Forex rebates on every trade - win or lose!

Well, learnt a lot with the Jappy.

Obviously stopped out for some nasty losses BUT I'll be back.

As SM says - determined to get its own way like a naughty child. However, it is not mis-behaving - there is a pattern which makes sense if you care to understand it - and I'm not using the right psychology so get the wrong results. Just like a child, if you don't understand what it is telling you by its behaviour it will win and you will lose and cause real heartache.

As Hils has indicated, it's all about working with the behaviour (trend) not trying to impose your own understanding on that behaviour.

mg (Resident Trend & Child Psychologist - failed)

morning, hope your all surviving the weather. Was thinking of going to glastonbury this year, pleased I didn't go. I've got my 2 older lads coming out on sunday for 10 days of spanish social which will be great, the eldest has just finished uni!

Closed my usd/yen earlier this morning for -20. See usd/cad broke its trendline from april last night, trading in a channel of the lows at the moment

Simple is not easy, meggers.

Or to quote Albert Einstein, "Everything should be made as simple as possible, but not any simpler."

At some stage, the dollar will keel over against the yen but when?

The weaker yen was "driven by the carry trade because the Australian and New Zealand dollars are standing up relatively well," said Paul Robson, foreign-exchange strategist with Royal Bank of Scotland in London.

Analysts said the Japanese currency's weakness came as a surprise, considering recent developments in the U.S. debt markets as well as reports that two large Bear Stearns-managed hedge funds might be in trouble.

"The interest thing is how resilient the foreign-exchange market has been relative to continued subprime mortgage and credit issues in the U.S. over the last couple of days," Robson said.

Market watchers said the softer yen may be attributable to Japanese investment funds channeling recently paid summer bonuses into overseas investments.
The yen's retreat "doesn't look like it's justified by interest rate moves or what's happening to risk appetite in other asset markets such as bonds, equities and credit," Robson said.

1 buys nearly 2 yankee dollars again....

decided to close longs at 1.9990 been a nice little run...

Two interesting posts from NewsTrader FX on the 'Latest Forex News' section of Forex Factory regarding the carry trade.

Post 1 (yesterday)

"The carry traders, housewives and the soon-to-be-retiring baby boomers (who will be collecting 800T Yen in benefits over the next five years) present some interesting implications for the Japanese economy going forward.

We know that the Japanese are great savers. As the carry trade mania continues to sweep the country, they likely will be saving (or investing in this case) even more, as the oppurtunity to make money becomes more apparent.

This may drive consumption levels down further-or at least prevent them from rising to a significant degree. Low consumption (and demand) will help to keep inflation low also.

The Boj will be very hard-pressed to raise interest rates in this enviorment. In reality-they'll by lucky to have one more this year, probably in July or August.

Overall-it's likely that rates can only rise very slowly. As other high yeilders raise their rates as well-the carry trade will still be an excellent investment.

Probably for many years to come."


Post 2 (today)

"I'm aware this may seem to contradict my previous post-so let me clarify.

While I do believe that nothing can "stop" the carry trade, I also am fully aware that there likely will be times when some serious unwinding can occur. While I still don't believe the carry trade can be "stopped", it certainly could hit a few potholes. It hit a big one in February and recovered. I believe it would recover again. However, we could be at such a point right now-a pothole. I'm not saying it definately will happen-but I am saying that the situation bears careful watching.

I'm concerened by two things-the Bear Sterns situation, which is far from fully played out and the movement seen in equity and bond markets on Friday afternoon.

Bear loaned money to its own fund and that may stop the bleeding for now. The problem lies with how the underlying securties that the fund (and many other hedge funds as well) invested in may come to be re-valued. The underlying securities-the CDO's-are collateralized with sub-prime mortgages. We know those are going bad and are likely to get worse before they get better.

The CDO market is estimated to be a $1T market-perhaps even more. The CDO's could be devalued by 30%-that's $300B of devaluation, a lot of money in anyone's book.

Becasue the market is thin, collective selling (if that occurs) will drive prices down even further as buyers will be very hard to come by. That 30% loss might start to look good by comparison.

Let's turn to Friday afternoon in equity and bond markets. Forget the Dow and S&P taking big losses-what has really caught my attention is the rise in bond prices. That indicates a flight by the professional money out of equities and into a safe investment-bonds. It's a move to avert risk.

As all currency traders should be aware of-risk aversion means carry trade unwinding and the more risk is averted-the bigger the unwind will be.

Now i'm not predicting that this will happen. What I am saying is that there are some strong indications that it could. Therefore, you want to be there on Sunday when Asian equity markets get going and you want to be alert for similar equity and bond movement.

I'll be there-for sure."

So if the carry trade hits the "pothole", what then? My partner is long yen against the dollar because he thinks the upside is so limited against the down. He reckons the chart indicates the currency "boys" are getting nervy about this 124 level - record lows against the euro etc. If the fall comes, it will surely be fast.

Supermum if you are short yen....would you consider that you are hedged...at a "family level ".... lol


Possible short set up if Cable cant breach 2.0000 ... watching


Anyone use the upgraded power charts..I am finding that any lines drawn are not getting deleted. I remove them...and save...then they seem to reappear later...
Anyone else get this..

Hils ...82.30 usd index...might be the turn you are looking for

Certainly on the 10-minute, D, let's see if it can carry over into the 1-hour.

I'll be a bit surprised though if it has the va va voom to break the longer term falling resistance once it's pushed back over 83 in a couple of weeks time. I suspect they'll be banging at the door to sell around 83.1 to 83.2.

My early doors shorts in EUR/ YEN and GBP /YEN more than making up for that lackluster Cable...

1.9975-80 probably about as far as Cable can go without it becoming a good chance of breaking lower..

Shorted Cable from 9998 closed at 9974 for +24, retracing a little now and looking for a repeat short entry. Unfortunately have two other short positions from further down, so hoping to trade out :S

Went long when it broke $2. Closed that for a small loss, looking for a short entry myself.

Short again from 9982, might be a bit too early, but tight stop in place (makes a change for me).

UK pound edges above the $2 level

The exchange rate is good news for Brits visiting the US
The pound has risen briefly above $2 - close to record highs - as investors expect an interest rate rise in July.
In early trade in Europe, one pound touched $2.0006, almost reaching May's 26-year high of $2.013 dollars.

Bank of England minutes released last week showed that the main rate-setting committee voted five members to four to freeze rates at 5.5% in June.

Analysts said this makes an interest rate rise to 5.75% in July a near certainty, in a bid to beat inflation.

Expectations of higher interest rates make the pound more popular amoung currency investors, as they can gain a higher return.

We appreciate that the MPC has to control inflation but a stronger pound performs a similar role in dampening economic activity ..BCC economist David Kern


The pound, which later slipped a fraction to 1.999 dollars in mid-morning trade, has gained 8% against the dollar over the past 12 months.

I was talking to some friends who are real money players at the T20 on Friday night (brilliant display by Ramps, btw). They're knocking out cable big time at whatever they can get over $2.

Snap pth

Hilary

I hope 'knocking out' means shorting?

pth