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Latest trading opportunities W/c 8th July 2013

Discussion in 'Jarratt Davis- Trading Signals' started by Jarratt Davis, Jul 9, 2013.

  1. redrag

    redrag Private, 1st Class

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    Hi Jarratt

    Could I ask you what your exit strategy is on these trades?

    I understand your entry strategy being to add to your position at each "big figure" if the market moves against you. What would be your targets if you have, like me, sold EURUSD at 1.30, 1.31 and 1.32?

    Also, news out in the last 36 hours has weakened the USD, strengthened the Yen and strengthened the Euro. Do you remain confident that your trading strategy still holds good? If so, what timescale are we looking at?

    Many thanks.
     
    #11 redrag, Jul 25, 2013
    Last edited: Jul 26, 2013
  2. redrag

    redrag Private, 1st Class

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    Hi Jarratt

    How do you interpret Kuroda's speech last night?

    Thank you.
     
  3. Jarratt Davis

    Jarratt Davis Special Consultant to the FPA

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    Hi Redrag,

    If you are cautious about holding positions then you can simply use stops of around 50 - 100 pips on each trade and then use similar profit targets. If you'd have done this on Euro you would have had 2 losses (from 1.30 and 1.31) and one win (from 1.32) but the loss would have been only 0.5% - 1% overall.

    As I have stated I am happy to hold my positions.

    My strategy is to hold my positions as long as I remain confident in the underlying fundamentals. This regularly leads to me being in trades where the market is moving against my positions over a sustained period of a few days or even weeks.

    My first exit strategy is to keep a close eye on the cause of the moves. If i feel that the fundamentals have changed I will exit the position and take my loss, but most time fundamentals do not change this quickly and it is simply a case of sentiment adjusting to some rumor or other temporary event.

    My second strategy is more technical in nature, and involves me adding secondary and sometimes third positions in the market to give me a better average price on the pair i'm trading. Very occasionally the market will move violently against me, which results in me holding a couple of positions as the price moves several hundred pips against me. Even with zero leverage this can cause floating losses of 5 - 10% which then become something I watch more intently.

    In these instances I will have a pre-set level in the market, that if the price reaches I will simply add a hedge onto my position. This locks in the floating loss until the markets settle and we have some economic figure or speech that seems to restore order to things and begins pushing the price my way.

    Most times I will take the hedge off for a profit and then ride the move back to where I originally saw the trade playing out to. Although I am perfectly happy to take a loss on the hedged position and then continue riding the original move once it starts to go my way.

    Hedging just takes the stress out of holding something that moves against you .... And also gives me time to refresh my thinking and make decisions based on logic rather than risk my emotions becoming involved. It may be that as I hold the hedged position it becomes clear that the markets are completely mixed or the reasons for my trade have simply gone away, at which point I can make an educated decision to just close all positions and take my overall loss.

    The point is, the hedge freezes time and allows me to think clearly about what I am doing , why I'm doing it and what I'm going to do next with no pressure.

    I am currently holding two positions on the USD/JPY (100.55 and 98.00) with a hedge set at around 96.50, should it drop that far.

    As long as the BOJ continue their monetary policies the yen will weaken .... And as long as US data comes out positive the Fed will Taper their QE program and the US dollar will strengthen .... These two things will push the price of the pair up.

    In the mean time the markets are uncertain and basically worried that the Fed might change their minds or do something dovish .... The Euro is benefitting from this uncertainty too.

    This week is a big week for the markets so I will be watching the data from the US and the speeches that are taking place carefully!

    Hope this helps, and if you need anything else just let me know.

    J


    - Jarratt Davis
    Fx trader, funds manager and Forex mentor
    www.JarattDavis.com

     
  4. Jarratt Davis

    Jarratt Davis Special Consultant to the FPA

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    He didn't really say anything surprising.

    The markets basically reacted and bought yen simply because he didn't actually introduce anything new or announce any surprise increase in stimulus.

    The only reason traders are putting money into yen is simply uncertainty .... As soon as that clears again this will most likely change.

    Hope this helps :)

    J


    - Jarratt Davis
    Fx trader, funds manager and Forex mentor
    www.JarattDavis.com

     
  5. redrag

    redrag Private, 1st Class

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    Many thanks Jarratt.:)
     
  6. dgolly

    dgolly Recruit

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    My second strategy is more technical in nature, and involves me adding secondary and sometimes third positions in the market to give me a better average price on the pair i'm trading

    I totally respect your good work and who am I to say, but I don't agree with this trading tactic. In fact you may be better off adding to a winning position. Adding to a loser improves average price but leaves you with a larger losing position. Like we always said on the floor, losers average losers!
     
  7. Jarratt Davis

    Jarratt Davis Special Consultant to the FPA

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    Hi Dgolly,

    Obviously this has worked for me over several years but you do make a fair and valid point :)

    J


    - Jarratt Davis
    Fx trader, funds manager and Forex mentor
    www.JarattDavis.com

     
  8. redrag

    redrag Private, 1st Class

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    I think this all comes down to the basic point Jarratt has made previously: psychology.

    That's why there are so many successful traders out there that have opposing strategies. There are also a lot of losing traders out there with good strategies but fail to apply them consistently because they make emotional decisions.
     
  9. redrag

    redrag Private, 1st Class

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    Hi Jarratt

    This is the fifth consecutive day that the Yen has strengthened and I would have thought that the BOJ would have stepped in by now. What am I missing here? Is it just a flight into the Yen because of the uncertainty over short-term US economic policy?
     
  10. Triantus Shango

    Triantus Shango Sergeant Major

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    yeah, for me too until my equity reached $0. :D

    point is, if you have deep pockets, you can afford the risk.


     

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