I don't think this will be a big boon for the USD
Well, what's a man to do? I mourned my losses for a while, tried to stay out of the market to avoid the dreaded bottom left quadrant of the prospect theory curve. That link is well worth a read for anyone unaware of prospect theory.
So what went wrong?
First, my view of the reaction for Powell. I assumed everything would be very muted, and this was clearly not the truth. Next, I tried to scalp the moves as I continued to falsely believe the market would adjust back to its previous levels. This led to more losses (the gold chart below is particularly painful).
Then I took more risk than I should have and got short SPX on the though this would make for a hawkish Fed. This would've been perfect - if we hadn't hit an all time high first. I got stopped out at the top, although I was able to have another go at the same trade and am now up quite nicely on my new shorts.
Conclusions:
Just a rough day at the office. My positioning was too aggressive into the announcement (although to be fair it was unscheduled), I reacted without thinking carefully enough to the news, then was too early with some of the other trades.
The lesson is probably not to overtrade, and if there's a market reaction you haven't expected, get out and re-evaluate before jumping back in.
Cheering up time:
Think it's time for a beer or two, and maybe a glass of wine. I did find myself much cheered up though after reading about the Bozza gaffes today. For anyone who hasn't read about this... have a read of the below. I think my favourite part is when he does an impression of a petrol car.
No comments:
Post a Comment