Global Macro Trading Journal

Got stopped out of the short but this was a nice example of what is likely to happen when market goes from a Trump on to a Trump off mode. Stocks slide, bonds and gold pop, the US dollar falls
 
SPY stopped me out and went weak again. I avoid trading indices like a plague, they drive me nuts. So much back and forth bs. i tried again smaller
 
They are even forecasting inflation bellow their 4.5% target in the coming years, i think that will be right, with the risks to the downside
 
EWZ and the Bovespa are flirting with 52 week highs as people realize that the central bank will drive down the returns on BRL cash down and they will have to take some risk if they want a good return. Whole Trump sell-off on this was stupid, Brazil will be a very internally driven story for years. S&P500 and Trump wont be able to influence this much either way.
Even the BRL is rallying hard, up 1.7% even though a cut is supposed to be bad to the currency
 
Soros lost $1B betting against the Trump rally

http://www.wsj.com/articles/billion...lion-in-weeks-after-trump-election-1484227167

Even though he lost, I like the methodology that he uses. Soros is net long a lot of assets including
"The broader portfolio held by Mr. Soros’s firm performed better, posting profits before and after the election from long-held investments in sectors including financials and industrials, according to people familiar with the firm. Those gains helped Soros Fund Management gain about 5% on the year."
So what he does is to try to find negatively correlated TRADES and make money from them. Of all the trades avaliable in the universe of potential trades, the negatively correlated ones are the most useful, because they will cut down the volatility of his portfolio. Being good at those trades is invaluable.
Turns out he was wrong a lost 3.3% but its a good method to follow.

I do something similar trying to time SPY/ES shorts, difference is, I play A LOT smaller. Yesterday my losses on SPY amount just shy of 0.1%. Part because I didnt had a lot of conviction, part because I dont stick around if a short is not making me money. Soros is bolder so when he is wrong he gets hurt more but if he is right he will bank huge. I will get a little bolder as we get closer to inauguration but I dont think i would risk as much as 3%

My risk "budget" for these index shorts is around 0.5%-1% a year. That's the most I plan to lose if I'm consistently wrong of them. If I make profits I will add to the budget but I dont plan to risk a whole lot.
Especially because I follow the 'hedget basket' approach. I already own protection through UST bonds, gold, USD assets (hedge for BRL assets) etc
 
As a matter of fact, not sticking around losing shorts is something I learned from the descriptions of how Soros trades. He is said not to be loyal to losing positions and doesn't care at all about closing them. Its a little puzzling why he fought the market like that. As soon as the market made a new all-time high (a powerful technical and quant signal), there was zero reason to stay short
 
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