Boris and Kathy's FX Blog www.bktraderfx.com
11/30/2006
Today's Email Alerts
Alert # 3
GBP/USD Chart
Well the question of the day seems to be – will the GBP/USD go to 2.000? If the US data continues to deteriorate like it has been it’s certainly a strong possibility. Today’s 49 print on Chicago PMI was shocking – the first contractionary reading since 2003 and if tomorrow’s ISM follows suit the FX market will only have one thing on its mind – the coming of the US recession. Of course manufacturing is only a small part of US economy and services so far, have held their own – but no one is going to wait for a confirmation. Everyone will assume that manufacturing leads to the downside and services will follow. That why tomorrow’s ISM may be the dollar bulls last chance.
The strength of the pound therefore is really not inherent to the unit but rather a function of US weakness. In fact today’s UK retail data indicates that UK consumer may be very tired going into the Xmas season setting up the possibility of the worst UK Xmas in 25 years. But for now waiting for a turn in the pair is like waiting for Godot.
EUR/JPY Chart
Meanwhile, tonight blizzard of JPY data may be critical to setting the tone for the yen. This week’s blowout IP number put talk of a December BOJ rate hike right back on the table. The only reason for BOJ reticence is the weak state of consumption in Japan. Therefore any upside surprise to today’s labor, CPI and Household spending reports could really seal the deal and turn market sentiment squarely in yen’s favor. See the dailyfx calendar for all the details of the upcoming releases. We’ll be watching too.
Over and out.
Alert # 2 Stopped out of Short CHF/JPY
We got stopped out of CHF/JPY at 96.65 for -37 pips on each lot. It seems that the market does not want to give up on its trend.
Alert #1 Short CHF/JPY
Divergent data from Japan and Switzerland makes us want to go short CHF/JPY. Japanese Industrial Production created a whopping surprise to the upside printing 1.6% vs. -0.4% expected and put talk of BoJ rate hike in December right back on the plate. Meanwhile Switzerland most important economic statistic - the Kof index of leading economic indicators fell for the 5th month in a row suggesting that Swiss growth has peaked and the SNB may only raise once and halt.
So we want to go short CHF/JPY (Currently 96.28) Stop 96.65 T1 is 96.07 T2 is 9547
Alert # 3
GBP/USD Chart
Well the question of the day seems to be – will the GBP/USD go to 2.000? If the US data continues to deteriorate like it has been it’s certainly a strong possibility. Today’s 49 print on Chicago PMI was shocking – the first contractionary reading since 2003 and if tomorrow’s ISM follows suit the FX market will only have one thing on its mind – the coming of the US recession. Of course manufacturing is only a small part of US economy and services so far, have held their own – but no one is going to wait for a confirmation. Everyone will assume that manufacturing leads to the downside and services will follow. That why tomorrow’s ISM may be the dollar bulls last chance.
The strength of the pound therefore is really not inherent to the unit but rather a function of US weakness. In fact today’s UK retail data indicates that UK consumer may be very tired going into the Xmas season setting up the possibility of the worst UK Xmas in 25 years. But for now waiting for a turn in the pair is like waiting for Godot.
EUR/JPY Chart
Meanwhile, tonight blizzard of JPY data may be critical to setting the tone for the yen. This week’s blowout IP number put talk of a December BOJ rate hike right back on the table. The only reason for BOJ reticence is the weak state of consumption in Japan. Therefore any upside surprise to today’s labor, CPI and Household spending reports could really seal the deal and turn market sentiment squarely in yen’s favor. See the dailyfx calendar for all the details of the upcoming releases. We’ll be watching too.
Over and out.
Alert # 2 Stopped out of Short CHF/JPY
We got stopped out of CHF/JPY at 96.65 for -37 pips on each lot. It seems that the market does not want to give up on its trend.
Alert #1 Short CHF/JPY
Divergent data from Japan and Switzerland makes us want to go short CHF/JPY. Japanese Industrial Production created a whopping surprise to the upside printing 1.6% vs. -0.4% expected and put talk of BoJ rate hike in December right back on the plate. Meanwhile Switzerland most important economic statistic - the Kof index of leading economic indicators fell for the 5th month in a row suggesting that Swiss growth has peaked and the SNB may only raise once and halt.
So we want to go short CHF/JPY (Currently 96.28) Stop 96.65 T1 is 96.07 T2 is 9547
11/29/2006
Today's Email Alerts:
Alert # 3 Locking in more profits on the GBP/USD
The GBP/USD has melted down. The Beige book was neither dollar bearish or dollar bullish. We were banking on that for a bigger move to deliver a further break lower that didnt really ensue. Therefore, we want to move our stop on the second short GBP/USD lot to 1.9475, locking in a minimum of 40 points on the trade.
Alert # 2 T1 in the GBP/USD
The markets are moving fast and we hit the first target on the GBP/USD trade, 15 minutes after the release went out (+20 pips). We have moved our stop to breakeven on the second lot and we are targeting 1.9365.
Alert # 1 Reversal in the GBP/USD
US GDP numbers were very strong this moring and the US dollar is turning. Given yesterday's comments from Fed officials including Bernanke, Plosser and Poole, the Beige Book report is likely to reflect hawkish sentiment, which should extend the US dollar's reversal. The British pound has seen one of the biggest extensions which puts it at a greater risk of a reversal.
Therefore we want to short the GBP/USD at 1.9495 with a stop at 1.9525. First target is 1.9475, move the stop to breakeven once that level is reached. The second target is 1.9365.
Alert # 3 Locking in more profits on the GBP/USD
The GBP/USD has melted down. The Beige book was neither dollar bearish or dollar bullish. We were banking on that for a bigger move to deliver a further break lower that didnt really ensue. Therefore, we want to move our stop on the second short GBP/USD lot to 1.9475, locking in a minimum of 40 points on the trade.
Alert # 2 T1 in the GBP/USD
The markets are moving fast and we hit the first target on the GBP/USD trade, 15 minutes after the release went out (+20 pips). We have moved our stop to breakeven on the second lot and we are targeting 1.9365.
Alert # 1 Reversal in the GBP/USD
US GDP numbers were very strong this moring and the US dollar is turning. Given yesterday's comments from Fed officials including Bernanke, Plosser and Poole, the Beige Book report is likely to reflect hawkish sentiment, which should extend the US dollar's reversal. The British pound has seen one of the biggest extensions which puts it at a greater risk of a reversal.
Therefore we want to short the GBP/USD at 1.9495 with a stop at 1.9525. First target is 1.9475, move the stop to breakeven once that level is reached. The second target is 1.9365.
11/28/2006
Today's Email Alerts:
Alert # 2 Stopped out of USD/CHF
We got stopped out of the USD/CHF long trade for 30 pips. It came 4 pips shy of our T1 but unfortunately did not have the momentum to extend much further. We've hit 3 losers, but thankfully our losses have been controlled and we are still up 120 pips since the beginning of the month and 327 pips for the past 2 months.
Alert # 1 Long USD/CHF
Existing Home Sales have printed better than expected suggesting that Us housing may be stabilizing. After days getting pounded the US dollar is due for a bounce. We think the market may use this positive news to rally the greenback so we are going long USD/CHF (Currently 1.2070) Stop 1.2040 T 1 1.2098 T2 is 1.2147
We are using USD/CHF because its conforms to our 7 day ( in this case 8 day) fade strategy from our book.
Alert # 2 Stopped out of USD/CHF
We got stopped out of the USD/CHF long trade for 30 pips. It came 4 pips shy of our T1 but unfortunately did not have the momentum to extend much further. We've hit 3 losers, but thankfully our losses have been controlled and we are still up 120 pips since the beginning of the month and 327 pips for the past 2 months.
Alert # 1 Long USD/CHF
Existing Home Sales have printed better than expected suggesting that Us housing may be stabilizing. After days getting pounded the US dollar is due for a bounce. We think the market may use this positive news to rally the greenback so we are going long USD/CHF (Currently 1.2070) Stop 1.2040 T 1 1.2098 T2 is 1.2147
We are using USD/CHF because its conforms to our 7 day ( in this case 8 day) fade strategy from our book.
11/27/2006
Today's Email Alerts:
Alert # 2 Holding Over the Weekend
We heard from many of you and apparently most FX dealers did not honor the stops. As we've noted earlier gap openings are very rare in FX but nevertheless a fact of life. Oanda is one of the few market makers that quotes on week-ends - and they stopped us out at 1.9340 at 1:13 PM on Sunday. One of the attributes of the FX is that it is a decentralized market and every market maker has a different dealing policy.
Although these moves are rare- in the future we will try to remain flat over the week-end in order to minimize the chances of these liquidity vacuums but as traders we know that you can never fully avoid all sharp adverse moves. That's part of risk. However, rule #1 is to never let any trade become your last. Like any professional risk managers such as insurance companies, good traders cap their losses and move on to the next idea.
Alert # 1 Stopped on the Short GBP/USD
We were stopped on our short GBP/USD (-20) earlier in the day (1:13 PM EST). For those of you wondering how that's possible our dealer makes markets on the weekends - but even those dealers that do not will generally honor your stops even on gap opening such as we are having tonight. Generally, gap openings over the weekend are very rare in FX - they happen no more that 4 times a year, but tonight's price action underscores the importance of always trading with stops in order to control risk.
As for the price action, momentum rules the day as option players who sold volatility scrambled to cover their exposure and triggered yet more and more stops in the spot market Note that dollar weakness against the commodity currencies has been far more modest than its losses against the majors. That's why we think when the turn in the dollar comes we may want to take advantage of it through another USD/CAD long. For now we are sidelined
Alert # 2 Holding Over the Weekend
We heard from many of you and apparently most FX dealers did not honor the stops. As we've noted earlier gap openings are very rare in FX but nevertheless a fact of life. Oanda is one of the few market makers that quotes on week-ends - and they stopped us out at 1.9340 at 1:13 PM on Sunday. One of the attributes of the FX is that it is a decentralized market and every market maker has a different dealing policy.
Although these moves are rare- in the future we will try to remain flat over the week-end in order to minimize the chances of these liquidity vacuums but as traders we know that you can never fully avoid all sharp adverse moves. That's part of risk. However, rule #1 is to never let any trade become your last. Like any professional risk managers such as insurance companies, good traders cap their losses and move on to the next idea.
Alert # 1 Stopped on the Short GBP/USD
We were stopped on our short GBP/USD (-20) earlier in the day (1:13 PM EST). For those of you wondering how that's possible our dealer makes markets on the weekends - but even those dealers that do not will generally honor your stops even on gap opening such as we are having tonight. Generally, gap openings over the weekend are very rare in FX - they happen no more that 4 times a year, but tonight's price action underscores the importance of always trading with stops in order to control risk.
As for the price action, momentum rules the day as option players who sold volatility scrambled to cover their exposure and triggered yet more and more stops in the spot market Note that dollar weakness against the commodity currencies has been far more modest than its losses against the majors. That's why we think when the turn in the dollar comes we may want to take advantage of it through another USD/CAD long. For now we are sidelined
11/24/2006
Today's Email Alerts:
Alert # 6 Back to Short GBP/USD
We are going to try the GBP/USD short one more time, now that US traders are in. We think the combo of weak GDP and severely overbought conditions is worth one more try.
We are shorting GBP/USD (currently (1.9320) Stop 1.9340 T1 is 1.9301 T2 is 1.9272
Alert # 5 Stopped on Short GBP/USD
Momentum has just proven too strong in the GBP/USD and we are stopped at 1.9330 (-18). We are sidelined for now.
Alert # 4 Short GBP/USD on Weak GDP
Wild and crazy night in FX tonight as both euro and pound make new yearly highs, but latest UK GDP data suggests that BoE may hold off on further rate hikes as private consumption moderated markedly from 0.6% expected to 0.4%. We are going to get short here looking for some of the euphoria to wear off.
We are going short GBP/USD Currently (1.9312) stop is 1.9330. T1 is 1.9287 T2 is 1.9245
Alert # 3 Long USD/CAD Out at Breakeven
Very spiky action in thin markets tonight as traders try to gun for EUR/USD 1.3000 and USD/JPY 116.00 creating dollar weakness throughout. As a result we were taken out of rest of of our long USD/CAD at breakeven, so we are (+16) on the trade and sidelined for now.
Alert # 2 T1 Reached on Long USD/CAD
T1 was hit at 1.1418 (+16) we go breakeven on rest of trade targeting T2 1.1454
Alert #1 Long USD/CAD on Reversal
Yesterday CAD PM Harper made a speech about making Quebec a "nation" albeit a cultural one. While the political reaction was positive, traders may not be kind as it can bring back the whole notion of separatism and upheaval that has plagued Quebec-Canadian relations for the past 30 years. Combine that with oil bearish oil inventory on Wednesday and we think shorting the loonie is worth a try.
We going long USD/CAD (currently 1.1402) stop is 1.1380 T1 is 1.1418 T2 is 1.1454.
Alert # 6 Back to Short GBP/USD
We are going to try the GBP/USD short one more time, now that US traders are in. We think the combo of weak GDP and severely overbought conditions is worth one more try.
We are shorting GBP/USD (currently (1.9320) Stop 1.9340 T1 is 1.9301 T2 is 1.9272
Alert # 5 Stopped on Short GBP/USD
Momentum has just proven too strong in the GBP/USD and we are stopped at 1.9330 (-18). We are sidelined for now.
Alert # 4 Short GBP/USD on Weak GDP
Wild and crazy night in FX tonight as both euro and pound make new yearly highs, but latest UK GDP data suggests that BoE may hold off on further rate hikes as private consumption moderated markedly from 0.6% expected to 0.4%. We are going to get short here looking for some of the euphoria to wear off.
We are going short GBP/USD Currently (1.9312) stop is 1.9330. T1 is 1.9287 T2 is 1.9245
Alert # 3 Long USD/CAD Out at Breakeven
Very spiky action in thin markets tonight as traders try to gun for EUR/USD 1.3000 and USD/JPY 116.00 creating dollar weakness throughout. As a result we were taken out of rest of of our long USD/CAD at breakeven, so we are (+16) on the trade and sidelined for now.
Alert # 2 T1 Reached on Long USD/CAD
T1 was hit at 1.1418 (+16) we go breakeven on rest of trade targeting T2 1.1454
Alert #1 Long USD/CAD on Reversal
Yesterday CAD PM Harper made a speech about making Quebec a "nation" albeit a cultural one. While the political reaction was positive, traders may not be kind as it can bring back the whole notion of separatism and upheaval that has plagued Quebec-Canadian relations for the past 30 years. Combine that with oil bearish oil inventory on Wednesday and we think shorting the loonie is worth a try.
We going long USD/CAD (currently 1.1402) stop is 1.1380 T1 is 1.1418 T2 is 1.1454.
11/22/2006
Today's Email Alerts:
Alert # 2 Taking T2 on USD/CAD
USD/CAD has collapsed after CAD CPI data and we are going to bank T2 ( currently at 1.1403) +50 on the second lot of the trade. That's a total of 68 points (+18 T1 and +50 T2) on this trade.
Happy Turkey day to Americans. We'll see you next week.
Alert # 1 Taking T1 on USD/CAD
USD/CAD has finally dropped and we are going to lock in T1 at 1.1435 (+18) and go to breakeven on the trade
Alert # 2 Taking T2 on USD/CAD
USD/CAD has collapsed after CAD CPI data and we are going to bank T2 ( currently at 1.1403) +50 on the second lot of the trade. That's a total of 68 points (+18 T1 and +50 T2) on this trade.
Happy Turkey day to Americans. We'll see you next week.
Alert # 1 Taking T1 on USD/CAD
USD/CAD has finally dropped and we are going to lock in T1 at 1.1435 (+18) and go to breakeven on the trade
11/21/2006
Today's Email Alerts:
Alert # 4 Short USD/CAD
Oil prices are flirting with the $60 a barrel mark. Bad weather has disrupted oil production in Alaska while a couple of US refineries have reported outages. The weather is also getting cooler here in the Northeast, which is providing the perfect backdrop for more gains in oil prices. The US dollar - Canadian dollar currency pair is only beginning to react, but we think that more losses could be in store.
Therefore we are shorting here at 1.1453 with a stop at 1.1483. First target is 1.1433. Once that is reached, move your stop to breakeven and target 1.1375 for the second lot.
Alert # 3 Out of EUR/JPY at Breakeven
EUR/JPY has rallied above our break even stop of 151.35 so are now completely out of the trade (+13). Markets are clearly slowing ahead of the holidays and price action is very choppy, so are sidelined for now.
Alert # 2 Taking T1 on Short EUR/JPY
EUR/JPY is within 1 point of T1 at 151.22 so we are taking it here (+13) and going to breakeven on rest of trade.
Alert #1 Short EUR/JPY
Euro-zone news has been lackluster all night long with French GDP showing no growth this quarter and Italian Industrial Orders and Sales missing expectations. With all the bad news on yen already baked in we think the euro will slide more against the dollar than the yen.
We are going short EUR/JPY ( Currently 151.35) stop is a tight 151.50 T1 is 151.21 T2 is 150.88.
Alert # 4 Short USD/CAD
Oil prices are flirting with the $60 a barrel mark. Bad weather has disrupted oil production in Alaska while a couple of US refineries have reported outages. The weather is also getting cooler here in the Northeast, which is providing the perfect backdrop for more gains in oil prices. The US dollar - Canadian dollar currency pair is only beginning to react, but we think that more losses could be in store.
Therefore we are shorting here at 1.1453 with a stop at 1.1483. First target is 1.1433. Once that is reached, move your stop to breakeven and target 1.1375 for the second lot.
Alert # 3 Out of EUR/JPY at Breakeven
EUR/JPY has rallied above our break even stop of 151.35 so are now completely out of the trade (+13). Markets are clearly slowing ahead of the holidays and price action is very choppy, so are sidelined for now.
Alert # 2 Taking T1 on Short EUR/JPY
EUR/JPY is within 1 point of T1 at 151.22 so we are taking it here (+13) and going to breakeven on rest of trade.
Alert #1 Short EUR/JPY
Euro-zone news has been lackluster all night long with French GDP showing no growth this quarter and Italian Industrial Orders and Sales missing expectations. With all the bad news on yen already baked in we think the euro will slide more against the dollar than the yen.
We are going short EUR/JPY ( Currently 151.35) stop is a tight 151.50 T1 is 151.21 T2 is 150.88.
11/17/2006
Today's Email Alerts:
Alert # 3 T2 Hit on GBP/USD
We have already hit T2 on the Long GBP/USD trade banking a total of 91 pips (22 points on the first lot and 69 points on the second lot). This is a nice end to the week, have a great weekend.
Alert # 2 T1 Hit on Long GBP/USD
We got filled on T1 at 1,8882 (+22 points) . We are now at breakeven on rest targeting T2 1.8929
Alert # 1 Long GBP/USD off Weak Housing
We are correcting our time stamp on this - it should be 8:56am and not 3:20am! We got a bit too excited about sending the info out. Also, below is the spelled checked edition =)
US Housing Starts printed at their worst level this decade yet the dollar has not weakend much. We want to take this opportunity to get long GBP/USD (Currently 1.8860) Stop 1.8827 T1 1.8882 T2 is 1.8929
Alert # 3 T2 Hit on GBP/USD
We have already hit T2 on the Long GBP/USD trade banking a total of 91 pips (22 points on the first lot and 69 points on the second lot). This is a nice end to the week, have a great weekend.
Alert # 2 T1 Hit on Long GBP/USD
We got filled on T1 at 1,8882 (+22 points) . We are now at breakeven on rest targeting T2 1.8929
Alert # 1 Long GBP/USD off Weak Housing
We are correcting our time stamp on this - it should be 8:56am and not 3:20am! We got a bit too excited about sending the info out. Also, below is the spelled checked edition =)
US Housing Starts printed at their worst level this decade yet the dollar has not weakend much. We want to take this opportunity to get long GBP/USD (Currently 1.8860) Stop 1.8827 T1 1.8882 T2 is 1.8929
We have done well since we started in October - banking a total of 366 pips!
Here are our results
Here are our results
11/16/2006
Today's Email Alerts:
Alert #2- T1 on GBP/USD long hit
The Philly fed printed a lame 5.1 reading much in line with expectations but after yesterday much better than expected Empire it was ultimately a dissapointment to the market. We made our T1 target on GBP/USD at 1.8908 (+23) and now move stop breakeven on rest targeting T2 at 1.8975.
Alert # 1 Go Long GBP/USD off Weak CPI
US CPI numbers printed way below estimates at -0.5% versus -0.3% expected suggesting that pricing pressure in US remains non-existent and the Fed will remain on the sidelines for the foreseeable future. UK retail sales also printed stronger this morning.
Right now the US dollar is rallying a bit after the TIC data which is counterintuitive and we want to take this opportunity to go long the GBP/USD
We are buying the GBP/USD at market (currently 1.8885) with a 1.8850 stop. First target 1.8908, second target 1.8975.
Alert #2- T1 on GBP/USD long hit
The Philly fed printed a lame 5.1 reading much in line with expectations but after yesterday much better than expected Empire it was ultimately a dissapointment to the market. We made our T1 target on GBP/USD at 1.8908 (+23) and now move stop breakeven on rest targeting T2 at 1.8975.
Alert # 1 Go Long GBP/USD off Weak CPI
US CPI numbers printed way below estimates at -0.5% versus -0.3% expected suggesting that pricing pressure in US remains non-existent and the Fed will remain on the sidelines for the foreseeable future. UK retail sales also printed stronger this morning.
Right now the US dollar is rallying a bit after the TIC data which is counterintuitive and we want to take this opportunity to go long the GBP/USD
We are buying the GBP/USD at market (currently 1.8885) with a 1.8850 stop. First target 1.8908, second target 1.8975.
11/14/2006
Today's Email Alerts:
Alert # 3 Take T2 on USD/JPY Now
US numbers this morning were very weak and point to the possibility of an early 2007 rate cut. As we expected, USD/JPY has collapsed on the number. The knee jerk reaction is currently finding support above our second target. Given no more meaningful data left today (business inventories are not very market moving), we could see a bounce from here.
Therefore we are not going to be greedy and we will be taking profit on our second lot here at 117.32, for a gain of 50 pips on the second lot, totaling a profit of 67 pips on the entire trade.
Alert # 2 Take T1 Now
We are off to CNBC and cant monitor the trade through the event risk to take T1 now ar market (117.65) for +17 and move stop to break even.
Alert # 1 Short USD/JPY
Japanese GDP printed much stronger than expected at 2.0% vs. 1.0% putting the possibility of a December rate hike by the BoJ back on the table. Meanwhile US data (retail sales and PPI) is predicted to be weak tomorrow. We think USD/JPY may see further weakness as the day progresses, so we are looking to short USD/JPY here (117.82) Stop is 118.15
First target is 117.62, once that is reached, move your stop to breakeven on the second lot. Target 117.23 for the second lot.
Alert # 3 Take T2 on USD/JPY Now
US numbers this morning were very weak and point to the possibility of an early 2007 rate cut. As we expected, USD/JPY has collapsed on the number. The knee jerk reaction is currently finding support above our second target. Given no more meaningful data left today (business inventories are not very market moving), we could see a bounce from here.
Therefore we are not going to be greedy and we will be taking profit on our second lot here at 117.32, for a gain of 50 pips on the second lot, totaling a profit of 67 pips on the entire trade.
Alert # 2 Take T1 Now
We are off to CNBC and cant monitor the trade through the event risk to take T1 now ar market (117.65) for +17 and move stop to break even.
Alert # 1 Short USD/JPY
Japanese GDP printed much stronger than expected at 2.0% vs. 1.0% putting the possibility of a December rate hike by the BoJ back on the table. Meanwhile US data (retail sales and PPI) is predicted to be weak tomorrow. We think USD/JPY may see further weakness as the day progresses, so we are looking to short USD/JPY here (117.82) Stop is 118.15
First target is 117.62, once that is reached, move your stop to breakeven on the second lot. Target 117.23 for the second lot.
11/10/2006
Wrong Sucker!
“I assume that markets are always wrong.”
George Soros
“The market can stay irrational longer than you can stay solvent”
John Maynard Keynes
So what brings me to this topic? Well the US midterm elections of course.
As late as the evening of Tuesday November 7th the GOP win Senate contract was trading at 70 bid showing that FX traders are not the only idiots around. The magic power of market predictions was not so magic after all. As one of my favorite bloggers, Atrios, so succinctly noted in a jibe at all the pundits who hold market sentiment so dear, “Markets provide a cute distillation of conventional wisdom, that’s all.” For a prime example just look at the Dow. Global economic growth is contracting. Housing-as-ATM is done. US economy is tipping into a recession – put a fork in it we are done. Yet equity traders are partying like its 1999. Morons? You bet.
But making money out of assuming that markets are always wrong is a lot tougher than it sounds. As Lord Keynes noted irrationality can persist a lot longer than your bank account. Fading the market requires two contradictory qualities – total confidence in your long term view and innate humbleness to take quick losses if prices don’t confirm your outlook. More importantly to truly capitalize on the market turn you need to plow into a position with everything you have. Soros’s other famous quote was, “You can’t be enough of a pig when you are right.”
Think how difficult this is to achieve in real life. You have be constantly defensive when markets don’t go your way and super aggressive when they do. Most people can be one or the other, but rarely both. The game is complicated further by the fact that sometimes the markets go your way for a bit only to pivot and reverse stopping you out in frustration.
Yet this is what makes trading so wonderful. If it was in any way truly forecastable banks would simply set up computer boxes and capture all the profits in all the markets. They’ve tried and failed many times. Thank goodness. Here is to the wild unpredictable, irrational nature of the game. Ultimately it’s what allows all us to trade and survive by that oldest of human tools – our wits..
Oh yea - and are the markets always wrong? No. But don’t fall into the mindless assumption that they are always right either.
“I assume that markets are always wrong.”
George Soros
“The market can stay irrational longer than you can stay solvent”
John Maynard Keynes
So what brings me to this topic? Well the US midterm elections of course.
As late as the evening of Tuesday November 7th the GOP win Senate contract was trading at 70 bid showing that FX traders are not the only idiots around. The magic power of market predictions was not so magic after all. As one of my favorite bloggers, Atrios, so succinctly noted in a jibe at all the pundits who hold market sentiment so dear, “Markets provide a cute distillation of conventional wisdom, that’s all.” For a prime example just look at the Dow. Global economic growth is contracting. Housing-as-ATM is done. US economy is tipping into a recession – put a fork in it we are done. Yet equity traders are partying like its 1999. Morons? You bet.
But making money out of assuming that markets are always wrong is a lot tougher than it sounds. As Lord Keynes noted irrationality can persist a lot longer than your bank account. Fading the market requires two contradictory qualities – total confidence in your long term view and innate humbleness to take quick losses if prices don’t confirm your outlook. More importantly to truly capitalize on the market turn you need to plow into a position with everything you have. Soros’s other famous quote was, “You can’t be enough of a pig when you are right.”
Think how difficult this is to achieve in real life. You have be constantly defensive when markets don’t go your way and super aggressive when they do. Most people can be one or the other, but rarely both. The game is complicated further by the fact that sometimes the markets go your way for a bit only to pivot and reverse stopping you out in frustration.
Yet this is what makes trading so wonderful. If it was in any way truly forecastable banks would simply set up computer boxes and capture all the profits in all the markets. They’ve tried and failed many times. Thank goodness. Here is to the wild unpredictable, irrational nature of the game. Ultimately it’s what allows all us to trade and survive by that oldest of human tools – our wits..
Oh yea - and are the markets always wrong? No. But don’t fall into the mindless assumption that they are always right either.
Email Alerts for November 9th
Stopped on Short EUR/JPY
November 9, 2006 EMAIL TIME: 3:05am EST
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Greetings!
We were taken out of the short EUR/JPY at 150.60 (-25) after Japanese eco Watchers printed a bit softer than last month's reading. We are sidelined for now but may revisit this trade if a new and better catalyst presents itself.
Stopped on Short EUR/JPY
November 9, 2006 EMAIL TIME: 3:05am EST
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Greetings!
We were taken out of the short EUR/JPY at 150.60 (-25) after Japanese eco Watchers printed a bit softer than last month's reading. We are sidelined for now but may revisit this trade if a new and better catalyst presents itself.
11/08/2006
Today's Email Alerts
Alert # 3 EUR/JPY Ready to Roll Over
Short EUR/JPY
Bank of Japan Governor Fukui turned things around yesterday night when he said that the central bank would not hesitate to raise interest rates if needed. Every time we break above the 150 level in EUR/JPY a politician either domestically or internationally steps in and makes a pro Yen comment. It is no different this time around as we mark a potential quadruple top in the Japanese Yen.
Short Yen positions have already been cut significantly on the futures market which suggests that we could see another turn at the key level here. Risk is very favorable so we want to take this short at market (150.35) Our stop is 150.60 T1 is 150.12 T2 is 149.64. As usual go to break even if T1 is hit.
Alert # 2 Stopped on Long USD/CAD
Well hardly an hour into the trade we got stopped on USD/CAD at 1290 (-30). What an ugly trade as we ran into CAD bullish oil inventory numbers that changed the whole tone of the price action. Fortunately our risk was well contained, so we escape with just a nick and scratch. We remain sidelined for now, although we are eyeing several possible setups for later in the day.
Alert # 1 Long USD/CAD
USD/CAD has found nice support after yesterday's massive reversal. We have Canadian trade balance and house prices scheduled for tomorrow. With the persistently low prices of oil and the strong Canadian dollar over the past few months, trade flows are likely to contract which would be negative for the CAD.
Therefore we are going long here at 1.1320 with a 1.1290 stop. First target is 1.1347, second target is 1.1396. As usual when the first target is reached, move your stop on the second lot to breakeven.
Alert # 3 EUR/JPY Ready to Roll Over
Short EUR/JPY
Bank of Japan Governor Fukui turned things around yesterday night when he said that the central bank would not hesitate to raise interest rates if needed. Every time we break above the 150 level in EUR/JPY a politician either domestically or internationally steps in and makes a pro Yen comment. It is no different this time around as we mark a potential quadruple top in the Japanese Yen.
Short Yen positions have already been cut significantly on the futures market which suggests that we could see another turn at the key level here. Risk is very favorable so we want to take this short at market (150.35) Our stop is 150.60 T1 is 150.12 T2 is 149.64. As usual go to break even if T1 is hit.
Alert # 2 Stopped on Long USD/CAD
Well hardly an hour into the trade we got stopped on USD/CAD at 1290 (-30). What an ugly trade as we ran into CAD bullish oil inventory numbers that changed the whole tone of the price action. Fortunately our risk was well contained, so we escape with just a nick and scratch. We remain sidelined for now, although we are eyeing several possible setups for later in the day.
Alert # 1 Long USD/CAD
USD/CAD has found nice support after yesterday's massive reversal. We have Canadian trade balance and house prices scheduled for tomorrow. With the persistently low prices of oil and the strong Canadian dollar over the past few months, trade flows are likely to contract which would be negative for the CAD.
Therefore we are going long here at 1.1320 with a 1.1290 stop. First target is 1.1347, second target is 1.1396. As usual when the first target is reached, move your stop on the second lot to breakeven.
11/07/2006
Today's Email Alerts:
Alert # 1 Getting Out of AUD/NZD
AUD/NZD has been the most painstaking trade that we have been in this past month. Fundamentals played out just like we expected but the currency pair has not budged. Earlier this evening, the Australian central bank raised rates by 25bp to 6.25 percent and was very bullish on both the economy and monetary policy. Prime Minister Howard was on the wires shortly thereafter commenting on the strength of the economy and the confidence of consumers. Yet the Australian dollar has been unable to rally.
We have sat through this trade for 2 days now and no longer want to be in it. The rest of the Australian data this week runs a stronger risk of coming out weaker than stronger while the inability of the AUD/NZD to rally, especially above the 1.1550 level (our entry) is extremely worrisome.
Therefore we are moving on and closing the 1 lot position that are short at 1.1535, taking a modest 15 point loss on the position.
There will always be more trades, this one is just not behaving well enough to be worth waiting for.
Alert # 1 Getting Out of AUD/NZD
AUD/NZD has been the most painstaking trade that we have been in this past month. Fundamentals played out just like we expected but the currency pair has not budged. Earlier this evening, the Australian central bank raised rates by 25bp to 6.25 percent and was very bullish on both the economy and monetary policy. Prime Minister Howard was on the wires shortly thereafter commenting on the strength of the economy and the confidence of consumers. Yet the Australian dollar has been unable to rally.
We have sat through this trade for 2 days now and no longer want to be in it. The rest of the Australian data this week runs a stronger risk of coming out weaker than stronger while the inability of the AUD/NZD to rally, especially above the 1.1550 level (our entry) is extremely worrisome.
Therefore we are moving on and closing the 1 lot position that are short at 1.1535, taking a modest 15 point loss on the position.
There will always be more trades, this one is just not behaving well enough to be worth waiting for.
11/06/2006
Today's Email Alerts:
Alert # 2 AUD/NZD Another Push to the Upside
After breaking out of a massive triangle formation, AUD/NZD has already retraced to the top of the triangle and is bouncing from there. In fact, if you look closely, the AUD/NZD "retracement" lasted for basically 7 trading days.
The Reserve Bank of Australia is set to raise interest rates this week, which should be positive for the Australian dollar. New Zealand only has the unemployment rate due for release this week and the market is forecasting a weaker print. As such, we think that AUD/NZD may have more room to extend.
However the risk is larger and the spread greater in AUD/NZD, so in this case, we are only going in with one lot. More specifically, we are buying AUD/NZD here at 1.1550 with a 1.1500 stop and a target of 1.1626.
Alert # 1 The Week Ahead
The key event risk this week in FX may not be economic but political in nature. Tomorrow's mid-term elections may well determine the direction of trade for the rest of the week and we may prefer to stand aside until we get better visibility as to how the results come in.
Conventional wisdom states that Democrats may win both the House and the Senate in which case the dollar is likely to weaken as FX markets generally dislike any change in the political climate. Yet if Republicans manage to retain the Senate – and latest polling suggests momentum may be going their way – the resulting gridlock in Washington would in fact be seen as dollar bullish. Furthermore, a full Republican win of Congress – a long shot to be sure – would be just the kind of surprise that could propel the dollar higher as continuity would be assured. In either case, order flows are likely to be muted as pairs meander back and forth until the 2006 election results begin to trickle in late tomorrow night. Stay tuned. We certainly will be.
Alert # 2 AUD/NZD Another Push to the Upside
After breaking out of a massive triangle formation, AUD/NZD has already retraced to the top of the triangle and is bouncing from there. In fact, if you look closely, the AUD/NZD "retracement" lasted for basically 7 trading days.
The Reserve Bank of Australia is set to raise interest rates this week, which should be positive for the Australian dollar. New Zealand only has the unemployment rate due for release this week and the market is forecasting a weaker print. As such, we think that AUD/NZD may have more room to extend.
However the risk is larger and the spread greater in AUD/NZD, so in this case, we are only going in with one lot. More specifically, we are buying AUD/NZD here at 1.1550 with a 1.1500 stop and a target of 1.1626.
Alert # 1 The Week Ahead
The key event risk this week in FX may not be economic but political in nature. Tomorrow's mid-term elections may well determine the direction of trade for the rest of the week and we may prefer to stand aside until we get better visibility as to how the results come in.
Conventional wisdom states that Democrats may win both the House and the Senate in which case the dollar is likely to weaken as FX markets generally dislike any change in the political climate. Yet if Republicans manage to retain the Senate – and latest polling suggests momentum may be going their way – the resulting gridlock in Washington would in fact be seen as dollar bullish. Furthermore, a full Republican win of Congress – a long shot to be sure – would be just the kind of surprise that could propel the dollar higher as continuity would be assured. In either case, order flows are likely to be muted as pairs meander back and forth until the 2006 election results begin to trickle in late tomorrow night. Stay tuned. We certainly will be.
Frequently Asked Questions
What Is Your Trading Philosophy?
We practice what we call “High Probability Trading.” Even though we are resident analysts at DailyFX.com, we are traders first and analysts second. In order to achieve this, every single one of our trades are a fusion of both fundamental and technical analysis. We also believe that money management is just as important as the entry, which is why we practice defensive trading. This means that we try to bank profits as often as possible regardless of the size and reduce our risk in the market as early as possible. In order to achieve this, we usually trade lot sizes in multiples of 2. There is always a first target (known as T1) and a second target (known as T2). It is our rule of thumb that whenever T1 is reached, we move our stop on the remaining position to breakeven (the entry price) so that there is no longer any real risk and we have banked a portion of the profits. This allows us to NEVER TURN A WINNER INTO A LOSER.
When Did You Start This Service?
We started this site on September 20th, 2006 and gave our first free trading signal on October 1, 2006.
Is This Service an FXCM Product?
This service is independent of FXCM and DailyFX.
What Type of Account Should I Trade? What Leverage?
Your account size is dependent upon how much funds you have available for trading. Smaller account holders should use mini lots while larger accounts should trade regular lots. We typically recommend no more than 10 to 1 leverage.
How Often Do You Send Out Alerts? What Times?
We send out alerts at least once a day. Depending upon how busy the trading day is, you can expect to receive 1 to 2 trade alerts with possibly 2 to 4 follow-up emails on those alerts. We are your eyes and ears into the market and there are two of us so we are watching for trades 24 hours a day. This means that these ideas may come at any time during the day, which include both the European and US trading sessions. The easiest way is to sign up your cell phone numbers as well.
Do You Take Into Account the Spread on Your Stop or Targets?
Yes, we actually do account for the spread already when setting our stop or targets, so you do not need to add any additional “buffer” (unless you want to of course). However, each broker has different spreads so for your guide, our spreads and price feeds are based upon FXCM and Oanda.
Do you place the orders in the market yourself and if yes how fast after you place your orders do you forward the positions to subscribers?
We place the orders after we receive the email alert in our own email boxes to be on par with subs. Sometimes we get better execution sometimes worse.
What Happens if My Broker Does not offer the Currency Pair that you trade?
There are many brokers that offer a very diverse set of currency pairs including FXCM and Oanda. Should your broker not offer the currency pair that we are recommending, you can always do a “synthetic trade” using the legs of the currencies. For example, if we recommended long AUD/CAD, a synthetic trade would be going long AUD/USD and long USD/CAD. They amounts are slightly different because the AUD/USD has a higher pip value than USD/CAD but that is just a simple mathematical calculation. You can also pass this trade up, there will be many others but if you choose to take it, you would need to watch carefully and manually because you would not be able to put in proper stops and limits if you did a synthetic trade.
Where Can I Find How Economic Releases Were Released Quickly and Free?
For US news, CNBC is the fastest source of information. Most brokers offer real-time news feeds including FXCM, which has the IFR News plugin for both demo and live account holders.
Can You Tell Me What You Think About My Trade?
We do not give personalized trading advice.
I am Getting Your Emails Late! What Can I do About This?
Email delays are usually a function of your email provider. Yahoo seems to have the biggest problems, we recommend Gmail. We are also doing our best to find ways to reduce this problem as well and to increase efficiency, but we have found that most issues are resolved once subscribers add our email to their address book. What you can do is make sure that you add bktrader@gmail.com into your known or safe list. If we send mail to someone who has not put us on these "known" lists, our mail is still being delivered but can be subject to many additional filters. If it does not get bounced but does not land in the inbox, it is most likely in the bulk folder or grossly delayed. This can change with every mailing that we send due to the ISPs dynamic content filtering. For certain email providers, you may also need to reduce your filtering level and add our address to your safe list.
Why Are You Guys Giving All These Great Trades for Free? Will You Guys Eventually Charge for this Service?
We will move to subscription model in a month or two, but will always keep part of the service for free. We want to be upfront with this – the price range will probably be between $85-100 US dollars a month.
What Is Your Trading Philosophy?
We practice what we call “High Probability Trading.” Even though we are resident analysts at DailyFX.com, we are traders first and analysts second. In order to achieve this, every single one of our trades are a fusion of both fundamental and technical analysis. We also believe that money management is just as important as the entry, which is why we practice defensive trading. This means that we try to bank profits as often as possible regardless of the size and reduce our risk in the market as early as possible. In order to achieve this, we usually trade lot sizes in multiples of 2. There is always a first target (known as T1) and a second target (known as T2). It is our rule of thumb that whenever T1 is reached, we move our stop on the remaining position to breakeven (the entry price) so that there is no longer any real risk and we have banked a portion of the profits. This allows us to NEVER TURN A WINNER INTO A LOSER.
When Did You Start This Service?
We started this site on September 20th, 2006 and gave our first free trading signal on October 1, 2006.
Is This Service an FXCM Product?
This service is independent of FXCM and DailyFX.
What Type of Account Should I Trade? What Leverage?
Your account size is dependent upon how much funds you have available for trading. Smaller account holders should use mini lots while larger accounts should trade regular lots. We typically recommend no more than 10 to 1 leverage.
How Often Do You Send Out Alerts? What Times?
We send out alerts at least once a day. Depending upon how busy the trading day is, you can expect to receive 1 to 2 trade alerts with possibly 2 to 4 follow-up emails on those alerts. We are your eyes and ears into the market and there are two of us so we are watching for trades 24 hours a day. This means that these ideas may come at any time during the day, which include both the European and US trading sessions. The easiest way is to sign up your cell phone numbers as well.
Do You Take Into Account the Spread on Your Stop or Targets?
Yes, we actually do account for the spread already when setting our stop or targets, so you do not need to add any additional “buffer” (unless you want to of course). However, each broker has different spreads so for your guide, our spreads and price feeds are based upon FXCM and Oanda.
Do you place the orders in the market yourself and if yes how fast after you place your orders do you forward the positions to subscribers?
We place the orders after we receive the email alert in our own email boxes to be on par with subs. Sometimes we get better execution sometimes worse.
What Happens if My Broker Does not offer the Currency Pair that you trade?
There are many brokers that offer a very diverse set of currency pairs including FXCM and Oanda. Should your broker not offer the currency pair that we are recommending, you can always do a “synthetic trade” using the legs of the currencies. For example, if we recommended long AUD/CAD, a synthetic trade would be going long AUD/USD and long USD/CAD. They amounts are slightly different because the AUD/USD has a higher pip value than USD/CAD but that is just a simple mathematical calculation. You can also pass this trade up, there will be many others but if you choose to take it, you would need to watch carefully and manually because you would not be able to put in proper stops and limits if you did a synthetic trade.
Where Can I Find How Economic Releases Were Released Quickly and Free?
For US news, CNBC is the fastest source of information. Most brokers offer real-time news feeds including FXCM, which has the IFR News plugin for both demo and live account holders.
Can You Tell Me What You Think About My Trade?
We do not give personalized trading advice.
I am Getting Your Emails Late! What Can I do About This?
Email delays are usually a function of your email provider. Yahoo seems to have the biggest problems, we recommend Gmail. We are also doing our best to find ways to reduce this problem as well and to increase efficiency, but we have found that most issues are resolved once subscribers add our email to their address book. What you can do is make sure that you add bktrader@gmail.com into your known or safe list. If we send mail to someone who has not put us on these "known" lists, our mail is still being delivered but can be subject to many additional filters. If it does not get bounced but does not land in the inbox, it is most likely in the bulk folder or grossly delayed. This can change with every mailing that we send due to the ISPs dynamic content filtering. For certain email providers, you may also need to reduce your filtering level and add our address to your safe list.
Why Are You Guys Giving All These Great Trades for Free? Will You Guys Eventually Charge for this Service?
We will move to subscription model in a month or two, but will always keep part of the service for free. We want to be upfront with this – the price range will probably be between $85-100 US dollars a month.
11/05/2006
Email delays.
We have been getting some emails about some subs getting our trade alerts 3 to 4 days late. This is a function of your ISP which may be delaying the processing of the emails from us. You can take a look at the following instructions to see if this would help. BUT THE BEST SOLUTION IS TO SIMPLY GET A GMAIL ACCOUNT. GMAIL APPEARS TO BE WORKING PERFECTLY AND THAT IS WHAT WE RECOMMEND TO ANYONE EXPERIENCING PROBLEMS.
For Yahoo and Hotmail Subscribers, who arent receiving the emails, please read the following:
With many of today's email services like Yahoo mail and Hotmail, customers can configure their email accounts to process their incoming mail more efficiently. Typically, a person is able to create a list of "known senders," or a "friends list," and email that comes from the people on the list goes straight through to their inbox.
If you are sending mail to someone who has not put you on these "known" lists, your mail is still being delivered but can be subject to many additional filters. If your mail does not get bounced but does not land in the inbox, it is most likely in the bulk folder. This can change with every mailing you send due to the ISPs dynamic content filtering.
At Constant Contact we are working with these ISPs to improve mail delivery for your permission-based email and decrease the number of "false positives" (good mail which is filtered as bad), but we are not able to give an estimated time frame. Although there is not much you can do about landing in the bulk folder at this time, there are some steps you can take to minimize it.
- Turn on the permission reminder to encourage people to add you to their safe list.
- Turn on Constant Contact Authentication and improve email delivery rates to the ISPs and corporate domains that use email authentication to filter incoming mail.
- Use the Anti-Spam Checker to improve email delivery rates to receivers that use content filtering on incoming mail.
- Put a note on your visitor signup page asking potential subscribers to add your sending address to their safe list when they sign up.
We have been getting some emails about some subs getting our trade alerts 3 to 4 days late. This is a function of your ISP which may be delaying the processing of the emails from us. You can take a look at the following instructions to see if this would help. BUT THE BEST SOLUTION IS TO SIMPLY GET A GMAIL ACCOUNT. GMAIL APPEARS TO BE WORKING PERFECTLY AND THAT IS WHAT WE RECOMMEND TO ANYONE EXPERIENCING PROBLEMS.
For Yahoo and Hotmail Subscribers, who arent receiving the emails, please read the following:
With many of today's email services like Yahoo mail and Hotmail, customers can configure their email accounts to process their incoming mail more efficiently. Typically, a person is able to create a list of "known senders," or a "friends list," and email that comes from the people on the list goes straight through to their inbox.
If you are sending mail to someone who has not put you on these "known" lists, your mail is still being delivered but can be subject to many additional filters. If your mail does not get bounced but does not land in the inbox, it is most likely in the bulk folder. This can change with every mailing you send due to the ISPs dynamic content filtering.
At Constant Contact we are working with these ISPs to improve mail delivery for your permission-based email and decrease the number of "false positives" (good mail which is filtered as bad), but we are not able to give an estimated time frame. Although there is not much you can do about landing in the bulk folder at this time, there are some steps you can take to minimize it.
- Turn on the permission reminder to encourage people to add you to their safe list.
- Turn on Constant Contact Authentication and improve email delivery rates to the ISPs and corporate domains that use email authentication to filter incoming mail.
- Use the Anti-Spam Checker to improve email delivery rates to receivers that use content filtering on incoming mail.
- Put a note on your visitor signup page asking potential subscribers to add your sending address to their safe list when they sign up.
11/03/2006
Today's Email Alerts
Alert # 2 Take Second Profit on AUD/USD
Even though the headline NFP number was weaker than expected, the upward revision to payrolls in September completely offset that. The dollar has rallied and has taken the AUD/USD a mere 3 or 4 pips from our T2 (.7687). Right now it is trading at .7690 and has been doing so for the past 15 minutes. There is no point being greedy about 3 pips and risk the remaining profit. so we are taking profit on our second lot here at .7692, which would bank us a total of 58 pips on this trade (15 on T1 and 43 on T2).
For those who took the Extension Fade on AUD/CAD, the move was even more monstrous. However, the spread was wider and the risk larger, which is why we picked the AUD/USD over AUD/CAD to short. Either way, you have just seen one of the strategies in our new e-book in action on 2 pairs profitably. For those who do not have it yet, you can get it here
Alert #1 Take Profit market (7720) on short AUD/USD Move to B/E
Lets take our T1 here at 7720 (+15) and move stop to b/e ahead of NFP
Alert # 2 Take Second Profit on AUD/USD
Even though the headline NFP number was weaker than expected, the upward revision to payrolls in September completely offset that. The dollar has rallied and has taken the AUD/USD a mere 3 or 4 pips from our T2 (.7687). Right now it is trading at .7690 and has been doing so for the past 15 minutes. There is no point being greedy about 3 pips and risk the remaining profit. so we are taking profit on our second lot here at .7692, which would bank us a total of 58 pips on this trade (15 on T1 and 43 on T2).
For those who took the Extension Fade on AUD/CAD, the move was even more monstrous. However, the spread was wider and the risk larger, which is why we picked the AUD/USD over AUD/CAD to short. Either way, you have just seen one of the strategies in our new e-book in action on 2 pairs profitably. For those who do not have it yet, you can get it here
Alert #1 Take Profit market (7720) on short AUD/USD Move to B/E
Lets take our T1 here at 7720 (+15) and move stop to b/e ahead of NFP
11/02/2006
Today's Email Alerts
Alert #1 Short AUD Going Into Payrolls
We are still short the AUD/USD going into payrolls (we got in at .7735, its pretty much there). This is now a pure NFP play, given the strength of the prior move and the low risk, we are still hanging onto it. There could be big revisions to September's awful 51k print. We also believe that given the recent jobless claims, ADP and Hudson Employment reports, we run a good chance of seeing triple digits.
You can read our full NFP outlook on DailyFX
US Non-Farm Payrolls - What to Expect for the Dollar
Alert #1 Short AUD Going Into Payrolls
We are still short the AUD/USD going into payrolls (we got in at .7735, its pretty much there). This is now a pure NFP play, given the strength of the prior move and the low risk, we are still hanging onto it. There could be big revisions to September's awful 51k print. We also believe that given the recent jobless claims, ADP and Hudson Employment reports, we run a good chance of seeing triple digits.
You can read our full NFP outlook on DailyFX
US Non-Farm Payrolls - What to Expect for the Dollar
11/01/2006
Today's Email Alerts:
Alert #5 Aussie and USD/CAD
Indeed, sometimes technicals does foreshadow fundamentals and in the case of the Aussie, both retail sales AND the trade balance disappointed. As we mentioned earlier, we were at engagement and just returned to the office to check the quotes. We hope you jumped on the weak data when it came out at 7:30pm and sold either the Aussie or AUD/CAD as we recommended.
We still like the AUD/USD short but want to sell at a .7735 limit with a .7765 stop. Should that order to reached, our first target will be .7712. Second target will be .7687
We were stopped out of our second USD/CAD lot for a +20 profit, but are happy about it since we banked a total of 45 pips on the entire trade.
Alert # 4 Statistical Significance - Australian Dollar
For those who are reading our new e-book, we have a strategy called the Extension Fade which is based upon statistical significance. The Australian dollar is setting up perfectly for our Extension Fade strategy. This is a pure technical, low risk play.
The clearest Extension Fade is in AUD/CAD. The currency pair has printed a positive candle for 8 trading days now - over the past 10 years, we have only seen 5 periods where the AUD/CAD has strengthened for 8 trading days with only 1 out of those 5 extending beyond 8 days.
The AUD/USD is also doing a similar thing. The currency pair has rallied for seven straight days. In the past 10 years, there were only 14 times that the move has extended for 7 days, with only 3 of those 14 lasting for longer than 7 days. We credit our technical analyst Jamie Saettele for looking that far back for us.
Therefore we are looking to short one of these pairs with the day's high as the stop. AUD/USD is our preferred play because of the lower spread, smaller risk and possibilit of a firm payrolls on Friday. However we do want to point out that AUD/CAD does have a greater statistical significance.
Due to a prior engagement, we will NOT be in the office to watch Australian data come out at 7:30pm EST (Retail sales and trade balance). Should the data come out weak, we recommend a short with the today's high as the stop. As soon as we get back to the offices later that evening (probably by 10pm EST), we will send out an update on what we think.
These statistically rare events are hard to pass up.
Alert #3 Moving Stop on USD/CAD
EMAIL TIME STAMP: 12:30pm The heads up may have come a bit too quickly, but USD/CAD is now trading at 1.1330, and we want to make sure we lock in profits on the second lot as well.
Move your stop on the second lot to +20 at 1.1310, should the currency continue to rally to 1.1350, we will be bumping up the stop once again to 1.1325 (+35). There will not be an email alert on this, so watch the markets. There will however be an alert if it goes far above 1.1350 (and probably a take profit =) ) or a confirmation that we are fully out of the trade.
Alert #2 T1 on USD/CAD
We hit T1 (1.1315) on USD/CAD for +25 pips. Move your stop to breakeven on the second half of the position at 1.1290. Our second target is 1.1380.
Heads up, should USD/CAD continue to rally, we plan on moving up our stop.
Alert #1 Long USD/CAD
The Canadian dollar first shot higher on the announcement that the country will begin to tax Canadian income trusts. The USD/CAD is retracing on weaker US data, but this should be very negative for the Canadian dollar over the next few days.
We are therefore recommending a long position here at 1.1290, with a stop at 1.1250. First target is 1.1315, second target is 1.1380.
Alert #5 Aussie and USD/CAD
Indeed, sometimes technicals does foreshadow fundamentals and in the case of the Aussie, both retail sales AND the trade balance disappointed. As we mentioned earlier, we were at engagement and just returned to the office to check the quotes. We hope you jumped on the weak data when it came out at 7:30pm and sold either the Aussie or AUD/CAD as we recommended.
We still like the AUD/USD short but want to sell at a .7735 limit with a .7765 stop. Should that order to reached, our first target will be .7712. Second target will be .7687
We were stopped out of our second USD/CAD lot for a +20 profit, but are happy about it since we banked a total of 45 pips on the entire trade.
Alert # 4 Statistical Significance - Australian Dollar
For those who are reading our new e-book, we have a strategy called the Extension Fade which is based upon statistical significance. The Australian dollar is setting up perfectly for our Extension Fade strategy. This is a pure technical, low risk play.
The clearest Extension Fade is in AUD/CAD. The currency pair has printed a positive candle for 8 trading days now - over the past 10 years, we have only seen 5 periods where the AUD/CAD has strengthened for 8 trading days with only 1 out of those 5 extending beyond 8 days.
The AUD/USD is also doing a similar thing. The currency pair has rallied for seven straight days. In the past 10 years, there were only 14 times that the move has extended for 7 days, with only 3 of those 14 lasting for longer than 7 days. We credit our technical analyst Jamie Saettele for looking that far back for us.
Therefore we are looking to short one of these pairs with the day's high as the stop. AUD/USD is our preferred play because of the lower spread, smaller risk and possibilit of a firm payrolls on Friday. However we do want to point out that AUD/CAD does have a greater statistical significance.
Due to a prior engagement, we will NOT be in the office to watch Australian data come out at 7:30pm EST (Retail sales and trade balance). Should the data come out weak, we recommend a short with the today's high as the stop. As soon as we get back to the offices later that evening (probably by 10pm EST), we will send out an update on what we think.
These statistically rare events are hard to pass up.
Alert #3 Moving Stop on USD/CAD
EMAIL TIME STAMP: 12:30pm The heads up may have come a bit too quickly, but USD/CAD is now trading at 1.1330, and we want to make sure we lock in profits on the second lot as well.
Move your stop on the second lot to +20 at 1.1310, should the currency continue to rally to 1.1350, we will be bumping up the stop once again to 1.1325 (+35). There will not be an email alert on this, so watch the markets. There will however be an alert if it goes far above 1.1350 (and probably a take profit =) ) or a confirmation that we are fully out of the trade.
Alert #2 T1 on USD/CAD
We hit T1 (1.1315) on USD/CAD for +25 pips. Move your stop to breakeven on the second half of the position at 1.1290. Our second target is 1.1380.
Heads up, should USD/CAD continue to rally, we plan on moving up our stop.
Alert #1 Long USD/CAD
The Canadian dollar first shot higher on the announcement that the country will begin to tax Canadian income trusts. The USD/CAD is retracing on weaker US data, but this should be very negative for the Canadian dollar over the next few days.
We are therefore recommending a long position here at 1.1290, with a stop at 1.1250. First target is 1.1315, second target is 1.1380.
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