(binned per thread starter's request) Market bottom rotation trad

GBPUSD continuation setup with demand failure.

CRM shorted demand failure and weakness.

SLCA tracking for potential continuation long play.

So far one of biggest green days on trading for 2018, lets see what else this day gives. Also quite a dense number of macro plays due to geopolitical / risk on factors.

Filling in some small sized longs on USDRUB, RUB got some help on the Oil move, but most likely overreacted to the strenght of news.

Trading halts

One difference between currencies and equities is that currencies tend to trade all the time without any forced lockups on trading, while US equities have a halt mode if there are specific conditions met. Generally halts can be split into many different types of halts, but mainly two types of halts are the most frequent ones:
-non regulatory halt (usually lasts 5-10 minutes and is due to strong 10% or higher move of equity without any news explanation, NYSE will halt trading in order to access info if possible).
In non regulatory halt typically if equity moves up and is halted it will often resume with trading higher, if its halted on the way down it will usually resume with trading lower after the halt is released.

-regulatory trading halt (those halts can last for very long time somethimes even months, and are forward guided by SEC usually where regulators have access to fraudulent info in regards to that company or owners. Those halts can be devastating if trader is caught on wrong side as they often has huge gap opens after halt is resumed. Statistically for trader to be caught in such halt is extremely low, but it is a some probability.)

Somethimes after halts asset might have very strong quick moves due to a lot of traders being scared or simply time pushing more people into condesed positioning after halt is released. Therefore it is to be extra careful. The stronger that asset has moved into the halt, the more cautious trader should be, because often counter move could happen quickly.

Two examples bellow. LEDS example of softer move and halt resuming with higher trading. LFIN halt on 18th December after massive move up, resulted in devastating halt where equity opened with gap (after 10 min halt) on 60 while trading on 145 just minutes ago. Any daytrader being in long position from 100-145 USD area most likely lost whole account once it resumed from halt. Now on LFIN we have however different type of halt (currently lasting for few days), which is regulatory halt, initiated by SEC. Very likely the result will be again huge gap down open.

Long term bearish macro : Turkish lira (TRY)

Currently Turkish lira is caught between rock and a hard place, with very little room to navigate for any high level operators, whether its central bank or a president. Facing a runaway inflation, war with neighbour country, nationalistic leader triggering outside forces on reactionary play, high yields on 10y bonds, lots of external debt, unwillingness to push for rate hikes, bearish correlated exposure to other emerging market countries etc etc... There is a lot to list of all the bearish factors currently devaluating TRY day after day. The thing about heavy liquidation events such as hyperinflationary crisis that is due to above counted factors is that country as whole puts often the liquidation event on themselves trough decisions made on political side along with hierarchical players executing wrong decisions and pushing country bit by bit towards that liquidation event. Hyperinflationary crises are one of the strongest and worst economic events because majority of short term wealth in that country is evaporated. Currently Turkey is on its way towards that. Generally such crisis is triggered by unability to pay for short term debts as there is not enough cash flow or yields are pressing too hard, which is currently the case for Turkey, not yet very obvious but it is a cascading play once it starts to roll.



So to make things worse that mass of external debt of country has been not long ago rated as "junk". Pretty much the last thing that country wants is to have lowest possibly rating on external debt, as that points to systemic problems and serious chances of default. To think that Turkey might default is not out of whack question, in fact it has defaulted many times over past 100 years, with avarage default span of 10 -15 years aprox. When country defaults on internal debt (often not needed) its not a big problem, but when its done on external debt it yields huge problems as international markets lose faith to lend to such country. Since emerging market countries are heavily connected in trade, default of one could have spill on effect to other emrging debt countries, especially the institutions that own such debt.



Looking at broader historical context, a lot of countries with 40% of external debt to GDP growth do default. Generally countries central bank should be increasing interest rates in inflationary environment, but in case if that country is highly indebt it might not be possible and to make things worse Erdogan has noted many times that central bank should have or aim for policy with lowering interest rates, which markets interpret as weakness and without surprise push lira lower. When it comes to leading country on market side (country that is globalised and has currency / debt traded globally) is that good strategic leader will only disclose the most needed info and usually bullish info, while keeping anything that markets might see as weakness as a secret, and let the markets figure out that info if needed but by yourself a time before that happens. Disclosing info that bank should have preffered lowering rates policy is bad strategic move, because that in fact central bank cannot do, but with saying that publicly one is admitting that there is also not much room on hiking rates upwards. Having a leader of country that plays every play on first ball is the worst thing possible, as markets will always outplay that person.

While high inflation might not be big problem if one has strongly growing economy, inflation rate above 10% will almost never be able to be matched by economic growth, which will yield to every year that passes and inflation is not taken under control to further bearish impact on economy overall, especially if the debt is rising.



The main info case that is currently pushing markets back to strongly pricing TRY on bearish side is that Turkish economy is relatively well growing.

How to play it

Since this is very long macro play, its important to have realistic time horizon while playing it. For example if trader was to randomly play M1 plays along just overall macro direction holding for very large TP targets that would most likely result in huge amount of losing positions and BE trades, thus having short term macro in play is important. One of easiest way to ensure that is to always play it along strong momentum (USDTRY bullish) and then checking what the reason was for markets reacting the way they are and if that aligns with overall long scale macro play then start looking for continuation plays along the move. Trader should hold such trades for larger targets liquidating position in many chunks. Thing is that huge liquidation events are never priced in fully ahead of time as majority of market participants have more bullish and positive bias towards each economy, therefore each smaller macro play will further and further price that assets towards more realistic pricing until the liquidation event is overdue. Therefore even though that picture is bleak right now for Turkey, majority of the move was no where near yet baked into the price. An example is Venezuelan bolivar, even though that most market participants could have a clear as possible info in 2016 that country will most likely default and currency will crash, the move was still not yet fully baked in, as in 2017 it had actually the largest drop to be recorded. Becouse the future is never 100% to be guaranteed markets always price in chance to fight another day even if that fight is most likely never going to happen.

NKTR this play looks way to good to be missed, but if it only wasnt for spreads....Could turn into the play of the day.

Tick tack clock is ticking, towards the edge of market close shorts usually tend to panick first.

Very rare occasion that flagship play of the day is stolen by much stronger flagship play. This is the day however. Finishing the day here sticking till the last minute with flagship play of the day bake on NKTR and heavy short squeeze. Went in with large risk exposure nearly 8R on full DD, and played it along the strongest sharks. Baking the strongest winning day of 2018. On hind sight could have held for a bit larger target on TP side.
Question is, can anyone point to exact same play presented on this thread from before? History repeated with nearly 100% accuranccy.

Still trying to record some video on how to spot single player defending the side by heavy orders, usually i am unable to record it being too focused on play (profits first,teaching second), but will try to put some examples in future in. 102 - 102,10 had a major player (could be few) pressing every time and order book confirmed that orders were consumed and not just a spoofs.

Great post! How about trading the TRY on the Daily chart?

Well yes, but the point is that you want to maximize the profits. If you trade on daily and even if you are 100% right you will only be able to access to limited amount of R on gains (if you are scaling position towards daily price volatility). The only way to access larger amount of R gains is to be very precise on exact low TF timing. Most macro traders cant do it, as they dont understand price structures, but thats what this thread is made for to combine both factors and how to be tightly aimed. Understanding short term liquidations and fitting them towards long term liqudidations it the only way to be exact on timing towards higher side.
Think of price like puzzles, surely once you get 70% of puzzles in position its easier to see whole picture, but your reward will be minimized, but what if you can see potential whole picture while only having 20% of puzzles collected, but all fitting perfectly along potential macro picture? (mind that most players wont be able to see that, thus youll be ahead of curve).

Just want to post some info for those interested to trade on mobile. Unfortunately tc2000 offers very poor iPhone but switching btw charts is quick. For me it’s a no go, because you can display only small number of candles. it’s not enough to see what’s going on



I found Oanda I NetDania offer such apps where you can switch btw chart e in 1 tap

Oanda



NetDania




if somebody has experience with other apps, let us please know if it’s worth checking

thanks

trd

loss on EU 0.8R
but good win on AC

reentered on EU M5 with 3 pos to be more flexible with trade management.
1st closed already

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USDCHF continuation?

BAd luck?