We just opened a long position in the EUR/USD pair @ 1.46616
Our Stop Loss is at - 170 @ 1.44916 with an ultimate target of 1.5
Wednesday, September 24, 2008
New Longer Term Trade Entry
We are shorting the USD/CHF @ 1.08885 with a wide stop of -200 pips @ 1.10885. Our ultimate target is 1.04885 +400 pips
We Have Entered a Few Longer Term Trades
We have entered into a few longer term, 18-72 hours, trades.
The bailout plan is not going to get rubber stamped, as is, and that is spooking the markets. We believe the Pound and the Aussie dollar could benefit from this, and we think they still might have a nice pop left in their rally. We have some wide stops on these trades as well as wide ultimate targets, although we will take profits, if any, before targets are hit if we see any change of trend.
So we’ve opened the following positions:
Long
GBP/USD @ 1.8595 with a wide stop off 200 pips at 1.8395 Target 1.90
GBP/JPY @ 197.10 with an even wider stop of 300 pips at 194.10 Target 202.10
AUD/USD @ 0.8382 with a stop of -150 pips @ 0.8232 Target 0.8642
The bailout plan is not going to get rubber stamped, as is, and that is spooking the markets. We believe the Pound and the Aussie dollar could benefit from this, and we think they still might have a nice pop left in their rally. We have some wide stops on these trades as well as wide ultimate targets, although we will take profits, if any, before targets are hit if we see any change of trend.
So we’ve opened the following positions:
Long
GBP/USD @ 1.8595 with a wide stop off 200 pips at 1.8395 Target 1.90
GBP/JPY @ 197.10 with an even wider stop of 300 pips at 194.10 Target 202.10
AUD/USD @ 0.8382 with a stop of -150 pips @ 0.8232 Target 0.8642
Monday, September 22, 2008
Destroying the Dollar...........Maybe the Amero is for Real
They talk about "breaking the buck", well you could call the Bush Presidency an attempt to "Destroy the Dollar".
Bush had the responsibility to monitor those in charge of the economy. He's gone thru a few Treasury Secretaries, each time one of them told him he had to raise more money(read taxes) to support the wars, they were fired.
Anybody with a brain could've realized the explosion in real estate was being fueled by imprudent lending, over supply of artificially cheap money, and rampid fraud. The government knew the GSA's needed tighter overseeing 4 years ago, but the administration was too busy chasing Saddam Hussein.
Now after the money we're going to have to print to cover this bailout gets into circulation, what do you think is going to happen to the dollar? The more supply there is of something, even a currency, the less its worth. The future of the dollar is very murky. They is a very real possibility that US Sovereign debt, may actually get downgraded by the major rating agencies.
The Amero?..............No there's an idea George.
Bush had the responsibility to monitor those in charge of the economy. He's gone thru a few Treasury Secretaries, each time one of them told him he had to raise more money(read taxes) to support the wars, they were fired.
Anybody with a brain could've realized the explosion in real estate was being fueled by imprudent lending, over supply of artificially cheap money, and rampid fraud. The government knew the GSA's needed tighter overseeing 4 years ago, but the administration was too busy chasing Saddam Hussein.
Now after the money we're going to have to print to cover this bailout gets into circulation, what do you think is going to happen to the dollar? The more supply there is of something, even a currency, the less its worth. The future of the dollar is very murky. They is a very real possibility that US Sovereign debt, may actually get downgraded by the major rating agencies.
The Amero?..............No there's an idea George.
Friday, September 19, 2008
The Carry Trades We Recommeded......
Last Evening we suggested opening two carry trade positions. By definition a carry trade lasts many days or weeks, so one can take advantage of rollover interest.
I still believe in the premise of the trades, but the trader in me forced me to close the positions at +330 pips on the AUD/JPY, we entered at 85.21 and we exited and 88.51.
On the NZD/JPY trade we took 200 points at 73.30 we had entered at 71.30. We just could pass up +500pips in 12 hours. That being said, we would recommend taking some profit on both trades but holding at least a small position longer term.
I still believe in the premise of the trades, but the trader in me forced me to close the positions at +330 pips on the AUD/JPY, we entered at 85.21 and we exited and 88.51.
On the NZD/JPY trade we took 200 points at 73.30 we had entered at 71.30. We just could pass up +500pips in 12 hours. That being said, we would recommend taking some profit on both trades but holding at least a small position longer term.
What a Week...........
The US administration and Congress are trying to Save the World's Financial Markets from a Total Collapse.....
Those that follow this blog know that I don't follow or trade news, to me its all built into the daily charts, simple I trade, ...............but I feel I have to chime in on the events of this week.
These are just my personal thoughts and speculations.
***********************************************************************************
What was witnessed in the last seven days will not be witnessed again by anyone alive today.
THAT, is how big this is/was.
In my humble opinion, we were days away from a Global Banking Meltdown that would have seen many major banks and corporation simply disappear into bankruptcy.
A Summary if you will.......
On top of Bear Stearns deal, the historic monetary policy moves by the Federal Reserve Bank's Board of Governors and Ben Bernanke, and last but CERTAINLY not least, the federal bail out of Fannie Mae and Freddie Mac..............we add the following events of this week for your reading pleasure......
Lehman is gone
Merrill Lynch is now owned by BofA
Morgan Stanely is about to merge with some other bank......
That's three of the top five Wall St Bankers, gone or part of other entities.
AIG, which it turned out, was THE weak link, is now owned by the Fed/Treasury
....and we, in all probability, averted at least one MAJOR Money Center Bank (read Citi, in my opinion), from failing by the end of next week.
Not one of those Lehman Holdings bankruptcies, where the subsidiaries are allowed to be sold off..........................
Nope, this would have been announced on a Friday after 6PM Pacific Time, and which ever bank it was, would have re-opened with "federal" in it's name on Monday morning. (Remember FDIC insurance covers only personal accounts up to $100,000.00 per depositor/bank. If I have four $100K accounts, $400k in total, I only get back $100k................and businesses lose everything.)
We know it would not have been JPMorgan Chase, the Fed is already partner's with them on the Bear Stearns theft,....uhhh., I mean "deal".
Bank of America just bought Merrill so that's not it.
WellsFargo is a solid bank, not in any real trouble, so its not them.
Maybe it would have been foreign, like UBS.........possibly
My bet is still on Citi though, and THIS IS NOTHING BUT MY OPINION AND ITS BASED ON NOTHING OTHER THAN PURE SPECULATION ......hello, big brother, I'm talking to you.
Breaking the Buck
The sign that something had to be done immediately came late Tuesday/early Wednesday when the Reserve Primary Fund, one of the world's largest Money Market Funds BROKE THE BUCK!!!!!.
To "Break the Buck" essentially means that the value of your money market fund at the bank was reduced from $1.00/dollar deposited, to in this instance $0.97. That's essentially devaluing the USD by 3%.
I don't care what any one says, the "breaking of the buck" by more Money Market Fund Managers this coming week, would have begun a run on the major banks.
Money Market depositors are usually happy with their small but "guaranteed" interest from Money Market accounts, but they never stop to think that ......................hey it is a fund, ..................its value could go down.
Their next statement would have shown the value of their Money Market Savings accounts go DOWN, .........negative NOMINAL INTEREST RATES.
We've had negative real interest rates for a while but negative nominal, where it costs you money to keep your money in a Money Market Fund.
Had the US Government sat on their hands, in my opinion, the runs on major banks, throughout the world would have been apocalyptic.
I think there would have been a world financial collapse so fast and so swift that many of the larger economies of the world would have been thrown into a decades long depression, in my humble opinion.
I noticed something was weird early in the week when my ECNs were quoting me ridiculously wide spreads most FX Pairs, relative to last week
Why?..............it turns out some big FX dealers (read Global Banks) had backed out of the market, either partially or completely, to see what was going to happen. Which ever bank makes a big market in the Pound was probably one of the Interbank dealers that sat out, because I was getting 12 pip spreads and Cable, 18 on the Guppy and more on Sterling/Swiss.
What does all this mean to FX traders next week..............more on that later.
Whoosh, sorry for the long post.
Forex - 99% Discipline
DISCIPLINE: to train by instruction and exercise; drill
I can not stress enough the importance of being extremely disciplinedwhen trading the FX market. Without it I guarantee you you will lose a lot of money. Discipline means sticking to your trading plan. You did make a plan, I mean you planned your trade, right?
Taking the time to plan your trades is part of preparation. To prepare however, you need a very good understanding of the FX markets and the tools needed to analize it, that's enlightenment. If your are "enlightened" then the last piece of the puzzle is patience. Use your enlightenment to prepare you plan. Be patient and wait for the signal you are looking for and enter the market only when your plan calls for. If you are disciplined enough to learn prepare and wait for your signal to hit you will be profitable.
Discipline, Enlightenment, Prepararation, Patience-----DEPP
The KingMakers and The Billion Dollar President
I came across this little tidbit and it got me thinking......which can at times be a dangerous this :).........
So by my back of the napkin calculations Obama has raised about $400 million so far.......lets add another 75% for the general election, so that's $700 million........lets round up to $1Billion USD......I don't know, I just like that word "Billion"...........but even $700 million to become president must be some kind of record.
But here's the kicker, Obama has and will not take any Government matching funds, he's going to do this all without government money!!!!!
Anyway, it occurred to me that the Obama Campaign really is the first campaign to at least begin to leverage the power the the web and especially the whole Web 2.0 concept. Certainly, there are other more ideological reason for their prowess in fundraising, but his campaign used the web as the tool it is.
They media has always talked about the so called "political backroom king makers" but not so much this time around, why?
Ill tell you why, because the KingMakers are Bill Gates, Steve Jobs, Larry Elliston and the rest of those who have grown information technology exponentially over the last decade............they are "the KingMakers" and the mass media just still doesn't get it.
Read the rest of the article
Biden's candidacy ended abruptly after the Iowa caucuses in early January. After he finished his bookkeeping for the failed campaign, his fundraising from donors totaled about $9.9 million. Obama, in his continuing quest for the White House, has raised 39 times that much.
So by my back of the napkin calculations Obama has raised about $400 million so far.......lets add another 75% for the general election, so that's $700 million........lets round up to $1Billion USD......I don't know, I just like that word "Billion"...........but even $700 million to become president must be some kind of record.
But here's the kicker, Obama has and will not take any Government matching funds, he's going to do this all without government money!!!!!
Anyway, it occurred to me that the Obama Campaign really is the first campaign to at least begin to leverage the power the the web and especially the whole Web 2.0 concept. Certainly, there are other more ideological reason for their prowess in fundraising, but his campaign used the web as the tool it is.
They media has always talked about the so called "political backroom king makers" but not so much this time around, why?
Ill tell you why, because the KingMakers are Bill Gates, Steve Jobs, Larry Elliston and the rest of those who have grown information technology exponentially over the last decade............they are "the KingMakers" and the mass media just still doesn't get it.
Read the rest of the article
The Realities of trading the Spot Forex Market
Q:Is it really possible to make money on a consistent basis trading the FX market? A: Absolutely
Q:Is it probable? A:Absolutely not!!
In fact, 95% of people who open FX trading accounts loose most or all of their money. The question is, why? We started this blog to help people avoid the mistakes that cause some traders to lose huge amounts of money and even in some cases end up in bankruptcy, trading the FX market.
We want to help those thinking about putting money in the FX market, or those who are already trading and struggling, to keep their money and grow their investment rather than lose it all because of bad trading methods/trading psychology or get the "get rich quick" delusion.
If you currently are not a full time forex trader, and have a full time job, our advice to you is to either subscribe to a simple, good signal service, for a monthly fee, and trade their signals or give your money to a "Managed Fund" and let the "pros" grow your money. But be careful not to deal with a 'boiler house". Be sure to investigate each funds performance, how many years they ahve been in operation and who runs it. Make sure you do your due diligence before giving anyone money to invest for you.
Q:Is it probable? A:Absolutely not!!
In fact, 95% of people who open FX trading accounts loose most or all of their money. The question is, why? We started this blog to help people avoid the mistakes that cause some traders to lose huge amounts of money and even in some cases end up in bankruptcy, trading the FX market.
We want to help those thinking about putting money in the FX market, or those who are already trading and struggling, to keep their money and grow their investment rather than lose it all because of bad trading methods/trading psychology or get the "get rich quick" delusion.
If you currently are not a full time forex trader, and have a full time job, our advice to you is to either subscribe to a simple, good signal service, for a monthly fee, and trade their signals or give your money to a "Managed Fund" and let the "pros" grow your money. But be careful not to deal with a 'boiler house". Be sure to investigate each funds performance, how many years they ahve been in operation and who runs it. Make sure you do your due diligence before giving anyone money to invest for you.
79.5% Per Year Interest On Your Money
............is the return you would make if you were able to grow your FX account by 5% a month. That is by no means impossible, infact its very possible. It equates to this.
That's right, an average of 25 NET pips per day would grow an account from $100,000.00 to $179,560.00 in 12 months using only 1XMARGIN , cash in other words. You would only need your margin if you chose to be in more than 1 trade at a time. That's 125 NET pips per week......that can easily be accomplished with as little as 1 correctly researched and prepared for trade.
So why do so many traders lose money, In our opinon its all about patience. Waiting for the right setup on the right pair at the right time. Preparation is so important in forex trading, but is probably the least talked about subject.
Look for signals, no matter how long or short your chart time frame is, that have a very high percentages of being correct and real, not "ghosts" or false signals and stick to those signals. Be picky, people think there are only 2 position you can have in any market, long or short. But there is a third........the sidelines, not in the market at all, a time to prepare for the next great trading opportunity you can find.
Preparation, a subject for many posts to come.
That's right, an average of 25 NET pips per day would grow an account from $100,000.00 to $179,560.00 in 12 months using only 1XMARGIN , cash in other words. You would only need your margin if you chose to be in more than 1 trade at a time. That's 125 NET pips per week......that can easily be accomplished with as little as 1 correctly researched and prepared for trade.
So why do so many traders lose money, In our opinon its all about patience. Waiting for the right setup on the right pair at the right time. Preparation is so important in forex trading, but is probably the least talked about subject.
Look for signals, no matter how long or short your chart time frame is, that have a very high percentages of being correct and real, not "ghosts" or false signals and stick to those signals. Be picky, people think there are only 2 position you can have in any market, long or short. But there is a third........the sidelines, not in the market at all, a time to prepare for the next great trading opportunity you can find.
Preparation, a subject for many posts to come.
Remember Long Term Capital Management?
This is one of THE BEST articles I've ever read, regarding the recent history of Government Bailouts.
Does any one remember Long Term Capital Management?
I do.........they were the biggest failure, at that time, of an investment fund in US history........anyway, the NY FED summoned officials from 14 different banks and brokerages to an emergency meeting in September of 1998, fearing another "market meltdown crisis". The next day LTCM or at least its creditors were bailed out of at least some of their risk.
Bear Stearns was on of the banks who had much to lose............infact they were LTCM's prime broker, they cleared all of their trades.......and the were the only one of the 14 major creditors who voted against the government bailout.............the knew more than the rest.
Read this article, you'll understand a more about our special form of "Capitalism"
Does any one remember Long Term Capital Management?
I do.........they were the biggest failure, at that time, of an investment fund in US history........anyway, the NY FED summoned officials from 14 different banks and brokerages to an emergency meeting in September of 1998, fearing another "market meltdown crisis". The next day LTCM or at least its creditors were bailed out of at least some of their risk.
Bear Stearns was on of the banks who had much to lose............infact they were LTCM's prime broker, they cleared all of their trades.......and the were the only one of the 14 major creditors who voted against the government bailout.............the knew more than the rest.
Read this article, you'll understand a more about our special form of "Capitalism"
Some of Our Posts from WP
Forex Carry Trade Ideas #1
Hi everyone,
We are currently looking to go long a number of JPY denominated pairs, now that its been revealed that the meltdown is starting to hit Japan also.
AUD/JPY
We are buyers here but with a stop @ 81.00 that's 425 pips away from where we are now, so buy only a portion of what you budget for. Take a "less than cash" position size ( 100k acct value take position < href="http://forexreality.wordpress.com/2008/09/18/forex-carry-trade-idea-2forex-carry-trade-idea-2">Forex Carry Trade Idea #2
NZD/JPY
FXCM does not offer this pair so we trade it at anther FCM.
We are buyers here also, and again the stop is very wide so take a Small position......... no more than "cash" no margin, (if your account value is $50K take no more than a $50k position, 5 mini lots)
Currently the pair is trading at 71.30 on the ask. The stop level we think should apply is the recent low of 67.22, so a stop at 66.90 is recommended, thats -440 pips so AGAIN small position, less than cash is best.
We are in at 71.30 Stop Loss at 66.90 -440 Position size 33% of cash
Remember you'll be earning Rollover interest which will bring down your basis.
Lehman Brothers............Time to Fail
According to the New York Times and otlher sources, Lehman Brothers Hold Corp. will file for bankruptcy protection sometime tonight in Federal Court in downtown Manhattan. Sec. Of Treasury Paulson has said adamantly that taxpayer money will not be used to save Lehman, this time, if you listen to Paulson, its not too big to fail.
In my opinion the question instead should be; is it [Lehman] "too big to save", especially with Merrill now offering itself to Bank of America, AIG scrambling for cash and Washington Mutual, the biggest thrift in the US, being rumoured to be on the brink of failure, one has to wonder why the Treasury is saving any bullets it has left.................maybe they see a bigger problem on the horizon? While all this is happening, the man than controls the money in the biggest economy in the world, Ben Bernanke is oddly quiet........?
Hi everyone,
We are currently looking to go long a number of JPY denominated pairs, now that its been revealed that the meltdown is starting to hit Japan also.
AUD/JPY
We are buyers here but with a stop @ 81.00 that's 425 pips away from where we are now, so buy only a portion of what you budget for. Take a "less than cash" position size ( 100k acct value take position < href="http://forexreality.wordpress.com/2008/09/18/forex-carry-trade-idea-2forex-carry-trade-idea-2">Forex Carry Trade Idea #2
NZD/JPY
FXCM does not offer this pair so we trade it at anther FCM.
We are buyers here also, and again the stop is very wide so take a Small position......... no more than "cash" no margin, (if your account value is $50K take no more than a $50k position, 5 mini lots)
Currently the pair is trading at 71.30 on the ask. The stop level we think should apply is the recent low of 67.22, so a stop at 66.90 is recommended, thats -440 pips so AGAIN small position, less than cash is best.
We are in at 71.30 Stop Loss at 66.90 -440 Position size 33% of cash
Remember you'll be earning Rollover interest which will bring down your basis.
Lehman Brothers............Time to Fail
According to the New York Times and otlher sources, Lehman Brothers Hold Corp. will file for bankruptcy protection sometime tonight in Federal Court in downtown Manhattan. Sec. Of Treasury Paulson has said adamantly that taxpayer money will not be used to save Lehman, this time, if you listen to Paulson, its not too big to fail.
In my opinion the question instead should be; is it [Lehman] "too big to save", especially with Merrill now offering itself to Bank of America, AIG scrambling for cash and Washington Mutual, the biggest thrift in the US, being rumoured to be on the brink of failure, one has to wonder why the Treasury is saving any bullets it has left.................maybe they see a bigger problem on the horizon? While all this is happening, the man than controls the money in the biggest economy in the world, Ben Bernanke is oddly quiet........?
Hello, We'd Like to Introduce Ourselves.....
We are the forex reality blog here on blogspot. We've been blogging at wordpress for a little while and we've decided to give blogspot a try as well. We'll be posting informative and unique, we think, analysis of the major FX pairs , trading, carry trades, technical anaysis and more! We hope you'll be part of our online forex trader's community both here on the blog and at the member site.
So Stay Tuned ........We look forword to seeing you in the very near future.
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