Hi guys, i will be trying to post on every week trading opportunity and ideas. I hope some people would put some comment and discuss on it.
Basically i play 7 major currency: AUD NZD JYP GBP EUR USD CHF(seldom touch)
I will be discussing on the movement of each currency and my view of its trend for the week.
AUD had been going up trend for the pass 1 month. Currently the short term trend is looking at a bullish direction if it break the 0.7272 which is the highest point that AUD had gone up on Jan after the economical downturn.
But if it doesn't break that barrier, it could be a starting of a downtrend which would be similar on Jan til Feb.
The focus will be on the RBA interest rate decision on TUE 07/04/09. If you look at Jan data, the downtrend started after 07/01/09. Hmm maybe it is just a coincidence.
Personally i would be more bias toward bearish AUD.
NZD is always simillar to AUD movement. It had been increasing over the pass 5 weeks, furthermore there isnt much economical news on NZD this week.
Meanwhile, a Bloomberg News survey shows that 7 of the 13 economists polled forecast the RBNZ to lower the benchmark interest rate by another 50bp to 2.50%, while the remaining participants are calling for a 25bp rate cut to 2.75%.
I am expect not much movement on NZD or it should somehow follow AZD trend.
There could be some pullback in NZD/USD since it remains overbought.
JYP was the worst performing G10 currency for the pass week's trade. Japan enconomy doesnt look good as japan jobless rate hit 2 year hight, in addition household spending are down for the 11th straight months.
Most likely that Bank of Japan will keep it rate at 0.1% throughtout the year.
But the yen may be vulnerable to a higher technical corrections.
The thing to watch here is the potential impact that the bank’s meeting minutes could have on risk appetite, as indications that BOJ officials have judged that the current economic situation is deteriorating more rapidly than previously anticipated could weigh on the Nikkei, but lift the Japanese yen purely as a result of flight-to-safety.
GBP close last week at 2 months high against USD and 5months high against JYP. But the United Kingdom the worst performing economy in the industrialized world. Furthermore the pass week reports does reflect much of a recovery. In order to see an improvement to the economy and markets, the central bank’s and government’s efforts would be considered a key turn for the better for the pound. Such convictions must also be won by data. The consumer confidence report on Tuesday will gauge the consumer’s contribution to growth. Industrial production and visible trade will gauge the influence of two other major components of GDP
On Thurs 09/04/2009, Bank of England will have an interest rate decision. Even thought currently the interest rate is near zero (0.5%) , it wouldn't be a surprise if there is another interest rate cut. Keep watch on a pullback or bearish GDP this week.
EUR rally with the interest rate decision cut of 25bp which is lower then the expect 50bp. ECB policy officials clearly see the disadvantage of rates near zero, but they are running out of options and time. In his public address, President Trichet suggested the current rate was not necessarily a floor and that the central bank would announce its decision on pursuing unusual policy tools next month. This may include quantitative easing, purchasing additional private debt or any other number of possibilities; but for the euro trader, it will mean conditions in the Euro Zone are just as bad as they are in the United States and United Kingdom. If the upcoming economical data still doesn't show sign of stabilizing, the ECB left with no choice could further cut the interest rate.
In addition EUR wasn't able to make new high, most probability that EUR is still in a bearish condition.
Sunday, April 5, 2009
Saturday, April 4, 2009
TUE 04/07/2009 04:30 GMT RBA Interest Rate Decision
Interest rate decision had been affecting the market movement.
The next RBA interest rate decision will the on TUE 04/07/2009 0430GMT.
Over the pass few week the AUD/USD had be railing up pushing it back to 0.7153.
The AUD/USD could continue its rise if the central bank decided that the interest rate have reach its bottom. Currently the interest rate is at its 45-year low of 3.25%.
In long term expectation, AUD/USD clearly is on a bullish outlook. But if RBA would hold its rate and decided that it reaches its bottom, AUD/USD would break its support line of 0.7272 and continue its rally upwards.
On the other hand, if the economic outlook does look promising, and the trade condition is deteriorating, RBA would cut its interest rate to boost lending rate. High possible of a 25bp or more interest cut.
AUD/USD average pip movement is less then 200pips per day.
I dont expect big movement like 100pips when the news is release. Try to set a profit of around 50pips and 25pips trailing stop. If movement before the news is release is more then 30 pips i advise to not trade this event.
The next RBA interest rate decision will the on TUE 04/07/2009 0430GMT.
Over the pass few week the AUD/USD had be railing up pushing it back to 0.7153.
The AUD/USD could continue its rise if the central bank decided that the interest rate have reach its bottom. Currently the interest rate is at its 45-year low of 3.25%.
In long term expectation, AUD/USD clearly is on a bullish outlook. But if RBA would hold its rate and decided that it reaches its bottom, AUD/USD would break its support line of 0.7272 and continue its rally upwards.
On the other hand, if the economic outlook does look promising, and the trade condition is deteriorating, RBA would cut its interest rate to boost lending rate. High possible of a 25bp or more interest cut.
AUD/USD average pip movement is less then 200pips per day.
I dont expect big movement like 100pips when the news is release. Try to set a profit of around 50pips and 25pips trailing stop. If movement before the news is release is more then 30 pips i advise to not trade this event.
Friday, April 3, 2009
March US Non Farm payroll
US Non farm payroll is one of the most widely anticipated reports on the US economic calendar, the Employment Situation is a timely report that gives a picture of job creation, loss, wages and working hours in the United States. Data in the report relies on the Household Survey and the Establishment (or Payroll) Survey. While the Household Survey is based on the interviews to US households, the Establishment Survey queries business establishments, making it the preferred source of data. The Employment Situation's has many significant figures such as: Change in Non Farm Payrolls, Unemployment, Manufacturing Payrolls, and Average Hourly Earnings.
Yesterday the market raily after the G20 meeting and the ECB interest cut. As optimism spread across investor. Honestly i believe it is all these are just speculation, they are trying to make the market move up before the real news the non farm payroll is release.
All eyes are on the Non Farm Payroll, as the reality will sink in since on friday.
In preparation for trading this top event risk, we need to put it into the context of speculation and consider the impact this employment gauge could have in altering expectations for growth in the US compared to its global counterparts. The more important for forex market price action, though, is that fundamental US data does not tend to have a logical impact on the currency. Instead, risk trends remain in the driver’s seat so traders must consider the impact of NFPs on risk appetite. Indeed, if we see that NFPs fall more than expected or the unemployment rate climbs above 8.5 percent, the news could trigger losses in risky assets like stocks, trigger flight-to-safety, and thus, lift the US dollar, especially against high-yielding currencies like the Australian dollar but perhaps even the euro. On the flip side, if job losses and the unemployment rate don’t climb quite as much as anticipated, the news could spark enough optimism to boost demand for stocks and forex carry trades, and subsequently lead the greenback lower.
Yesterday the market raily after the G20 meeting and the ECB interest cut. As optimism spread across investor. Honestly i believe it is all these are just speculation, they are trying to make the market move up before the real news the non farm payroll is release.
All eyes are on the Non Farm Payroll, as the reality will sink in since on friday.
In preparation for trading this top event risk, we need to put it into the context of speculation and consider the impact this employment gauge could have in altering expectations for growth in the US compared to its global counterparts. The more important for forex market price action, though, is that fundamental US data does not tend to have a logical impact on the currency. Instead, risk trends remain in the driver’s seat so traders must consider the impact of NFPs on risk appetite. Indeed, if we see that NFPs fall more than expected or the unemployment rate climbs above 8.5 percent, the news could trigger losses in risky assets like stocks, trigger flight-to-safety, and thus, lift the US dollar, especially against high-yielding currencies like the Australian dollar but perhaps even the euro. On the flip side, if job losses and the unemployment rate don’t climb quite as much as anticipated, the news could spark enough optimism to boost demand for stocks and forex carry trades, and subsequently lead the greenback lower.
Thursday, April 2, 2009
Basic of forex
I believe that the basic in trading forex is all about money management and trading psychology
What is money management?
One of my friend's girlfriend was interested in investing money on me. But she is worry that i will lose all her money. I simply told her that if i keep losing, it will take around 5months for me to ALMOST lose it all.
What i really mean is that i only use a small percent of the capital to trade each time. The way of forex is lose little win big. So with good money management you can keep ur capital safe.
Simply i give a very normal example. Any strategy, no matter what the success rate is, either 80% or even 100%. I will take that all strategies have the success rate of 50%. So every time you click on your trade to sell or buy there will be a 50/50 chance you will win.
If every time you lose you only lose 5%, and when you win you take 10% of your capital. Out of 10 trade, win 5 lose 5, win 50% lose 25%. In the end you still earn a 25% increase in your capital.
In conclusion to be successful in trading, you must be able to manage you capital first.
Next i would like to talk about Trading psychology.
This is the most difficult and simplest skill in trading. Why is it so? Cause it is always easy to say but doing, it is difficult.
FEAR GREED these are the common problem with every trader.
-Fear of losing
-Greed of more profit (using more then 5% of capital)
In addition revenge..
As a trader, you must always have the mindset that you are investing, not gambling. Never think of revenge. A lost is a lost.
Honestly i am still very bad in this area. On feb the trending market fail. I got desperate, i went out to learn other strategy. I think my mindset become gambling instead of invest.
I dont regret it, as lesson learn.
I am still researching of combining technical analysis and fundamental analysis together.
What is money management?
One of my friend's girlfriend was interested in investing money on me. But she is worry that i will lose all her money. I simply told her that if i keep losing, it will take around 5months for me to ALMOST lose it all.
What i really mean is that i only use a small percent of the capital to trade each time. The way of forex is lose little win big. So with good money management you can keep ur capital safe.
Simply i give a very normal example. Any strategy, no matter what the success rate is, either 80% or even 100%. I will take that all strategies have the success rate of 50%. So every time you click on your trade to sell or buy there will be a 50/50 chance you will win.
If every time you lose you only lose 5%, and when you win you take 10% of your capital. Out of 10 trade, win 5 lose 5, win 50% lose 25%. In the end you still earn a 25% increase in your capital.
In conclusion to be successful in trading, you must be able to manage you capital first.
Next i would like to talk about Trading psychology.
This is the most difficult and simplest skill in trading. Why is it so? Cause it is always easy to say but doing, it is difficult.
FEAR GREED these are the common problem with every trader.
-Fear of losing
-Greed of more profit (using more then 5% of capital)
In addition revenge..
As a trader, you must always have the mindset that you are investing, not gambling. Never think of revenge. A lost is a lost.
Honestly i am still very bad in this area. On feb the trending market fail. I got desperate, i went out to learn other strategy. I think my mindset become gambling instead of invest.
I dont regret it, as lesson learn.
I am still researching of combining technical analysis and fundamental analysis together.
Wednesday, April 1, 2009
Feb lost
Even since the start of the economic crisis on 2008 jun July, a obvious downward trend had been carrying everyone til 2009 Jan.
I believe it had been easy to trade forex for this period as obvious trend is spotted easily.
On Fed, the market condition changes, as a result technical analysis does not work. Personally i lost around 1.5k USD.
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