Friday, January 9, 2009

What a week.

What a week it has been on many fronts. Start of the year, very large moves, an avalanche of fundamental data and all kinds of headlines grabbing news. Most telling, perhaps, is the NFP report released few hour ago. The nation's unemployment rate bolted to 7.2 percent in December, the highest level in 16 years, as nervous employers slashed 524,000 jobs, capping one of the worst years in modern history for American workers. This is rather serious. On top of that, analysts expect January to be worse, because employers tend to wait with bad news until after the holiday season. Also, a lot of employees are forced into working less hours, or even jobs are converted into part time positions in in order to save costs.Currencies reacted sharply, with USD getting stronger. Euro lost about 300 pips, although Pound seemed to be holding ground. It is sliding now. And Yen is raising head again. It had been stealthily getting stronger for last few days and today this process accelerated. Which didn't work well for my daily GBP-JPY trades, however, there is nothing really to complain about.
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What a week.

Tuesday, January 6, 2009

Toyota in trouble

US automakers are not alone in feeling pain. Toyota, which just recently has passed GM as the world's largest producer of cars, has taken a rare step of shutting down production for 11 days. Only plants in Japan are scheduled take this drastic step. This follows three days shut down that took place in December. This step highlights the impact of the relentless decline in global demand for cars, which plunged over 35% in December. To be fair, Detroit's troubles started well before recent economic slowdown, and were somewhat different that Toyota's. Regardless, most, if not all, world's car producers are suffering.Forex commentators were quick to link this development with Yen weakness, which is probably pile of crap. Let's not forget that over last few months there were NO good news coming from Japan and Yen still managed to stage a great rally, which is overdone now. I strongly suspect, any news from Japan could be used as an excuse for falling Yen. Well, reporters have to write something.Weakness in JPY came at perfect time, when I was ready for it. Some pips were made yesterday, few more today.
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Toyota in trouble.

Sunday, January 4, 2009

Back to normal

Now that all the holiday seasons are over, we can get back to normal. For a while we are done with dead days in the middle of the week, unpredictable spreads, lousy fills and even lousier service from brokers. We can start loosing money on our own accord, without having an excuse "broker screwed me". But more seriously, January has a tendency to be a busy month, with large moves and wide daily ranges. Following dreadful 2008, banks, hedge funds and other big money managers will be starting to implement their investment and trading strategies for the year. This means that large pools of money will probably be positioned in assets of choice, maybe planting seeds for bigger, longer trends. What is important about this large market participants is not only that they have buying power but also STAYING power. Once money is committed to a financial instrument or asset class, it might very easily remain there for months and years. Individual traders tend to underestimate the implications of staying power of big players, but this is one of the forces behind massive, long term moves.
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Back to normal.

New Life

After prolonged absence, I decided to breath new live into this blog. For some time now I've been keeping a self hosted blog named, what else, FX Madness. It can be found here www.fxmadness.com
That blog is updated almost daily and it covers trades, lots and lots of trades. Most likely I will post some of those posts here, with the links to original. So, if you are as passionate about Forex trading as I'm, come on over, say hello and tell me what you think.
MIke K.