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发表于 2009-4-6 17:05
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April 5th, 2009 at 8:37 am
After the weekend.in: General, Longer Term Trades., Trades, Trading concepts
Last week ended on a very good note. The longer term trade in GBP-JPY reached a half way point. Half in a way that first objective was achieved. The second might take great deal longer. I took partial profits at 148.00, as was posted on Price moved somewhat higher and closed at about the high of the day, just under 149.00. There is an interesting correlation between Friday close and Sunday open, IF on Friday price closes strong (around daily high, or low.) Price has tendency to continue in the direction of a strong close. This lasts for about 4-5 hours after the open, assuming the open at 17:00 EST, and works best on Yen pairs. This is not a precise trading strategy, just a general observation to be used in conjunction with other analysis. Things like breaking news or large gaps can render it not valid, but it is a decent “clue provider”. For example, both EUR-JPY and GBP-JPY could be O.K. buys here at the open, with an objective of maybe 80-100 pips. I wouldn’t look for any more, because of potential conflict with higher time frame.
Daily chart, what I used for my longer term trade, suggest possible break in the up trend, before the move resumes.
Previous minor high of a little over 148 creates an obstacle, as well as general neighborhood of 150. This might prove to be important psychological area, like round numbers tend to be. On time scale this large we can’t look at precisely 150 to be a resistance, but rather a band around this number. For the beats it could be as wide as 100 pips above and below 150. Now, I will not be taking any trades to the downside but keep the balance of my long position. If pull back happens, I’ll ride it out and try to find additional entries for trades on smaller time frames.
Meanwhile, I placed couple of orders in GBP-AUD.
In principle, I think this cross will move up. Buy order is placed at 2.1025, with 400 pips objective. Should the price move down first, I’d like to get in at 2.0600. This trade will have a stop at just under 2.0400. Looks busy for me , with all the positions from last week and being on the lookout for gaps….
I received, well, have been receiving, fair number of questions about leverage, position sizing and so on. Some readers want to know how much money can one make, when very little leverage is used. I decided to disclose results one of my accounts where I take these kind of discretionary trades, with leverage no bigger than 2:1 , and most transactions at 1:1. Time span covered will be from beginning of this year until today, or about 3 months. I’ll probably post it next Saturday, but could be sooner. So, anybody who wants to know what kind of returns are possible trading Forex, without excessive leverage, and risk, keep checking these pages over coming days.
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April 4th, 2009 at 12:43 pm
No more interventions. Really?in: Articles, General
The just ended G-20 summit in London was supposed to bring some answers to financial crisis spanning the world. After couple days spent debating and series of meetings, key agreements was published. Summit was declared a success and politicians, after taking some pictures together, moved on, most of them to NATO meeting. I when it was first announced.
Last item listed there has to do with international trade. Participants agreed to “rejection of trade-blocking measures to protect individual countries economies, plus another $250 billion in financing to help trade flow.” This is the most interesting part, from the perspective of currency trader. At first glance, this means that countries wouldn’t enact any new protectionist measures, such as “Buy America”, or impose new and unfair tariffs on foreign products. After closer examination, though, there is much more to it. According to summit briefings, delegates understood that foreign exchange markets could be used as a tool of protectionism and undermine efforts of global recovery. They cited recent huge moves in currencies as harmful to any farther progress.
If the most important part of the agreement is not what seems, it doesn’t bode well for the “competitive devaluation” part. While talks were under way in London, ECB is rumored to have steped in and support Eastern European currencies, at the expense of the Euro. Polish Zloty and Hungarian Forint were the main beneficiaries. Even if more direct interventions are put on hold now, those quantitative easing actions will continue unabated. Most likely scenario is that volatility will remain high, which is good for active traders.
We will see soon if central banks indeed stick to what politicians drafted. Swiss Franc recovered all the ground it lost to USD. Currently it is even stronger than before SNB intervention.
As it was pointed out , SNB never stated the objectives they hoped to achieve by intervention. If they really wanted to weaken Franc, one should reasonably expect another action soon, since CHF is stronger against USD now. Should they do nothing, it puts a big question mark on motives behind previous move. Some suggested, that it was a punitive action, for being pressured to relax bank secrecy laws by international community. Lack of commitment at current level would reinforce that idea. Of course SNB has a perfect out now- sticking to the summit agreement. Whatever happens, trading Forex is certain to remain interesting.
Mike K.
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April 3rd, 2009 at 9:14 am
Largest ever bail?in: General, Longer Term Trades., Trades
Yesterday evening, my time, I posted some of the “points of agreement” from the G20 summit. You will notice that one of them talks about wide spread, international action of putting curbs on executives compensation. Think it applies to banks and similar financial institutions. Over coming weeks and months we will learn about how it is going to be implemented. Probably not much will come out of it, unless the banks become nationalized. Governments must think that these people are overpaid, and today they just got the confirmation for that. One Julius Meinl V, the owner of Austria’s private Meinl Bank AG was detained in Vienna late Wednesday on suspicion of offenses including fraud and breach of trust. On top of that, he is suspected of defrauding investors through unauthorized share buybacks linked to the Meinl many other posts.
Today price reached first objective of this move.
I settled for 142.00 entry with first target of 148.00. I took partial profits today at that level for nice 600 pips gain. Long term target is 162.00, in summer maybe, or until market developments make me change my mind. For now I’m bullish this pair and since the core position is smaller, I can get more actively involved in buying hourly signals, without overexposing myself. In spite of my strong opinion for this cross, leverage used is small, because swings are, and will probably remain, very wide. Notice how after trade was initiated price fell promptly, touching 100SMA and bounced hard from there to new highs. Through this, the trend remained unchanged, previous low was not taken out, but this kind of price behaviour can easily kill a trade, or even an account, of somebody who is over leveraged. Wouldn’t that be a shame, to be right on direction, have great timing and still suffer a loss because of excessively large position? Happened many times to countless people and will happen again.
In the post Special Drawing Rights I took a look at 4H chart of EUR-GBP. A sell order was placed there.
Since this had been published, couple of other smaller trades were taken, but this particular order remained valid. It was finally triggered yesterday. My target here is large, perhaps a little too large considering the fact it is Friday today. As of this writing, trading should remain active for another 4 hours, so I might close it if the position is in profit of 80 pips or more. Should this be the case I will return to selling it using hourly chart. It will be noted on these pages. Finally, a sell of EUR-CAD was discussed. This trade is currently under way and it looks like I will carry it over the weekend.
Mike K.
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April 2nd, 2009 at 7:55 pm
No surprises.in: General, Trades
European Central Bank cut its benchmark interest rates by 0.25% to 1.25%. I doubt anybody was surprised by this move, except perhaps those who wanted more. President Jean-Claude Trichet left the gate opened for farther cuts if warranted, although the tone of his statement indicated reluctance to that. I think that most people wanted to see what additional action would ECB take, this so-called “quantitative easing” which broadly covers any other move by central banks. None of this happened, also, much as expected. To date EU has been very reluctant to follow in footsteps of BoE and FED- policy of expanding the money supply in the economy by buying securities from banks. Trichet stated vaguely that ECB would examine other options but didn’t elaborate. Just like other CB’s they could, in theory, buy government bonds in the secondary market, buy face operational difficulties in how they would allocate that across the 16 member countries. It is not as straight forward as elsewhere. So, for now at least, no additional steps were announced.
The G20 members, on the other hand, did come up with some new measures. There is a whole list of them, which I’ll skip for now, but one stands out. Prime Minister Gordon Brown, the host, said leaders at the G-20 summit have agreed to give $1 trillion to the International Monetary Fund and the World Bank to help struggling nations around the world. Details of who would contribute how much and over what time span were not immediately available. One thing is clear, donors will have to borrow that money themselves before they contribute. Mad world.
Tell you what else is mad, the weather. It was snowing here yesterday. For at least three hours. Couple of blocks away from my place there is a large landscaped area which is attended to once a week. I guess yesterday was the day, because there were people doing the work. Including mowing lawns, while thick snow was coming down. It was quite hilarious, I pulled over to take a closer look. Too bad I didn’t have a camera with me, most people will not believe.
Here is the chart of EUR-PLN trade that was mentioned in last post. And the details.
If you recall I wanted to sell it upon emergence of bearish candle after Sunday. Monday was still bullish, but Tuesday’s candle changed color. I was hoping for smaller reversal candle like doji or a star, which would close somewhere between 4.7000 and 4.8000. Instead market painted a Bearish Engulfing Pattern (A), not a problem in itself, but this limited my profit potential, entry was lower, and original stop at 4.9500 became too big. Eventually, decided to sell with a stop just above the minor high of 4.7500. Entry was at 4.6200 and price moved swiftly my way. Rumor has it that ECB stepped in to support Central European Currencies, but who knows? By the time it was time to call it a day profit was good so decided to close it at 4.4947, for 1250 or so pips.
Sell order at 4.4000 is still valid, main trade, if this move happens. The above position was a bonus play. Price action didn’t develop exactly as hoped for, but close enough to produce few pips. I’m happy.
Trade from yesterday also came to a conclusion already.
Target was not very ambitious, only 55 pips, but nice little trade. Swissy played ball and took a dive. There is something about EUR-CHF I should cover, but there are so many other things going on it has to wait. Tomorrow, Friday, might be better time for that. I’m placing one more new order before the weekend.
Euro became a little stronger today, but it might be running its course. Want to try EUR-CAD on a break below last lows. Sell order is placed at 1.6585. Objective is 160-170 pips at the moment. This might be a little rich, so if the trade happens and shows decent profit tomorrow, I’ll close it before the weekend. We will see tomorrow and also take a look at the long term GBP-JPY trade, which is under way.
Mike K.
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