Frustration of Trading

A simple weekend rant on a frustrating series of trades this week. A long time ago I opened a retail FX account, small sum of money, mostly to test an idea or two and basically screw around to satisfy gambling urges. Over the course of three trades I more or less managed to get stopped on the bottom/top tick of each move. I annotated a chart, triangles represent trades, circles are the stops:

 

Interestingly enough I did discover a huge arb or inefficiency in their exotic options model. My FX broker, OANDA, offered what they called “Box Options” which were basically graphical methods of trading barrier options or knock-in/knock-outs. Barrier options are quite popular OTC exotic (hardly exotic anymore) options in FX and FI. Unfortunately for me, the model was quickly remedied fairly quickly and I never had a real opportunity to exploit it. I do see from time to time that some European Spread Betting sites still have this inefficiency. Can you guess what it was???

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~ by largecaptrader on April 21, 2012.

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