Betting against interest rate markets again. Liquidation margin is killing my Bitcoin trading strategy. Good down day to top up a few altcoins.
Bought
Yancoal Australia (YAL.AX): Australian Coal. Partial fill on order from previous day completed at same price - see TIB170 for the story.
Shorts
Euribor 3 month Interest Rate Futures (FEIZ0): I have been banging on about the way European interest rates are behaving weirdly. I watch 3 month Eurodollar rates rise to levels not seen for very many months. [Means: Eurodollar rates are rates paid on US dollar deposits in foreign banks]. Then I see a dramatic change in the Japanese Government 10 year bond rates - here it is on a 4 hour chart. A drop in price of 20 basis points in 6 four hour slots - i.e., one day
Stepping back to bring more data in, I see that this level was tested middle of last week when BoJ made changes announced on January 9. This chart is not going up - i.e, rates are rising and not falling [Note: this is a price chart which is the inverse of a rate chart. Price falls, rate rises].
You will also see that I did add a short trade when price made the rise last week (the lower dotted line has a dot showing trade time). What do I see on a Euribor chart? I see price rising, i.e, rates falling.
This is a chart of December 2020 futures. I see price rising where prices are falling in other key interest rate markets. The trader in me sees a chance to add to a trade I am already short in. 2 more contracts short added.
I would not imagine that expectations that far ahead in time change on a whim like this. But they do? They do because they react to words from ECB Governing Council member Ardo Hansson talking down inflation risk
Cryptocurency
Bitcoin (BTCUSD): Bitcoin price tried to make a recovery and for quite some time held the $10,000 level. This is a key level as the next price support is way down below $9,000. Here is a chart I made during the night.
I continued the battle with the liquidation price imposed by my exchange, Bitmex. I thought I had the game won when I went to bed around midnight with 8 contracts open and a slew of take profit targets in place. I added a net of 6 new trades. I did bank 2 winning trades of $228 (2.1%) and $399 (3.9%) per trade profit. Liquidation price was well below the price when I left the trading. I wake up this morning to find the liquidation trade came along and took me out for a 17.7% loss of balance. Losses are a function of trading.
The worst part comes when you look at the price chart I looked at this morning. Price is well above where it was when I went to bed. My trading strategy is predicated on a strong belief that price will continue rising in the long term. I do not want to be stopped out by some arbitrary limit. All well and good to be stopped out when the money in the account runs out.
Altcoins I started an Altcoin portfolio in December - see http://mymark.mx/BehindTIB5 for the Steemit post. I said I would look to manage the portfolio like an exchange traded fund and consider rebalancing. I have not worked out a rebalancing trading strategy. The normal rebalancing process is to reduce the winners and top up the laggards. I did not want to use a down market time to reduce holdings in the winners. The other idea is to use funds coming into the account to top up the laggards. That is what I decided to do. I calculated a new average position size and topped up 4 of the coins that had dropped below 10% of portfolio value. Positions added to were Litecoin (LTC), Dash (DASH), NewEconomyMovement (XEM), and Monero (XMR). The sheet shows the additions and the amount of BTC allocated. I have not reworked the positions summary.
That then shapes the strategy for this portfolio. I am going to keep this one focused on Tier One altcoins anywhere from positions 6 to 15 on the market capitalisation rankings with one or two slots open for rising coins (and listed on Bittrex)
Currency Trades
Forex Robot closed 12 trades (0.43% profit) and is trading at a negative equity level of 6.5% (higher than prior day's 6.4%).
Outsourced MAM account I run an outsourced forex trading account with Actions to Wealth. They closed out trades for 1.48% losses for the day.
Cautions: This is not financial advice. You need to consider your own financial position and take your own advice before you follow any of my ideas
Images: I own the rights to use and edit the Buy Sell image. All other images are created using my various trading and charting platforms. They are all my own work
Crypto Trading: get 6 months free trades with Bitmex for leveraged crypto trading. http://mymark.mx/Bitmex
Bitcoin: Get started with Bitcoin for as little as €50 (in Bitcoin) and earn Bitcoin at a rate way better than your bank will offer - think weeks instead of months. http://mymark.mx/Mark
January 17, 2018