Random Thoughts

banker — Mon, 06 Sep 2010 12:20:48 +0000

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

banker — Sat, 04 Sep 2010 22:26:57 +0000

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

banker — Wed, 01 Sep 2010 23:58:10 +0000

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