long term EURO/DOLLAR PLAY

[loza]

if you are certain to the pair to go to parity, what long term play would you do? Forex would be perhaps a problem as a Euro fake rally might shake a lot of Dollar longs out. Also is there a better play like EURO/SWISS - swiss being the better than USD?
I am thinking on actually opening a forex account but I may play the futures or future options.
Any ideas?

 

[kxvid]

You can trade with very low/ no leverage. In the interim you would have to pay the negative swap for being short euro. As long as parity happens in the next few years you would make money. Everybody expects the ECB to lower rates so the swap costs should decrease anyway.

 

[southbeach4me]

There are no certainties in anything. You cannot predict the future, if you do you, will get burned. Easier to play the short- mid term by looking at what price action it exhibits and waiting for Euro go back up and bounce back down off of 55ema or 200ema and go back under major resistance point for short oppportunity. (as seen here in the daily chart). In your case you should use NO leverage as it seems you lack forex trading experience to know how to properly use leverage without being shaken out. The purple line is the 55 ema....the white line is 200ema... look for euro to come near or bounce off one of those lines, then use MACD to find declining upward momentum as well as developing bearish candlestick on the daily to enter your short. My 2 cents....


** I have traded EURO, GBP( spot), and ES futures for over 3 yrs fulltime...

One more thing, stay away from bucketshop FX brokers. I use MB Trading(NO!, I do NOT work for them!) but they are a true ECN and I have never been screwed over with frozen orders or huge misquotes like you willl find with most other brokers, good luck to you...

 

[Martinghoul]

Quote from loza:
if you are certain to the pair to go to parity, what long term play would you do? Forex would be perhaps a problem as a Euro fake rally might shake a lot of Dollar longs out.

This makes no sense. If you're certain that EUR goes to parity vs USD, why do you care about fake rallies, shake outs or anything else? Also, if you're certain, why do anything other than going short EURUSD?

Also is there a better play like EURO/SWISS - swiss being the better than USD?
I am thinking on actually opening a forex account but I may play the futures or future options.
Any ideas?

There's all sorts of possibilities. You can sell EURCHF, EURGBP or many other pairs. It all depends on your view of how the world economies are going to evolve. But, again, if you're certain about EURUSD, why do anything other than EURUSD?

Quote from kxvid:
You can trade with very low/ no leverage. In the interim you would have to pay the negative swap for being short euro. As long as parity happens in the next few years you would make money. Everybody expects the ECB to lower rates so the swap costs should decrease anyway.

This also makes no sense. What is "negative swap"? Do you mean EURUSD carries negatively? Furthermore, nobody expects the ECB to lower rates and, even if they did, your carry would get more negative, i.e. worse, rather than better.

 

[loza]

Because you can be 100% right but leverage will kill you....
Still, would futures or forex play out better? Forex you can take a position almost close to cash - Still I think better it would be to trade in IB swiss account. That way it is double whammy,swiss plus usd/euro spread....

Quote from Martinghoul:

This makes no sense. If you're certain that EUR goes to parity vs USD, why do you care about fake rallies, shake outs or anything else? Also, if you're certain, why do anything other than going short EURUSD?

There's all sorts of possibilities. You can sell EURCHF, EURGBP or many other pairs. It all depends on your view of how the world economies are going to evolve. But, again, if you're certain about EURUSD, why do anything other than EURUSD?

This also makes no sense. What is "negative swap"? Do you mean EURUSD carries negatively? Furthermore, nobody expects the ECB to lower rates and, even if they did, your carry would get more negative, i.e. worse, rather than better.

 

[Martinghoul]

Quote from loza:
Because you can be 100% right but leverage will kill you....
Still, would futures or forex play out better? Forex you can take a position almost close to cash - Still I think better it would be to trade in IB swiss account. That way it is double whammy,swiss plus usd/euro spread....

That's then just a question of sizing the trade correctly.

When you say futures, do you mean FX futures? If so, for purposes of this conversation, it doesn't really matter which you choose. As to CHF, it's not without risks of its own.

 

[loza]

Yes, I am sure you are right...still having ability to open an account based in CHF with IB and be able to trade FX futures (currency pairs) is awsome. They are the big options player for futures in Europe.....

Quote from Martinghoul:

That's then just a question of sizing the trade correctly.

When you say futures, do you mean FX futures? If so, for purposes of this conversation, it doesn't really matter which you choose. As to CHF, it's not without risks of its own.

 

[Vulcan Trader]

I'd go with OANDA because you can trade a micro account and even trade with small size down to 1 penny. I mean it ......you can trade with a lot size of 1 penny. Can't get burned with that. Be encouraged.