A few questions about forex trading (and not trading haha)

[Saltynuts]

So I saw someone say something like maybe it was a bit easier to pick long term trends in futures markets because the cental banks generally TELL you what they are going to be doing or at least try to be doing. I think it was Mavrick.

Is it the case that one can pretty much accurately forecast which direction a currency pair will go over the long term?

if so, this might suit me well in a few ways. I would really love to divercify into other markets. that is, into currencies that might be likely to appreciate against the US dollar over long periods of time.

Lets say one feels the swiss francs will appreciate against the US dollar for months or years. over time, i would take some of my dollars and buy francs. but not hapazary - i would try and buy when appropriate based on my technical analyses - when there a pullback that followed the right pattern. but use technicals that relate to over bought and over sold conditions, RSI, and stuff like that - stuff that would get me over time hopefully a much lower price point.

So you (hopefully) learn some good trading in those pairs. particulerly good entrence points

then the long term view changes, and you reverse course. now you have to over time undue what you did before. you do the same thing, just the other direction.

Does this sounds like its any potential?

 

[NoodleStrudle]

That's exactly how you do it. After all the TA members on this site do it exactly the same way and according to them they are all incredibly successful.

I do it slightly differently but that is aside the point. In currencies you may wanna read up on financing charges, rolls, central bank intervention, and just a quick question to you. Why do you think not everyone just holds long term longs or shorts if something is gonna happen almost surely.

So I saw someone say something like maybe it was a bit easier to pick long term trends in futures markets because the cental banks generally TELL you what they are going to be doing or at least try to be doing. I think it was Mavrick.

Is it the case that one can pretty much accurately forecast which direction a currency pair will go over the long term?

if so, this might suit me well in a few ways. I would really love to divercify into other markets. that is, into currencies that might be likely to appreciate against the US dollar over long periods of time.

Lets say one feels the swiss francs will appreciate against the US dollar for months or years. over time, i would take some of my dollars and buy francs. but not hapazary - i would try and buy when appropriate based on my technical analyses - when there a pullback that followed the right pattern. but use technicals that relate to over bought and over sold conditions, RSI, and stuff like that - stuff that would get me over time hopefully a much lower price point.

So you (hopefully) learn some good trading in those pairs. particulerly good entrence points

then the long term view changes, and you reverse course. now you have to over time undue what you did before. you do the same thing, just the other direction.

Does this sounds like its any potential?

 

[padutrader]

yes generally there are very long term trends. for example i know the usd will strengthen against my country's currency the INR,Indian Rupee over the long term so you can or anyone can position themselves to benefit.
there is the carry trade too where you choose countries with big interest rate differential...i have no idea how it works but you can google it

 

[padutrader]

That's exactly how you do it. After all the TA members on this site do it exactly the same way and according to them they are all incredibly successful.

I do it slightly differently but that is aside the point. In currencies you may wanna read up on financing charges, rolls, central bank intervention, and just a quick question to you. Why do you think not everyone just holds long term longs or shorts if something is gonna happen almost surely.

to answer your question i think because it needs a lot of patience...you can short my country's currency against the usd but you have to hold for 5-10 years to get some benefit

 

[NoodleStrudle]

Really? I am willing to put my hand into the fire to claim that you would be bankrupt before year end if you did so. Why? Well that is for you to figure out. The answer lies in my original post

to answer your question i think because it needs a lot of patience...you can short my country's currency against the usd but you have to hold for 5-10 years to get some benefit

 

[tomorton]

In some ways its easier to follow long-term price trends. On that sort of scale, we can assume fundamentals are driving the price progression, its not just a technical correction, susceptible to reversal without warning.

As an analogy, its easy to see the uptrend in ambient daytime temperature starting from late winter, through spring into summer. So its low risk to take a "long" long-term position on temperature in April. However, on the 30th April, at 11:00am, its very hard to conclude whether temperature will more probably be 0.01 degrees higher or lower in 15 minutes' time.

So much for short-term trades being less risky.

 

[Saltynuts]

That's exactly how you do it. After all the TA members on this site do it exactly the same way and according to them they are all incredibly successful.

I do it slightly differently but that is aside the point. In currencies you may wanna read up on financing charges, rolls, central bank intervention, and just a quick question to you. Why do you think not everyone just holds long term longs or shorts if something is gonna happen almost surely.

This is a good question one I was wondering myself. Maybe traders are thinking this,way but to volume of ibternational flow just swamp them?

Ideas?

Thanks!

 

[Saltynuts]

to answer your question i think because it needs a lot of patience...you can short my country's currency against the usd but you have to hold for 5-10 years to get some benefit

tradergod, why would it take 10 years to get some benefit? I thought you could use very high leverage in the forex markets. Thanks!

 

[Saltynuts]

Really? I am willing to put my hand into the fire to claim that you would be bankrupt before year end if you did so. Why? Well that is for you to figure out. The answer lies in my original post

Noodle, im not quite folliwing - you thing going short indian currency with USD or something similar will make on bankrupt in short order?

thanks!

 

[maximumpossiblesuffering]

Reply to your post is inline, below:

"Saltynuts, post: 4648148, member: 500195"]So I saw someone say something like maybe it was a bit easier to pick long term trends in futures markets because the cental banks generally TELL you what they are going to be doing or at least try to be doing. I think it was Mavrick.
Certain stocks with great management and growth stories can have better long term trends than futures. Don't fight the Fed or a country's Central Bank combined with a confirming trend is great advice.

Is it the case that one can pretty much accurately forecast which direction a currency pair will go over the long term?
Like any other long term trade, you have a fundamental basis for the trade and manage it according to technicals in an attempt to maximize profits and hopefully reduce risk.

if so, this might suit me well in a few ways. I would really love to divercify into other markets. that is, into currencies that might be likely to appreciate against the US dollar over long periods of time.
It is important to consider if the trade you are contemplating truly represents diversification as some currency pairs such as AUDJPY and CADJPY are usually correlated with US equity indexes.

Think in terms of money flows from risk to safe haven currencies and vice versa. Safe haven currencies include USD, JPY, and CHF (Swiss Franc). The best safe haven currency during "flights of safety" depend on the reason behind it. Global inflation and fiscal responsibility concerns may favor the "Swissy". High geopolitical tensions may favor the "Buck". Global economy concerns may favor the Yen.

Lets say one feels the swiss francs will appreciate against the US dollar for months or years. over time, i would take some of my dollars and buy francs. but not hapazary - i would try and buy when appropriate based on my technical analyses - when there a pullback that followed the right pattern. but use technicals that relate to over bought and over sold conditions, RSI, and stuff like that - stuff that would get me over time hopefully a much lower price point.
Yield differential is an important theme in long term currency price movements. Last time I looked, Switzerland had negative interest rates and in the United States rates are "high" with an outlook for higher rates still. Relative economic outlooks between countries, including inflation is also important to follow as it influences Central Bank policies. Other times geopolitics and fiscal issues can dominate trading.

What would you say is the current trend of the Swiss Franc versus the other major currencies is right now?

So you (hopefully) learn some good trading in those pairs. particulerly good entrence points
A while back, I mentioned to you about babypips.com. They have a free, very concise and fairly comprehensive trading course on currencies. The information in this course is applicable to trading other markets as well.

then the long term view changes, and you reverse course. now you have to over time undue what you did before. you do the same thing, just the other direction.

Does this sounds like its any potential?
Capital, knowledge, risk management, and discipline go a long way in maximizing one's returns in the financial markets. The acquisition of these ingredients implies that hard work and trading experience are necessary.