the cost of funding is below 5% which is great but this could fluctuate of course


Although from last weeks PMI's around the globe alot of Green shoots I saw especially out of SKorea on Output and shipping numbers but this would need to follow through.
  • #493
  • Nov 4, 2012 6:39pm Nov 4, 2012 6:39pm
Given the retail number and slight improvement in Trade I will be out completely if they hold tomorrow .
  • #494
  • Nov 4, 2012 6:53pm Nov 4, 2012 6:53pm
Seeing these numbers and looking at PMI's from around the world my argument has loss more momentum than the previous month. SL moved to 1.0445 from 1.05,

I might even get of half here but looking to US numbers for a validation. this might be a busted position trade and I will be very disappointed in myself for the days/weeks spent on this.
  • #495
  • Nov 4, 2012 7:06pm Nov 4, 2012 7:06pm
but export is down 1% and import is down 2% from previous month.


Quoting jplazard
Given the retail number and slight improvement in Trade I will be out completely if they hold tomorrow .
  • #496
  • Nov 5, 2012 1:37am Nov 5, 2012 1:37am
Quoting jplazard
If anything I would be that guy who is the longest term trader of a group. I will say though I am not one of those guys who is a wait and hold or allow the market to go against me with the perception that it will come back eventually. The only way people can build a smaller account is to cut losses very quick, get in and out of profitable trades so that you can meet quarterly targets and increase size in each quarter, than when your account is big enough you can look at position trading for macro swing plays but still keep strict MM and drawdown...
JP, taken note of your advice re quarterly targets and size increases. I was thinking more 1/2 yearly as I am working. If you don't mind, any other advice for the guy that is trying to push size up aggresively ?
  • #497
  • Nov 5, 2012 2:23pm Nov 5, 2012 2:23pm
^ What is your typical hold time and do you trade multiple pairs or just focus on one.
  • #498
  • Nov 5, 2012 2:24pm Nov 5, 2012 2:24pm
was bored last night and did a (not my best) sheet on unemployment I am going to refine it better so that it can have some great comparisons
Attached File(s)
File Type: xlsx EMPLOYMENT.xlsx   324 KB | 251 downloads
  • #499
  • Nov 5, 2012 2:26pm Nov 5, 2012 2:26pm
The evidence of history shows overwhelmingly that the banks get it wrong all the time. Last week one of the fed governors in the United States admitted it was their intention through monetary policy to weaken the US dollar. So now many countries are complaining at the G20 meetings how the United States is screwing up their plans and wishes because they all believe growth is equated with good exports and exports depend on competitive prices and of course a weaker currency gives an inherent advantage. In the past this was correct. Now the actions of the US fed has begotten other countries to do the same. This gravitational pull is wreaking havoc around the world. Here in Canada and the US the jobs recovery is mostly due to the public sector.

But now the world is growing up.At some point the world may call a spade a spade and demand that the US become a more responsible citizen but for now it is same old same old.

The analysis based on number of economists asked suggest it is a 50/50 probability. However, the big neighbour is in trouble and there are indications that the Australian economy could be influenced by this which should put the probability of a rate cut at 100%. But based on the traditions of bank inertia the RBA could likely default.

I believe the do nothing is mostly priced in but a cut is not. I will participate on quick downward price action but not upward movement as I don't think it is in the best interests to have a strong Australian dollar.
  • #500
  • Nov 5, 2012 2:38pm Nov 5, 2012 2:38pm
I can't agree more on this. Given the unemployment numbers in certain territories and the excess inventory/supply it will be an interesting year for Australia in 2013. The Gov really put themselves in a corner by promising a surplus EOY and this comes at the heals of reduced tax receipts from the private sector and continued subdued growth abroad.

I personally think there are going to be some big happenings coming after elections ie. possible war, or Greece or other leaves the eurozone which could cause a shock but right now it seems everyone is abiding by Obamas wishes not to do anything too drastic pre elections.
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