Flows and Orders/FXWW News

Going with the trend is the new contrarian play!

Interesting to read some comments from our hedge fund insider @FXWW888 who says that most traders he’s spoken with this morning are positioned short USD as they believe that all other traders are overly long USD!

  1. Following up on an earlier comment I made, we all know talk the talk is just half of the journey. Analysts and anyone for that matter can always find some kind of rational to justify whatever view there is. I could come up with 20 reasons that directly contradict Kyle Bass’s standpoint that Japan is doomed. And the fact that JGBs haven taken more traders to the cleaners who looked to tame the beast from the short side than any other asset would even support my “virtual” stance (In fact I agree with Kyle Bass on this).

    More generically speaking, I have made more over the past 10 years as bank and hedge fund trader reacting to market dynamics and hopping onto trends, no matter how short-lived some of them were, than trying to predict and anticipate moves. We all know that in the market in its current environment could not care less about any support and resistance levels, what analysts believe or have to say, what GS says or does, and for that matter what anyone believes. Until I started up my own shop focusing purely on systematic, higher frequency currency strategies, I had access to any and all tier1/tier2 research portals, got the strategist/sell-side sales morning calls and to be honest I have never felt it added any value at all. Even my own views turned out to be more correct than what I came across from others in aggregate. But even that would not have had me survive too long. I resorted to react to market dynamics even if that meant that I got stopped out 5-10 times at or around entry levels before I was able to capture larger moves simply because I was always initially aligned with the prevailing trends.

    I am venturing to say that standing right here right now, I attach pretty much a 50/50 chance to any major currency pair to either go up or down, right now one either has to have insider knowledge of flows or one is better advised to just sit on one’s hands and wait for the next story/move to unfold. Just my 2 cents.

  2. do you see Cable & EUR/GBP open with small gaps this morning Sean? i see on my platform. Just entered EUR/GBP short to test water with stops above 8650 🙂

  3. No Dok, didn’t see any gaps this morning. I got stopped out of my long cable trade on Thursday so feeling a bit unsure. Still like long GBP play but timing is everythg as usual

  4. i am always watching your site Sean & will wait for you to inspire me into another Cable long, what’s happen last thursday is unexpected & i am still your fans, ever ! 🙂

  5. don’t know if a consolidation will happen above or below yearly low。the summer holiday may reduce activity except 2008。don’t know if market is in same mood with 2008 year。
    I notice Goldman Sach reduce US GDP forecast to 1.6%, which may change their models output。Directional bias after the summer to Xmas may be unknown,or changed。

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