16/12: Russian Ruble nears collapse – triggers volatility across the board

Today was purely insane.  The USDRUB traded as high as 79 and as low as 58 – that is a 2,000 (yes, two thousand!!) pip range in a single day.  What will Russia do now?

At the time of writing this blog post it is trading around 70 rubles to the dollar.  Bear in mind that it was trading around 35 to the dollar as recently as August 2014.  Thus, the currency has lost half of its value (compared to the US dollar) in around 4 months.  In addition the price of oil, one of Russia’s main revenue earners, has fallen from $105 per barrel to $55 per barrel in about the same space of time – also around a 50% drop.  Again, what will Russia do now in order to handle this crisis?

The uncertainty surrounding Russia created safe-haven demand meaning a strengthening of the Yen, and a reduced appetite for riskier instruments such as equities.  The DAX and US indices fell heavily in the morning but rallied strongly in the afternoon.  Exciting times for watching the markets.

Sidenote – Paul Wallace speaks a bit more about the Ruble and Putin here.

On a personal note

I did a little bit of DAX testing (nowhere near as much as I had wanted to do), and took two real-time paper trades on Oil.  The first one was a full loser.  The second one is open at present (note it hit the stop shortly afterwards).  Here’s the chart showing both trades.  So that was two losers, following a string of 5 winning paper-trades over the last six sessions.

Dec16 Oil (no.2)

Note to self on these trades:  Double Tops should be reversal patterns at the end of a rally – they should mean a whole lot less after a decline (like in the Oil chart above) – doh!  Additionally I want to trade patterns around key levels (basically earlier turning points) that I have identified on the chart – the double tops should be sitting below the key levels, not above the key levels – like the 54 handle in the chart above – double doh!  That’s something I learned from that trade. In terms of the 2nd trade, there was going to be an expiration of several Oil futures contracts as well as several Oil option contracts around 7pm or 8pm GMT.  Would this impact on the volatility and price action 1-2 hours beforehand?  Should I have known about the expirations?

And finally … the US 10 Year 

I also spent about 1hr trading/scalping the ZNH5 futures contract – that’s the US 10-Year treasury note (Mar2015 expiry) – on my colleague’s custom-built platform – it feeds directly on the data from the CME (Chicago Mercantile Exchange).  This is a totally different method of trading – using market depth – I will be doing this for a few hours on each of the remaining session up to xmas.  The idea is for me to provide feedback on the platform and to provide some ideas based on my trading background and experience.

All right, I think it’s about time I finished up for the day.

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One Response to 16/12: Russian Ruble nears collapse – triggers volatility across the board

  1. Pingback: Swiss National Bank removes EURCHF floor | George's FX trading blog

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