Global Macro Trading Journal

[ralph00]

Quote from gmst:

covered my AUD short at 1.0205. I am pretty positive it will end up lower, but typically I am a short term trader, and getting 160 pips in one day with full-size on is very good for me!!!!

Another of my logic to cover now was employment report coming tomorrow. My logic is if the number is against me, I would get an opportunity to possibly re-load my short. And the good thing about trading discipline is that I am not gambling before a market moving number.

However, yesterday I wrote that I will keep the position through the employment number. When I wrote yesterday, I was expecting AUD to be somewhere in the range 1.035-1.045 during the unemployment number and so didn't want to lose potential profits by exiting my position - thinking about Livermore's quote - "I could see a clear rally coming and I still sat through my position and half my profits went away, but it didn't occur even once to me to close my position since it would have meant that I might have lost my position."

Probably in all truth what this change of thought illustrates is an important psychological bias "People tend to cut their winners short". But I won't be so harsh on myself as I did increase the AUD short position 3 times at different levels today before closing it all.

Sell the rips, but the dips! Is there any doubt that the world will be again saved at some point in the next 24 hours? You'll likely get a chance to reload at $1.03. I'm pleased I sold euros and aussies on the silly pops this week, but am not smart enough to cover just yet.

 

[gmst]

Quote from ralph00:

Sell the rips, but the dips! Is there any doubt that the world will be again saved at some point in the next 24 hours? You'll likely get a chance to reload at $1.03. I'm pleased I sold euros and aussies on the silly pops this week, but am not smart enough to cover just yet.

Its true at some point they will save it again. ECB was buying furiously Italian bonds today. But i have a feeling that you not selling off probably is a better decision. Who knows! Good luck.

 

[Martinghoul]

Quote from gmst:
Its true at some point they will save it again. ECB was buying furiously Italian bonds today. But i have a feeling that you not selling off probably is a better decision. Who knows! Good luck.

ECB has not been buying furiously. They bot, in my estimate, less than €2bn, which is 1/2 of the size they did at the beginning of last week.

 

[ralph00]

Quote from Martinghoul:

ECB has not been buying furiously. They bot, in my estimate, less than €2bn, which is 1/2 of the size they did at the beginning of last week.

What's the average turnover in Italian bonds each day?

 

[gmst]

Quote from Martinghoul:

ECB has not been buying furiously. They bot, in my estimate, less than €2bn, which is 1/2 of the size they did at the beginning of last week.

oops ok i read it somewhere, but obviously you will know better as i assume you know guys who are dealing in that market

 

[nbr]

Quote from Martinghoul:

ECB has not been buying furiously. They bot, in my estimate, less than €2bn, which is 1/2 of the size they did at the beginning of last week.

Wondering if that has anything to do with the fact that Mario does not like Silvio.

 

[Martinghoul]

Quote from ralph00:
What's the average turnover in Italian bonds each day?

No such thing as an average, to be honest, ralph. Average volumes on MTS, which is the dominant electronic platform, used to be arnd €5-7bn a day in notional terms (including t-bills, floaters and linkers). That was a year ago or so. Now you're lucky if more than €2bn trades and the volumes have been steadily going down. After today, I expect it to get even worse.

BTW, MTS volumes and other such stuff are publicly available on their website (www.mtsdata.com).

Quote from gmst:
oops ok i read it somewhere, but obviously you will know better as i assume you know guys who are dealing in that market

Nobody actually knows, as the ECB doesn't publish the aggregate data on their purchases until the week after. But everyone does make educated guesses, for sure. Based on these estimates, you can work out a rough ballpark number.

 

[gmst]

Quote from Martinghoul:

No such thing as an average, to be honest, ralph. Average volumes on MTS, which is the dominant electronic platform, used to be arnd €5-7bn a day in notional terms (including t-bills, floaters and linkers). That was a year ago or so. Now you're lucky if more than €2bn trades and the volumes have been steadily going down. After today, I expect it to get even worse.

Martin curious, why volume is going down on MTS ? Are people dealing more using voice brokers or is it that volume overall is falling. if overall, would you explain why overall volume is falling, is it because of high volatility ? thanks

 

[ralph00]

Quote from Martinghoul:

No such thing as an average, to be honest, ralph. Average volumes on MTS, which is the dominant electronic platform, used to be arnd €5-7bn a day in notional terms (including t-bills, floaters and linkers). That was a year ago or so. Now you're lucky if more than €2bn trades and the volumes have been steadily going down. After today, I expect it to get even worse.

BTW, MTS volumes and other such stuff are publicly available on their website (www.mtsdata.com).

Nobody actually knows, as the ECB doesn't publish the aggregate data on their purchases until the week after. But everyone does make educated guesses, for sure. Based on these estimates, you can work out a rough ballpark number.

Could this mean the ECB could make a big (if temporary) impact with relatively small buys?

 

[Martinghoul]

Quote from gmst:
Martin curious, why volume is going down on MTS ? Are people dealing more using voice brokers or is it that volume overall is falling. if overall, would you explain why overall volume is falling, is it because of high volatility ? thanks

Yep, nobody wants to trade, as these mkts become more and more dysfunctional and illiquid. Dealers widen their bid/offer, 'cause they have no appetite to warehouse any of this stuff (given the recent Jefferies accident, who can blame them). The real money community are scared sh1tless, so, unless they're selling in a total panic, you won't see them. The fast money punters don't want to get involved, 'cause liquidity is so crap. So, yeah, among other factors, it's a function of high volatility and uncertainty.