Does weak dollar (euro as well) can be an answer to the crisis!

Hi everbody, nice to be here and share ideas and get feed backs from experienced traders. Actually I interested in forex since years but not as a trader, I actually buy cash and sell from banks, not very practical. I'm in forex market as a trader in the last few months, I still working on to build up my strategy in forex with play money (after losing 250 usd in real in 1 week)
I'm well aware that techinal analysis alone is not enough for long term and steady gain, my opinion. I noticed lately that dollar is weakening steadly, not only against euro but almost against all developing countries' currencies. Can weak usd re vitalize demand again all over the world, lots of unemployment and fear still, but can it increase demand and slowly growth as well. Of course I'm interested in forex side, which means sell usd what I'm doing for some time.

Welcome Fellow Trader! I'm glad you joined us.
I'll give you here a quick first answer : It's getting late here. I'll give you more details on my opinion later.

Personally, my forex deals are generally based on longer term macro analysis (a few weeks/months) but I use Technical analysis (TA) for the entries as I find a few indicators quite efficient.
Now this being said, I believe that a lot of Forex participants base their trading on TA (in a FX trading room, the number of screens with charts filled with MA , support and resistance lines etc is just amazing) and I guess that's for any term (from scalp to long term investment).

Regarding the strength/weakness of the USD, before last summer, the Forex markets were driven essentially by the central banks rates differentials (carry trades), but as the differential tend to vanish (the rates are all close to zero now !) and particularly since September 08 (Lehman!) Forex market seem to be driven by what we can call the "risk appetite/aversion play". The USD is a safe haven compared to the others currencies (but the JPY): with bad news and decreasing stock markets, the USD tends to strengthen and the opposite is true.
My point here is the weakness of the USD you referred to is due to the current rally on the stock market. If you think the rally sustains then shorting the USD short term can be a good play, (me I tend to play the risk aversion at short term)

Now back to your main question, I agree with you : to me, inflation (weak dollar, weak euro, weak money generally!) is (part of) the solution, that's precisely the point I'm discussing in another thread here and for which I owe more details (soon!) and that's precisely the purpose of the Quantitative Easing. I'll give you more details soon I promise!

Welcome almbayrak!

Its good to see that you trading in this crazy environment, very brave. However, if you can learn to trade in this environment you should have no problem in a bullish one ;-) (arguably since bullish markets are easier to trade).

It would seem you are asking an economic question here. Considering economies go hand in hand with currencies you are at a good start.

Before answering your question maybe I can give you some background info for you to consider for incorporating into your trading system.

The two most popular ways of analyzing and trading markets is Fundamental Analysis and Technical Analysis. The question you are asking seems to be about fundamentals. So in order to be able to answer that question perhaps it would be a good idea to look at some key fundamentals that drive currency movements ( I will only list a few, but the list can go on forever!):

• understanding where the demand and supply of currencies are coming from (corporations that are multi-national, central banks, consumers and many more)
  
• Capital and Trade flows which make up a countries balance of payments quantifies the demand for the currency over a period of time.
  
• Capital flows measure the net amount of currencies being bought or sold due to capital investment. (a negative capital flow balance indicates that there are more physical or portfolio investments bought by domestic investor than foreign investors)
  
• Physical flows can be things like Foreign Direct Investment (FDI flows; those investing foreign country must sell their own local currency and buy foreign currency, an increase on demand for foreign currency which could increase the price of currencies)
  
• Portfolio flows measure captial flows ( equity and fixed income markets, its worth while following both these markets as they can closely correlate to currencies at diff points in history)
  
• Naturally it would follow watching exports and imports would be important as this shows international trade flows. knowing the countries trade supply chain (TSC) is helpfully to know when trading the respective pair.
  
• Interest are very big as they often move currencies; so if interest rates are big so is monetary policy.
  
• Knowing overall economic health is also good.
  

These are only somethings for you to get you started thinking about fundamentals behind currency movements, as you point out jobs markets is a part of the overall health of the economy which at times can move currencies as well. If you can consider the countries of the pairs you are trading, and think about these variables it may help you answer if a weak dollar wil help spurt a recovery.

For example I can tell you one thing fundamentally about a weak dollar. As seen back in 2007 and early 2008, a weak dollar led to a commodity boom and high inflation, which surging demand in emerging markets for commodities espically. This was often reflected in high interest rates seen in commodity related currencies such as the AUS, NZD and CAD (aussie, kiwki, and loonie).

However, that wasn't the only story there were other forces such as carry trade going on, but that is a different story for a different day.

Its probably you go study some of these terms and consider how they would affect your trade.


It is in my experience often that fundamentals are a great way of asseing overall long term trends, however I wouldnt weigh in the long term health in my short term trades (of a weeks). Espcially in currency markets since they are so liquid I rely mainly on technical analysis if im trading for a few weeks only.

Technical analysis however can be used alone, I know many successful wealthy traders who only use technical analysis for long and short run.

If you have any questions about anything feel free to post again!

-snapman

PS (sorry I wrote so much, hopefully I didn't scare you, take your time as it took me along time to learn these concepts as well).

btw I disagree with Sauros on the inflation thing, but thats because I don't fully understand his argument still. Though, that's what this forum is all about now isn't it ;-) ... I hope we can have some more good discussions in the future. Keep working at it!

-snapman

Snapman wrote:

btw I disagree with Sauros on the inflation thing, but thats because I don't fully understand his argument still. Though, that's what this forum is all about now isn't it ;-) ... I hope we can have some more good discussions in the future. Keep working at it!

-snapman

Fortunately we don't have all the same opinions! If it was the case : there would be no market, no trading and no forum where we can discuss
Snapman, I'll give you more details soon on the inflation thing...

Sauros wrote:

Snapman wrote:

btw I disagree with Sauros on the inflation thing, but thats because I don't fully understand his argument still. Though, that's what this forum is all about now isn't it ;-) ... I hope we can have some more good discussions in the future. Keep working at it!

-snapman

Fortunately we don't have all the same opinions! If it was the case : there would be no market, no trading and no forum where we can discuss
Snapman, I'll give you more details soon on the inflation thing...

My sentiments exactly

Almbayrak, one more thing as you're at the most important stage of your trading : the building of your system (and that could take years, mine is not complete yet!). You need to keep in mind that trading is a probability game : you will have winning trades, you will have losing ones. You need to make sure that your system has a positive expectancy, the additional point to consider is how much money you make in a winning trade, how much you lose in a losing one.

Let me take some example from gambling : in the roulette game, the odds are against you because of the 0 (0 is not black, not red, not odd, not nothing). You have there a slightly negative expectancy (the casino has a slightly positive one) : this means that in the long run, you will lose. In the blackjack game, card counting allows you to have a positive expectancy, that's why it is forbidden by the casinos as they know that they would go broke if they didn't.

Trading can be compared to the roulette : the odds are slightly against you because of only one thing : the bid-offer, the brokerage fee : your broker is the casino.
Now all the Technical Analysis, Chartism, Economic analysis, Maths algorithms etc etc whatever you chose (I personally use a mix of all of those) aim to only one thing : how to bring back your expectancy above 0.

Dear Sauros and Snapman thank you for your valuable feed backs. I use every information to improve my strategy and my knowledge in forex. I want to share my strategy the one I’m working on it and I would like to have your opinions about it, strong and weak points.



I must say I trade in forex in short term it can be 1 hour 3 hour or max couple day. I do not use fundamental analysis in forex, I use mostly chartism and technical analysis but from time to time I ask myself why it is decreasing and increasing. The answer can come from anything, some news, fundamental analysis, psychology or simply this is it, no answer I can find, this the market accept it or leave it, I say myself.



Talking about fundamental analysis, trade deficit or budget deficit, interest differences yes they all important on the other hand borrowing or direct investment or expectations about future, or strategic alliances of the countires, to check all of these data, actually to find these datas are real difficult, market is going somewhere to follow it, is more easier. It is not healty to decide with lack of data, it is better to follow the market, chartism and technical analysis.



Regarding dollar weaknes, I noticed when I checked dollar movement against all currencies, especially developping countires currencies, all charts looks very similar USD/ZAR already cacth sep 2008 level, others are in steady increase against dollar. Is it market or big player decision like fed or central banks. I belive fed or cental banks are the real decision makers in forex market. As an example USD/TRY is over 1,70 turkish months ago, central bank make a declaration saying that “they do not allow rate over 1,70”. Market keep on moving upwards but central bank directly started selling dollar to the market after 2-3 weeks rate was lower than 1,70 now it is around 1,55.



My weak point I still trying to understand who makes the rates move up and downs ok reuters are declaring the values but where reuters are getting them too, from banks, which banks? I guess this question seems very basic for you but still I could not clarified in my mind. In stock exchange there a pysical place where prices are decide but where is the place for the forex values decisions. Some basic question is still not fully answered in my mind.



Anyway I would like to share my strategy and have your comments on it.

I called it “surfing”

• I use charts especially candlesticks
  
• First I define trend by using daily or 3 hours time frame
  
• Then I try to set strenght and support points
  
• Close the strenght or support point I invest ½ or 1/3 of the amount I intend to use.
  
• If I started to make profit, I invest the other part ½ or 2/3, if some losses start to happen I close the position without increasing loss.
  
• I put ‘stop loss’ just below the support point ( assuming I’m long)
  
• I put’take profit’ just below the first or second strenght point ( “ )
  

In brief words “find the wave, ride on it untill it finishes, then do the same on the opposite way” (if you are in front of the screen)



Is it working, yes it is working in many times, am I winning all the time “no” I try to find reasons of losses, I think the method is simple and I should win most of the time if I use properly because moving with the market waves should be profitable normally.



I notice one of my mistake, that is psychological, I always try to find peak points both sides to be short or long, I dont like losing even I don’t like to lose profit chance. Maybe I should take position in the middle of the trend in between strenght points.



Anyway I would like to know your comments on it.



Almbayrak66

Snapman I want to correct my point, of course fundamentals are very important, I always take a look about what is going on, trying to understand the whole picture, my point is many times fundamentals are behind the market, as an example in forex, there is a huge trade deficit in one country and continious in years, ok there is borrowing, IMF etc. but what I expect in mid or long term, to lose its currency value, because after sometime borrowing will become more diffcult for this country, but the point is when? Timing is the main key, this can happen in 6 month or 6 years. In stock exchange to my suprise I see many stocks making big rallies while company making huge losses. Speculation ? Manipulation ? probably, I personnly stay off these kind of stocks. My point is speculation or more importantly manipulation can happen?? in forex too, yesterday EUR/USD decreased 75 pip in 3 minutes then back to its level in 3-4 hours, how can this explained? Probably some people lose millions.

Hi Almbayrak66,
First regarding the forex prices : the forex is what we call an Over-the-counter (OTC) market : it means there's no exchange as for the stocks where everybody gets the same price but the prices of the transactions are "agreed" between the two counterparts of the deal in function of the bid (demand) for a currency and the offer. So technically you can have different prices in different places at the same moment for the same pair. Now, there are "arbitrageurs" with sophisticated systems on the markets that buy a currency and sell it instantly in another place for a higher price at the same moment for a sure profit : mechanically it ensures that you will find very similar prices everywhere in the world at the same moment.

As you mentioned the Central banks have the key role in the Forex market as they're "guardians" of the monetary stability of their country and have plenty of tools to regulate the rate of their currency through their interventions : interest rates, money supply, quantitative easing programs, buy back of treasuries etc.

A few economic releases have a consequent impact on the (short term) moves of the forex markets : CPI, jobs figures, GDP and of course all the rates announcements from the Fed and the ECB. Surprises in the figures create huge volatility moves : yesterday there was an ECB rate announcement at 12:45 (London) then Trichet's meeting, at 13.30 US job data, those triggered the moved you mentioned. The good thing is the releases are scheduled in advance, you can find a good "live" calendar here : http://www.thelordoftrading.com/Doomberg4.html .Try to follow it while you trade and you will understand what triggers the intraday jumps

Now, it's very hard to trade the economic releases, because of the huge volatility as most of the time the brokers widen dramatically the bid-offer (some just reject your trades) and the big moves on the 2 sides generally shoot your stop loss... My recommendation is to avoid trading 15-30 minutes before and after the eco releases.

Now back to your trading strategy : of course I would need to see more details but at first sight, it sounds good to me.
The style is called "swing trading" : the guys there assume that the markets stay in a range and rebound between support and resistance 80% of the time and only trend 20% of the time. The idea then is to buy at support and sell at resistance. Swing trading can really lead to outstanding profits.

A few comments I would have on your strategy, at first sight :

- I think your idea to add to the position when you make profit is a real good thing. it's called "pyramiding" : generally the guys tend to do the opposite and add to their losers to "average down" the purchase price, to me it's a big mistake. Now the only thing is the pyramid should have a larger base than its top, the first position should be bigger than the second as when you are trading the second one you are protected by the profits of the first (actually it's all about the expectancy stuffs I mentioned earlier, I will detail more one day). I would recommend you try a 2/3-1/3 strategy or even 1/2-1/4-1/4

- We all try to "catch the falling knife" and try to pick the bottom and the tops. The swing trading is by nature contrarian, your guess is the support/resistance will hold so at those points, you want to trade against the trend : finding the bottom/top is definitely the most difficult game... you need to master. As indicators you may find Bollinger Bands of use and a few candlestick patterns : at the support/resistance : evening star, or generally any doji , engulfment. In order to avoid to face a train, what you can try as well, is to identify a longer term trend (let's say bull) and only buy at support without reversing the deal when the resistance is reached.

- The trick with the stop-loss and take profit is to trade the deals where the stops are closer than the take profit : Again that's the expectancy stuff

- Don't focus on winning most of the time : the thing is how much you win when you win and how much you lose when you lose. You will be surprised to know that many profitable traders just win 30% of the time.

That's it for now, I hope it helps and good luck in your "Surfing"

Hi Sauros, thank you for your detailed answer, it is full of wisdom and experience. Clarified many points.



Unless currencies do move in acceptable ranges central banks do not intervene I believe, as you quote they are guardian of the currencies, they protect their currencies from under valuation and over valuation from time to time. But they do like to be in the market all the time. But on the other hand, I’m sure fed do not follow traders (big or small) for dollar valuation.



Regarding news, yes it triggers volatility and big financial institutions do their best to benefit max of it, widen up the gaps as it is the end of the world, activating stop losses and margin calls, my opinion. Better to stay off those periods or be in after some experience or follow up “the falling knife”



“pyramiding” I will definitely consider to build proper pyramide.



Positive expectancy, I do understand in my way, I’m moderate poker player (texas hold’em), I can not have good hands all the time, but when I have one, I always do my best to make max benefit out of it, translating this in forex, with familiar charts or movements I will invest much more than the regular amount ie., if able to catch the falling knife, otherwise it is not possible to be in the profitable side with 30% win. The key point is, as you quote “how much you win, how much you lose”



At the end “arbitrageurs” do exit just to make sure thats quotes values are similar all over the world. But for valuation I’m sure that many banks do follows reuters quotes, I wonder where is the main counter and the main counter parts (can it be chicago currency exchange??) , how about volumes, is it possible to see the volumes at one specified time all over the world. Valuation will remain an unsolved point for me. Anyway this is forex “love it or leave it”



“ I only do trading for living”

I red this in a forum, the guy was serious and seems to me, he lives well,

Anyway this “quote” is also my wishful hope for the future.



Almbayrak66

Hi Almbayrak66,
Actually, regarding the main players on the Forex market : I heard a few major investment banks (I can't remember the precise list but it includes : DB, UBS, Barcap, Citi, Morgan Stanley JPM,...) do most of the volume on the Forex market (more than the half). Thus, getting data on the trading volumes become very difficult and personally I never managed to get some reliable : I'm afraid trading Forex is without the volume data (and Technical Analysts miss a consequent data here).
I'm not sure I got your point on Reuters : to me Reuters follow the banks quotes and not the opposite (?). For instance, on Reuters Kobra or Bloomberg, with the quotes you can see the banks contributing them.
Personally, I don't play poker (a few of my fellow traders do, I wish I had time to look at it, like at any game where you need to seek desperately how to get the odds on your side... ) Maybe one day you can give me some lessons but I can imagine there are a lot of similar points with trading and it should give you the patience, as you mentionned, to wait for the only few good hands that will drive you to profits. My personal opinion is to be profitable in trading, you need to be able to take a lot of losses and survive before those few big winners come... That's the difficult thing with "trading for a living" because when you're in a loosing streak and you need money to eat, the confidence in your system and the patience can decrease dramatically and make you at the end take the wrong decision.
This being said, I believe that "trading for a living" is the dearest wish of all of us here.
See you

[quote="Sauros"]Actually, regarding the main players on the Forex market : I heard a few major investment banks (I can't remember the precise list but it includes : DB, UBS, Barcap, Citi, Morgan Stanley JPM,...) do most of the volume on the Forex market (more than the half)." Hi Sauros, this explanation solved an important question mark in my mind, thank you very much indeed, , "how easy to make some people happy."

With improving strategy with this forum, last week I made good profit and close all my losses.

Regarding poker I can say, I started for fun and relaxe my mind, later I will use it to improve and train my psychological ability, actually otherwise it is not possible to be on the profitable side.

Stict to topic, I still believe dollar against euro and other currencies will be weakened in long term, name it, it can be some news, fund transfer or smtg. else

Congrats on the gains,Almbayrak66, keep us posted of your trade and strategies!

come let your friends know about the forum as well ;-) .

I might have to agree with you on the dollar being weaker long term. If we are in recovery mode the dollar wll certainly be weak and we will probably see a commodities rally. Though, its possible that we are not in rally mode...

Almbayrak66
Well done! Now I guess you know you will have more profits, and more losses as well, the only thing is to keep it positive in the long run. Just one comment on the "break-even" effect : I saw some guys (and it happened to me a few times) come back from consequent losses and take their profit at 0 while if they had kept their position open they would have ended with a good overall profit... But I believe that letting the profit run after a loss is the most difficult trick of trading...

Back to Pyramiding, I've just posted in the blog : http://blog.thelordoftrading.com/2009/07/traders-from-top-of-these-pyramids-40.html a quote from Jesse Livermore, a trader who made (and lost) hundreds of millions, telling about his way to build a pyramid, quite interesting!
You will notice how the positions he puts on his winners are always smaller than the base of the pyramid.

Hi, I'm back to the topic regarding the USD weakness.
Firstly I need to say I was a bit reluctant a few weeks ago when this topic started to short the USD as I believed that the stock markets would drop giving strength to the USD as a safe haven (risk aversion play). I was wrong on that and I have re-assessed my view since.
- Looking more closely into the Quantitative Easing, Credit Easing and co stuffs, just forget about the technicalities : it's just FED printing massively USD and to some extent "supporting its weakness". Bernanke's testimony on 21 July seems to indicate that the FED expects to keep the Fed funds rate low for longer than many had thought. The debate now in the media is whether they will be able to stop the inflation it implies when the time will come. If we want the play the long term weakness of the USD, we need to follow closely what the monetary policy of the FED : they rule. And should they fail to contain the inflation ... well... we're RICH !!!
- Another thing to monitor in a long term USD position is China. Albeit it called for the creation for a new currency to eventually replace the dollar, they keep being massively long dollar and US treasuries. My guess is they are no fool and know that the dollar is doomed and they could go long massively Commodities to hedge their USD exposure
Personally, I'm thinking about building a consequent long EURUSD position progressively for the long term but just looking for the good moment to initiate it. It could be a good moment soon I think.

It is clear that dollar is getting weaker, actually it has positive effect on global trade since it is the main currency in global trade. With increasing purchasing power of other currencies, there may be increase in demand all over the world as well. That will help also China export to increase who is the main customer for US borrowings. I believe we have time to see impact on inflation since demand can not increase back to before crisis level easily. My concern what would be ECB reaction for strong Euro? It may have positive effect on commodity prices but negative effect on export.

The Euro has been strong lately, though I haven't seen any numbers on import/exports but its possible we will see better numbers for the end of third quarter. Espcially the seemingly bubbly equities market in china and possible excessive loan growth.

Do you mean we have time before we see any impacts of inflation?


If so I can agree but this only maybe short term. Mid crisis and pre crisis the Eur was very strong. Surprisingly, despite their history, the ECB did not intervene! If anything a weaker dollar and higher EUR will only hurt economic recovery in the EURO zone even more. Right now they are the ones who will stop pumping liquidity into the EUR markets and if the EUR continues to rally this will be bad news.

This scenario leaves room for a huge short on the EUR when levels get really extended.

I believe that inflation is always #1 concern in eurozone, europe suffered a lot because of inflation in WW2 and also ECB is dealing 20-25 countries economies. I also believe ECB do not intervene directly to the market unless Euro becomes very strong and started to hurt economy and exports. But where is very strong point, before crisis it has reached around 1,65 at that time ECB did not intervene directly, but now in this recovery period this level can be very strong? But it is clear that we will steady increase in some unpredictable pace, probably market will give signs for the strong level. Today GBP/USD downd aprox. 150 pips in 1 minute ( I was there he he! ) in the forums it is said that BOE news caused this, BOE is against strong GBP and intervened. Actually I don't know whether it is caused by this news but it is clear that central banks may act againts big volatiliy.

My opinion we will not see any effect of weaker dollar (not very weak!) on inflation in short or mid term, 1 year maybe 2.
* companies decreased their break even points lover with decrease in labor costs, other savings and commodities, we have seen pretty good profit explanation from the companies altough demand gets weaker.
* Oil supply is higher than demand, stocks are full I read in some forum ( I'm not sure about this news, not seen real figures)
* Demand is lower compared pre crisis period.
* People are saving more, general tendency all over the world.(lower demand)
* China made a long term agreement with russia on oil, china oil demand from the world market can be less.
* Carry trade money will be less in the coming periods, japan investors need time to forget (lower liqudity for hedge funds to effect commodity prices)

Based on above points I believe weaker dollar does not have direct impact on inflation in mid term, unless it becomes very weak and started to hurt commodity producer countries, any volatilty in commodity prices may arise from trading not production.

almbayrak66 wrote:

I believe that inflation is always #1 concern in eurozone, europe suffered a lot because of inflation in WW2 and also ECB is dealing 20-25 countries economies. I also believe ECB do not intervene directly to the market unless Euro becomes very strong and started to hurt economy and exports. But where is very strong point, before crisis it has reached around 1,65 at that time ECB did not intervene directly, but now in this recovery period this level can be very strong? But it is clear that we will steady increase in some unpredictable pace, probably market will give signs for the strong level. Today GBP/USD downd aprox. 150 pips in 1 minute ( I was there he he! ) in the forums it is said that BOE news caused this, BOE is against strong GBP and intervened. Actually I don't know whether it is caused by this news but it is clear that central banks may act againts big volatiliy.

Hehe I was long on the pound for about two weeks, but I exited the position around a high 1.70, the next day it went to 1.69 but very quicly retraced. Either way I was trading this on purely technical play, I didn't bother to follow the regional fundamentals :p

Its is quite clear that the ECB is more focused on inflation, they always have their targed inflatin policy and look at what they are doing now! they are risking a choke on growth by not stimulating the economy anymore. Its interesting how American history is different post depression which is why Americans tend to be more growth orietned (vs inflation feared) when it comes to monetary policy. It will be interesting to see who makes the right calls!... Will america see hyper inflation and will the EURO zone stagnate for decades? :p

almbayrak66 wrote:

I believe that inflation is always #1 concern in eurozone, europe suffered a lot because of inflation in WW2 and also ECB is dealing 20-25 countries economies. I also believe ECB do not intervene directly to the market unless Euro becomes very strong and started to hurt economy and exports. But where is very strong point, before crisis it has reached around 1,65 at that time ECB did not intervene directly, but now in this recovery period this level can be very strong? But it is clear that we will steady increase in some unpredictable pace, probably market will give signs for the strong level. Today GBP/USD downd aprox. 150 pips in 1 minute ( I was there he he! ) in the forums it is said that BOE news caused this, BOE is against strong GBP and intervened. Actually I don't know whether it is caused by this news but it is clear that central banks may act againts big volatiliy.

Hi, well done, it's always good to enjoy a good ride ... Me I caught the trend a bit after on the EURGBP playing the GBP weakness against euro.
To me the jump was clearly triggered by the BOE decision to extend their treasuries purchase program.
Once again it is the Quantitative Easing thing : when a central bank purchases assets it creates money and drives their currency down.
Here's an article I found here about this : http://forum.thelordoftrading.com/economic-news-market-comments-opinions-f5/bn-boe-extends-bond-purchases-after-recession-deepened-update2-t130.htm
Now the problem to trade the Quantitative Easing with GBPUSD is that both US and UK have a quantitative easing program. BoE decided to extent its program, we'll know what the US will do on 12 August and that could trigger these types of jumps on USD : http://forum.thelordoftrading.com/economic-news-market-comments-opinions-f5/bn-fed-likely-to-end-300-billion-treasury-purchases-meyer-says-t126.htm

Now on your view on Europe and Inflation : I agree, it's still the #1 concern and ECB will be probably the first to increase back their rates.

Hi Sauros, long time no see, I hope trading going fine in this caotic environment, you remember I explained you, my starting system in FX trading and I called it surfing (sort of swing trading anyway), in below the link a guy did it much much better than I thought, probably he lives in st. thomas, where ever it is. Nothing new under the sun.

http://www.babypips.com/blogs/pip-my-system/so_youve_finished_the_school_o.html

Hey almbayrak66, Welcome back! I hope you're doing well too!
Yes I recently did well on my trading and finally got it right and our discussions here helped me a lot : on the USD weakness, central banks role, Quantitative Easing etc. After this year began badly (I was short stock) I'm now well in the positive, and now need to focus on the end of the year to make 2009 a good year. As I said before, with my trading style I suffer many losses before one or two big winners will put me well in the profits and that's what is happening now with some good positions : long gold, long EURUSD, long EURGBP and long stocks.

I had a quick look to your link (i've heard that babypips is basic but decent) and the Cowabunga system . Definitely there are some good points to study further here notably the main trend/secondary trend thing, that roughly says "don't fight the market". Now the problem with this kind of system is that works for a limited time then stops working : you need to be able to adapt very quickly to new markets conditions. One example is the famous "Turtle" traders system that was very easy, made a lot of money until it stopped working.

To me, OK nothing new here, but the most important thing to succeed in trading is to find a system that suits you, spend years (and generally a lot of losses..) to build it and then once it's developed, stick to it with no second guess.

Hey thanks, good to see your comments. Actually you know with cowabunga system and mine, the only similarity is the surfing board.
Good to hear you are doing well. This system thing making me crazy, once I'm thinking of swing trading, than scalping, than range trading, now momentum trading, time interval is another point. Nowadays seriously thinking of carry trade, short usd/try or long aud/usd, but DXY index is almost one year low, any correction may happen soon, I don't know. My mind gonna blow up or suddenly all fogs and mess will clear up and I come up with a good few systems on hand. I hope to reach second option.

almbayrak66 wrote:

Hey thanks, good to see your comments. Actually you know with cowabunga system and mine, the only similarity is the surfing board.
Good to hear you are doing well. This system thing making me crazy, once I'm thinking of swing trading, than scalping, than range trading, now momentum trading, time interval is another point. Nowadays seriously thinking of carry trade, short usd/try or long aud/usd, but DXY index is almost one year low, any correction may happen soon, I don't know. My mind gonna blow up or suddenly all fogs and mess will clear up and I come up with a good few systems on hand. I hope to reach second option.

Haha the thing is you're becoming a REAL trader almbayrak66 ! That's the only way to build a system : you need to try everything and find out what works for you and what doesn't and take the best of each style to come up finally with YOUR own system. I have myself a bit the same approach as yours (and my system is not totally completed ...) and has tried anything : from scalp to investment, chart, TA, Elliot Waves, psychology, fundamentals, statistics etc. As I said previously, I think trading is a game of probability and you need to put all the odds on your side for every single trade : it happens when different system converge

Now I think that's like you've missed a trend : you look the trend developing while you are aside and at the precise moment when you decide to finally enter, it reverses. What I mean is that is when you are desperate that it finally works ! So don't give up my friend and you and me know that it worths!

Sauros thanks, good to hear these words from you, a real trader, it means a lot to me. When I become a rich trader, I'll buy a lamborghini murcielago for you (don't say you have already 2), but with my speed of trading probably you'll be an old man by then, anyway it's a good car.

almbayrak66 wrote:

Sauros thanks, good to hear these words from you, a real trader, it means a lot to me. When I become a rich trader, I'll buy a lamborghini murcielago for you (don't say you have already 2), but with my speed of trading probably you'll be an old man by then, anyway it's a good car.

Haha I've a couple of lamborghini already but no yellow one yet, so you're welcome!!!
The trouble is the cars are miniature toys

Sauros wrote:

almbayrak66 wrote:

Sauros thanks, good to hear these words from you, a real trader, it means a lot to me. When I become a rich trader, I'll buy a lamborghini murcielago for you (don't say you have already 2), but with my speed of trading probably you'll be an old man by then, anyway it's a good car.

Haha I've a couple of lamborghini already but no yellow one yet, so you're welcome!!!
The trouble is the cars are miniature toys

Will be an old man? If sauros "will" be an old man, what does that make him now ;-) hahaha jk man.

no lamborghini murcielago for you, young man, even a red one.

Snapman wrote:

Sauros wrote:

almbayrak66 wrote:

Sauros thanks, good to hear these words from you, a real trader, it means a lot to me. When I become a rich trader, I'll buy a lamborghini murcielago for you (don't say you have already 2), but with my speed of trading probably you'll be an old man by then, anyway it's a good car.

Haha I've a couple of lamborghini already but no yellow one yet, so you're welcome!!!
The trouble is the cars are miniature toys

Will be an old man? If sauros "will" be an old man, what does that make him now ;-) hahaha jk man.

Snapman, You a kid