The recent releases of data about the US economy was at best, conflicting. However, the jobs numbers were off the mark by too much so there was underlying sentiment that tapering would either be postponed or it would be a small amount, kind of like a token taper if you will.
So the Feds announced no taper at 2 AM HK time, and AUD/USD took off like the shuttle while USD/JPY sank like a stone.
I was a bit nervous going into news time so I closed my AUD/USD positions and missed the chance to make quite a bit of money. I settled for a little bit since I had AUD/JPY positions anyway so I figured I'll make money there and wait for an Aussie pullback.
Anyway, with my new paradigm of trading, things are going much better. I have to remind myself time and again that the old rules no longer apply and the only way to survive this market is to play by the new rules.
Quite simply, you just have to stop intellectualizing the trades too much because its no longer responding to the old trading principles. Someday I might try write about my new paradigm of trading, but in the meantime, blogging will have to do.
Wednesday, September 18, 2013
Friday, September 6, 2013
NFP September 2013
For those readers wondering, I have not been taken out by the market.
On the contrary I was able to take the market by the horns and ride out
the volatility over the past weeks. More on this later.
In the meantime, among all the recent Non Farm Payrolls (NFP) releases
in recent history, this will come across as one of the most important.
This is because of its proximity to the much anticipated (or dreaded)
tapering. The NFP along with the employment rate are being watched
closely by no less than the FEDs which makes it even more capable of
inducing volatility. At this point the dollar is heavily bought so if
the NFP goes in a different direction there are likely to be big swings
in the market. The general consensus is that NFPs will print higher than
expected, but time and again, this has proven to be no guarantee of
actual data.
Regarding how I was able to ride out the market, here is what I learned.
You have to UNLEARN what you have known about the forex market over the
last couple of years. It is a totally new ball game and I realized just
how accurate my "new paradigm for forex " really was. Its not as
simplistic but suffice it to say that at this point, the market has
truly rewritten the rules.
I would be a liar if I said that I know how to handle the market now
because I don't. What I do know is how to survive and not be taken by
the manipulation of the market. Like I said, I don't know completely how
the market works, nor do I have the magic formula. But here's a piece of
advice that I think will go a long way in helping you cope with it.
Manipulation is a given today because of the amount of money wielded by
the bigger institutions. Remember though that their ability to
manipulate relies heavily on the predictability of the market to their
moves. If we want to throw them off the track, then lets be
unpredictable in our response. By doing so, we can render their
manipulative attempts impotent.
Anyway, its a little under 1 1/2 hours to NFP. Be careful out there.
On the contrary I was able to take the market by the horns and ride out
the volatility over the past weeks. More on this later.
In the meantime, among all the recent Non Farm Payrolls (NFP) releases
in recent history, this will come across as one of the most important.
This is because of its proximity to the much anticipated (or dreaded)
tapering. The NFP along with the employment rate are being watched
closely by no less than the FEDs which makes it even more capable of
inducing volatility. At this point the dollar is heavily bought so if
the NFP goes in a different direction there are likely to be big swings
in the market. The general consensus is that NFPs will print higher than
expected, but time and again, this has proven to be no guarantee of
actual data.
Regarding how I was able to ride out the market, here is what I learned.
You have to UNLEARN what you have known about the forex market over the
last couple of years. It is a totally new ball game and I realized just
how accurate my "new paradigm for forex " really was. Its not as
simplistic but suffice it to say that at this point, the market has
truly rewritten the rules.
I would be a liar if I said that I know how to handle the market now
because I don't. What I do know is how to survive and not be taken by
the manipulation of the market. Like I said, I don't know completely how
the market works, nor do I have the magic formula. But here's a piece of
advice that I think will go a long way in helping you cope with it.
Manipulation is a given today because of the amount of money wielded by
the bigger institutions. Remember though that their ability to
manipulate relies heavily on the predictability of the market to their
moves. If we want to throw them off the track, then lets be
unpredictable in our response. By doing so, we can render their
manipulative attempts impotent.
Anyway, its a little under 1 1/2 hours to NFP. Be careful out there.
Thursday, August 8, 2013
Consistent irrationality in forex
If anything, there is indeed a method in the madness that has taken hold
of the market.
Again we have great figures for the US Initial Jobless Claims and the
USD continues to drop.
USD/JPY dropping and the EUR/USD ascending.
Just a bit more and I wouldn't be surprised if a major crackdown
occurs. This is really an "in your face" thing that has no problem
keeping the market irrational for an extended period.
of the market.
Again we have great figures for the US Initial Jobless Claims and the
USD continues to drop.
USD/JPY dropping and the EUR/USD ascending.
Just a bit more and I wouldn't be surprised if a major crackdown
occurs. This is really an "in your face" thing that has no problem
keeping the market irrational for an extended period.
Wednesday, August 7, 2013
THE NEW PARADIGM IN FOREX
I can just see the headlines now:
EURO AND JPY RISING TO NEW HIGHS ON USD STRENGTH
Duhhhhh
But that is how the market has been moving.
So here you have it, the new paradigm in FOREX:
GOOD FUNDAMENTAL NUMBERS = BEARISH
BAD FUNDAMENTAL NUMBER = BULLISH
EURO AND JPY RISING TO NEW HIGHS ON USD STRENGTH
Duhhhhh
But that is how the market has been moving.
So here you have it, the new paradigm in FOREX:
GOOD FUNDAMENTAL NUMBERS = BEARISH
BAD FUNDAMENTAL NUMBER = BULLISH
Tuesday, August 6, 2013
Big improvement in US trade balance results in a stronger Euro
This comedy of errors simply does not cease.
We get a HUGE improvement in US Trade Balance and what happens?
The EUR/USD climbs HIGHER!!
Meaning because of the GREAT trade balance figures, the EURO is stronger
and the USD is weaker!
Looking over at the USD/JPY currency pair, you can see the USD dropped
against the EURO too.
Either the markets have turned stupid or there is something sinister.
Traders, someone is playing us.
We get a HUGE improvement in US Trade Balance and what happens?
The EUR/USD climbs HIGHER!!
Meaning because of the GREAT trade balance figures, the EURO is stronger
and the USD is weaker!
Looking over at the USD/JPY currency pair, you can see the USD dropped
against the EURO too.
Either the markets have turned stupid or there is something sinister.
Traders, someone is playing us.
Wednesday, July 31, 2013
Some strange movements in data release and EUR
The CPI for the Eurozone was released at 5:00 PM today in my time zone.
A highly volatile event, it was so curious that the data was released so
late and went from positive to negative and was interchanged between
core YOY and core.
Moreover, it seemed as though the EUR hung in midair and despite having
a double negative, it moved ever so slightly to INCREASE! Then gingerly
moved down and is parked now at its previous levels.
A highly volatile event in a hair trigger market and we get nary a
movement from the EUR/USD over negative EURO data?
If this is a precursor of events to come later, I will try and exit the
market before the fireworks.
Those who opt to stay in the market are well advised to ensure they have
wide margins and to not jump the gun after the first data release (GDP)
because the FOMC promises more volatility and possibility of reversal.
Pretty exciting series of events. I am very curious to see how it plays
out along with the other hidden market movers.
A highly volatile event, it was so curious that the data was released so
late and went from positive to negative and was interchanged between
core YOY and core.
Moreover, it seemed as though the EUR hung in midair and despite having
a double negative, it moved ever so slightly to INCREASE! Then gingerly
moved down and is parked now at its previous levels.
A highly volatile event in a hair trigger market and we get nary a
movement from the EUR/USD over negative EURO data?
If this is a precursor of events to come later, I will try and exit the
market before the fireworks.
Those who opt to stay in the market are well advised to ensure they have
wide margins and to not jump the gun after the first data release (GDP)
because the FOMC promises more volatility and possibility of reversal.
Pretty exciting series of events. I am very curious to see how it plays
out along with the other hidden market movers.
VERY VOLATILE DAY
Today July 31 is a day that will live on in infamy.... JOKE.
That is however not a really gross exaggeration. Because this day we
have so many high risk events and so many trigger happy traders.
First, in a few minutes we will have the Eurozone CPI. After this, we
have the US GDP. Then we have the FOMC rate decision and press
conference. All high risk events that has everyone on edge because this
is where the Feds will have to convey their sentiments about the start
of tapering IF it is to commence on September.
Moreover, the technical data all suggests to imminent breakouts in AUD,
USD, EUR and even JPY. The problem is no one can tell which way it will
go. It can go either way and this is what makes the next 12 hours pretty
tense.
So we have the EURO data coming up.
Good luck!
That is however not a really gross exaggeration. Because this day we
have so many high risk events and so many trigger happy traders.
First, in a few minutes we will have the Eurozone CPI. After this, we
have the US GDP. Then we have the FOMC rate decision and press
conference. All high risk events that has everyone on edge because this
is where the Feds will have to convey their sentiments about the start
of tapering IF it is to commence on September.
Moreover, the technical data all suggests to imminent breakouts in AUD,
USD, EUR and even JPY. The problem is no one can tell which way it will
go. It can go either way and this is what makes the next 12 hours pretty
tense.
So we have the EURO data coming up.
Good luck!
Tuesday, July 30, 2013
Thoughts while waiting on Euro data
Its just a few minutes to the release of Euro data and the more I observe events, the more I realize that there really is a hidden hand in all of these. Therefore the key to make money is to figure out how the hand will move.
Many forex experts are beginning to look pathetic. One day, they focus purely on fundamentals and next they focus purely on technical analysis in a bid to cover their erroneous projections the previous day.
If its enough to confuse a finance guy like me, then you can be sure the average Joe who just clicked the links that promised "to make lots of money through forex" has his head spinning.
Despite this scenario though, there is hope over the horizon. The Federal Energy Regulatory Commission has accused JP Morgan of manipulating power prices and if they can do this in the power market, then they can definitely do this in the Forex market. All that is left now is for the Feds to sit up and take notice before the hidden hand rips the market apart.
Here is a link to the JP Morgan rate manipulation story for those who are interested.
Its a heavy data week and its looking to be the wild wild west again with no sheriff in sight so good luck traders!
Many forex experts are beginning to look pathetic. One day, they focus purely on fundamentals and next they focus purely on technical analysis in a bid to cover their erroneous projections the previous day.
If its enough to confuse a finance guy like me, then you can be sure the average Joe who just clicked the links that promised "to make lots of money through forex" has his head spinning.
Despite this scenario though, there is hope over the horizon. The Federal Energy Regulatory Commission has accused JP Morgan of manipulating power prices and if they can do this in the power market, then they can definitely do this in the Forex market. All that is left now is for the Feds to sit up and take notice before the hidden hand rips the market apart.
Here is a link to the JP Morgan rate manipulation story for those who are interested.
Its a heavy data week and its looking to be the wild wild west again with no sheriff in sight so good luck traders!
Friday, July 26, 2013
Useless fundamental analysis or what if the data is wrong?
The thought suddenly occurred to me that while I have been looking only
at the manipulation aspect, there is a possibility too that the data is
wrong and that the USD is in fact fundamentally weak.
I have been watching the USD/JPY go lower and lower all the while
reading about how the US economy is recovering and that the Japanese
want to weaken the Yen further. With all this rhetoric I am soooo amazed
at how this currency pair is sinking. All this strange movements are
making fundamental and technical analysis obsolete.
Bottom line is that there are other forces at work here. It certainly
makes no sense to speak of the USD being fundamentally strong and
technically weak so the only possibilities left are manipulation or
incorrect data. Go figure.
I hope that the growing number of traders questioning the market
movements will draw the attention of those agencies that can investigate
if any unscrupulous individuals are turning forex trading into their own
gambling nirvana.
at the manipulation aspect, there is a possibility too that the data is
wrong and that the USD is in fact fundamentally weak.
I have been watching the USD/JPY go lower and lower all the while
reading about how the US economy is recovering and that the Japanese
want to weaken the Yen further. With all this rhetoric I am soooo amazed
at how this currency pair is sinking. All this strange movements are
making fundamental and technical analysis obsolete.
Bottom line is that there are other forces at work here. It certainly
makes no sense to speak of the USD being fundamentally strong and
technically weak so the only possibilities left are manipulation or
incorrect data. Go figure.
I hope that the growing number of traders questioning the market
movements will draw the attention of those agencies that can investigate
if any unscrupulous individuals are turning forex trading into their own
gambling nirvana.
Unbelievable in its arrogance
I am watching the USD/JPY AUD/USD and the EUR/USD now. Post University
of Michigan data which gave a glowing picture of consumer sentiment not
seen since 2007.
There was also several key US data released earlier this week that
likewise painted a rosy picture of the US economy.
Now unless the USD is no longer the currency of the USA, then common
sense and past experience dictates that the USD would be stronger after
such data.
But since this week, these have been sentiments raised using phrases
like anti-US moves against the USD/JPY in particular because the market
movement no longer reflected reality.
In fact, given the volatility post Draghi and Bernanke speeches, it is
extremely unbelievable that the market moves in the manner it is doing
now. I mean the volatile reactions to simple words which were hints or
even vague references were in such magnitude that you get over 100 pips
movement in a few minutes.
Yet this "in your face" data merited a 50 pip or so drop in the OPPOSITE
DIRECTION!
Its extremely disconcerting and I really hope there is a forex
equivalent for insider trading. The Feds and the NFA should already look
into this because this kind of market manipulation has some extremely
sinister implications not only for forex but for the economy at large as
well.
of Michigan data which gave a glowing picture of consumer sentiment not
seen since 2007.
There was also several key US data released earlier this week that
likewise painted a rosy picture of the US economy.
Now unless the USD is no longer the currency of the USA, then common
sense and past experience dictates that the USD would be stronger after
such data.
But since this week, these have been sentiments raised using phrases
like anti-US moves against the USD/JPY in particular because the market
movement no longer reflected reality.
In fact, given the volatility post Draghi and Bernanke speeches, it is
extremely unbelievable that the market moves in the manner it is doing
now. I mean the volatile reactions to simple words which were hints or
even vague references were in such magnitude that you get over 100 pips
movement in a few minutes.
Yet this "in your face" data merited a 50 pip or so drop in the OPPOSITE
DIRECTION!
Its extremely disconcerting and I really hope there is a forex
equivalent for insider trading. The Feds and the NFA should already look
into this because this kind of market manipulation has some extremely
sinister implications not only for forex but for the economy at large as
well.
Solid proof of manipulation
Finally, the past few days have shown that manipulation exists.
We get really good data for the USD and what happens?
The USD/JPY drops!
NFA ET TU?
We get really good data for the USD and what happens?
The USD/JPY drops!
NFA ET TU?
Tuesday, July 16, 2013
Post US CPI
In a manner consistent with my previous post, a few minutes ago we got
really good US numbers for CPI etc. So how did the market react?
Well there was the initial drop for the AUD/USD and EUR/USD pairs post
event though not as much as previous good numbers. But 15 minutes later,
lo and behold. They are back at their previous levels with change to spare.
And what of the USD/JPY pair? Quite pathetic. A small increase post data
followed by a decrease to previous levels. Again with change to spare.
Seriously. This is one confused market.
Or it is one where neither bull nor bears are in control.
Only the manipulators are in the drivers seat
really good US numbers for CPI etc. So how did the market react?
Well there was the initial drop for the AUD/USD and EUR/USD pairs post
event though not as much as previous good numbers. But 15 minutes later,
lo and behold. They are back at their previous levels with change to spare.
And what of the USD/JPY pair? Quite pathetic. A small increase post data
followed by a decrease to previous levels. Again with change to spare.
Seriously. This is one confused market.
Or it is one where neither bull nor bears are in control.
Only the manipulators are in the drivers seat
Puzzling market behavior
A few minutes ago, the EUR CPI and other EUR related data was released.
All are in the green, meaning the data was better than expected.
So how did the EUR pairs react? Nada, zilch. If at all, both the EUR/USD
and the EUR/JPY DROPPED prior to data release and has yet to regain even
half of what it dropped.
It's really quite puzzling to me because these are the fundamentals that
matter, yet the movement is pathetic particularly in the light of the
volatility when Mario Draghi spoke.
Strange times indeed.
All are in the green, meaning the data was better than expected.
So how did the EUR pairs react? Nada, zilch. If at all, both the EUR/USD
and the EUR/JPY DROPPED prior to data release and has yet to regain even
half of what it dropped.
It's really quite puzzling to me because these are the fundamentals that
matter, yet the movement is pathetic particularly in the light of the
volatility when Mario Draghi spoke.
Strange times indeed.
Friday, July 12, 2013
FOREX TRADING - THE HIDDEN HAND THAT MANIPULATES THE MARKET?
For several months now, I have been observing how the forex market has
been behaving. This was because I was seeing some unconventional
movements that ran contrary to what happened in reality.
What made it even stranger was despite the blatant departure from what
was normal, there were some analysts that appeared to have a ready
explanation which would later on be contradicted by others. In other
words, it was a scenario that smacked of manipulation.
And why not indeed?
After all, with a 4 trillion market daily, the temptation to sway
markets with a little push now and then is just too much to resist I
suppose. All it takes is a group of writers / analysts and some seed
money grown with the help of leverage and you're all set.
Here is a possible scenario with a sequence of events:
- Take some high volatility events occurring a few weeks or months down
the road.
- Hold a meeting with your analysts and draw a plan
- For example, you want to short the EUR/USD big time after a speech by
Draghi. So you proceed to have your analysts project a picture of a
strong Euro while the others can write about a dollar weakening. Keep
the noise levels about this scenario high about 1 week before data
release. Observe how the long positions are building up. Now wait for
the speech and ask your analysts writers to begin writing their analysis
about one of several things: why the euro suddenly weakened, why the
dollar found new born strength or why the speech of Draghi doomed the
Euro. Start shorting the market a bit and have these reports trickle out
a little at a time, slowly increasing the level of immediacy thus sowing
seeds of insecurity and doubt in the market. Now suddenly unleash a
deluge of shorts and the EUR crashes big time when others notice the
price dropping. Panic selling ensues and you suddenly have a nice little
profit for you to share with your cohorts.
Is this a plausible scenario?
Before the rapid increase in interest in Forex by ordinary people, no.
Because banks have very strict rules about trading. But open the market
to traders with money, leverage and a crooked sense of trading, and add
millions worth of new money from ordinary people hoping to make money
from forex, then the scenario becomes quite plausible.
This is why the market has been dispensing with the usual correlations
and is behaving so erratically. It has become in effect, the wild wild
west of finance.
Think about it. How can you analyze and trade a market that will move
seemingly in a random manner? It has deteriorated into nothing more than
a high stakes gambling arena where some greedy bastards take advantage
of clueless people holding money, following rules while they operate
outside the rules because they control a large amount of money which can
literally move markets the way they want to.
Am I disillusioned? Yes I am. Because I have a strong background in
finance and economics and I can tell when people are selling lies.
Will I abandon ship? Nope. I'm fighting it out here because I want the
real legitimate market forces to reclaim the forex market before
governments clamp down and fix exchange rates which is not that far off.
Central bank intervention is becoming a very expensive proposition and a
one currency proposal as well as fixed exchanges have been on the radar
for quite some time now. This is why I hope the market will be able to
reform before this happens.
been behaving. This was because I was seeing some unconventional
movements that ran contrary to what happened in reality.
What made it even stranger was despite the blatant departure from what
was normal, there were some analysts that appeared to have a ready
explanation which would later on be contradicted by others. In other
words, it was a scenario that smacked of manipulation.
And why not indeed?
After all, with a 4 trillion market daily, the temptation to sway
markets with a little push now and then is just too much to resist I
suppose. All it takes is a group of writers / analysts and some seed
money grown with the help of leverage and you're all set.
Here is a possible scenario with a sequence of events:
- Take some high volatility events occurring a few weeks or months down
the road.
- Hold a meeting with your analysts and draw a plan
- For example, you want to short the EUR/USD big time after a speech by
Draghi. So you proceed to have your analysts project a picture of a
strong Euro while the others can write about a dollar weakening. Keep
the noise levels about this scenario high about 1 week before data
release. Observe how the long positions are building up. Now wait for
the speech and ask your analysts writers to begin writing their analysis
about one of several things: why the euro suddenly weakened, why the
dollar found new born strength or why the speech of Draghi doomed the
Euro. Start shorting the market a bit and have these reports trickle out
a little at a time, slowly increasing the level of immediacy thus sowing
seeds of insecurity and doubt in the market. Now suddenly unleash a
deluge of shorts and the EUR crashes big time when others notice the
price dropping. Panic selling ensues and you suddenly have a nice little
profit for you to share with your cohorts.
Is this a plausible scenario?
Before the rapid increase in interest in Forex by ordinary people, no.
Because banks have very strict rules about trading. But open the market
to traders with money, leverage and a crooked sense of trading, and add
millions worth of new money from ordinary people hoping to make money
from forex, then the scenario becomes quite plausible.
This is why the market has been dispensing with the usual correlations
and is behaving so erratically. It has become in effect, the wild wild
west of finance.
Think about it. How can you analyze and trade a market that will move
seemingly in a random manner? It has deteriorated into nothing more than
a high stakes gambling arena where some greedy bastards take advantage
of clueless people holding money, following rules while they operate
outside the rules because they control a large amount of money which can
literally move markets the way they want to.
Am I disillusioned? Yes I am. Because I have a strong background in
finance and economics and I can tell when people are selling lies.
Will I abandon ship? Nope. I'm fighting it out here because I want the
real legitimate market forces to reclaim the forex market before
governments clamp down and fix exchange rates which is not that far off.
Central bank intervention is becoming a very expensive proposition and a
one currency proposal as well as fixed exchanges have been on the radar
for quite some time now. This is why I hope the market will be able to
reform before this happens.
Thursday, July 11, 2013
ON CORRELATIONS AND DIVERGENCE
Not too long ago, there were correlations that you could count on in
Forex. Some of them, like the EUR/USD vs USD/CHF were almost mirror
images due to almost perfect negative correlation. That way, you could
use the pairs to hedge against one another.
Today, however one can no longer rely on perfect correlation because it
does not happen anymore. In fact, one of the more important
correlations, the AUD/USD vis s vis SP500 is not that reliable either.
In fact, just last month, there was an unusual divergence between the
two which many analysts thought to be indicative of dire events brewing
in the market.
Thankfully, those dire events have not come to pass (yet?) but the point
I am making is that trading has taken on a different tone today where
one can really be caught off guard by a sudden move that can lead to
closeouts for positions that had no stops or sufficient margin.
I have been reading several articles that are quite informative about
the new market trends and as soon as I figure out how to best format
them on the blog, I will post them here.
Forex. Some of them, like the EUR/USD vs USD/CHF were almost mirror
images due to almost perfect negative correlation. That way, you could
use the pairs to hedge against one another.
Today, however one can no longer rely on perfect correlation because it
does not happen anymore. In fact, one of the more important
correlations, the AUD/USD vis s vis SP500 is not that reliable either.
In fact, just last month, there was an unusual divergence between the
two which many analysts thought to be indicative of dire events brewing
in the market.
Thankfully, those dire events have not come to pass (yet?) but the point
I am making is that trading has taken on a different tone today where
one can really be caught off guard by a sudden move that can lead to
closeouts for positions that had no stops or sufficient margin.
I have been reading several articles that are quite informative about
the new market trends and as soon as I figure out how to best format
them on the blog, I will post them here.
Wednesday, July 10, 2013
Something strange is going on...
The FOMC minutes this morning set off a lukewarm reaction from the
market with the end result being almost back where it started.
However, after Bernanke finished with his Q and A portion, the USD, to
quote some traders, collapsed!
The market moved with such ferocity and speed that a lot of stops were
taken out and both the EUR and the AUD went beyond their channels and
appreciated strongly against the USD.
For one thing, while the answers of Bernanke shed some doubt on the
prospect of commencing tapering this September, the bottom line was that
the US economy was still on track for tapering because it appeared to be
on the road to recovery. Then there was the general agreement among
traders prior to the move, that the USD was on an uptrend.
So the sudden move took most people by surprise and really shook up the
market around 530 am Manila time.
Anyway, there wasn't any damage on my part except that I had just closed
some AUD/USD long position prior to the move! I missed the chance to
make decent profits and I almost got my shorts squeezed.
Just to be safe, I am in consolidation mode and will just wait for the
AUD data for release this morning before stepping back to reassess my
next moves.
Like I said, there is something strange going on and it appears to be
some form of manipulation by maybe a large group which controls a
substantial part of the funds in the forex market. Its good to see that
some other renowned traders have taken notice of the situation and
hopefully, someone will look into where this move (and other curious,
previous moves) came from.
As always, be careful. It's becoming more of a mind game nowadays rather
than a trade based on sound economic and business principles.
market with the end result being almost back where it started.
However, after Bernanke finished with his Q and A portion, the USD, to
quote some traders, collapsed!
The market moved with such ferocity and speed that a lot of stops were
taken out and both the EUR and the AUD went beyond their channels and
appreciated strongly against the USD.
For one thing, while the answers of Bernanke shed some doubt on the
prospect of commencing tapering this September, the bottom line was that
the US economy was still on track for tapering because it appeared to be
on the road to recovery. Then there was the general agreement among
traders prior to the move, that the USD was on an uptrend.
So the sudden move took most people by surprise and really shook up the
market around 530 am Manila time.
Anyway, there wasn't any damage on my part except that I had just closed
some AUD/USD long position prior to the move! I missed the chance to
make decent profits and I almost got my shorts squeezed.
Just to be safe, I am in consolidation mode and will just wait for the
AUD data for release this morning before stepping back to reassess my
next moves.
Like I said, there is something strange going on and it appears to be
some form of manipulation by maybe a large group which controls a
substantial part of the funds in the forex market. Its good to see that
some other renowned traders have taken notice of the situation and
hopefully, someone will look into where this move (and other curious,
previous moves) came from.
As always, be careful. It's becoming more of a mind game nowadays rather
than a trade based on sound economic and business principles.
Tuesday, July 9, 2013
A couple of very important tools in my forex toolkit
These are two tools that are extremely essential to my forex trading day
and are mainstays in my browser.
1. http://www.fxstreet.com/fundamental/economic-calendar/
2. http://mc24.ch/24inch.html
Right now I only have 3 monitors so I need to keep them as one of my
browser windows only. Once I have my 6 monitor setup in place, I will
keep them exclusively in a separate window.
Check them out and see if you find them useful.
and are mainstays in my browser.
1. http://www.fxstreet.com/fundamental/economic-calendar/
2. http://mc24.ch/24inch.html
Right now I only have 3 monitors so I need to keep them as one of my
browser windows only. Once I have my 6 monitor setup in place, I will
keep them exclusively in a separate window.
Check them out and see if you find them useful.
Monday, July 8, 2013
Relative calm
After a dizzying couple of weeks worth of data and speeches, the market
has entered a time of relative calm. However, whether this is truly calm
waters, or the calm before the storm remains to be found out.
Of course for my part, I will continue trading and devote a bit more
time to this site. I have decided to make this blog a kind of resource
for those who wish to learn as much about the forex market in a thorough
manner, while making maximum use of the time available for studying.
So over the next few weeks I intend to post learning resources, reviews
and some links to useful reading materials.
has entered a time of relative calm. However, whether this is truly calm
waters, or the calm before the storm remains to be found out.
Of course for my part, I will continue trading and devote a bit more
time to this site. I have decided to make this blog a kind of resource
for those who wish to learn as much about the forex market in a thorough
manner, while making maximum use of the time available for studying.
So over the next few weeks I intend to post learning resources, reviews
and some links to useful reading materials.
Friday, July 5, 2013
Post NFP Assessment
Now that the dreaded data has been released, what happened?
Well for starters, the darn positioning took out EUR/USD long resulting
in a ()_*((&#(Q&!#$$ closeout.
To get back to where I was a few hours back, I need to make 4X what I
have now.
That's the bad news.
The good news is:
- it freed up a chunk of funds that I can freely trade without worrying
about margin. A new beginning, so to speak. A 4X return, or 400% is not
unheard of in Forex. I mean it stands to reason that if you can lose
400%, then you can make 400% too. It will probably take a but longer
than before though (yes I did 500% before) but hopefully these losses
have turned me into a more prudent trader.
- the numbers were mixed. We got a really good NFP number of 195K BUT we
also got a bad unemployment rate of 7.6. It's not exactly a stalemate
but it makes the QE taper outlook just as confusing as before.
- as I had mentioned before the NFP, it appeared as though the EUR might
reverse taking out those who shorted it. Well lo and behold it didn't drop as anticipated given the pre NFP movement. Because of the data above it dropped, but not that much, in fact I am sort of cheering it on to take out 1.28. So far we just hit 1.2805 and we are at 1.2840 as I write.
Of course its just one hour post NFP so it would be interesting
to see just what will happen before closing. Would still hope to see a drop through 1.28 so I can feel better about going long. But the market is so tame compared to this afternoon. Seems that many traders still have that 4th of July buzz but action may pickup again in a couple
of hours.
Thats about it for now. I need to go back and continue monitoring and
scalping when I can.
Well for starters, the darn positioning took out EUR/USD long resulting
in a ()_*((&#(Q&!#$$ closeout.
To get back to where I was a few hours back, I need to make 4X what I
have now.
That's the bad news.
The good news is:
- it freed up a chunk of funds that I can freely trade without worrying
about margin. A new beginning, so to speak. A 4X return, or 400% is not
unheard of in Forex. I mean it stands to reason that if you can lose
400%, then you can make 400% too. It will probably take a but longer
than before though (yes I did 500% before) but hopefully these losses
have turned me into a more prudent trader.
- the numbers were mixed. We got a really good NFP number of 195K BUT we
also got a bad unemployment rate of 7.6. It's not exactly a stalemate
but it makes the QE taper outlook just as confusing as before.
- as I had mentioned before the NFP, it appeared as though the EUR might
reverse taking out those who shorted it. Well lo and behold it didn't drop as anticipated given the pre NFP movement. Because of the data above it dropped, but not that much, in fact I am sort of cheering it on to take out 1.28. So far we just hit 1.2805 and we are at 1.2840 as I write.
Of course its just one hour post NFP so it would be interesting
to see just what will happen before closing. Would still hope to see a drop through 1.28 so I can feel better about going long. But the market is so tame compared to this afternoon. Seems that many traders still have that 4th of July buzz but action may pickup again in a couple
of hours.
Thats about it for now. I need to go back and continue monitoring and
scalping when I can.
Pre NFP thoughts and apprehensions
The EUR/USD has been flirting with the downside since this morning.
Despite falling over 100 pips yesterday post Draghi, there has been very
little attempt to stage a rebound.
There are two ways to interpret this. One is to conclude that the EUR
will break 1.28 tonight post NFP and drop like a rock, or it can be a
way to make traders think it will do so, get them to short the Euro
before promptly reversing and making a break to the upside.
From what I have seen in these past few months of very curious trading
behavior, I have a feeling that it might be the latter.
Ideally though I would opt to sit this one out due to the critical
nature of this particular release (more on this at a later post) but I
have an open long position in EUR so I have to buckle down and weather
the storm tonight. I am seriously considering hedging with a small short
as well so that in case my long is taken out, it won't be a total loss.
At this point its close to T minus 240 minutes.
Scary.
Despite falling over 100 pips yesterday post Draghi, there has been very
little attempt to stage a rebound.
There are two ways to interpret this. One is to conclude that the EUR
will break 1.28 tonight post NFP and drop like a rock, or it can be a
way to make traders think it will do so, get them to short the Euro
before promptly reversing and making a break to the upside.
From what I have seen in these past few months of very curious trading
behavior, I have a feeling that it might be the latter.
Ideally though I would opt to sit this one out due to the critical
nature of this particular release (more on this at a later post) but I
have an open long position in EUR so I have to buckle down and weather
the storm tonight. I am seriously considering hedging with a small short
as well so that in case my long is taken out, it won't be a total loss.
At this point its close to T minus 240 minutes.
Scary.
Thursday, July 4, 2013
More than 100 PIPS!
The Euro dropped more than 100 pips on Draghi's press conference. Seems
like some people made a lot of money at other peoples expense again.
The movement seemed to be a bit out of sync with reality. Many analysts
even stated that a dovish ECB is bearish for the Euro.
Reminds me of that scene in "A Good Year" where Russell Crowe
manipulated the market to make a quick profit.
like some people made a lot of money at other peoples expense again.
The movement seemed to be a bit out of sync with reality. Many analysts
even stated that a dovish ECB is bearish for the Euro.
Reminds me of that scene in "A Good Year" where Russell Crowe
manipulated the market to make a quick profit.
Post ECB Rate Decision Carnage
Wow. The ECB decided to keep rates unchanged so there wasn't much
movement. Then Mario Draghi opens his mouth and the Euro drops 90 pips!
I was almost taken out by this carnage. Terrible volatility that can
really wipe you out. Be careful out there.
movement. Then Mario Draghi opens his mouth and the Euro drops 90 pips!
I was almost taken out by this carnage. Terrible volatility that can
really wipe you out. Be careful out there.
Tuesday, July 2, 2013
Wednesday market assessment
So far its been a relatively well behaved market but as many analysts
are now pointing out, today and the day after the 4th of July will bring
their own fireworks into the market.
We have some data for release before the holidays which will have a big
impact on the USD. This is considered a precursor to the NFP coming up
on Friday. For novice traders like myself, the NFP or New Farm Payrolls
is a big event that brings major volatility to the market. It can bring
substantial profits but by the same token, it can also bring massive
losses.
So beginners and those who have little experience in trading highly
volatile markets are advised to trade this using demo accounts first.
That ensures that you have the experience (and stomach) to tackle wild
market movements. Demo accounts are key to the proper preparation of a
budding forex trader. They are free and you can use them as well as a
way to select your broker since brokers have different trading
platforms. It is important to pick one that will enable you to trade
effectively because some systems might end up slowing you down which can
affect your trading adversely. Remember, demo accounts are a VERY
IMPORTANT tool for the new forex broker. Use them.
are now pointing out, today and the day after the 4th of July will bring
their own fireworks into the market.
We have some data for release before the holidays which will have a big
impact on the USD. This is considered a precursor to the NFP coming up
on Friday. For novice traders like myself, the NFP or New Farm Payrolls
is a big event that brings major volatility to the market. It can bring
substantial profits but by the same token, it can also bring massive
losses.
So beginners and those who have little experience in trading highly
volatile markets are advised to trade this using demo accounts first.
That ensures that you have the experience (and stomach) to tackle wild
market movements. Demo accounts are key to the proper preparation of a
budding forex trader. They are free and you can use them as well as a
way to select your broker since brokers have different trading
platforms. It is important to pick one that will enable you to trade
effectively because some systems might end up slowing you down which can
affect your trading adversely. Remember, demo accounts are a VERY
IMPORTANT tool for the new forex broker. Use them.
Sunday, June 30, 2013
Thoughts before markets open July 1
3 1/2 hours to market open.
This week promises to be another cliff hanger with so much important data and events. From the starting block I expect volatility to be high and as one analyst put it, the Asian sessions which were previously low key have been quite volatile from the time the NZ market opens.
So let's all be careful out there and as always, do your homework before trading. This isn't gambling or a game of chance. All your moves should be well thought out ones.
This week promises to be another cliff hanger with so much important data and events. From the starting block I expect volatility to be high and as one analyst put it, the Asian sessions which were previously low key have been quite volatile from the time the NZ market opens.
So let's all be careful out there and as always, do your homework before trading. This isn't gambling or a game of chance. All your moves should be well thought out ones.
Saturday, June 29, 2013
Glad to be here
Thanks to the Toywizard, I now have a little soap box on the web.
While I am excited at the prospect of sharing my experiences with Forex, I am also a bit apprehensive about whether it will be noticed at all. The prospect of disappointing readers is a very real one but then that comes with the territory whenever one speaks or writes in public.
I am new at this and I am truly a novice at Forex even after 5 years of involvement. So bear with me and let's go on and explore Forex through a laypersons eyes.
While I am excited at the prospect of sharing my experiences with Forex, I am also a bit apprehensive about whether it will be noticed at all. The prospect of disappointing readers is a very real one but then that comes with the territory whenever one speaks or writes in public.
I am new at this and I am truly a novice at Forex even after 5 years of involvement. So bear with me and let's go on and explore Forex through a laypersons eyes.
Who is the Forex Scribe?
The Forex Scribe was exposed to the wild and wonderful world of Forex trading more than 5 years ago when he was commissioned to write about Forex trading. While the Forex Scribe was well versed in the financial world as well as world economics, the retail Forex trading segment was largely unknown.
And during the span of 5 years, the Forex Scribe went on to study the Forex market while writing articles about it. Eventually, he went into trading with demo accounts and several years back, began gradually trading with real money.
No the Forex Scribe is not a rich trader, not even close. BUT he is a veteran of many margin closeouts, wrong decisions and some right ones. It's been a roller coaster ride, but the learning experience makes it worth it. Everyday, until today, the Forex Scribe learns something new because despite being in Forex for almost half a decade, he feels as though he is still a novice at it.
The purpose of this blog is to share his experiences with forex. Hopefully on a daily basis but knowing how hectic trading can be, several posts per week would be a more realistic expectation. The Forex Scribe is no expert but that is why he decided to blog about. To offer an alternative view and opinion about the market, from someone who is for all intents and purposes, a layman. By doing so, it his hope that he can help his fellow laypersons get a grip on what the Forex Market is all about and how one can navigate safely through these sometimes treacherous waters.
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