Wednesday, May 30, 2007

Battle at Kruger

Take a look at this Video clip.....I think it posses some powerful messages. A little long but well worth the wait.


Chinese Stocks worrying market's

After yesterday's announcement on new Taxes for Chinese stock participation, the markets overseas sold off in a big way. The Shanghai SE Composite index fell 6.5% last night and Emerging Market currencies in general sold off hard. Alot of "doom and Gloom" dealers I know of are saying this is the end. Being the Yield monkey that I am, I am not sure this is the case......BUT.... I am willing to cut back on risk and see hoe things play out. Next week we have the Brazil rate cut announcement and if the market does not get 50bp there will be a MAJOR sell off.

Good Luck and Good Forex trading.


Tuesday, May 29, 2007

So you think CEO's got stiff sentences here....

Here is an article from today'sUSA Today. If this doesn't send a message to other CEO's noting will.


Tuesday, May 22, 2007

Just when you think you are doing well......

In the "You can always do better department" comes this story from Trader Daily.

Tuesday, May 15, 2007

A Great Lesson for Traders

I came across this Article in Trader Daily. I know for myself taking a loss is the hardest thing to do. I think it is part of being a trader. When taking a position it is you against the market. From time to time you are going to be wrong. It is not the number of times either, it is how quickly (or slowly) you decide to cut the position that separates the successful traders from the pack.

Enjoy the read.

Good Luck and Good Forex Trading.


Sunday, May 13, 2007

Downgrades, rate hikes.....who cares, ride the wave!!

Certainly not Emerging Markets. In the last few weeks we have seen a surprise rate increase in Mexico and a downgrade in Turkey, as well as considerably deteriorating politically scene and still both currencies have ended the week at thier strongest level in months.

Why fight the is trend? Sure there are "hic-cups". When the Mexican CB raised rates unexpectedly it was a painfull mark to market day but remember if you are trading a portfolio based book it was just one of many currency position's you had on. Let's take a look at a few currency and countries.

Inflation numbers came out again this week and they were again quite low. Logic says that a CB does not make just one change in rates so I expect another rise in the near 3 months (co-workers thisnk sooner). I am currently short interest rates (small and mostly trading forward forwards to limit my risk if another rate hike occurs sooner) and long the currency.

Why fight a good thing. Rates are going lower. The CB has basically said that. The last vote was 4-3 for a 25bp cut with the 3 asking for 50bp. This adds to the pressure on the currency. This is a trend....ride it! I am short rates (not as much as I would like but try to sell everyday) and long the currency.

Wow have I ever missed this move! This currency has been a one way street for weeks (actually months) and I have caught very little of it. Does it continue I am not sure but I certainly would not stand in the way. I am out of this currency presently and will stay that way.

I have always used this currency as a funding currency. Rates are basically on top of dollars and I expect that to continue. I use this currency as a type of hedge against my portfolio to allow me to take more aggresive position in other regions.

Rates here are going up. The currency should continue to do well against the dollar. I am currently long Euro against the dollar in a small way, and will stay that way for now.

As a co-worker said on friday. The currency is downgraded, political problems, and still the currency ends the week at its strongest level! 19% positive carry is a powerfull plus to staying long this currency.

I remain long dollars against China (and now Hong Kong). I still think that the currency apprciation built into the market is more then the Chinese government will allow. I am playing this region as a "basket", being long dollars against China and Hong Kong and short against Korea (I want to sell against India and Indonsia when I get an opportunity). I heard of a lot of dollar selling by funds against Asia on Friday.

Basically, take what the market is giving you. I have said for years now that globally I see rates converging. This view has not changed.

Good Luck and Good Forex trading.


Tuesday, May 08, 2007

Is it worth it...

An article in today's Trader Daily tells of a Husband and Wife team that have pleaded quilty to insider trading. The couple worked at Morgan Stanley were the offense took place. This type of behavior is fasinating to me and brings me back to my original point....Is it worth it?!

The couple are both attorney's and in thoery at least capable of making a decent income. Now they will be spending a few years in jail. To me it is not worth the "fast money".

Monday, May 07, 2007

A funny thing happened this weekend.....

A funny thing happened this weekend, Saturday night at my sons baseball game, they lost. Not only lost, but got destroyed and in the process lost alot of confidence in themselves and their team mates. Now losing was not the surprise. All team lose from time to time but what was interesting to me was the manner in way they lost and how it relates to trading. It started innocent enough, top of the first 2 out running on first my son at bat (he has been ice cold of late). First pitch he rips into left center for a double, but the kid on first (not very fast to start with) was running on the hit and I had to hold him at third. What should have been a run resulted in runners at second and third with 2 out. The kids on the bench were very disappointed (my son was just happy to have a hit), they expected the runner at first to score, needless to say the next batter struck out and the inning was over. From there it was all down hill. We gave up 1 run in the bottom of the inning and 3 more 2 inning's later. After three inning's we were done 4-0. Not much you say and I agree, but if you were there you would not have said that. The body language said it all. Heads down, shoulders slumped, eyes rolling. It was not a good scene. As the coach there was little I could say or do to shake the kids out of their funk.

I think this relates directly to trading. How often do traders go into funks over seemingly little events and watched them steamroll into a major draw down of cash. When I managed other traders I talked consistently of "sitting tall in your chair" and to "be prepared for the next trade". If you are sitting there with your head down lamenting over the previous trade, what you did wrong, how the marketed "didn't react correctly", you have little to know chance of making money.

Each trade is a new chance to change your destiny. I try (it is hard... but I do try)to look forward all the time, watch the guys around me (what are they doing right and wrong and learn from their mistakes)and continue to march forward. Trading is a great profession. You get to make your own decisions and essentially be your own boss.

Tomorrow we play again. I suspect that the 12 year old boys that I coach will have long forgotten Saturday nights beating (the game ended 15-7 but it wasn't even that close). Lets hope that when the first ball is dropped or strike out occurs it does not translate into a poor body language that brings the rest of the team down. Whether it your trading team or little league team poor body language is a real downer.....

Good Luck and Good Forex trading.


Wednesday, May 02, 2007

Buffett looking for a new portfolio manager....

Warren Buffett is looking to hire a new portfolio manager to eventually take over for him. Is it in you ??


Covering my short Euro.

I covered my o/n short Euro/Usd position at 1.3570 (I entered at 1.3610 yesterday). Not my type of trading at all, but I had such little risk on, I was willing to take a chance on a short term punt.

Good Luck and Good Forex Trading


Tuesday, May 01, 2007

A random polling of Traders concludes.....

I just polled a few of my friends in the market and asked if they could have only one trade on....What would it be. The basic conclusion was long Dollars. Most liked being short NZD and AUD but being long dollars was stressed by all. One described Usd/Jpy as "looking like a champagne cork". Also a few HF's and Banks have come out today either exiting dollar shorts or suggesting dollar longs.

I have very little risk on so I have gone short some Euro/Usd (it meets my TRIAD criteria) for a short term play at 1.3610.

Good Luck and Good Forex Trading.


Happy May Day

Today is May Day which means throughout Europe, Mexico and Brazil there are National Holiday's. This translates to a very quiet session.

Yesterday the Mexican Finance Minister came out and stated that he felt the rate rise was pre-mature. hhhmmmm..well me too !

In talking to locals though it is clear to me that they are a bit concerned by increases in food prices. This could be what has led the Mexican CB to act. Also, do they know something that we do not? Entirely possible.

I have gone long small Euro this morning (1.3643), but only out of boredom and will look to purchase some Eurodollar interest rate futures today as I think Stocks can come under pressure in the coming sessions.

Good Luck and Good Forex Trading.