EPTTrading thread - Page 2
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Gummy
United States2180 Posts
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BrTarolg
United Kingdom3574 Posts
CDS prices are showing above a 95% chance of default I think its pretty certain that greece is totally going to default. In terms of the rest of europe, i'm not really too sure how its all going to unwind. I think if it wasnt for greece then the rest of piigs wouldn't have gotten into too much trouble in the first place. Probably say hello to the return of drachma and re-evaluate my position once that happens I guess my exit on gold is just a psychological/techincal one - i'll cut some just before 2000 and i'll cut some again at 2090. But in general i think it is fundamentally strong to be bullish gold on greece: http://www.zerohedge.com/news/standard-chartered-ceo-says-greek-default-inevitable I worked recently for standard chartered so i guess this carries some weight with me haha edit: yeah with the USD/EUR trade im basically betting on short term euro depreciation. Like i said, i'm pretty fuzzy on holding that much longer than what i've shown because of the dollar exposure. | ||
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Ender985
Spain910 Posts
I have a question for you. You stated that you're actually not buying the "yellow metal" directly but 'options' or 'futures' (which in my completely pedestrian understanding, sounds like you are just trading some sort of 'checks' that hold gold value): how do you actually do it? I've been pondering for a while go buy some gold, since it seems logical that with all the economic storm it will only rise in price, but buying an actual piece of metal and keeping it under my pillow doesn't quite sound like the best option. What I'm asking here is: can you do it yourself, maybe via internet, or do you need to go through some sort of third party agents like a bank or a more specialized institution? | ||
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BrTarolg
United Kingdom3574 Posts
On September 14 2011 08:17 Ender985 wrote: Pretty interesting thread, even though I'd say TL's general public is not much into this kind of deal, I still hope we can get this somewhere. I have a question for you. You stated that you're actually not buying the "yellow metal" directly but 'options' or 'futures' (which in my completely pedestrian understanding, sounds like you are just trading some sort of 'checks' that hold gold value): how do you actually do it? I've been pondering for a while go buy some gold, since it seems logical that with all the economic storm it will only rise in price, but buying an actual piece of metal and keeping it under my pillow doesn't quite sound like the best option. What I'm asking here is: can you do it yourself, maybe via internet, or do you need to go through some sort of third party agents like a bank or a more specialized institution? Either you do it through a broker, which facilitates financial transactions for you - for each transaction you pay a commission fee. Brokers are generally what people use for buying stocks or making investments etc You can also do it via spreadbettors or CFD (contract for difference). With these guys you generally trade derivatives which can be leveraged. You don't pay commission with these guys, instead you pay spreads (buying and selling price are different) They tend to be popular nowadays since they have lower "real" commission and give you a lot more flexibility in terms of your leverage and bet sizes. They make trading a lot easier for a common person, but as a result they make losing your money a lot easier. What does that mean? A derivative is a financial product which has its value derived from the underlying asset. So the price of a future is usually derived from the price of the actual thing. For all intents and purposes, if you want to be long gold, you can long gold. If you want to buy a gold option, you can do that too Leverage basically lets you magnify your gains and losses. Since you dont expect gold to move much more than say, 300 dollars EVER, it is somewhat unreasonable that in order to profit from owning gold you have to pay 1800 dollars for an ounce of it - your gains or losses are small relative to your investment. So instead of buying an actual ounce of gold, you trade a derivative of gold (so you arn't buying the actual thing, you are just betting on its value). I can say that for every 1 dollar move in the price of gold, i want to gain 10 dollars - at the same time i will loose 10 dollars for every 1 dollar gold moves down. To make this kind of trade you have to deposit a "margin" to cover your potential wins and losses. The margin required is usually much smaller than the nominal amount of gold you are buying - to be long say, 5 oz of gold (or 5 dollars a point), you only really need maybe 200 dollars margin. This margin can increase however if the market moves against you - but it means you can use the rest of the money in your account to make other trades In reality, spreadbets are simply useful because they are clean ways of trading your view, and you can control exactly how much you want to win/lose. Just be careful because most people find it TOO easy and start trading willy nilly and lose all their money There are plenty of spreadbetting companies and brokers willing to facilitate your business haha. In general, i would be extremely careful about your investments, and always talk to a professional. By no means are my spreadbets actual investments for me, these are speculative bets i make My main investment is me sticking my cash in a bank account, maybe buying some UK gilts - i.e the safest investments possible. Perhaps i could say, spend 10% of that on buying gold, however that would be nominal gold, and not spreadbet (i.e for every oz of gold i want to own, i have to pay the full amount) In a spreadbet instead i would only have to pay 40 dollars to "own" an oz of gold, as i am trading the difference between the opening price and the closing price. | ||
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BrTarolg
United Kingdom3574 Posts
Looks like europe is really going to take a hard hit soon. On top of that, correlation between indexes has risen to 92% - so basically there is very little difference between buying asian, european or american stocks right now - they are all moving up and down in unison I guess thats a sign just how much people are reacting to the news and just how on the edge of their seat everyone is about europe Zerohedge is very pessimistic and apocalyptic about europe in general as usual http://www.zerohedge.com/news/jefferies-describes-endgame-europe-finished Who knows how exposed the rest of the world is to europe right now. Certainly we know china has a fair amount of exposure, though they still have trillions on their balance sheet. It seems that (as usual) the banks are getting hit hardest the first. Soc gen, bnp, credit agricole are all taking massive hits and rumours are that they will be downgraded. ---- No new trades in my mind atm. Dollar printed its exhaustion candle so i am still looking to buy when it drops down again. Gold seems very reluctant to move, though they could be some big swings in the next few days so sit tight | ||
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rza
Canada384 Posts
btw i have some really basic questions about FOREX, any1 who want to help me pm plz. | ||
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Ender985
Spain910 Posts
Since I'm brand new into this, do you have any suggested reads for a beginner like me? I'm a physics major so my understanding of economics is very thin and generic. I understand trading is mostly about information management and risk assessment (much like poker xD), but I'd greatly help to have some sort of lingo dictionary for those of us unfamiliar with the terms being used in the discussions. | ||
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BrTarolg
United Kingdom3574 Posts
![[image loading]](http://img847.imageshack.us/img847/6014/eurdol.png) ![[image loading]](http://img571.imageshack.us/img571/774/eurodol.png) Uploaded with ImageShack.us Purely a "hooray chart patterns" trade. Probably no professional would ever do this but it worked last time. The first red circle is where i sold and then i bought at 1.3600 Now i'm selling again at the second red circle Sue me if i just believe in trend channels haha. I'm only putting a very small amount of money on this, its more just a chart patterns exploration thing more than anything else. --- On a side note, i'm looking for a good opportunity to short euro stoxx sometime this week, and this will be a fairly long term hold | ||
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TheDraken
United States640 Posts
On September 14 2011 20:02 Ender985 wrote: Hey, thanks for the info, much appreciated. Since I'm brand new into this, do you have any suggested reads for a beginner like me? I'm a physics major so my understanding of economics is very thin and generic. I understand trading is mostly about information management and risk assessment (much like poker xD), but I'd greatly help to have some sort of lingo dictionary for those of us unfamiliar with the terms being used in the discussions. I got interested in trading back about 4 years ago due to a combination of my father's occupation and also because the market was doing a bit of moving, which I thought was exciting. At the time I was just a student with little to no concrete economic knowledge beyond some econ classes and what I had gained reading a few news and wiki articles (so basically what you described as "thin and generic"). So I started with that - news and wiki articles. I began reading every single article (and I mean EVERY article) on major news sites like money.cnn.com, money.msn.com, finance.yahoo.com, reuters.com/finance, bloomberg.com/news/finance, etc. It almost got habitual and addicting to the point where I was averaging 4 to 5 hours a day reading articles. When I looked at graphs, I began to wiki everything I didn't understand, and I searched the definitions of all the technical indicators and buttons. With that in mind I was still aware of the fact that investing is not much better than gambling, and that most investment professionals don't do much better than a chimp would in picking positions. Things like mutual funds will give you broad market coverage and a relatively high level of safety, but that wasn't what I was planing playing around in the market for. I started doing some virtual trading to test my hand at things, and I was pretty satisfied with my results. So I went to my old man and got some real money to play around with. By this time the economy was tanking, and I was eager to "ride it down". Needless to say I began shorting like a madman, capitalizing off the financial sector and the auto industry. Had quite a bit of success in big oil since their movements are a bit more predictable, and I even got ballsy enough to play around with leveraged ETFs in energy. I figured international trade would suffer from the recession, so I bet against it. Housing market was obviously in trouble, so I bet against it. You get the point. Essentially a person just needs to take the time to research what is going on in the international markets, and think about what kind of effect it will have on certain industries and in what time frame. It is also important to recognize bad advice (I just stayed away from formal advice in general), and to recognize when information is irrelevant to your investment strategy. Plenty of sensationalist journalists were trying to convince people that the price of oil would be well over 200USD two years from that time. If you took the time to dissect their reasoning, you would see that 90% of it was conjecture, and the other 10% of it was based on what OPEC was doing next week. I used the information about what OPEC was doing at their next meeting, but I sure as hell wasn't going to believe any garbage that journalist had to say about something two years away. On top of that, the long term projection for oil was of little use to me since I was a trader, and while that information is useful for predicting trends, trends don't do jack if you need to know what oil is doing 24 hours from now. For that you have to research information on meeting dates, upcoming mergers and acquisitions, recent price shocks in other industries, new technology purchases, any major discoveries, any shakeups in the company management, any government policy changes directly affecting the industry... etc. Some market reactions are more arbitrary than anything (it is important to remember that perceptions are a huge driving force). Amusingly the market will almost always drop in the hours after a politician opens his mouth, with rare exceptions such as the announcements on QE back when the economy as a whole was in deep shit and any news was good news. All in all, I would say that investing doesn't require much work or knowledge to produce modest returns. Trading, however, requires an enormous amount of work to produce very respectable returns (if you're interpreting information well), but the slightest bit of slacking can tank your portfolio. I could only take about 4 months of it before I took my gains and called it quits. It's a fun experience, but you need to be willing to throw the time into it and keep your head straight when things don't go your way. Hopefully my little personal story gave you (and others I suppose) some sort of insight into how to go about learning these things and what "getting involved" requires. It wasn't exactly a formal way of going about learning this stuff, but I'm of the opinion that the best exposure is by diving into the thick of it and just exploring. I know I kind of went beyond your question but hopefully it helped. | ||
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BrTarolg
United Kingdom3574 Posts
I'm hoping to short stoxx when the rumourmill is done propping it up. Even if BRIC's do move in, i doubt it is enough to save europe | ||
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Ender985
Spain910 Posts
On September 15 2011 00:11 TheDraken wrote:Hopefully my little personal story gave you (and others I suppose) some sort of insight into how to go about learning these things and what "getting involved" requires. It wasn't exactly a formal way of going about learning this stuff, but I'm of the opinion that the best exposure is by diving into the thick of it and just exploring. I know I kind of went beyond your question but hopefully it helped. Thanks a lot for the great read. It sounds exactly as what I tend to do when I become interested in a new subject, basically do the research and teach myself. I guess this is one of the reasons why I became a PhD student. But over the course of the last few years, I also learned that directly asking the people who have been on the field for much longer than you can save you some months of trial and error and, more importantly, set you on the right direction. I'm specially interested in the "virtual trading" you mentioned. I heard that there are some programs that let you play 'virtual' money in the real trade market, using real-time data. It sounds like a great exercise and something that can teach you a lot, but I think these kind of programs are usually restricted to the trading compaines, ie you can not get your hands in one unless they hire you. Is that true? Also, you said to "stay away from formal advice in general". I understand in this business it is more true than ever that "information is power" and that there is plenty of naively wrong or plain misleading information around, so it is fundamental to trim the good info from the bad. So you mean to stay away from the general press, the specialized press, the official statements by the 'big players' or something different alltogether? All in all, to dive into the real trade market really sounds like it would take far too much time for me, this is why I was thinking of simply investing in the gold market, where I think trends are going to be generally positive and there is a lot less uncertainty involved. Maybe then I'll feel the thrill and want to get more involved, but for now I think I'll start on the safe side. | ||
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BrTarolg
United Kingdom3574 Posts
![[image loading]](http://img560.imageshack.us/img560/9623/golding.png) On gold - gold seems to refuse to budge and seems to be printing a downwards triangle - bad technical to see However recent markets have been rallying like crazy, and i personally feel this is irrational. All the indicators are pointing to a false rally and an impending market crash - europe is totally doomed and no matter how much rumours or "we will bail ourselves out" news there is, they literally cant stop greece from defaulting, as they have run out of money. Not only that, any austerity measures that have been attempted have totally and utterly failed, and it looks like china is beginning to pull out of what they see as an obviously losing trade Gold seems to have a fair support at the 1800 level, and resistance is slowly squeezing in, so i think within a few days we are going to see some kind of breakout The superman rally that stocks have seen in the last week and a bit i think simply can't last. My hope is that one this news of collapse my gold trade will come into proper fruition If we end up stagnating instead then i will reconsider my position and look for something else On stocks, we see SnP500 in its trend channel and is printing what looks like to be its 4th daily cycle. I expect it to reach around 1230 at which point i will be putting on a short | ||
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BrTarolg
United Kingdom3574 Posts
I think our turning point is coming around - within the next few working days we are going to see the swing high's of stocks before the big crunch. When i cant exactly predict. Dollar is coming back down from its swing high, and as i said, i will be looking to add around the 200 MA Gold is really getting squeezed now at the 1805-1800 level. I personally still expect to see strong support at this level, and as usual am hoping for a breakout within the next few days I still expect to see some stocks highs today, despite sp500 running through 1.2k and back again. I'll leave you with a fairly interesting article (swing trading for dummiez!). I do like reading this guys blog, you can find it at http://likesmoney.dojispace.com/. His analysis seems to be a> non professional b> therefore worth more than professional analysis + Show Spoiler + The dollar rallying out of a three year low has provided a consistent blueprint to set expectations with. ![[image loading]](http://img689.imageshack.us/img689/8397/10yearsof3yrlows.png) Black arrows in the above chart point to the previous three year lows. It is worth noting the rallies that ensue following the three year lows. The similarities between the previous three year low in 2008 and now are worth noting: Back in 2008 1) Three year low 2) 16 week consolidation (shortened intermediate cycle) following three year low 3) Explosive rally on first daily cycle following consolidation 4) A quick breather before the swing high of first daily cycle 5) Shallow daily cycle dip 6) Another explosive daily cycle UUP. ![[image loading]](http://img202.imageshack.us/img202/6728/08plus6.png) Now let’s see where we are today … ![[image loading]](http://img269.imageshack.us/img269/34/2011x.png) 1) Three year low — Check 2) 15 week consolidation (shortened intermediate cycle) following three year low — Check 3) Explosive rally on first daily cycle following consolidation — Check 4) A quick breather before the swing high of first daily cycle — Check 5) Shallow daily cycle dip — Possibly currently unfolding. 6) Another explosive daily cycle UUP —— Maybe Currently, I am waiting on a daily cycle low on the dollar to add. ![[image loading]](http://img853.imageshack.us/img853/8062/0dailyswinghigh.png) The dollar formed a swing high yesterday. Due to the strength coming out of the 3 year low, I expect the dollar to hold above the 200 MA as the dollar seeks its daily cycle low. Once the daily cycle low is in, I expect the dollar to continue to follow the blueprint ![[image loading]](http://img850.imageshack.us/img850/9931/maze.png) | ||
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MilesTeg
France1271 Posts
On September 14 2011 04:56 BrTarolg wrote: Please note that as a disclaimer, trading, spread betting or other similar financial activities are RISKY and should only in general be done with the advice of a professional. No, it should be done BY professionals ^^ As I work in a related field, I used to try to discourage people to try to make money if they aren't professionals. But a friend recently convinced me that the point isn't to make money, but to "have fun". I'd like to say one thing though, if this isn't fun or interesting to you, I really don't recommend it. As an individual you just get far too screwed by market makers, and even if you didn't trying your luck in the markets without any kind of edge seems suicidal to me. But anyway, if you enjoy it by all means, GL & HF! On September 14 2011 20:02 Ender985 wrote: Since I'm brand new into this, do you have any suggested reads for a beginner like me? I'm a physics major so my understanding of economics is very thin and generic. I understand trading is mostly about information management and risk assessment (much like poker xD), but I'd greatly help to have some sort of lingo dictionary for those of us unfamiliar with the terms being used in the discussions. If you're interested in this sort of thing the old Market Wizards books are good and fun reads to get an overall look at different aspects of trading. Then once you get a more precise idea of what you want to do you can start looking at more technical stuff. Not strictly about finance, but I would recommend Nassim Taleb's books Fooled by Randomness and The Black Swan to get the right mindset. | ||
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BrTarolg
United Kingdom3574 Posts
![[image loading]](http://img813.imageshack.us/img813/9582/shortstox.png) There are two possible fibb levels, one at 2150 and one at 2168. To be safe, i'm going for the second one I'm gonna be shorting at 2168. If the market moves against me, then i might cut my position and re-short at the next higher level, but i highly doubt its going to get that high Me and my prop trader friend (and a lot of other traders) think this rally is totally bullshit Levels are a bit clearer on SNP, but i want to be short europe right now since the whole rally is totally unjustified - europe is royally screwed and merkozy wont come up with anything to save it Some news will be coming out later today which might affect things - depending on the numbers, and how the market is moving, i will be very careful about tweaking my levels and stops here I'm going to keep a very close eye on this trade and probably make a lot of changes as the next two days goes | ||
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BrTarolg
United Kingdom3574 Posts
I'm planning to be long again at some point, either at the 1700 level or if i'm feeling bullish again. But that was very painful edit: more news, my stoxx short got filled, but i cancelled it because it was basically coordination to supply liquidity to banks so bank shares are going to go mental v soon I'll look for a new level to short stoxx later | ||
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drsnuggles
Korea (South)362 Posts
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repsac
91 Posts
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MooseyFate
United States237 Posts
On September 15 2011 22:24 drsnuggles wrote: The way you change directions every few hours based on trends that change every hours/days because you only look at short-term gains makes me cringe, this all seems rather haphazard. Welcome to the world of Internet/Software based trading. Everyone has tick-by-tick data, 30 charts, 20 indicators, and 7 news feeds and 4 pod casts going at the same time. No one holds a position for more than 2-3 days. And with the volatility in the market these days, combined with the inexperience of most at-home traders and wide use of electronic stops/limits, you can make a lot of money intraday if you have the stomach for it. | ||
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repsac
91 Posts
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