DAX trading & CFDs

[ThingyMajiggy]

To infinite and beyond again tonight on open, wouldn't surprise me if we had another go at 11,000 tonight, to new highs for this week already today. Never thought I'd see 11,000 on the DAX 3 or so years ago, has gone mental this market.

Only been watching tonight, been busy with other stuff so probably not the best idea to have some trades on this market while I'm distracted.

 

[>Apocalypto<]

To infinite and beyond again tonight on open, wouldn't surprise me if we had another go at 11,000 tonight, to new highs for this week already today. Never thought I'd see 11,000 on the DAX 3 or so years ago, has gone mental this market.

Only been watching tonight, been busy with other stuff so probably not the best idea to have some trades on this market while I'm distracted.

hi sam did you see that last run wtf was that 100plus pts in 2 min....

 

[DeepState]

hi sam did you see that last run wtf was that 100plus pts in 2 min....

 

[cynic]

hi sam did you see that last run wtf was that 100plus pts in 2 min....

I just had a number of short positions autoclosed on me in the blink of an eye!

When I checked the pricing, the particular FX broker I'm using took me out at a price more than 40 points above the daily high for the actual index.

I'm now eagerly awaiting their response to my emailed request for an explanation.

Needless to say, they'll be getting precious little future trading activity out of me until the matter is resolved to my satisfaction!

 

[Wysiwyg]

Obviously many were of the belief that 11000 ish was a fair level of resistance. Whoever bought the highs of that spike would be fleeced too. Mind you it is one of those ascending triangles so a breakout was also a possibility. It's the range and retrace that seems to have a deliberate motive though.

 

[>Apocalypto<]

I just had a number of short positions autoclosed on me in the blink of an eye!

When I checked the pricing, the particular FX broker I'm using took me out at a price more than 40 points above the daily high for the actual index.

I'm now eagerly awaiting their response to my emailed request for an explanation.

Needless to say, they'll be getting precious little future trading activity out of me until the matter is resolved to my satisfaction!

Hi very sorry to hear that, they will claim spread cynic, but good luck with it.

any idea on why it did it? hell of a move

 

[cynic]

Hi very sorry to hear that, they will claim spread cynic, but good luck with it.

any idea on why it did it? hell of a move

I've been checking the Bloomberg and MarketWatch sites to see if there's any news from around that time, but so far nothing's jumped out at me.

As for spread - their high was approximately 70 points above the index! I'd like to see how they reconcile that with their grandiose advertisements of 1 pip spreads!

 

[ThingyMajiggy]

hi sam did you see that last run wtf was that 100plus pts in 2 min....

Was out for the night so missed it, will re-watch it back on replay though, looked interesting, nearly 6000 contracts in 3 mins. There will be clues just before it happened.

 

[DeepState]

the particular FX broker I'm using

Care to share?

 

[DeepState]

Was out for the night so missed it, will re-watch it back on replay though, looked interesting, nearly 6000 contracts in 3 mins. There will be clues just before it happened.

It was pretty amazing.

At or around 13:02 (Berlin) people who move markets had already come into information that the ECB was running war games on Grexit and started to move to capitalise on it, knowing that publications were forthcoming in minutes. It looks like they took out stops or moved to do so at 13:06. An article was published by Der Speigel at 13:07 (Berlin) on line. If I were a smash and grab trader with market moving balance sheet size, about 5 mins is the lead I would take to smash the stupidity out of the market in a false flag like this. Too much shorter and I can't profit enough, too much longer and I become the stupid one as the rest smarten up. It was subsequently referred to in the coming minutes by other wires, in news worthy of fish and chip wrappers by that stage. By then, the market had already effectively gapped in two directions. Somewhere between when the information became available from ECB officials to the outside world and the publication, certain people with access to money decided to act upon it. Quite brilliant if you are into this sort of thing. Quite terrible if you believe in fair play and all that.

This news in itself was superfluous. Of course the ECB is running scenarios. They rescinded the use of Greek sovereign debt as collateral early in this saga, partly as a move to apply pressure, but partly because it reflected the possibility that Greece is going under. You should be seriously worried if this was not happening. However, facts and perception don't need to be consistent. This happens too fast to think much. All you need is context sufficient to cause worry for about a minute. Enough context to keep break-out traders from pulling orders set on auto-trade which were placing buys at whatever break-out point seemed logical at the time as the smart money sold into them and also into stops still trying to be executed.

That action was only on the DAX. Gotta think bigger.

That's all it takes to get a Masaratti that month. Ferrari is becoming so yesterday. Hehe. Beware out there. There be dragons and they are bloody good/bad.

 

[cynic]

Care to share?

Let's just say that they're often referred to by a four letter acronym beginning with the letter "F",
and to narrow it down a little further, they recently borrowed a few hundred million in order to continue their operations following last month's SNB incident.

I shall, of course, be forthwith referring to them by a somewhat more appropriate four letter word!

 

[DeepState]

Let's just say that they're often referred to by a four letter acronym beginning with the letter "F",
and to narrow it down a little further, they recently borrowed a few hundred million in order to continue their operations following last month's SNB incident.

I shall, of course, be forthwith referring to them by a somewhat more appropriate four letter word!

FuCX Me. Thanks. To be avoided.

I have been checking on various matters relating to collection of negative equity balances etc. A couple forgave them. Most did not. I am undecided as to whether to use guaranteed stops or options to protect positions in markets where there is embedded event risk. I guess 'it depends'. What I am learning is that the true liquidity in CFDs doesn't seem to be anything like the liquidity actually in the underlying market that they portal in to. In the ideal, they should be pretty much identical. Of course, all is not ideal.

If someone has color on that, pls pipe up. I'd like to understand the micro-structure better. It seems to have macro effects - pretty much uniformly negative from a consumer's perspective.

 

[cynic]

FuCX Me. Thanks. To be avoided.

I have been checking on various matters relating to collection of negative equity balances etc. A couple forgave them. Most did not. I am undecided as to whether to use guaranteed stops or options to protect positions in markets where there is embedded event risk. I guess 'it depends'. What I am learning is that the true liquidity in CFDs doesn't seem to be anything like the liquidity actually in the underlying market that they portal in to. In the ideal, they should be pretty much identical. Of course, all is not ideal.

If someone has color on that, pls pipe up. I'd like to understand the micro-structure better. It seems to have macro effects - pretty much uniformly negative from a consumer's perspective.

Options, whilst they can be quite costly for markets with a high implied volatility, are definitely worth serious consideration.

A stop can too easily result in a position getting canned at inopportune times during such crazy whipsaws.

A bought call/put option can confer all the upside/downside protection required for a predefined cost. Those employing them for this purpose needn't fear the dreaded market gaps and crazy whipsaws, (except perhaps when the positions are on separate accounts with different brokers).

My problem, last Friday, was that I was hedging those short positions with call options on one of my accounts with another provider.

Having my short exposure blown away at an unrealistically high price, and literally having no time to act before the market promptly returned from whence it came, seriously undermined the efficacy of the protection afforded by my call options.

Happily, the after hours futures market looks to be very close to the level where I was taken out. Hopefully I'll get the opportunity to exit the call options at a level close to the level at which my short exposure was blasted away or possibly recreate the lost short exposure on the options account.

For the benefit of those previously unaware, there are two morals to this story!

One is to think very carefully about the additional risks associated with holding opposing exposures across two providers (logistics of managing margin during sharp swings, possibility of failure of one broker etc.).

The other is that one needs to ensure that there will always be compatibility of pricing between both brokers!

Failing to consider, either of the above, can have catastrophic effects on what might otherwise have been a perfectly sound trading strategy.

 

[DeepState]

My problem, last Friday, was that I was hedging those short positions with call options on one of my accounts with another provider.

Having my short exposure blown away at an unrealistically high price, and literally having no time to act before the market promptly returned from whence it came, seriously undermined the efficacy of the protection afforded by my call options.

Q: Why did you have stops in place when you had options over them as well?

What I really really want is a guaranteed trailing stop or the ability to change guarantee levels all the time (subject to some minimum distance requirement) after the trade opens. Options being expensive, in this case, was referring to the spread. I should have said expensive to trade. I agree with everything you have said in this regard though.

I hold positions for weeks/months(CFD) or years(physical) and am trying to protect against killer swings from the point of my last assessment. As your and other experiences demonstrate, the performance of CFD providers is potentially very bad indeed during these times - which are the really big wealth killers. Saving a point here and there or dealing with day-to-day slippage is really very minor compared to the outliers that define an era. In my observation, material wealth creation or destruction over a career/life is frequently compressed into a small number of events. Diversification can only go so far.

Ideas appreciated.

 

[DeepState]

Q: Why did you have stops in place when you had options over them as well?

Forget I asked. You were auto-closed.

 

[skyQuake]

Q: Why did you have stops in place when you had options over them as well?

What I really really want is a guaranteed trailing stop or the ability to change guarantee levels all the time (subject to some minimum distance requirement) after the trade opens. Options being expensive, in this case, was referring to the spread. I should have said expensive to trade. I agree with everything you have said in this regard though.

I hold positions for weeks/months(CFD) or years(physical) and am trying to protect against killer swings from the point of my last assessment. As your and other experiences demonstrate, the performance of CFD providers is potentially very bad indeed during these times - which are the really big wealth killers. Saving a point here and there or dealing with day-to-day slippage is really very minor compared to the outliers that define an era. In my observation, material wealth creation or destruction over a career/life is frequently compressed into a small number of events. Diversification can only go so far.

Ideas appreciated.

IG offers FX CFDs with GSLOs, you'll pay a few pips extra for the privilege, and i'm pretty sure you can trail it.
Have not tested on the non-major pairs though.

Alternately you can utilize some structured products via the IBs, eg citiwarrant minis (essentially barrier oppies) They're marketed at retail though.

 

[StockTrader010]

DAX futures closed at 11,122.60 on Friday. I expect some givebacks today .

http://www.investing.com/indices/germany-30-futures

 

[>Apocalypto<]

I've been checking the Bloomberg and MarketWatch sites to see if there's any news from around that time, but so far nothing's jumped out at me.

As for spread - their high was approximately 70 points above the index! I'd like to see how they reconcile that with their grandiose advertisements of 1 pip spreads!

Cynic,

How did u go with them. I am interested as I am planing a account with them so i can trade off Ninja Trader but if this crap goes on maybe not.

what reason did they give you?

 

[cynic]

Cynic,

How did u go with them. I am interested as I am planing a account with them so i can trade off Ninja Trader but if this crap goes on maybe not.

what reason did they give you?

I'm still awaiting their response.

Irrespective of the legitimacy (or lack thereof) I am most reluctant to continue trading with any broker (OTC or otherwise) that chooses to conduct itself in that manner.

 

[DeepState]

... i'm pretty sure you can trail it.

Nah, that's the problem. They don't offer that combination of GS and trailing. Other strategies have a lot of spread expense and I need to roll the limits around to boot.

The break of CHF peg is a known event risk but which would still have cost a stack of dough relative to perceived risk deployment even with some reasoned allowance obtained from monitoring the reserve accumulation as would be fairly obvious to watch (unless you work in Everest Capital). Even then, you don't have a great idea of how much becomes too much.

There is so much event risk in FX now that I don't feel great waltzing in with my @**** in the wind and a 'best endeavours' clause as a shield from the cold.

Anyhow, this thread is about DAX even if the issue of the day is Eurozone.

Appreciate you sharing you thinking though. Thanks very much.