I have been struggling with “going short” all week. Not in the conventional manner as in “selling a stock short” – but more so with consideration to “getting short” on risk.
For the most part “long trades” are considered bullish and are taken when traders feel that markets (and risk) are going to move higher – where as “short trades” are bearish and are taken when traders feel markets are making a turn to the downside. There are many ways to play it – through inverse or bearish ETF’s or possibly through the purchase of instruments that perform well in times of risk aversion (many feel that gold is a good play in this instance).
Via currencies I have chosen to “buy JPY” as it is considered a safe haven currency – and is generally bought during times of risk aversion. Any way you cut it, the idea being that investors would be seeking safety – and that “going short” would be the trade of choice.
This has not been easy.
Markets have traded within a very tight range (sideways) for nearly two full weeks! And regardless of some great intra day trades and profits (which I’ve had to work very hard at) it’s been near impossible to hold on to any position of size for more than a couple of hours or so – before it’s either back to break even, or worse – going against me.
My indicators ( and my gut ) keep me on the short side regardless. I will endure this mornings barrage of U.S based news and evaluate from there.
I’ve layered in to a couple of long JPY trades here over the past 24 hours that will either make me a great deal of money or (at the worst) cost me 2% of my account (not bad considering I’m up over 4% on the week anyway) so…..
Stay tuned for some fireworks.
Getting short…and “staying short” – is a very, very difficult trade.
I’m sure you at least woke up in a good mood with the Yen & Nikkei overnight action!
Rock on Kong!
(Also check out my latest self-portrait on flickr — gotta relax, too 😉
Hey where’s the pic? – please re send the link to your photos!
Yes Zkot – I was at the computer late ino the night, and very early here again this morning – as this trade is driving me crazy. Grabbing profits as I go (thankfully) as within minutes literally – HUGE moves / volatility. I seriously can’t wait for the weekend here!
As it stands – I’ve resigned myself to a reasonable stop on these trades, and am gonna just letter fly. I think it’s gonna be a wopper but on the other hand, I’ve outlined my risk, and am not going to sweat it another minute.
Otherwise – thanks a pile for all your input here at the blog. I can only assume that many other readers are also gaining from your insightful posts and market observations.Keep it coming!
Taiwan now – wow….it sure looks beautiful!
Howdy Kong!
Did you see that Nat Gas / UNG spike at 10:30? There has got to be a way to just trade that. Either be set up to sell if it spikes, or set up to buy if it drops. I was set up to buy on a dip. Still may do that, as it is now dropping back down. Waiting to see how Nat Gas futures handle the 4.000 range. ~ 22 for UNG.
S&P futures on the brink (1559.95) as I write…
The latest pic is at:
http://www.flickr.com/photos/7466465@N05/8597782904/in/photostream
Love my old legacy lenses on Sony NEX camera bodies!
Cheers ~ zkot
I’ve got a big red line drawn at 22 on my UNG chart – hence selling the other day.
I think it’s made the long term trend change from flat – to up…but just ran into a reasonable area of resistance, and looks overbought. Wating for a pullback looks good to me.
Absolutely “bizzaro” movement across markets at the moment. Looking to decipher it a complete waste of time – as days like this ( and weeks like this ) still fall under my macro analysis of “topping procedure underway” – prepare to have your accounts hacked/whipsawed to shreds with consideration to both buying OR selling.
Long JPY trades are literally “dancing” 5 – 10 pips away from my trades falling to the green side – or the red….and I’m done with it….as it’s this kind of action that can drive a person insane.
I’m heading for the beach.
A good read. Thank you
Thanks alot Karim – I really appreciate it.
Hey – could you let me know – how did you come across my blog? where did you hear of me / find me?
Thanks!
To be honest with you I have absolutely no idea! But happy I have stumbled across it. I too trade fundamentally and aggressively but not FX so will be interested in seeing the model you have written about
USDJPY has HUGE support at 94. For the past 2 days, every time it touches it will bounce up 20 pips. I think most people are long this pair going into April, expecting the BOJ to deliver what it said and send this pair to 100 and beyond….now that end of March is over for the Japanese companies to buy yen…
It is interesting…..and you are right on the money!
I imagined that Nikkei would have corrected much further going into the fiscal year end, and in turn JPY would have bounced hard…but as per my last post – NOT HAPPENING!
That’s what makes a market right – spectulation. So next up – the BOJ meetings / expectations for April.
I’ve trimmed to next to no position now – so we’ll just trade it as it comes…although it could just as likely set up as a huge disapointment on news early April coupled with further “risk off sentiment” in markets abroad so – careful careful!
JPY has fallen very hard, very fast – and Forex has a wonderful way of catching the most traders……on the wrong side of the trade.