Random Thoughts
It is a quiet start to the week with the Labor Day holiday. Interestingly the market is little changed from where we left it on Friday. Is this the bottom? Or mearly a pause before another move lower for the Dollar? We are currently at support in Usd/Krw (1170-71) and India 46.70-75. The rest of the region has taken its cue from these currency pairs and as such remain in line. I have always been better off thinking medium term and as such I see this price action as a Pause and not a Bottom.
Speaking to friends in Equities they have continually spoke of large M&A’s going on. This is very positive for the equity markets and should translate to Emerging Markets.
Trends. Most traders that I know are behind budget this year. This is at large banks and HF’s. As such traders will try to latch onto something going into the 4th quarter of the year. The trend seems to be a weaker Dollar. Ranges have been realatively tight. Coming back from vacations I can see new short Dollar positions being put on.
Euro. This is a bit tricky. I perfer to sell rallys here AGAINST Emerging Markets and not Dollars.
Patience is very important now.
Good Luck and Good Forex Trading
The Difference between Traders and Brokers
A man in a hot air balloon realised he was lost.
He reduced his altitude and saw a man below.
“Excuse me, but can you help me?I promised a friend I would meet him an hour ago
but I don’t know where I am,” he said.
The man below replied: “You are in a hot air balloon hovering approximately 30
ft above the ground. You are between 40 and 41 degrees North latitude and
between 56 and 57 degrees West longitude.”
To which the balloonist replied: “You must be a broker.”
To which the man on the ground said:”I am, but how did you know?”
The reply came from above: “Everything you told me is technically correct but I
have no idea what to make of your information, and the fact is I’m still lost.
Frankly, you’ve not been much help so far.”
The man below responded: “You must be a trader.”
To which the balloonist replied: “Yes, I am, but how did you know?”
To which the man on the ground said: “You don’t know where you are or where you
are going.You have risen to your current position due to a large quantity of hot
air. You made a promise which you have no idea how to keep and you expect me to
solve your problem. The fact is, you are in exactly the same position you were
in before we met,but now,somehow,it’s my fault.”
Good Luck and Good Forex Trading
Currency Trading Soars
Lead article in todays WSJ is about the increased volumes from trading in the currency markets. According to the article the amount of daily volume has hit $4 trillion a day. WOW! I think this is quite interesting and possibly concerning. Clearly with further globalization investors are going to look for returns where they can find them. As such the hedging of currency exposure is a very important part of that return. But more important is the role the indivdual trader plays in this daily volume. With more and more people out of work, people are looking for a way to get income. Day Traders have emerged as a way (well at least people initially think so) to easily make money. We have all seen the informercials talking about trading systems. “Three green lights and you buy, two red lights you sell”. For anyone who has actually tried to do this for a living they know this does not work. If it were that simple everyone would do it. I have never looked at these systems but I am quite sure they are trend following systems. Repeat after me “There is no Holy Grail”. I do believe in systems but they must be developed yourself and back tested tirelessly. This way you have confidence that it works. I am concerned that a certain percentage of this increased volume comes from these day traders most of whom are probably desperate people looking far a last ditch event to save them. This always ends in failure. I have never day traded ( in the sense that it was my only source of income) myself and I have great respect for those who do it and do it well. But I can tell you from the experience of some of my friends who have tried. It ain’t that easy! These are traders who have spent years Proprietary trading for large institution who when they venture out on their own struggle. The point to this post is to warn people who see the article that although it is a large and growing market it is very difficult for the individual to be successful.
Click Here to read the article from the WSJ and Click Here to get a free down load if Reminiscences of a Stock Operator one of my favorite books on trading.
Good Luck and Good Currency Trading
Roger Clemens and Trading
Roger Clemens hit the news again this week. He was officially indicted on perjury charges for lying in front of Congress. As Earl Ward, lawyer for Brian McNamee (Clemens trainer) said this “is vindication for Brian. It says that you can’t demand a hearing, get up in front of Congress, lie, and then head back to Texas. It was arrogance that led to this.”
I cannot help but agree. We saw this type of arrogance on display during Game Six of the 1986 World Series when Clemens went into the locker room late in the game and came out clean shaven. This as it looked like Boston would win the series and the Boston players would be on TV getting interviewed. Disclaimer: I am a Met Fan. It Didn’t Happen! Now of course Roger Clemens is innocent until proven guilty and if he is innocent he should fight till then end to clear his name, but as I always say, where there is smoke there is fire, and lets face it there is a lot of smoke. His trainer has said he provided Clemens with HGH and steroids. The trainer, Brian McNamee has provided used syringes and gauze to investigators and finally Clemens good (Best?) friend Andy Pettitte told investigators that Clemens told him that he used HGH. Clemens claims Pettitte “misremembered” and that rather it was really his wife that received the injections.
So how does this relate to trading? EGO! Ego is the quickest way to to failure. Never think you are bigger then the market. Lets face it, when things are going well you feel invincible. Confidence, an essential factor in trading, is over flowing and you might take a chance or two that you might not usually take. There is no thing wrong with that. It is normal and necessary. But when adding to risk it is also important to stay alert. Take the same precautions that you would when things are going poorly. Although you may risk a little more capital you should be disciplined and not let one position take you out of the game. Remember the market is bigger then any one trader and if you are wrong cut the position and move on. There is always another trade, if you still have capital.
As for Roger, I was never a big fan but I clearly recognize the talent that the man possessed. He was dominant and made every team that he played on a contender for a title. It just seems to me that in this instance he spoke before thinking (and didn’t take the advice of council), or maybe he thought his fame and recognition would allow his bold statements to go uncontested. Either way he is in for a battle and one that if guilty could prevent him from one day entering the Hall of Fame.
Good Luck and Good Forex Trading
Cash is King
These are the Days when I am very glad that I am primarily invested in CASH!
The Dow Jones industrial average fell 265.42 points, or 2.5 percent, to 10,378.83.
The Standard & Poor’s 500 index fell 31.59, or 2.8 percent, to 1,089.47.
The Nasdaq composite index fell 68.54, or 1.2 percent, to 2,208.63.
Good Luck and Good Forex Trading
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