The pair continues to rise, having climbed about 3,300 pips since the 1st February and now coming up to touch a former big resistance level (orange line) AND the 200-day moving average:
Stratospherically bullish, EurTry has today pierced through the 200-day moving average and shot past it by some distance:
The moving average is the pink curve, the orange line is a strong weekly level from the last few months and the yellow level is the next strong resistance.
The daily candle today measures 3000 pips so far.
Closed two long trades today and another yesterday.
Account back over 6k.
Looking at the MSCI Turkey ETF, the first three hours of trade today show
massing sell volume accompanied by a large move down, which means that
it is a genuine move with real volume behind it (one of Wyckoff’s principles):
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Update on my account…
Sharpe ratio and other measurements (not included in this screenshot) are starting to show positive performance of my approach. I managed to bring drawdown to a smaller size (it peaked to 29% and now
is at 16%) and I continue to trade conservatively after a big win.
Here are some of the ways in which I have been trying to better manage my equity:
- setting targets on shorter-term trades;
- after a win, using a smaller (usually half) size for a trade immediately after, to minimise profit loss;
- diversifying approaches (e.g. holding a long-term, positive-carry position while also holding short-term,
negative-carry positions) on the same currency pair; - regularly use related-assets volume data to gauge trend strength;
- avoid trading in periods of a currency pair’s incoherent, indecisive, and choppy conditions;
- use stop-losses on shorter-term trades to absorb potential whipsaws;
- accepting irrational trend-within-trend, short-term reversal as opportunities for profit;
- pay less attention to fundamentals if there is a mismatch between a currency pair’s trend and
the sentiment in news items / economic forecasts for its country’s future: a prolonged mismatch
means more reliance on technical features than news-related drivers.
With all of the above, I am improving my trading.
It is not easy: even just managing one currency pair there are constant decisions to be made,
for example:
- how long to hold on to a trade in gross profit but in net loss due to negative carry;
- how large a trade size should be used when there is clear momentum in one direction;
- how wide a stop-loss should be, and which type (fixed, dynamic (and what kind of dynamic));
- when not to use a stop-loss (e.g. on long-term positive-carry trades);
- when to double up on risk - less and less now but occasionally the opportunity may come up;
- when not to trade at all;
- when to sit and watch an intra-day trade and when to step away without active observation;
- how to set targets in relation to negative carry connotations for a multi-day trade.
I hope to continue building a positive expectancy for the account.
I will keep you posted as I go.
Happy Trading
PipMeHappy
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Hi PipMeHappy
Thanks for sharing your performance and lessons learned. Interesting read!
The huge bullish surge on Friday hit the SL on my long-term short position EURTRY (carry trade). Yes, I even use SL on my long-term position when trading EURTRY or USDTRY. I am just not comfortable trading the TRY pairs without a SL, since these “1000-pips-jumps” seem to occur once in a while.
At the moment I have no open positions. Since I am only interested in long-term trades, I will wait for the pair to loose the bullish momentum. My entry signal is a crossover of the 10 and 20 day EMA.
Overall one can say that my first experiment with TRY pairs was not succesfull in terms of profit (total of -1760 pips). However, I learned my lesson (I hope). I missed the exit point (there I had about 500 pips of profit). With other pairs I ususally exit when the MACD line crosses the signal line (26,12,9). With these pairs I got carried away by the carry trade and I wanted to hold onto my positions even though my exit signal was popping up. I underestimated the impact of the price movement against the carry.
As I said, I will take a pause until I have an entry signal again for a short trade. Next time I will apply the exit rules I use for other pairs.
I am still very excited about these pairs.
Cheers
Pipersson
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@Pipersson Great to hear from you, you are on my same wavelength, trying to hang on to those carry-positive positions as long as possible.
Truth is, if we got our timing wrong with this it could go against us for years before carry and pip-profit would align: however, for the medium term, waiting and accruing carry even with negative pip-profit is worth a shot if there may be signs that your timing is slightly off by a few weeks/months but in the right direction.
The challenge is always trying to free capital for shorter-term trades while leaving some equity locked into a longer carry trade: a bet on a shorter-term trade, with bad planning, could mean too little margin left to absorb shocks (those “1000-pips-jumps”, as you called them) and jeopardising the carry trade with a margin call.
Some of my losses earlier this year were due to choppy conditions where the bullish leg had not quite been clearly launched and I got trapped going long on false starts. Momentum is always best when trying to trade against a losing trade, i.e. by betting in the opposite direction and closing a positive trade and take off the equivalent portion from a losing trade, gradualling reducing it. It is a risky strategy and it is a juggling act but it can reduce losses overall if volatility/momentum is available.
All the best!
PipMeHappy
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@Pipersson Did you see the 2300-pip drop today?
Down to a strong level (white line) and stalled:
have you gone short?
The drop today stalled at the 200-day moving
average as well as the aforementioned strong
level:
The Turkey MSCI ETF today stalled after an initial rise backed by strong buying volume: this means that the momentum in the EurTry or UsdTry has dried up:
The Turkish local/regional elections may or may not be a factor for the stall to persist through the week, but it is too difficult to mix politics and currency direction, so I will not even go there!
Interestingly, XU 100 BIST today has been falling sharply and yet EUR/TRY has been falling too:
these two have an inverse relationship and have had it for as far as you can look back in time:
what has made this relationship blip today, or rather, how long will it last?
I entered a small long on EUR/TRY but it has fallen sharply, however I would be curious to see
how it will close today before I make any decision.
Ah, now I know why…
By the way, EurTry yesterday and today has fallen by a total of 4400 pips…
The swap rate for selling Lira last night was insane: I got whacked with a whopping £-234 for holding my 25k long overnight on EUR/TRY!
I tried to work out what it would cost but the swap fluctuated by the minute on top of a wildly swinging spread ranging from <100 to >300 points: I decided to hold on and see if normal liquidity may return today.
I made some smaller long trades and covered about half of that overnight negative swap. I will try to manage things as best I can until the local Turkish elections at the end of the week.
PipMeHappy
Look at the swap rates:
for long overnight holding: £ -621 (10k position);
for short overnight holding: £ 129 (10k position).
Unbelievable !
Hi PipMeHappy
Of course I’ve seen the drop :).
However, I decided to stay at the sidelines until this blows over … way too wild for me :). I’ll stick to trading my majors and major crosses for now.
I am still hoping to set up a long-term short trade on a TYR pair lasting at least a couple weeks. I am waiting for my entry signal (EMA crossover) but I will only enter after the market calms down.
I wish you good nerves during this wild period!
All the best
Pipersson
Very sensible, @Pipersson
I just closed two longs with a total (incl. negative swap from yesterday for one of them)
loss of about £1100: I decided to do this and free up equity to open a large secondary short to take advantage of the extraordinary positive swap overnight and to stop
hemorrhaging money overnight going into tomorrow, given the crippling swap rate for longs.
I will see how the plan works out for me.
Take care!
Crazy times, lost about 2k via negative spread and pip loss combined.
Yesterday/today both longs and shorts will incur a negative rollover/swap!
I cannot wait until these elections are over… Two days to go…
And so it begins… today…
Voting has now finished and ballot boxes will soon be opened for vote-counting; follow the results in real time here:
http://www.hurriyetdailynews.com/secim/31-mart-2019-yerel-secimleri/istanbul-secim-sonuclari
After the massive Lira swings in the days before the local elections,
there have now been five days with long upper wicks worth thousands
of pips: these wicks all retreated below the 200-day moving average,
as this picture shows:
What this picture also shows is that the black broken lines that I had
put in a few months ago are still valid, namely a 4000-pip range that
EUR/TRY is still unable to break.
The massive swing high that we saw three weeks ago was not a true
break and due to unprecedented conditions that were not to last.
Alongside professional traders caught in the Turkish banks lock on
Lira liquidity in the run-up to the elections, I was lost in turbulent
conditions. Trying to stay on the ‘right’ side of these movements
proved very costly and I lost about £3k on my demo account.
Prior to these conditions, the pair had been rising for about five weeks
and it seemed set to rise further. Right now, the tables seem to have turned
and we may be back to Lira strength: I am short EUR/TRY once again, possibly
for a few weeks, trying to rebuild what has been lost, and assuming more stable
conditions post-elections.
The MSCI Turkey ETF has shown big buy-volume swings (green columns) in the
run-up to the elections, but the ETF price stayed flat: then, there was a pick-up in
price, this time with a modest volume, which may explain the move south in EUR/TRY
since the start of the week:
The main lesson here is to learn when to stay out of trading in unknown market conditions
(rather than trying to weather the storm). Holding short would have been a better outcome,
but then again there were signs of the uptrend continuing: difficult judgments had to be made.
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