FX short to mid-range frequency discretionary trading

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I do not have regrets about the previous trade and the 90-100 pips it was in the money (I do regret, however, in not having taken profit on my earlier short aud trade) before I got stopped out last night.

I chalk it up to lack of liquidity or pre-ECB scare in that the market was unusually one-sided post FOMC statement release. I was in the belief that the trade had a fair chance to build upon the 1.2310-20 level it seemed to have under control until the statement came out. It was the right trade to take, great entry, unfortunately it did not work out this time. I was betting on a run-up prior to the ECB press conference tonight.

P.S.: I am not running those discretionary trades to reap 90 or 100 pips, only, especially given that the trade had a fairly good chance to reach 1.25xx levels this week. Plus I thought 1.2230 levels would hold, as Ben exactly delivered as promised thus the one-sided dollar buying was a bit curious in my humble opinion. Looking to reap larger returns in liquid fx land has been very hard as of late, its the second time I give up a relatively juicy profit in the past month.
 
Quote from amazingIndustry:

I do not have regrets about the previous trade and the 90-100 pips it was in the money (I do regret, however, in not having taken profit on my earlier short aud trade) before I got stopped out last night.

I chalk it up to lack of liquidity or pre-ECB scare in that the market was unusually one-sided post FOMC statement release. I was in the belief that the trade had a fair chance to build upon the 1.2310-20 level it seemed to have under control until the statement came out. It was the right trade to take, great entry, unfortunately it did not work out this time. I was betting on a run-up prior to the ECB press conference tonight.

P.S.: I am not running those discretionary trades to reap 90 or 100 pips, only, especially given that the trade had a fairly good chance to reach 1.25xx levels this week. Plus I thought 1.2230 levels would hold, as Ben exactly delivered as promised thus the one-sided dollar buying was a bit curious in my humble opinion. Looking to reap larger returns in liquid fx land has been very hard as of late, its the second time I give up a relatively juicy profit in the past month.
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1.25 this week? The 1.25 touch expiring Friday close is paying 15/100. 110 pips is nearly 2x stat vol in 24h. I assume your targets must have some vol-assumptions rather than discretionary. The 1.24 touch is 35/100 to the buy.

On what basis are you defining a "fairly good chance" of reaching 1.25? Because it's not represented in vol.
 
To me vol is nothing else than a sub-market consensus. Your comments suggest to stay with the herd pays long term, I beg to disagree. If I believed in the same probability distribution than the market attaches to possible asset class return outcomes then I think we both can agree that we have no business to be in this industry. 15/100 was underpriced, imho.

"1.223 has held"
-> and why would 1.223 be significant? Because some expert said so, fibonaccis, moving averages, double top? Sorry I do not subscribe to mom's technical analysis arsenal. I subscribe to momentum and momentum favored the upside.

" I just don't get the logic of being handed 110 pips in a "wait and see" market, pre-ECB, and not taking it"
-> the logic is in that one may expect probabilities favoring the upside rather than downside at that point in time. Its not I was at the money or under water. And it was not that I held the position into the ECB press conference, the FOMC was a "relative non event" in relative terms. I would actually have stayed in or get into the same long trade again right around now would the ECB not talk today but tomorrow or early next week.





Quote from atticus:

1.25 this week? The 1.25 touch expiring Friday close is paying 15/100. I assume your targets must have some vol-assumptions rather than discretionary. The 1.24 touch is 35/100 to the buy.

On what basis are you defining a "fairly good chance" of reaching 1.25? Because it's not represented in vol.

1.223 has held. I just don't get the logic of being handed 110 pips in a "wait and see" market, pre-ECB, and not taking it.
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Quote from amazingIndustry:

To me vol is nothing else than a sub-market consensus. Your comments suggest to stay with the herd pays long term, I beg to disagree. If I believed in the same probability distribution than the market attaches to possible asset class return outcomes then I think we both can agree that we have no business to be in this industry. 15/100 was underpriced, imho.

"1.223 has held"
-> and why would 1.223 be significant?

" I just don't get the logic of being handed 110 pips in a "wait and see" market, pre-ECB, and not taking it"
-> the logic is in that one may expect probabilities favoring the upside rather than downside at that point in time. Its not I was at the money or under water. And it was not that I held the position into the ECB press conference, the FOMC was a "relative non event" in relative terms. I would actually have stayed in or get into the same long trade again right around now would the ECB not talk today but tomorrow or early next week.
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Taking your last-first... I agree that it's an asymmetric return in the next thirty days under a couple sigmas, but all bets are off at 8:30 tomorrow. Not to be an ass and back-seat drive, but I've never known any pro who didn't take some vol-assumption into account on spec-trades. A one-way 110 pip move is well outside mkt vols, like double! Would you have taken 150 pips? Maybe cover half at a figure and then LMT 20-30 lower on the re-buy? It's curious as you might expect vol to be lower (not 2x recent realized) before the ECB.

Anyway, it's been stated. If one is to take your comment on prob-distribution at face value then it's hard to believe you've ever traded vol. htf do you arrive at exit parms? It's a serious question. I am not looking for insight into solving for your directional model, it's just anathema in my mind, so it's simple curiosity.

1.223 significant? I assume it's rhetorical or you're assigning some significance to Bernanke's timing or some technical factors. I see no significance to 1.223. It either won't see it post ECB or will blow right through it.

15/100 can be bought here, now, at 1.225; touching 1.25 by NY close on Friday.

Sucks, as I've got to be up at 4am local.
 
I have not taken a 250 pip more on the aussie sell off 2 week ago. I am not sure I follow your whole approach to managing open positions. So, your rational is if you are up 40% on a long cash equity position and the vol market attaches a 1% probability to the underlying going up another 20% within x-days/weeks then you exit the position? To be honest, I have worked extensively on the fx side on the sell side (prop teams), hedge fund side and now on my own, and I do not know a single spec guy who would override his view on momentum in case vol levels disagree. I am generally trading momentum, what you are suggesting is "oh God, we made a 2SD move, lets take the pretty girl home". I think you are well aware that vols in fx, particularly daily ranges in eur are abnormally low at the moment.

Please do not make it sound as if the spec world over is worshiping the volatility gods, because that really could not be any further from the truth. But hey, you are spreading your usual shit: "You disagree with me means you probably have never traded". Please spare me from your drivel. I made my point clear you can beg to disagree, your right. But do you have to piss again around in others' threads? Can't you just once mark your territory in your own threads but behave civil in others'?

Quote from atticus:

Taking your last-first... I agree that it's an asymmetric return in the next thirty days under a couple sigmas, but all bets are off at 8:30 tomorrow. Not to be an ass and back-seat drive, but I've never known any pro who didn't take some vol-assumption into account on spec-trades. A one-way 100 pip move is well outside mkt vols, like double! Would you have taken 150 pips? Maybe cover half at a figure and then LMT 20-30 lower?

Anyway, it's been stated. If one is to take your comment on prob-distribution at face value then it's hard to believe you've ever traded vol. htf do you arrive at exit parms? It's a serious question. I am not looking for insight into solving for your directional model, it's just anathema in my mind, so it's simple curiosity.

Sucks, as I've got to be up at 4am local.
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Quote from amazingIndustry:

I have not taken a 250 pip more on the aussie sell off 2 week ago. I am not sure I follow your whole approach to managing open positions. So, your rational is if you are up 40% on a long cash equity position and the vol market attaches a 1% probability to the underlying going up another 20% within x-days/weeks then you exit the position? To be honest, I have worked extensively on the fx side on the sell side (prop teams), hedge fund side and now on my own, and I do not know a single spec guy who would override his view on momentum in case vol levels disagree. I am generally trading momentum, what you are suggesting is "oh God, we made a 2SD move, lets take the pretty girl home". I think you are well aware that vols in fx, particularly daily ranges in eur are abnormally low at the moment.

Please do not make it sound as if the spec world over is worshiping the volatility gods, because that really could not be any further from the truth. But hey, you are spreading your usual shit: "You disagree with me means you probably have never traded". Please spare me from your drivel.
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I really don't care an iota where you've worked or need to hear your CV again... my point was to arrive at a vague conception of what you "view on momentum" is? Because if you think 1.25 is touched by Friday you need to align it with reality. It was not my intent to call you out, but apparently that's all you got from my comments. It's nothing personal.

If you truly believe that 1.25 is realistic (this week) you're nuts to be trading D1 over vol.

To pay you a compliment -- you were perfect on the EURUSD and AUDUSD call and utterly fucked it sideways. Half a compliment.
 
Dude, I took this trade last week, and at that time yes I had a 1.25 target in mind. Yesterday momentum clearly pointed up and I was prepared for some action to the downside post FOMC but held the belief that my entry level/ and stop was safe. Stop to always pick things out of context, you mention my target then mention when I put on the trade on and mention the vol levels back then. Look at your past posts on my threads, each time you come out of the closet when a trade went sour, not when the "apparently bad" trade was put on. No comments or constructive contribution whatsoever on valid trades. Or did you have anything to say on my most recent trade entry? I can tell you what you WOULD HAVE SAID if the trade went bad from the outset and stopped out at 20-30 pips. ;-) I am done with this, I like to stay on course and not waste more of my time to defend myself how I dare to not make volatility a staple in my function of momentum. I consider volatility but do not smear it on my buttered toast each morning as you apparently do. Fair?

Quote from atticus:

I really don't care an iota where you've worked or need to hear your CV again... my point was to arrive at a vague conception of what you "view on momentum" is? Because if you think 1.25 touched by Friday you need to align it with reality. It was not my intent to call you out, but apparently that's all you got from my comments.

If you truly believe that 1.25 is realistic (this week) you're nuts to be trading D1 over vol.
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That's fair.

I'll take my leave, but here's my response to your question on my thread:

Quote from atticus:

I would've been short AUDUSD if it was trading under the 1.05 figure at the aussie session close. Assuming weakness into the ECB. We didn't close the session under 1.05 so no trade. I am looking for a pullback to 1.043 into the ECB, but meaning I would not hold anything into the meeting. Flat currently.
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Didn't take the trade, but the 1.043 target was based in vol. Take a look at bottom tick today and where we are now. It's one call, I realize.
 
I liked some of your aud comments in your thread (or was it someone else's, I mean the thread).



Quote from atticus:

That's fair.

I'll take my leave, but here's my response to your question on my thread:



Didn't take the trade, but the 1.043 target was based in vol. Take a look at bottom tick today and where we are now. It's one call, I realize.
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