Nice read overall, I like your writing style. Keep going (and if you care, pls elaborate on this stupidity thing).
ns
sKaLpZ Currency Trading For Beginners
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Nice read overall, I like your writing style. Keep going (and if you care, pls elaborate on this stupidity thing).
ns
I am keeping up with it and I know many others do but just doesn't feel the need to reply so early in the game. Fascinating writing, extremely helpful, and thanks a lot sKaLpZ for doing this for us.
Hello Adrian12,
For the last 60-to-90-days the forex (EUR/USD in particular) has been beset about by a number of factors.
I think this is a key reason why we saw EUR/USD ascend 1600-points straight up from around September 2004 to the beginning of 2005.
That is, the market focused on a single item, that being the US trade deficit.
The other thing the market looked at with blinders on is the US current account.
These became the "twin evils" prompting all the inside and informed market players to "SELL THE USD AND SELL IT NOW!"
Only one problem with that scenario: Every coin has two sides.
Blocking out this small bit of wisdom wiped out a lot of forex accounts as the price turned violently and heaved itself down 600-points in a sudden, single 6-day period, followed by another drastic drop of 300-points.
Could you imagine being one of the ones who had your money fully committed to buying the euro / selling the dollar at that time?
The prevalent trading advice and sentiment regarding EUR/USD was "buy the euro on dips!"
Yes, so "buy the euro on dips" of 20-points, 30-points, 50-points... while the entire market CRASHED 900-points as market visionaries saw the euro climbing to 1.4500.
Those same trading luminaries traded "reality" while "market reality" cleaned their clock.
These major currency strategist heads in the news included top names from Citibank, UBS and Barclays Bank.
And, if anyone should know which way EUR/USD is going these guys would....
Smarter money does not forsake sound trading rules and principles that were blatantly dumped by the masses in a 3-month knee-jerk reaction mania period that drove the price of EUR/USD to 1.3665.
Currently the bid price hovers at 1.28670.
As there were in September 2004, there are a number of components and factors influencing EUR/USD's rate, not just US interest rate hikes.
Taking all of this into consider may be better for a trader than to simply bet long USD due to one of any contributing items effecting the EUR/USD exchange rate price.
sKaLpZ
sKaLpZ,
Tell us why should a retail trader trade currencies over futures? Is there something that is so alluring about currencies except the leverage.
Tell us why should a retail trader trade currencies over futures? Is there something that is so alluring about currencies except the leverage.
Hi BlackMonday,
I know a couple guys who are good currency traders. I met one guy who is good at trading indexes!
There are over 6 billion people on the planet.
A couple guys who can trade forex well and one guy who can trade indexes?
You can meet 100s of supermarket checkers who are good at their job and see 1000s of truck drivers who drive great!
Why retail traders "should" trade forex versus futures? Number one, I'm not qualified to answer that.
I am qualified to write common sense on Elite Trader until Baron bans me.
I think a person "should" get a good-paying, steady career, not try trading their money in misbehaving markets.
Maybe people "should" get their heads examined before laying down their cash in a "trade" be it in forex or futures.
You know, not everyone belongs in the markets, BlackMonday. Even if they trade successfully for a period of time.
Just like some people write because they have to. Others sing because they must. Others burn inside to run marathons (26.2 miles) - I call it surviving.
Dean has to run 300-miles non-stop (read no sleeping). I met Dean live, by the way, at a book-signing - he's awesome.
If one loves trading they will trade and progress, be it futures or forex. If they are just doing either one to try to make a living or make money they may wake up to a shock sooner than later: Their money missing.
I think people should do what they can. Because they want to. Because they should. Because they can.
Kindest regards,
Sam
Im short EUR @129.6 & had a nice friday & just want to be greedy.. :> I had a nice run from 133.4 down to 1.32 the last rate hike week. Which was my first big winner. Maybe after 1 month of newbee losses. hoping for the same type of run next 3-4 days to get out at 126 would be $$. Ive only been trading eur for 3 months full time so Im not sure how its acted during other rate hikes. But you have to sleep with one eye open all night. I trade with a program called Buttontrader Its made me $$ so far. It has nice walking sounds so I can hear money moving while im trying to sleep. The products Ive been concentrating on are EUR ES QM ZN. if EUR keeps dropping will we see stop losses triggered & accelerate the drop.. Its hard to be a euro bull & the run ups seem to be weak. like the Eurozone Economy.. I did notice JPY had a nice day.Is it cause of yuan relavuation thing? And I think only EUR sold off on fri. My other positions for monday will be short QM short ZN long ES short EUR Ill see what happens. If anyone gets into this game please study & practice because the losses can be HUGE. I know I was there for a few weeks.. But I did not panic & got ahead.. Now I want to stay ahead.. good luck to all..
From Bloomberg:
Buffett, the world's second richest-man... has been betting against the dollar since 2002 on concern that widening U.S. trade and budget deficits will erode its value.
Berkshire made $1.63 billion on his forward contracts in the fourth quarter when the dollar slumped. The contracts are agreements to purchase foreign currencies on a future date at the current price.
Berkshire kept slightly more than $21 billion in foreign currency forward contracts through the first quarter as the dollar rose 4 percent against a basket of six currencies. Buffett said he would buy more contracts if it weren't for the skepticism of Vice Chairman Charles Munger.
Buffett, admired around the world for his investing prowess, also said Berkshire maintained a bet against the U.S. dollar of more than $21 billion even after it cost the company about $310 million in the first quarter.
Correct me if I'm wrong. Basically if you looked over Buffett's shoulder onto his forex trading platform you'd see $21 billion in his Balance indicator, with -$310,000,000 in his Unrealized Profit/Loss indicator.
Warren's in a drawdown.
That's "market reality," guys.
Well, well, well, the great Warren Buffett's been sucked in chasing the glittering Coinz. Keep comin', Mr. B, I'm waiting for you.
Whether or not the phrasology used "Berkshire made $1.63 billion on his forward contracts in the fourth quarter" means he closed his trades and actually booked the profits, or if he was just in the black $1.6 billion for a time before he was sucked under is an unknown, at least from that article.
If Adrian12 gets his(her?) 1.2600 number hit, Buffett's going to be in deep blank. Maybe to the tune of over $1,000,000,000 in the red.
Warren, if you're reading, this is what your Unrealized P/L indicator will look like:
-$1,000,000,000
You'll be heartily welcomed into the ranks of Baffoons who trade "reality" instead of trading market reality. Into the ranks of those who should have stayed out of the forex.
The market, and guys like me, through trading will eat you and your measly $21 billion: In the forex your de-financed carcass may just get tossed into the trash like a candy wrapper where it belongs.
These are dangerous waters, Warren. This is not the stock market, this is the world.
It doesn't always go the way you think it should.
The forex is a nasty bitch who has a bitter habit of chomping guys down who don't know how to get her to purr. She has long claws and even deeper teeth. And they're all sharp. Designed to neatly part a fool from his money.
You should cut your losses, boy, and get on back to the stock market. Better than being served up as Forex Stew.
At the 1.2600 level, if the market decides the euro is worth beans, the other economies falter more, the USD interest rate looks better and better, concerns and worries over USD instruments of investments in general greatly subside, and if the market decides a "trend" has set-in positive dollar-wise, USD gains may extend.
IF THAT HAPPENS... and we return to the 1.2100s even dropping into the 1.1700s... perhaps the market may just go a little nuts like it did the last quarter of 2004, only in the opposite direction pushing EUR/USD briefly into the 1.1300s.
If Warren and Bill are still short the USD with their mighty fortunes when speculation of the Chinese yuan floating kicks in hard, and a bad currency storm hits, if they have not pared their losses, both of them may be filing for bankruptcy as the EUR/USD zooms 10 cents down past 1.0000 in a turn-around shocking the globe.
Hint: Sweet currency nightmares are made of such shocks. The forex is not a safe place.
The article indicates that Buffett (and we can presume Mr. Bill, the software mogul) is short the USD against "a basket of currencies."
Well, I don't know about his "basket of currencies" but I am short the USD against the Australian dollar, the euro, Swiss franc, the British pound, the Canadian dollar, the New Zealand dollar and the Japanese yen.
Seven currencies.
A continued rally in the USD won't hurt me though because my system is structured to earn money in drawdowns. I have other trade directions in over 15 major cross rates that I am constantly opening and closing trades in and booking profits.
Using a series of money management techniques I'm able to keep myself out of trouble should the USD continue strengthening and actually make money due to my USD long positions I have in a number of pairs.
This is because I know what I'm doing in the forex. Can Warren and Bill say the same thing?
If they can't, they may be sharing their money with guys like Adrian and me.
You know what they, you shouldn't put all your eggs in one basket.
LMAO,
Sam
Buffett, the world's second richest-man... has been betting against the dollar since 2002 on concern that widening U.S. trade and budget deficits will erode its value.
Berkshire made $1.63 billion on his forward contracts in the fourth quarter when the dollar slumped. The contracts are agreements to purchase foreign currencies on a future date at the current price.
Berkshire kept slightly more than $21 billion in foreign currency forward contracts through the first quarter as the dollar rose 4 percent against a basket of six currencies. Buffett said he would buy more contracts if it weren't for the skepticism of Vice Chairman Charles Munger.
Buffett, admired around the world for his investing prowess, also said Berkshire maintained a bet against the U.S. dollar of more than $21 billion even after it cost the company about $310 million in the first quarter.
Correct me if I'm wrong. Basically if you looked over Buffett's shoulder onto his forex trading platform you'd see $21 billion in his Balance indicator, with -$310,000,000 in his Unrealized Profit/Loss indicator.
Warren's in a drawdown.
That's "market reality," guys.
Well, well, well, the great Warren Buffett's been sucked in chasing the glittering Coinz. Keep comin', Mr. B, I'm waiting for you.
Whether or not the phrasology used "Berkshire made $1.63 billion on his forward contracts in the fourth quarter" means he closed his trades and actually booked the profits, or if he was just in the black $1.6 billion for a time before he was sucked under is an unknown, at least from that article.
If Adrian12 gets his(her?) 1.2600 number hit, Buffett's going to be in deep blank. Maybe to the tune of over $1,000,000,000 in the red.
Warren, if you're reading, this is what your Unrealized P/L indicator will look like:
-$1,000,000,000
You'll be heartily welcomed into the ranks of Baffoons who trade "reality" instead of trading market reality. Into the ranks of those who should have stayed out of the forex.
The market, and guys like me, through trading will eat you and your measly $21 billion: In the forex your de-financed carcass may just get tossed into the trash like a candy wrapper where it belongs.
These are dangerous waters, Warren. This is not the stock market, this is the world.
It doesn't always go the way you think it should.
The forex is a nasty bitch who has a bitter habit of chomping guys down who don't know how to get her to purr. She has long claws and even deeper teeth. And they're all sharp. Designed to neatly part a fool from his money.
You should cut your losses, boy, and get on back to the stock market. Better than being served up as Forex Stew.
At the 1.2600 level, if the market decides the euro is worth beans, the other economies falter more, the USD interest rate looks better and better, concerns and worries over USD instruments of investments in general greatly subside, and if the market decides a "trend" has set-in positive dollar-wise, USD gains may extend.
IF THAT HAPPENS... and we return to the 1.2100s even dropping into the 1.1700s... perhaps the market may just go a little nuts like it did the last quarter of 2004, only in the opposite direction pushing EUR/USD briefly into the 1.1300s.
If Warren and Bill are still short the USD with their mighty fortunes when speculation of the Chinese yuan floating kicks in hard, and a bad currency storm hits, if they have not pared their losses, both of them may be filing for bankruptcy as the EUR/USD zooms 10 cents down past 1.0000 in a turn-around shocking the globe.
Hint: Sweet currency nightmares are made of such shocks. The forex is not a safe place.
The article indicates that Buffett (and we can presume Mr. Bill, the software mogul) is short the USD against "a basket of currencies."
Well, I don't know about his "basket of currencies" but I am short the USD against the Australian dollar, the euro, Swiss franc, the British pound, the Canadian dollar, the New Zealand dollar and the Japanese yen.
Seven currencies.
A continued rally in the USD won't hurt me though because my system is structured to earn money in drawdowns. I have other trade directions in over 15 major cross rates that I am constantly opening and closing trades in and booking profits.
Using a series of money management techniques I'm able to keep myself out of trouble should the USD continue strengthening and actually make money due to my USD long positions I have in a number of pairs.
This is because I know what I'm doing in the forex. Can Warren and Bill say the same thing?
If they can't, they may be sharing their money with guys like Adrian and me.
You know what they, you shouldn't put all your eggs in one basket.
LMAO,
Sam