Fading Yen - It has gone parabolic
- Thread starter gmst
- Start date
I'll give you credit for not bailing on the thread.
I will say that perpetual martingaling is not a wise risk management technique. It's precisely moves like this when combined with leverage sends traders into the retail food industry.
New highs print.
When I was junior at a bank in 1998 there was a day when USDJPY moved 20+ handles in less than 24 hours - off the top of my head I think it was during the LTCM crisis but it was hard to believe at the time. :eek: Maybe someone can pull up a long term chart as I don't have one to hand?
From this historical perspective the yen weakness to date has been fairly orderly, albeit a powerful one way move. It is quite possible that the "inflection point" of the parabola has yet to be reached. I doubt gmst is alone with his fade, most likely some macro hedge funds are hurting because such a move appears to be an outlier if you're only looking at the magnitude of price moves over the last 2-4 years.
For gmst it may well be a defining moment in their personal trading development. There are less stressful and more profitable ways to trade. I think most of us have put on these fading macro trades from time to time and the pain leaves such an indelible mark that we never want to return once the scars have headed.
If you don't mind sharing gmst, what % of capital have you lost so far? Are you sleeping well? It might be useful to the other posters (and yourself) to share more details about your feelings at this stage. Often writing things down can help to clarify your thinking and reach some sort of plan. A good plan today is better than a perfect plan tomorrow. Living to fight another day is all that matters when you get deep in the mire.
Sometimes what appears at the time to be a disaster ends up being a strong motivator for later successes, and you have to think this way if you want to succeed in the long run, even when the going gets tough.
From this historical perspective the yen weakness to date has been fairly orderly, albeit a powerful one way move. It is quite possible that the "inflection point" of the parabola has yet to be reached. I doubt gmst is alone with his fade, most likely some macro hedge funds are hurting because such a move appears to be an outlier if you're only looking at the magnitude of price moves over the last 2-4 years.
For gmst it may well be a defining moment in their personal trading development. There are less stressful and more profitable ways to trade. I think most of us have put on these fading macro trades from time to time and the pain leaves such an indelible mark that we never want to return once the scars have headed.
If you don't mind sharing gmst, what % of capital have you lost so far? Are you sleeping well? It might be useful to the other posters (and yourself) to share more details about your feelings at this stage. Often writing things down can help to clarify your thinking and reach some sort of plan. A good plan today is better than a perfect plan tomorrow. Living to fight another day is all that matters when you get deep in the mire.
Sometimes what appears at the time to be a disaster ends up being a strong motivator for later successes, and you have to think this way if you want to succeed in the long run, even when the going gets tough.
Thanks for a thoughtful comment. I have been very slow to respond as I have again fallen ill, after recovering last week. Due to this reason, I am sleeping very well - like 16hrs a day
Just something to note, usdjpy being a proxy for risk aversion can have 5-10-20 big figure moves in downward direction but won't have such moves in upward direction (please correct me if I am wrong on this historically).
My booked PL is 7.43% till now. And my open negative PL is more than -12%. So, net net this trade has been a loser as of now.
Quote from gmst:
Thanks for a thoughtful comment. I have been very slow to respond as I have again fallen ill, after recovering last week. Due to this reason, I am sleeping very well - like 16hrs a day
Just something to note, usdjpy being a proxy for risk aversion can have 5-10-20 big figure moves in downward direction but won't have such moves in upward direction (please correct me if I am wrong on this historically).
My booked PL is 7.43% till now. And my open negative PL is more than -12%. So, net net this trade has been a loser as of now.
Back in 2010, during the gulf spill, I was holding oil (without a disaster stop loss). After the initial loss, I could have gotten out at a smaller loss. But I continued to hold, thinking it would come back. I kept thinking.. surely if we can go to space we will fix this oil problem.. people are making a bigger deal out of it then it really is. It did finally come back but after I finally took a loss. I learned that during times of loss, we don't think clear. We become biased, hoping the trade will come back. At least that was my experience. I don't like to tell people what to buy or sell because usually there are pretty good arguments for both sides of the market. But when I saw this thread originally I couldn't help but to post because I didn't want to see someone lead a bunch of people into trading against strong fundamentals. BOJ wants the yen between 100 to 110 or so. They have openly stated it as a target. When a central bank says there will be growth, you can still be skeptical. But when a central bank says they are determined to significantly devalue their currency, you can take it to the bank.
It sounds like you are good at short-term technical trades. That's mostly my style as well. I sleep better at night that way.
Stick to what you are good at. Forget the rest.
Hope you feel better.
Oh and f*** all the haters and what they think. You posted an idea. You traded it. You kept us posted on your trades. It's just a loss. No big deal. Move on. Next.. On to the next big winner.
Did you change your stop? You said at inception that would exit at 96. You should follow the plan, reevaluate, and lick your wounds. You can always formulate a new plan, that is always better than ignoring the worst case stop.
5-10% loss is no biggie, you had a plan, it didn't work, move on.
But ignoring the stop is a bigger concern. Even if you get lucky this time it's a bad habit and you've already lost because you've set a precedent for next time...
The health matter is quite likely related to carrying a position for weeks on end which your subconscious mind knows is killing you. I've been there...you've got to follow the trade plan.
One day you'll wake up and USD.JPY prints above 100. Then what's the plan?