Global Macro Trading Journal
- Thread starter Daal
- Start date
You mean the outlandish 1% annual carry?
oops misread the 1.19 there. My bad.
you obviously didn't understand it.
let's say you have 10 trades on and something big unexpected happens - markets start to be volatile, your risk goes up.
you need to cut some trades immediately - which ones do you exit? those with more or less conviction? or do you keep all and hedge?
i thought you do trade for a living but now i doubt it. how do you enter your trades? based on technicals only? and if the move does not get confirmed you exit? that's certainly NOT a global macro the way i understand it but rather a punting on worldwide exchanges...
the saying "if the trade does not work i exit and vice versa" sounds a catchy phrase for newbies but trading/investing is a bit more complicated...you can never be 100% right with your timing!
peace
No worries on 1.19 part
As far as carry is concerned, admit its not much and I do expect trade to work out within 2-3 months. But let us say trade takes 6 months to work out, you would be paying 0.5% carry, if you are trading for an institution fine....but if you are running your own account and you use a 7 leverage, you would end up paying 3.5%.
The bigger point is I think there is no reason to be already short, rather its better to wait for peg to give way and then get short.
No obviously I understood exactly what you meant.
a. Something unexpected happens and markets become more volatile. Why exactly did my risk go up? It didn't because my stops stay were they were. Stops define my risk, not market volatility (if we disregard gap risk).
Let's assume I am long a call and the market becomes more volatile. Did my risk increase?
b. If you believe all traders lumped into the 'macro' pigeon hole are purely discretionary then you're wrong. Look up 'systematic directional' or 'systematic macro', there's plenty of other catchphrases.
c. Stops take me out of trades. Why this is a 'newbie catchphrase'? Why is 'trading and investing a bit more complicated than that'? How long have you been trading for a living to make such a broad statement?
IMO it is as complicated as you elect it to be for yourself. You like complicated then use complicated. I don't. One shoe doesn't fit all.
If you look historically some of the best (or rather 'fastest payoff') trades were made by betting against the direction of carry at the right time, especially when combined with outlandish PPP overvaluation.
Not the case for EURCHF obviously so it's a bit OT, but I'm patiently waiting for AUD to implode over the next couple of years even though the carry may then still be substantial. It that comes to pass it'll be a beautiful opportunity.
AUD is a pretty interesting beast. When it starts to go down, it is a beauty. And frankly one doesn't need a huge amount of fundamental analysis to profit from the opportunity. You can do it in a very technical way also. When AUD starts to fall, it falls fast and shorting after a big down candle (say > 200 pips) will ensure you will always be able to be in the "Big Short AUD trade" whenever it happens.
What pressure on the SNB? As far as I know, the only guy who's on the warpath is Christoph Blocher, who's a bit of a right-wing nutter. His bark is generally a lot worse than his bite and, if I am not mistaken, he's not taken altogether seriously in Switzerland. Moreover, I think that for Blocher, just like for other right-wing leaders across Europe, the ccy issues just offer a convenient platform to push their traditional agenda. I am pretty sure that other than Blocher, there's pretty universal political, business and popular support for the SNB policy. Obviously, this all with the caveat that I am short CHF and that the situation may change if Europe gets a lot worse.