Pulling an all-nigther for this EUR/USD trade

Quote from bond_trad3r:

I opened up Oanda when I saw this thread. I wish I would've pulled the trigger earlier.

Long @ 14032, stop 14010, target... don't know yet. I'll watch this closely and get out when it feels right.
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Ahh fuck. Closed at a small lost. I forgot Trichet was scheduled to speak 30 seconds before I made the trade.


Fuck it, I'm off to bed.
 
nice call on that long...i've been playing that for a day and a half...upset to wake up and see my limits hit 50 ticks below these highs but i guess you can't be upset about that...nice trade!
 
Quote from T-Bone Trader:

No! The people who are going to buy into the stock market are going to buy stocks by cashing out their US dollars - which is going to be a less-yielding trade....
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Sorry but this still does not make sense. Not trying to be difficult but not sure why others do not find the logic questionable given the facts. If you have U.S. Dollars you do not need to "cash out", if you cash out you sell your dollars and then need to be in another currency. As of now you simply have dollars which you need to buy US Stocks. U.S. entities have dollars to go into the market and Foreigners have to convert to Dollars to get into the US stock market. If you are long the dollar then you do not have to sell the dollar to move it into the stock market like you have to unload a bond position to switch into stocks. Now traders might switch from trading forex to stocks but how many significant traders move back and forth between forex and stocks in enough regular size to affect the markets.

As for the correlation you might be looking at the past year alone where falling interest rates in the US have had some effect on pushing the markets up but weakens the dollar. If you look longer-term the correlation you mention does not really hold up.

In 2007 the SPX was essentially flat while the EUR/US went from like 1.3100 to 1.3400 and in 2005 the market was somewhat higher while the EUR/USD was down the entire year.

Nice trade if you went long but be careful when conjuring a rationale that does not make sense on the fundamentals.
 
Quote from optioncoach:

Sorry but this still does not make sense. Not trying to be difficult but not sure why others do not find the logic questionable given the facts. If you have U.S. Dollars you do not need to "cash out", if you cash out you sell your dollars and then need to be in another currency. As of now you simply have dollars which you need to buy US Stocks. U.S. entities have dollars to go into the market and Foreigners have to convert to Dollars to get into the US stock market. If you are long the dollar then you do not have to sell the dollar to move it into the stock market like you have to unload a bond position to switch into stocks. Now traders might switch from trading forex to stocks but how many significant traders move back and forth between forex and stocks in enough regular size to affect the markets.

As for the correlation you might be looking at the past year alone where falling interest rates in the US have had some effect on pushing the markets up but weakens the dollar. If you look longer-term the correlation you mention does not really hold up.

In 2007 the SPX was essentially flat while the EUR/US went from like 1.3100 to 1.3400 and in 2005 the market was somewhat higher while the EUR/USD was down the entire year.

Nice trade if you went long but be careful when conjuring a rationale that does not make sense on the fundamentals.
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Dood, everyone knows you sell USD and buy the Iceland Krona when you want to go long US index.
 
Quote from optioncoach:

Sorry but this still does not make sense. Not trying to be difficult but not sure why others do not find the logic questionable given the facts. If you have U.S. Dollars you do not need to "cash out", if you cash out you sell your dollars and then need to be in another currency. As of now you simply have dollars which you need to buy US Stocks. U.S. entities have dollars to go into the market and Foreigners have to convert to Dollars to get into the US stock market. If you are long the dollar then you do not have to sell the dollar to move it into the stock market like you have to unload a bond position to switch into stocks. Now traders might switch from trading forex to stocks but how many significant traders move back and forth between forex and stocks in enough regular size to affect the markets.

As for the correlation you might be looking at the past year alone where falling interest rates in the US have had some effect on pushing the markets up but weakens the dollar. If you look longer-term the correlation you mention does not really hold up.

In 2007 the SPX was essentially flat while the EUR/US went from like 1.3100 to 1.3400 and in 2005 the market was somewhat higher while the EUR/USD was down the entire year.

Nice trade if you went long but be careful when conjuring a rationale that does not make sense on the fundamentals.
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Maybe you're right - what the hell do I know....all I know is that my chart reading is working for me - who cares about the fundamentals anyway...

:-)
 
Quote from T-Bone Trader:

Maybe you're right - what the hell do I know....all I know is that my chart reading is working for me - who cares about the fundamentals anyway...

:-)
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T-Bone, you were so excited about your trade that no one wanted to rain on you.

Actually, if you are expecting t-bond holders to move to the stock market, they sell t-bonds depressing bond prices which increases yield which supports the dollar. Foreign investors moving into the U.S. stock market from other non-U.S. instruments would also be effectively buying dollars. Longer term, the relationship between the dollar and stock market is tenuous at best.

Glad your trade worked out for you.
 
Quote from T-Bone Trader:

Maybe you're right - what the hell do I know....all I know is that my chart reading is working for me - who cares about the fundamentals anyway...

:-)
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Profits are all that count ;)
 
Correlation between EURUSD and Equities has been pretty good recently, but don't count on it to last forever.

Understanding the ECB policy vs the Fed policy will help to understand why the EUR tends to go up during bull markets and down during bear markets (ECB protects against inflation better).

Also, people still believe that the USD is "safe" largely because it's the reserve currency of the entire world whereas the EUR is still a young pup. So it has nothing to do with people cashing in their dollars to buy things. People just like having dollars when the whole financial world is collapsing.

I really question whether or not that will remain true in the future. Will be interesting to see how SDRs pan out.

ps. Too bad you didn't hold out for your real PT... or did you?
 
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