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Money talks
Mar. 5th, 2007 08:54 amReaders of this blog with memories longer than that of a typical thirteen-year old may recall that a few weeks ago I said that I had gone short on sterling at $1.9690, with a target of $1.9200
I made a few quid on this (about £380, I think), but I missed the big coup. This is unsurprising, since it happened at midnight last night UK time, or seven in the evening, on a Sunday, New York time. The 'money went down' in Japan and in Australia.
A two cent shift in sterling versus the dollar at midnight on Sunday is odd indeed. I'd go so far as to say that it's the kind of thing that just doesn't happen. And although it's all very well for me to be cursing the fact that I closed out on Friday afternoon, think about the poor sods who kept their (large) positions open, and were on the wrong side of things. Whoops.
Cable tends to be illiquid at this time of the night, which leads me to suspect that this was some kind of well-orchestrated coup from the guys at Citibank and elsewhere. The technical markers for the drop were well in place, it was overdue, there's an expiry coming up on March 14, and there was an opportunity to make a fair bit of money.
The interesting thing is, $1.9200 wasn't reached. It stopped at $1.9220. This would tend to indicate a retracement to about $1.9420 before the last and final drop to $1.9200. After that, it's long on sterling again, all the way up to $2.05.
The other possibility is a further drop. But this would also predicate the long slow run to $2.05. Both technical indicators are now in favour of a long sterling move. However, depending on whether the next move is up to $1.9420 (in which case the drop back to $1.9200 is still required) or down to $1.9200 (in which case that irritating long-term gap is closed) I'm not sure whether it's a long-term long sterling move or a medium-term long-sterling move.
Meanwhile, intra-day is virtually impossible to call.
Currency trading is great fun. Much of poker technique is translatable. For example, how much is enough? Sometimes a one-cent move is enough for the profit takers to move in. Sometimes it's two cents. You have to have the "feel for the game". Of course, it's a lot tougher than poker, because you only have a vague idea of who the players are and how many players there are in the game. That's what makes it so enjoyable.
I made a few quid on this (about £380, I think), but I missed the big coup. This is unsurprising, since it happened at midnight last night UK time, or seven in the evening, on a Sunday, New York time. The 'money went down' in Japan and in Australia.
A two cent shift in sterling versus the dollar at midnight on Sunday is odd indeed. I'd go so far as to say that it's the kind of thing that just doesn't happen. And although it's all very well for me to be cursing the fact that I closed out on Friday afternoon, think about the poor sods who kept their (large) positions open, and were on the wrong side of things. Whoops.
Cable tends to be illiquid at this time of the night, which leads me to suspect that this was some kind of well-orchestrated coup from the guys at Citibank and elsewhere. The technical markers for the drop were well in place, it was overdue, there's an expiry coming up on March 14, and there was an opportunity to make a fair bit of money.
The interesting thing is, $1.9200 wasn't reached. It stopped at $1.9220. This would tend to indicate a retracement to about $1.9420 before the last and final drop to $1.9200. After that, it's long on sterling again, all the way up to $2.05.
The other possibility is a further drop. But this would also predicate the long slow run to $2.05. Both technical indicators are now in favour of a long sterling move. However, depending on whether the next move is up to $1.9420 (in which case the drop back to $1.9200 is still required) or down to $1.9200 (in which case that irritating long-term gap is closed) I'm not sure whether it's a long-term long sterling move or a medium-term long-sterling move.
Meanwhile, intra-day is virtually impossible to call.
Currency trading is great fun. Much of poker technique is translatable. For example, how much is enough? Sometimes a one-cent move is enough for the profit takers to move in. Sometimes it's two cents. You have to have the "feel for the game". Of course, it's a lot tougher than poker, because you only have a vague idea of who the players are and how many players there are in the game. That's what makes it so enjoyable.
