But the floor is vs the Euro, not another currency.
Global Macro Trading Journal
- Thread starter Daal
- Start date
But the floor is vs the Euro, not another currency.
I'm considering a potential solution:
holding a basket of the 3 highest correlated currencies to the BRL in a beta-position sizing adjusted way. If I find out that the BRL is 30% more volatile than the AUD, I would short USDAUD with a position bigger in 30% than the hedged amount
There are some drawbacks but I just don't see an easy way out of this
holding a basket of the 3 highest correlated currencies to the BRL in a beta-position sizing adjusted way. If I find out that the BRL is 30% more volatile than the AUD, I would short USDAUD with a position bigger in 30% than the hedged amount
There are some drawbacks but I just don't see an easy way out of this
Ok, I guess your options are:
1. Find a forex broker that offers BRL, or CME futures if there's enough liquidity, and use that to hedge your currency exposure.
2. Keep 50% of your capital in BRL at a Brazilian branch of a big, sound, foreign bank or broker. Then, with that 50% of capital, trade the positions that you have access to.
The BZF is already sorta like BRL cash. Its NAV is priced off NDFs on the currency. The reason it embedded income is less than the central bank rate was because the market was pricing in future appreciation. I hope this lastest collapse has stopped people from thinking the currency could only go up
I have noticed (its still a small sample) that short term tactical trading calls that I have posted on Daal's journal have a pretty good success record - I am not completely sure but 'probably' I have a 100% hit rate till now.
My hypothesis is that I only post my best trading calls on this forum, for fear of being proven wrong in front of very astute investors contributing to this journal. This probably acts as a very good filter. Maybe if I restrict my actual trading to only the trades that I post here, it might smooth my account performance significantly!!
Among my macro calls, I was clearly wrong in establishing a long gold position for long term couple weeks ago. However, I was fortunate that I closed that position next day itself, when I wanted to use margin to short Euro when it broke a key low. That was pure luck which saved me from some losses on my macro trade, even though I went ahead and bought physical gold - which I consider to be a good decision. If gold goes down more, like 1650s or so, I will buy more of physical gold.
My hypothesis is that I only post my best trading calls on this forum, for fear of being proven wrong in front of very astute investors contributing to this journal. This probably acts as a very good filter. Maybe if I restrict my actual trading to only the trades that I post here, it might smooth my account performance significantly!!
Among my macro calls, I was clearly wrong in establishing a long gold position for long term couple weeks ago. However, I was fortunate that I closed that position next day itself, when I wanted to use margin to short Euro when it broke a key low. That was pure luck which saved me from some losses on my macro trade, even though I went ahead and bought physical gold - which I consider to be a good decision. If gold goes down more, like 1650s or so, I will buy more of physical gold.
Good post and good thinking.
I like the pyramide aproach of structuring your portfolio and as I have stated many times here the base of my pyramid is physical gold, the top are mining stocks.
I am a euro resident and gold in Euro's is down 3% from it's peak so for now my base is doing what it's supposed to.
If and ofcourse there is always an if this trend continues even gold at 1600$ or 1500$ would still offer a nice protection to global turmoil compared to many other assets with upside potential remaining.
My miners have taken quite the hit today, but I was up considerably on them year to date so that's a loss I am willing to take.
The pyramide has to have a risk top if not it wouldnt be a pyramide.