EUR/TRY long play, medium-term, using Fib extensions.
EUR/TRY is one of the few FX pairs that can truly rival stock-market trending: this (and its parent pair, USD/TRY) has been uptrending almost incessantly for over a decade, something that is quite rare in the fx world - other examples are true outliers such as USD/IRR and USD/ARS, but these are not accessible through your ordinary broker.
What I learnt from trading the summer 2018 correction into early 2019 was that this was a short-lived relief move for
the Turkish Lira, but the uptrend has since returned with force and seems unstoppable. As I developed the Lira carry trade idea in 2018 and 2019 I managed (on demo) to accrue over £2k of interest by holding short, however I then realised that the pace of upward movement was soon outstripping any profit made by playing the short carry-trade.
I stopped trading this pair long-term and only dipped back into it for intra-day trades to the long side, again appreciating that
it has near-zero correlation to EUR/USD and is actually truly motivated by Turkish monetary events and speculative positioning of its own making. This means that on a quiet day trading the EUR/USD I could always look over to the EUR/TRY and find opportunities there, short-term, knowing full well that its higher intra-day range is also matched by very poor per-pip value and a very expensive margin requirement tag: all in all. a difficult pair to trade intra-day.
This is where I am coming back to it for a slightly longer-term play: this time I am using FIbonacci expansion/extension tools, looking at the monthly line chart from the start of data (2008) up to the hyperbolic peak of summer 2018, then for the retracement down to the bottom of early 2019: the resulting projections give some realistic forecast of price movement into the future. Given that we are constantly breaking new highs, just like stocks or indices have been doing for years, it becomes impossible to use past prices to determine support/resistance zones, thus I am looking into this particular indicator to try gauging on a mathematical basis where we can expect price to reach.
My target is actually 10,000 - a strong round-number level by definition - which is about half-way between the two nearest Fib levels, thus a reasonable chance of being filled; the trailing stop is at about 2:! Reward-Risk ratio and the position size is 1M.
Let us see how this goes! Time-horizon is variable but I would give it about six weeks, thus until early December or so, to play out.
Good luck trading out there.
Francesco, FreeFX
What I learnt from trading the summer 2018 correction into early 2019 was that this was a short-lived relief move for
the Turkish Lira, but the uptrend has since returned with force and seems unstoppable. As I developed the Lira carry trade idea in 2018 and 2019 I managed (on demo) to accrue over £2k of interest by holding short, however I then realised that the pace of upward movement was soon outstripping any profit made by playing the short carry-trade.
I stopped trading this pair long-term and only dipped back into it for intra-day trades to the long side, again appreciating that
it has near-zero correlation to EUR/USD and is actually truly motivated by Turkish monetary events and speculative positioning of its own making. This means that on a quiet day trading the EUR/USD I could always look over to the EUR/TRY and find opportunities there, short-term, knowing full well that its higher intra-day range is also matched by very poor per-pip value and a very expensive margin requirement tag: all in all. a difficult pair to trade intra-day.
This is where I am coming back to it for a slightly longer-term play: this time I am using FIbonacci expansion/extension tools, looking at the monthly line chart from the start of data (2008) up to the hyperbolic peak of summer 2018, then for the retracement down to the bottom of early 2019: the resulting projections give some realistic forecast of price movement into the future. Given that we are constantly breaking new highs, just like stocks or indices have been doing for years, it becomes impossible to use past prices to determine support/resistance zones, thus I am looking into this particular indicator to try gauging on a mathematical basis where we can expect price to reach.
My target is actually 10,000 - a strong round-number level by definition - which is about half-way between the two nearest Fib levels, thus a reasonable chance of being filled; the trailing stop is at about 2:! Reward-Risk ratio and the position size is 1M.
Let us see how this goes! Time-horizon is variable but I would give it about six weeks, thus until early December or so, to play out.
Good luck trading out there.
Francesco, FreeFX