Range trading Euro US

Asian markets are holding back with no significant developments in Europe. A sense of euphoria was around the Spanish bailout. But the PM's comment at a press conference doesnt imply that the bailout is coming this weekend. So the good news is fading out. Euro US is range trading. If the Euro breaks the 1.3 mark, expect positive movement, but lets wait and watch

Short the Aussie dollar

Did you catch the Reserve bank of Australia's announcements today? Well if you havent seen it have look here. I quote from the news release at the RBA website" Key commodity prices for Australia remain significantly lower than earlier in the year, even though some have regained some ground in recent weeks. The terms of trade have declined by over 10 per cent since the peak last year and will probably decline further, though they are likely to remain historically high.

Financial markets have responded positively over the past few months to signs of progress in addressing Europe's financial problems, but expectations for further progress remain high. Low appetite for risk has seen long-term interest rates faced by highly rated sovereigns, including Australia, remain at exceptionally low levels. Nonetheless, capital markets remain open to corporations and well-rated banks, and Australian banks have had no difficulty accessing funding, including on an unsecured basis. Share markets have generally risen over recent months.

In Australia, most indicators available for this meeting suggest that growth has been running close to trend, led by very large increases in capital spending in the resources sector. Consumption growth was quite firm in the first half of 2012, though some of that strength was temporary. Investment in dwellings has remained subdued, though there have been some tentative signs of improvement, while non-residential building investment has also remained weak. Looking ahead, the peak in resource investment is likely to occur next year, and may be at a lower level than earlier expected. As this peak approaches it will be important that the forecast strengthening in some other components of demand starts to occur.

 

The news release further added: 

Interest rates for borrowers have for some months been a little below their medium-term averages. There are tentative signs of this starting to have some of the expected effects, though the impact of monetary policy changes takes some time to work through the economy. However, credit growth has softened of late and the exchange rate has remained higher than might have been expected, given the observed decline in export prices and the weaker global outlook.

At today's meeting, the Board judged that, on the back of international developments, the growth outlook for next year looked a little weaker, while inflation was expected to be consistent with the target. The Board therefore decided that it was appropriate for the stance of monetary policy to be a little more accommodative.

Here is another newsreport that supports the AUD short trade (Sourde: FXstreet): J.Foley, Senior Currency Strategist at Rabobank, comments that Aussie fundamentals have been worsening as of late, along with disconcerting results in the Asian giant. And if we add that market chat still expects the RBA to ease further before year ends, the panorama for the AUD does not look precisely rosy. “On top of that, the sharp drop in Australian bond yields over the past year or so means that the AUD has lost another prop. That said, while we will continue to look for opportunities to short the AUD, we would warn that AUD/USD may not offer the greatest scope for movement”.

If you look at the support and resistance levels for the Aussie dollar according to FX street here is what they are saying:

S3	S2	S1	R1	R2	R3
1.0249	1.0275	1.0300	1.0385	1.0411	1.0437

Ok, so whats the trade im going to be running-Short the Aussie dollar, watch the trade as you go there is a lot of scope for the Aussie dollar to fall! if you ook at the charts, last year the Aussie dollar was trading at 0.96617 level. Not saying it will go that low, but the RBA wants the dollar to soften to boost exports, and this rate cut is a step in that direction.

Happy shorting of the AUD!

Trade idea around US dollar Non Farm payroll

So, I have been so busy that I have had time to do Forex trading. Need to get back, ASAP. Anyways, had some time today so looked up the Non Farm payroll today and got a trading idea/tip, try it out and let me know how it goes ( please follow my blog).

BTW the US NFP is going to be announced in 2.5 hours or 2030 hours Singapore time.

Ok so here is my  trade idea is: USD NFP If Actual NFP is greater than 160K, then go Long USDJPY

SL=30 pips TP=30 pips.**

I did some quick reading before we arrived at the above (btw, the article has nothing to d with the trading idea)

Some reading on the NFP-source: bkassetmanagement.com)

FX: Now Onto Payrolls….

With the European Central Bank’s monetary policy meeting now behind us, it is time to focus on the U.S. non-farm payrolls report. In some ways, investors are already thinking about payrolls because today’s strong rally in equities and currencies can be largely attributed to better than expected reports on the labor market. Economists initially anticipated a sharp pullback in job growth after seeing non-farm payrolls rise 163k in July but after the latest reports, a number of banks have upgraded their NFP forecasts. More specifically, job cuts eased in the month of August according to Challenger Grey & Christmas while companies added more workers to their payrolls according to ADP. While the ADP report has had a poor record of tracking payrolls, it has been more accurate forecasting the direction of payroll growth. Economists had only been looking for a 140k rise and instead, ADP reported a 201k increase in workers last month. Jobless claims also fell to its lowest level in 4 weeks and most importantly the employment component of ISM non-manufacturing rose to its highest level since April.

According to these leading indicators for non-farm payrolls, job growth could surprise to the upside but not so fast! The main argument for weaker payroll growth is the uptick in jobless claims, which is worrisome. Also, while the employment component of ISM non-manufacturing has a strong correlation with non-farm payrolls, it failed to accurately forecast the uptick in July. The index actually fell from 52.3 to 49.3 that month which means that the rebound seen today to 53.8 could be snapback from prior levels. Consumer confidence has also been mixed with the Conference Board reporting the largest decline in sentiment since October, which contrasts with the increase in the University of Michigan report. Currently economists are looking for payroll growth to slow to 130k, down from 163k the prior month. Based on the other labor market reports, there’s reason to believe that job growth could surprise to the upside but fall short of exceeding the 163k rise reported for the month of July.

Non-farm payrolls is one of those economic reports that can cause tremendous volatility for the forex markets and this month’s number is particularly important because it can determine whether or not the Federal Reserve eases next week. When the Fed Chairman last spoke in Jackson Hole, he did not commit to any changes in monetary policy but made a strong case for more stimulus. At the time, many people believed that he wanted to wait for another non-farm payrolls report before making a decision to ease. If payrolls grow by more than 130k, the central bank could opt to postpone easing but if it rises less than 100k, then QE3 or changes to the extended period language in the FOMC statement could be in play.

See the article here

Happy trading!

(**disclaimer: this is my personal thought, and I am not responsible for any outcome, please use your own discretion as any outcome from this trade is not my responsibility)

Forex and Intra day trading

Happy new year folks. I was doing some research today and came across a good blog : http://forexintradaytrading.blogspot.com/2011/08/forex-brokers-spread-comparison.html One of the other intresting things I discovered is live spread comparason for various brokerages and market makers: http://www.fxintel.com/ This lets you compare the spreads while trading and lets you take a call.

Another interesting tool is on good old Oanda:
Study a chart of the latest market activity to identify forex trends. This chart is a consolidated view of economic news, blog commentary, forex rates, OANDA spreads, and technical indicators. Use the filter field to search for specific news items.:http://fxtrade.oanda.com/analysis/forex-market-tracker


Explains all complicated PMI and other market data in a nice way to make sense http://fxtrade.oanda.com/analysis/infographics/


BTW my calls for today for intra day trading only ( maximum of 20 pips):

 USDCAD short
Euro USD long
AUD USD long

Happy trading

European Central Bank announcement and why you shouldn't trade today

So I have often heard that people who trade in forex, take breaks from trading. This helps them become better traders ( I am going to try this, because as a small trader myself I feel compelled to go in and trade). I guess this is the maturity that comes with time. Dont trade when the conditions are not right. I am also working on my trading plan ( I have concluded this is a WIP) but I need to have a draft plan in place soon.

Anyways coming to the point on the ECB announcment, I was watching the press conference, listening intently to ECB president Mario Draghi, now going by what the media outlets have been feeding people like me I was expecting a big bazooka', as they were talking about deflation and how they will take steps to control it.

As you can see, there is going to be no 'bazooka' the markets are still for the lack of a better word screwed up. I am day trading, but if the EURO breaks up there will be financial chaos. The sovereign debt may be a countries problem, but isnt the European union suppose to be a union so that they start functioning as one currency. I am no economist, but if these guys will continue to push nationalistic agendas and not address the issues at hand, they will plummet the world in a financial crisis which I belive will make the 2008 financial meltdown seem like a Sunday picnic, with tea and cucumber sandwiches.

Il aso was thinking, before every meltdown there may be a symbolic big boy that dies, look at Bear Stearns, Lehman brothers. Now we have MF mutual. Not as huge, but big, same drama and public enquiry. Could this be the tell tale sign before the domino effect starts? ( I have a shudder going down my spine as I write this).

Anyways Looking to see whats going to happen this evening in Europe as the leaders meet to talk. One advice though, dont trade today, when a big announcement is happening as the movement in the currency prices can wipe out small traders like me  ( and you if you are reading this)

Happy trading folks!

The becoming of a forex trader- Bad calls

Bad call on trades

Yesterday had to be worst trading day for me. I Lost close to 1800 dollars on Euro GBP and Aud US. I guess I didnt read the market right. Aud US has to be my favorite pairmade money on USD INR and GBP AUD

I think I have heard a lot of times, dont trade when you can read. I learnt it the hard way yesterday. I am going to stay off trading and statr trading after Franco German summit tom. I have to become super successful in trading as I belive its going to be a means to fulfilling a lot of my dreams. Anyways more from my journey as a forex trader later. Oh yeah! before I sign off, I am going to go for a seminar on Saturday to see how to trade better, expect a full report and strategies they share.

BTW, if you like what I am saying, follow my blog and tell me what you want to hear on forex and living in Singapore and I shall oblige.

Till later...

Forex trading and me

 Forex trading and me

For those of you who know me, know I have been a PR guy all my life, started in India, now living in Singapore. Anyways, for the longest time like everyone else, I too wanted to make money. Tired regular SIP’s in mutual funds, which are good, but nothing to write home about. Saving cash in fixed deposits ( yawn!) boring as hell and takes forever to make money.

So I was on the lookout for avenues to start making money I went about my mundane life trying to balance work-work balance and trying to get some life in there. Low and behold one day we get an opportunity to work on a forex trading client, www.oanda.com , That I believe was start of good things. I had to do a lot of research to understand what the hell-this industry and client was all about.

It was then I understood the difference between ECN or a broker and market makers like Oanda. Seemed nice, so what is the catch? Hmm days passed by, as I serviced the account little by little more information started coming through. Almost six month passed and I was talking to my mate Jagan, telling him about Forex trading. SO I kinda procrastinated ( i sometimes do that).

While I wasted time doing rubbish things ( read life and job) thousands of dollars were being made and lost. I use to see adds in papers saying make millions etc. and I thought to myself, “ what fucking crapshit, if people could make so much money, everyone would quit their job and do this. Fucking conmen, I am sure there is a catch to it.” 

I continued to let it be, not doing anything about it, Jagan in the meantime bought a book on Forex and started reading it, and we both decided that we should open a play account with good old Oanda, which we did. Boy oh boy, good choice. In the interim we ( my friend Jagan, Inseeyah and yours truly) went for one of those get rich quick seminar, to see what its all about.

Now they were trying to peddle some courses etc. but the key take away was this, Forex trading works. So I am now going to share my journey in this cool and exciting business that I am going after. The reason I am making it public is, everyone should benefit from this so if you are interested, please do follow my updates