Forum > View Topic (Analytic)
This thread was started in response to the Analytic:
Speculators' Futures FX Positions
The weekly figures on traders' futures commitments obtained from the Chicago Mercantile Exchange's International Monetary Market shed valuable light on the developing flows pursuing one currency versus another.
I have been reading this bog for three month.....and most of people keep talking about risk aversion and USD will rally back since June as you know.
If you read my notes on this blog, you may know that I never long USD but always short it when it rally....because it is the long term trend as I believe so.....I still have my positions and hope USD will makes its new low from here.
I think that many people come to this blog who are looking for information or advice.
But some of people in this blog have kept talking about USD will rally back through end of this year like USD/CAD will go to 1.2 or GBP/USD won't break 1.7....EUR/USD will reach 1.2 or 1.3.....and so on.... I really deeply doubt them, specially when they speaks very firmly. like eat my dog if GBP/USD break 1.7....and so on........
I think these kind of comments were so irresponsible, and I believe some of people are following their comments and losing money now or before....
I feel so sorry for them.......
Why do you sound so bitter (or sour)? :)
A true trader's dictionary has no such words as 'catch' and 'chance'. In fact, there are NO missed opportunities in the markets. History repeats itself...and further, markets are to be traded in portions. HOW MANY times have we seen oil touching $65 in the past two months? A dozen, two dozen? So much so, when oil tanked from $68 - $58 in two days and from $63 - $69 in another two, there must've been cries of 'catches' and 'chances'? Yet, oil is (hopefully) heading for $65 again! :) So here's your trade. Even if not, your trade is the $70 - $75.
Verily, those who try to find the top and bottom of the market measure their trades in 'catches' and 'chances'. The market will always be there. It's for us to decide whether we will be there or no [by virtue of our (in)discipline]...
we dont trade in a perfect world. the market is full of issues and uncertainties. economists are good at predicting shocks more so than financiers.
so all my point was to garbabe stock bears predicting 20%+ pullback for no apparent reasons. not to see we wont get that but it will come under a shock condition if it is going to be a sharp move - this we cannot predict.
What are your expectations? Are you bullish or bearish on the market now? How are your forecasts, depression like the 1929-1933? Or are you optimistic about the stock market?
I see you predict 68 $ for the oil, it will affect the Norwegian Kroner. So is it a good time to go short with Major currencies like CHF or USD now?
Best Regards
Many traders are talking about risk aversion everyday, just because they didn't catch the chance to short USD as same as stock traders.
Many of you are writing on this blog, saying risk aversion or USD rally back should ask yourselves if you really want to buy US bond and long USD and hold it by the end of this year, or just because you don't have the position on short USD ......
Good luck!!! everyone!!! I hope all of you will catch the chance to short USD when it rally back next time.......
Well, finance theory DOES suggest that any anticipated events are reflected in today's prices ('buy on rumor...sell on news!), but even if neutralize Ashraf's repute and analysis aside, I would have to agree w/ him that there hardly any precedent when the markets anticipated/forecasted/predicted/SPECULATED (or even can) a massive pull back.
Agreed that shocks bring out massive pull backs, but that is it! A massive pull back would not, and do not, occur under 'normal' market functioning. Technical correction here and there, but again, that's it. Surelt, if the opposite were to be the case, you and I would sell all, put our feet up and wait for the markets to rebound. Isn't it?
Asad
well for starters, some banks been making huge trading profits recently especially goldman. betting at severe lows for currencies/markets was an easy game for quick money as many markets were below equilibrium prices and not sustainable e.g oil. but it will get a lot harder for traders now that obvious mispricing becomes increasingly difficult to spot. i will expect trading profits for the banks to fall in h2 which will probably help bring stocks down a bit anyways.
but if u think about it u have a 33.3% chance in making money on a direction of a market. a lot of bets may be won due to chance, TA and fundamentals.
did anyone expect quantitative easing in 2008?? probably not too many but 0% yes. now that is what u call a shock and that's what helped push the stocks and inflation linked instruments up and dollar down. had we have known for sure quantitative easing and other central bank measures occured we would not get such historically large volatility and short sharp corrective moves. if markets fully anticipate price movements with high accuracy why would there be such volatility? i dont think so. it is likely to be more gradual and not so corrective. we would not have such a huge rally if markets were rational, forward thinking and able to predict future events with accuracy.
markets remain irrational a lot of the time but what helps cause all this volatility is unpredictable events which market participants as a whole cannot forsee.
Spec, the 1st paragraph of your comment is the most general comment ive ever read on this website. What do you exactly mean by "markets"and what do you mean by "massive pullback". Name me single day when markets were anticipating a massive pullback. How do you define and measure such a remark? But here's a top for you, when VIX was at a very complacently low 12 in 2007, markets were indeed pricing massive pullback. i for one did expectc rates to reach 0% when they were at 1.5% (surely somnthng bad had to happen) I also saw 850 S&P500 when it was well above 1,000 heres the LINK http://bit.ly/EKpIy and i wasnt the only one. As for the next massive pullback, it will not be as aggressive and violent as in Feb-March but instead, as drawn out as that in 1938-1942.
Asad. yes, Indeed.