That's how this month has been in the world international finance. It was so bad that every day was a drama until the end; the New York Stock Exchange especially saved all the fireworks for the last hour, or worse, the last 15 minutes. Before that, heart strings were pulled this way and that, up large amounts, down large amounts. Those involved had no idea where was up. Me, from my computer trading platform? I was stunned at the ranges of movements in prices, as I have written about recently. As they say in some films, "It's dangerous out there." My head has not ached but nights have been interesting. So much happened during trading in Asia and Europe that it became very risky to have any position open overnight; that's one reason why a lot of selling at the day's end was seen on Wall Street. The crazy weather in Barbados, with those wild thunderstorms and heavy rain, woke me up several times and given my interest, I checked goings on in Asia or Europe. Have you ever been in an abattoir?It's gory and really unpleasant. That's often how I viewed things. I checked my little one; tried to go back to sleep myself; adopted a tight foetal position, and thought sweet thoughts about the day to come.
The chief currency strategist of the company with whom I trade wrote this weekend: "Good riddance October. A month that began with much hope as the US government pursued the housing/financial sector rescue package ended with unprecedented carnage in nearly every asset class, leaving few investors unscathed. Hedge fund and portfolio withdrawals forced asset sales, driving down shares worldwide and triggering margin calls, which prompted yet further selling. In currencies, this sent the JPY-related currency pairs (so-called "carry trades") plunging and the US dollar soaring. Additional government steps late in the month (Fed extension of USD swap lines to Brazil, Mexico, Singapore and South Korea; interest rate cuts from the Fed, China, Norway, and Japan; and the start of the Fed's commercial paper program, to name just a few) triggered sharp rebounds in shares and carry trades, but much of the damage remained. The economic outlook deteriorated still further as US 3Q GDP printed negative (and the details of the report were even worse than the headline reading), US and European confidence gauges fell to new lows (for many, all-time lows). Credit conditions continued to improve, but remain above pre-Lehman levels, as is overall market volatility. With financial market conditions still at stressed-out levels and economic outlooks eroding rapidly, it would be premature to suggest that further bouts of panic won't still materialize. However, the stabilization seen in this final week of October does favor a more prolonged period of consolidation as markets get their feet back under them."
I've learned a lot in the year since I started trading. But I learned so much this month. I have my eyes set on an overall target, but I now also have my eye on something very simple. All is never lost. There are many horrible bad days, but even these have great bright spots. Huge disappointments are there: the many trades that were sent for a loss by a sharp movement in prices in a few minutes, of the kind you would expect to see in a whole day, and then go back to following the direction you wanted and denying you a potentially large gain. My trading strategy guru had to vent this week after several such experiences. I vented too, internally.