Friday 10/21 Exp day

My SPY puts are going to expire worthless today. I don't really care about this one particular trade because it was a small position. But what I find most frustrating is how hard it is to make money on short trade these days. Most of my losses this year have all been on the short side of the risk. I figured with QE behind us, we would go back to a normal trading environment, but that doesn't seem to be the case.

I think part of the problem is that there is massive cash sitting on the side lines waiting to be invested in something and that creates upward pressure on risky asset. And the cash isn't just coming from traditional investors, but normal corporations who are all sitting on massive pile of cash. Apple inc, for example, has a cash balance of $73 billion dollars. In a normal economic environment, Apple would use that cash to build factories to expand their business. But that's not happening. The reason for this is that it is simply not profitable for companies to invest in added capacity and productivity these days.

Thursday 10/13

Just bought bunch of 121 Oct SPY puts around 2.20 (Vol 31%/Delta -.55). Looking for a 2-3% pull back on ES/SPY in the next few days.

10/12

Got stopped out of the AUD.USD short @ 1.0151.

Monday 10/10

Doubling AUD.USD short position @ .9913
Which brings my average short price to about .9850

For now, I am keeping original stop/exit .10026/.9400




Open trades:
AUD.USD   Short .9850   Target .9400 (will re-adjust later)  Stop 1.0026




3:30 AM PST UPDATE
The market is showing some strength during London session, but I am still strongly bearish. I think once NY opens, the move will be faded. I just went back and looked at charts and see a few big resistance lines around my stop at 1.0026 levels and a big one at 1.0050ish. To keep it safe, I am going to move up stop to 1.0150. I don't want to get stopped out of a good trade.

 

Open trades:
 AUD.USD   Short .9850   Target .9400 (will re-adjust later)  Stop 1.0150

Shorting AUD.USD again 10/7

Just shorted AUD.USD @ .9783
Stop 1.0026
Exit .9400 (will re-adjust later)

AUD.USD has been rallying since setting a low at .9390 last week. It’s now trading around .9800 levels. There are a lot of resistance levels from here up to parity at 1.0000. I am looking for the carry trade unwinding to resume again at these levels.

Closed AUD.USD Short

Exited AUD.USD short @.9595 for 285 pips profit

Now I'll sidestep the market and see if .9535 support from 2010 will hold. If it does, we might get a small rally back to .9800 levels before resuming downward trend again. 

Short AUD.USD

Short AUD.USD @ .9880
Stop 1.01
Exit .9550 (will re-adjust later)

Shorting because it reached 38% fib retrace from 1.0390 peak in mid Sept

TGIS

Thank God It's September!  (TGIS)

August was a brutal month and I am glad it's finally over.

The choppy volatile trading was difficult and frustrating to trade. I kept getting whipsawed.
I was getting stopped out of good trades, and taking big losses on the bad trades. Also, my Crude losses did a lot of damage to my account, but that was my own fault for not following my own trading and money management rules.

I should make a note to myself to stay out of the markets in August. Actually, better yet, I should come up with a trading rule to know when to side-step the markets. I think one the key skills to master in trading is knowing when not to trade. It seems paradoxical, but it's true. I have heard this mentioned by a few other well known traders too. So I need to work on this.

For now, I'll enter September with a fresh perspective and leave all my previous biases behind.

Closed out AUD.USD short

Closed out the AUD.USD short @ 1.0552 for a loss of -102 pips.

Monday 8/22 (late night update)

I am still short AUD.USD from 1.0450 and have been watching the pair chop around by 50 pips on both sides for the past week. One negative development for the trade has been, while risk has sold off considerably, AUD.USD has held firm. This might be a sign of underlying strength relative to other risks.

We have also formed a very big wedge on the hourly and it could break either way. Last week I was thinking about doubling up the size of the trade, but considering that August has been a bad month for me, I prefer to trade small the rest of the month. So I'll stay put for now. I'll be watching the pair closely to see what side of the wedge it breaks out from. If it breaks to the upside, I might wait for first pull back and close out position.



Open trades:
AUD.USD   Short 1.0450   Target .9950 (will re-adjust later)  Stop 1.0650

Thursday 8/18

Shorting AUD.USD again @ 1.0450
Target .9950
Stop 1.0650

I got stopped out of AUD.USD yesterday, but the market is finally turning around. I am jumping back in with half the size of the yesterday's position. Once the market gets really moving, I might add more.

Wed 8/17

Got stopped out of the AUD.USD short position @ 1.0550 for a loss of -120 pips.

Tuesday 8/16/2011 - Short AUD.USD

Just shorted AUD.USD @ 1.0430
Target .9950
Stop 1.0550








Risk has been rallying since the markets finally bottomed on 8/9. Most instruments have reached the 50% fib of the recent leg down. Market needs to go back to the lows to re-test it before rallying further, and that’s what I am expecting.

I was contemplating between shorting CL, ES or AUD.USD, and finally settled down with AUD.USD, because CL has burned me too many times recently and managing stops with it is too stressful. I am getting tired of playing CL with $3-4 dollar stops and still getting burned. I didn’t want to play ES, because it moves too slowly. AUD.USD provides a compromise between the two, it’s not as crazy as CL but it makes faster moves than ES, so I am going with AUD.USD.

I’ll readjust target if it becomes necessary, but will not move stop up. I need to start being more disciplined with my stops.

Wednesday 8/10

Lowered target on USD.CAD from .9750 to .9710. Next support line is around .9630, but I don't think it can get there today. I'll be happy to close out the trade today with profit and leave some money on the table, instead of risking the lost of profit. I'll check back again in a few hours when NY opens and will re-adjust if necessary.


Open trades:
USD.CAD   Short .9939   Target .9710  Stop .9939



UPDATE 9:00 AM
How frustrating. I just got stopped out of the USD.CAD trade @ .9939 for break-even.

8/9 Tuesday Night

USD.CAD update:

The position is working out well. As expected, risk assets are starting to stabilize and USD.CAD position is well into profit. It actually got 18 pips away from my .9750 target earlier today, but then it quickly bounced off of 38% fib level. I set my original exit to .9750 because .9740 was the 8/5 low, so I figured we would at least drop to that level. But now I am thinking USD.CAD might make another run for the 38% fib level support and break it this time. There is no support bellow that until the .9630 areas. So it might be smarter for me to either exit right now or lower exit to next support to capture maximum possible profit. I am going to see how the dollar behaves half way through the London session before I make a decision. For now, I'll leave things as is, but I have lowered my stop to break-even.




Open trades:
USD.CAD   Short .9939   Target .9750 (will re-adjust later)  Stop .9939