Rebirth of the Capital Legend

Chapter 277 Take the initiative on the board!
"The trend of the pound exchange rate seems to be 'buy kill buy'."

Seeing that the pound exchange rate continued to plunge and fell below the lowest point in the early trading, Zheng Wenjun, the fund manager of the Van Ligo Hedge Fund's institutional trading room in Hong Kong, frowned and said.

"It seems that the trend of the pound exchange rate has indeed effectively fallen below the 1.5300 to 1.5400 range." Gao Jianli, the head of the trading team of Vanligo Hedge Fund, responded, "Does this mean that the pound exchange rate will... choose to break downward here?"

"Oh, it's hard to say." Zheng Wenjun sighed and said, "The existing long orders in the market are decreasing sharply, while the short orders are increasing continuously. The net long position has dropped by nearly 4 lots in just half an hour. This shows that in addition to the rapid increase in short positions, many investors who previously held long positions in the market are also continuously reducing their positions, or closing their positions to take profits or stop losses."

"But the market news and sentiment have not changed much compared to before." Gao Jianli said, "Although the meeting last Saturday did not produce any results, the Bank of England is still conducting open market operations, and its strategy is still mainly to stabilize the pound exchange rate. There are also some new data on the referendum sampling survey and simulation results, which are also biased towards the bulls in the market.

Another thing is that the pound sterling exchange rate has been falling for almost two years.

The exchange rate at this moment is at a historical low.

In this case, it seems that the downward momentum of the pound sterling exchange rate is not much, but the probability of a further rebound upward is much greater than that of a downward rebound. "

"The trend of the pound exchange rate, whether it is breaking upward or downward, has nothing to do with the so-called pattern and technical trend." Zheng Wenjun said, "Such a huge amount of long and short positions are piled up in the market. The direction of the trend basically depends on the main long and short institutions in the market. Who can't hold on first and who closes the position first. As long as a main institution with a position of 10 lots closes the position, the long and short investor groups in the market will most likely start to stampede."

"But currently... judging from the market news and the changes in the positions of the major institutions in the market..." Gao Jianli said, "the positions of the major institutions in the market have not changed much."

Zheng Wenjun nodded slightly and responded: "This is what makes me feel strange!"

"I feel that the trend of this Asian session is mainly due to the impact of the weekend news and the increase in positions of the main short-selling institutions in the early trading session." Gao Jianli said, "Based on my guess, I think there is a high probability that this is still a short-selling trap. As the negative reaction of the weekend news is completed, the intraday speculative bulls and the main short-selling institutions that took the opportunity to suppress the market will slow down their aggressive operations on the market, and the sentiment will be repaired. The trend of the pound exchange rate will definitely rebound quickly and repair the current plunge."

"According to you..." Zheng Wenjun said, "Should we continue to hold the large number of long positions in our hands and wait for the pound exchange rate to rebound?"

Gao Jianli nodded and said, "I think the underlying logic of the market's bullish expectations has not changed. The referendum result on the 23rd is biased, and at present... it is still more likely to stay in the EU. In this case, there is no reason why the pound exchange rate will not rebound after the intraday speculative positions are temporarily cleared and the sentiment stabilizes.

What's more, from the intraday high to now.

The plunge in the pound sterling exchange rate has reached nearly 100 points.

From a day trading perspective...

After the pound exchange rate fell below 1.5300, intraday traders who had previously gone long in the 1.5300 to 1.5400 range had a strong demand to stop-loss and close their positions.

But now, when the pound exchange rate has pulled back to this position, also above 1.5300 points, especially many intraday traders who shorted at the high point in the early trading, also have the need to take profit and close their positions.

That is to say, as long as there are no further major changes in the current market news.

As market trading hours go on, I believe that the long and short forces in the market will soon reach a new balance.

Next, unless the main short-selling institutions in the market continue to invest huge amounts of funds to suppress the market, otherwise... the pound exchange rate should be difficult to fall below the 1.5200 mark.

In general, no matter how the pound exchange rate changes here.

I always think that before the referendum result on June 6 comes out, or before the market expects the referendum result on June 23 to be clear, the pound exchange rate will most likely maintain a violent fluctuation trend. However, as the game between the main long and short institutions in the market intensifies, the fluctuation range of the market will definitely intensify, and the fluctuation amplitude will definitely become larger. "

"Your analysis does make sense," Zheng Wenjun said. "But our current long positions are still relatively heavy. What if the trend of the pound sterling exchange rate continues to exceed our expectations? What if the 1.5200 mark is broken again soon?

In general...the meeting last weekend did not achieve the expected results, which was below expectations.

When we trade, we still cannot rely on luck.

Since the feedback from market news is different from our previous expectations, and the market trend is not as strong as we expected.

This means that the market's bullish and bearish trends are actually changing gradually.

Since the market's consistent bullish expectations are gradually fading, the market trend will inevitably not be as strong as before.

What's more, the net long position in the market is still maintained at a relatively high level. Many early long positions in the market who are not firm in their will or feel that the market trend is not as expected have already had a strong idea of ​​taking profits or stopping losses to cover their positions.

In this way, many factors are superimposed.

Current expectations in the pound exchange rate market, although overall, are still biased towards the bullish direction.

But in fact, the trend is not as certain as before. "

"Then according to Mr. Zheng's meaning...should we reduce some of our positions?" Gao Jicheng asked.

Zheng Wenjun nodded and responded, "While our fund's long positions have not yet fallen into losses, we should reduce the long positions with higher holding costs, lower the positions, and keep more reserve funds to deal with subsequent market trends. I think this will be more conducive to our active choice on the market."

"Okay!" Gao Jicheng thought about it and responded.

Since Zheng Wenjun has already made a clear trading decision, there is no point in him saying more.

After responding, Gao Jicheng immediately conveyed the relevant trading instructions to all traders in the trading room in accordance with Zheng Wenjun's trading strategy requirements.

When the corresponding trading instructions are delivered, traders quickly use their own accounts to cover and close their positions.

The fund's long positions can be quickly reduced to a reasonable level where risks can be controlled, and the fund's overall holding costs can also be further reduced.

However, due to their institutions, a large number of positions were closed and covered in a short period of time.

In addition, other long positions were covered and short positions were added on the market.

The pound sterling exchange rate, which had originally slowed down its decline, suddenly plunged again, directly breaking through the 1.5230 point and quickly approaching the 1.5200 point mark.

"From the high point in the morning to now, the pound exchange rate has plunged more than 120 points in the Asian session, and the imbalance between long and short forces is getting more and more serious. If this trend continues, I am afraid that the situation of 'long killing long' will intensify. By then... I am afraid that the 1.5200 mark may not be able to hold up." Noting that the pound exchange rate trend did not stop after the continuous plunge, but instead triggered a chain reaction, and quickly moved out of the trend of continuous intraday lows, at 3 pm, in the trading room of 'Huifeng Global Asset Management Universal Hedge Fund' in Hong Kong City, the head of the trading team Gerald immediately reported to the fund manager Godfrey, "Mr. Godfrey, we can't let the pound exchange rate develop like this. If the exchange rate continues to fall like this and continues to break through the 1.5200 mark, the bullish sentiment in the market will probably be weakened, and it may also trigger a more serious chain reaction."

"Today, the bears took advantage of the weekend's news feedback and launched a fierce counterattack." Seeing that the fund's long positions had lost more than 3000 million U.S. dollars in a day and the overall position had reached the break-even line, Godfrey stared at the trend of the pound exchange rate without showing any excessive tension. He sighed and continued, "Since these major bearish institutions in the market want to take this opportunity to further expand the war, then we will continue to play with them."

Currently, the long positions held by their funds have reached 22 lots.

However, the proportion of positions is still not high considering the huge size of the entire fund.

What's more, he can also link up with institutions such as "Mitsui Yoshitomo Investment Company", "Tianhe Capital", and "Pacific Capital" to attack at the same time.

Thinking of this, Godfrey quickly...

At the same time, he instructed Gerald to direct the traders to continue increasing their long positions.

At the same time, he instantly connected with the trading rooms of other major long institutions and expressed his own strategic ideas.

"If the 1.5200 barrier is breached, it will indeed have a huge impact on the bullish sentiment in the market, and will also cause a more serious 'buy kill buy' situation on the market." After listening to Godfrey's analysis, Sato of Mitsui Yoshitomo responded, "Since this barrier must be defended, our institution can only follow up with 1 orders, work together to maintain the pound exchange rate trend above 1.5200, and then wait and see."

All weekend long, after his lobbying in the group and his determination to risk his career.

Head office increased the amount of credit available to him for his investment in the pound sterling exchange rate.

Therefore, now facing the large-scale long positions in his hands and the overall position status that has fallen into a slight floating loss, Sato is no longer as panicked as before, and can calmly join forces with the "Huifeng Global Hedge Fund" headed by Godfrey.

"I'll follow up with 5000 lots." Gu Chijiang of Tianhe Capital responded.

Compared with the amount of funds in the 'Mitsui Yoshitomo Foreign Exchange Investment Fund' headed by Sato and the 'Huifeng Global Hedge Fund' headed by Godfrey, the amount of available funds in his hands is far from enough, so he is relatively more conservative and cautious in investment.

But no matter what...

At this point, everyone is standing on the same interest.

If the market is not maintained and the pound exchange rate is allowed to quickly fall below 1.5200, it will be a huge loss for everyone's positions.

This was accompanied by the continued investment of funds from several major bullish institutions in a counterattack.

Around 3:30 p.m., the pound exchange rate, after a continuous dive, finally stabilized around 1.5200.

Then, when the market trading time comes, it will enter the European trading session.

When a series of European investors, speculators, and a large number of major short and long institutions began to become active.

The pound sterling exchange rate trend on the market began to gradually rise again, gradually fluctuating in a bullish direction.

"It seems that the entire European capital institutions are still clearly biased towards the bullish direction in their expectations for the referendum results on June 6 and the trend of the pound exchange rate." Seeing that the pound exchange rate once again tended to fluctuate in the bullish direction after the trading time entered the European session, Meng Shengfei from the Investment Department 23 of Huayin International in Hong Kong City sighed helplessly, "Every time during the European trading session, the pound exchange rate rebounds and rises."

Hearing Meng Shengfei's complaints, Su Yi responded with a smile: "This is not surprising. The main institutional funds that are long in the market are mostly European capital."

"The pound exchange rate is at 1.5200, and there is obvious resistance. At this moment, the bulls in the market are taking the initiative again. I am afraid that if we want to further sell off and guide the bearish sentiment in the market, it is unlikely to break through 1.5200 points." Kong Fansheng of Huayin International Investment Department said, "But if we don't do this and let the market rebound rapidly, then all our efforts in the morning will be completely in vain."

"Why not follow the trend and cover the newly added positions with intraday floating profits?" Hearing Kong Fansheng's concerns, Frederick of 'Aberdeen Asset Evolution No. 1 Hedge Fund' responded with a chuckle, "Before the expected results of the referendum on June 6 become clear, it is basically impossible to defeat the main bulls in the market in one fell swoop, which means that the confidence of the bulls in the market will completely collapse and induce extreme market conditions.

Since it is impossible to accomplish everything in one go.

Then we might as well follow these speculative funds in the market and enjoy the violent fluctuations in the market.

Do some day trading.

This will reduce some of the holding costs, reap some small profits, control the position within a reasonable range, always leave sufficient margin, and ensure our initiative on the market. "

"Mr. Frederick's idea is good." Su Yi responded with a smile, "This battle between longs and shorts has not yet been decided. In this case, we must be flexible in our operations on the market."

(End of this chapter)