Today the markets remained volatile and made little sense to me. Despite equities performing well and oil being high, haven assets such as JPY, CHF and Gold maintained a strong bid.
US data was once again better than expected and we traded on this, however the market seemed to shrug it off and persistently sell off the USD. I could not make sense of this whatsoever and I will not try to reason out an irrational market.
Our trading on HF:
We had a volatile day. We started the morning with a 4% gain, to then go 2% down, to then break even and then to go 2% down again and then break even. We then traded on expectations of US data being better than expected. It was but the USD spiked downwards instead of upwards and flashed past our stops by several pips. We have hedged out of drawdowns of more than 50% twice since we started trading here, but today there was simply no point. It was time to accept the loss and not risk more of everyone’s money in an irrational market. We opened two trades to balance out the losses and which both would have reduced losses to only 1%, but as soon as we went to close them, the spreads widened 5 times and it prevented us from doing so.
From deposits of 88,000 we currently have remaining 71,420 or 81.2%. I realise this is far from ideal, but we took a calculated risk hoping to make a killing (50% gain) and while our assumption and expectation on the data was correct, the market had other ideas and we lost 7.2% profits from this week and 18.8% of the original capital. We have been in far worse positions before however and this leaves us plenty of fire power to recover with so I am not to concerned. I am just glad I cut it when I did.
Its amazing that we randomly got stopped to the pip more than 70 times in the last 5 days, costing us over hundreds of thousands of USD in potential profit but yet when its time for losses, this laser accuracy seems to disapear. This is really bad luck or something more, im not going to comment it again, have ranted about it enough on twitter the last few days.
Im going away for one week for work purposes in Europe next week, so will not be communicating too much on this blog for that duration.
I expect a strong NFP tomorrow with 213k and decent wage growth. Hopefully the market will not have other ideas about that as well!
For now sorry about today, I tried my best, I just couldn’t get the results we wanted. On the positive side, we have taken on a smaller loss than we have in the past and are in a good position to recover. We just need two good days.