- Unforgettable lesson from 1994 : Was my worst year trading ever. Since then, have always remembered my boss JL's advice at the time - learn from the experience and make sure I make money the next time such a situation arise.
- This time, I have sensed a 1994 style bond market carnage in the making for weeks already. Positioned for it but poor trading got me stopped out for the month right before this huge 50-tic ED down move. Following the DT NL breakout at 98.855 (to low of 98.57), the stupid Hilsenrath (no taper) article caused an apparent false break signal with a pre-crash rally to 98.885. This is the most expensive 3-tic penetration for me ever.
- In the name of trading discipline, would not allow myself to trade after getting stopped out for the month. Thus, missed the whole post FOMC move. Instead of now having made budget for the year, am in fact small down for the year. Very bad feeling, this is.
- Think that this bond bear will be as bad if not worse than 1994. From 1.60%, this is the bursting of an obvious long drawn bond bubble. Way to go yet. Back in 94 it was like a never ending nightmare for me. This time I intend to be on the other side. It's not too late.
- Stick to ED and ZN, no need to trade anything else for the coming months. Fed/US rates will be the prime driver of markets. FX pairs have too much noise interference from the non-USD leg. Equities may not necessarily turn into be a bear market as rates are going up due to recovery and not inflation. [Gold is a good way to play this as well - rates up gold down no ambiguity plus housewives all long]. Position where primary direct impact is, don't bother with 2nd order instruments.
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