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Since EURTRY failed to break through the 50% Fibonacci retracement at 3.9083 on Friday and RSI is back in neutral territory, I closed my EURTRY short trade at 3.9354 this morning. Having opened the position at 4.0524 on 23 January, this translates into a quick 3.64% spot+carry return. I still like the pair for shorts, but considering the sharp TRY recovery since January I'd rather watch from the sidelines until a new selling opportunity presents itself.
Open positions as of 13/02/2017 08:44am CET:
EURUSD short from 1.0795, unrealized return: +1.51%
Realized YTD return: +4.34% from 3 trades
Total YTD return: +5.85% from 4 trades
It's Sunday, and Sunday is blues day! This week with the slow blues A Fool No More by Peter Green. It is off his 1979 album In The Skies. Having founded Fleetwood Mac in London in the late 1960s, Green used to be a preeminent blues rock guitarist during the British blues movement. Even audiences not listening to the blues will probably recognise some of his songs, such as Black Magic Woman, which was later covered by Santana. Peter Green began taking larger doses of LSD around 1970, leading to him leaving Fleetwood Mac. Succumbing to mental illness, Green underwent treatment for schizophrenia in psychiatric hospitals in the mid-1970s. Although he reappeared on the music scene sporadically towards the end of that decade, he has mostly remained in obscurity from 1980 onward.
Saturday Links: Sunday edition! Yeah, that's right. I didn't get around to writing this yesterday.
How the Flash Crash Trader’s $50 Million Fortune Vanished -- Bloomberg Markets -- Investigative piece on Navinder Singh Sarao's fortune, which is tied up in a complicated web of offshore investments. Sarao, dubbed the "Flash Crash Trader" and "The Hound of Hounslow", was convicted for fraudulent trading in the financial markets. Interestingly, aged almost 40, he lived in and traded from his bedroom in his parents' house. He went on to make roughly $50 million from futures trading. US regulators claim he helped cause the Flash Crash of May 2010. After having been extradited by his home country England and subsequently sent to Chicago, Sarao was ordered to pay $38.4 million to the CFTC and US Justice Department. I'm working on a post about the accusations myself; watch this space for more. I'm not going to defend Sarao's trading strategies, which may have involved an HFT practice called "spoofing", but I think it's ridiculous this matter had to be settled in the US and I must say it's nothing short of embarrassing if one individual trader can break the international financial markets from his bedroom. I mean, if that's really true, how stable and trustworthy can today's automated markets be?!
A Litany of Problems With p-values -- Statistical Thinking -- Informative post about the shortcomings of null hypothesis testing and p-values. Practitioners will find this extremely useful. From personal experience, I can say that null hypothesis testing only looks easy from the outside. It's extremely easy to calculate p-values, after all. Press a button in the statistical software of your choice. But to make educated inferences you should look beyond the numbers and ask yourself whether you would fully trust your statistical tests: If you're testing a potential trading idea, would you put your own money into it?
While my open positions are going well, I have no ideas for any further trades. As usual, lots of noise coming from Trump, but nothing substantial and hence nothing tradable, in my opinion. Don't trade hot air, i.e. ignore what Trump is saying, focus on what his administration is actually implementing.
I'm looking for EURUSD to hit 1.06 today. Ideally, we'll see a re-test of 1.0524 soon.
Open positions as of 10/02/2017 08:54am CET:
EURTRY short from 4.0524, unrealized return: +3.83%
EURUSD short from 1.0795, unrealized return: +1.39%
Realized YTD return: +0.7% from 2 trades
Total YTD return: +5.92% from 4 trades
The NZD fell after the Reserve Bank of New Zealand expectedly kept its benchmark rate unchanged. RBNZ governor Graeme Wheeler highlighted the NZD's strength. The reserve bank regards the NZD as overvalued (i.e. a drag on exports), and as such, the NZD may be the main factor in the decision on when to begin hiking rates. My NZDJPY long idea is clearly looking less attractive as of today. The pair is still on my watchlist, but an imminent trade is unlikely due to downside risk to the NZD.
Regarding the JPY, Shinzo Abe reportedly told Donald Trump he should discuss currency matters at international forums, such as the G20 summit in Hamburg in July, instead of using Twitter. Possible Hamburg accord?
Open positions as of 09/02/2017 08:31am CET:
EURTRY short from 4.0524, unrealized return: +2.71%
EURUSD short from 1.0795, unrealized return: +1.21%
Realized YTD return: +0.7% from 2 trades
Total YTD return: +4.62% from 4 trades