Tuesday, July 31, 2007

It's Dangerous out there.

Well today marked the ending of the worst month of my career. Although I am not happy about losing money I think it is good that it is behind me and I now look forward to new opportunites. These markets are very nervous. Look at today's price action. Stocks sell off and futures go bid and every Emerging Market gets sold off. I suggest trading smaller positions and taking profits (and losses) slightly quicker then usual.

Good Luck and Good Forex trading


Saturday, July 28, 2007

Yield Monkey's look on in Horror

OK,So riding the wave of Emerging Market Joy has finally got me. And got me good! The rick aversion theme was on in full force. I at first fought it, then tried to square up, now I am in survivor mood. As a friend said to me yesterday, "This week has been a long month"! Ditto from me. But what is happening and more importantly what will happen?

What is happening is that the market has begun to believe how bad this Sub-Prime issue is. How it has effected the housing issue in a major way and how it could eventually put the U.S. economy in a real recesses ion. No one want to say it but the possibility is real. Think about your own situation, 401k which looked so nice just a week ago looks quite venerable right now. In times like this do you go out and buy that new plasma screen TV or do you put off that purchase on til a later time. On a larger issue if no one is buying homes then an economy really slows. New home buyers, renovate (you need to hire workers), buy new appliances(Durable goods) and need to furnish the new spaces. I believe this is one of the biggest drivers of an economy. Not to mention if the war in Iraq ever starts to deescalate, then there will be alot of young men and women coming home looking for work.

What will happen in my opinion we have more to come. Remember I have been quite wrong in my prediction's over the past few weeks (look at my P/L for more confirmation). Every rally in Emerging currencies is faced with new sales as established shorts are looking to exit. Also any new shorts, have very tight stop losses attached, propelling the market higher. Before I left the office yesterday, there were a few Hedge Funds sniffing around for offers (dollar offers) in any EM currency. The official close in Brazil was 1.8990 but was trading at 1.9150/00 when I walked out. Bad News. I have tried my best to square up, but Argentina, one of my number one plays all year, continues to remind me why I hated trading this currency back in 2000-01. Interest rates have gone to 25% and liquidity to next to no thing. This combination has resulted in great P/L pain for me.

This week I will definitely square up everything possible. EVERYTHING. After that I start again, and if all else fails I can begin to ask the age old question.....

Would you like fries with that Sir?

Good Luck and Good Forex Trading.

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Sunday, July 22, 2007

Beckham Mania hit's the States.

I was flipping through the TV stations last night when I came upon ESPN and saw the Chelsea vs LA Galaxy game on. I could not help but imagine the enormous pressure that Beckham must be feeling at this moment. Sure he is used to it, as he has played top level "Football" for many years but it seems to me that the MLS is pinning all it's hopes on this man. I know what you are thinking, for 250 mio dollars you would take the pressure too. But remember this man was already rich and famous and could have written his "ticket" to just about anywhere he wanted to play (for a hell of a lot of money). So why here, why now ? I think this is an interesting situation.

I know in my career there has been many times that I could have "coasted" (for lack of a better term). I was up budget, things were going well. Why rock the boat? I was due for a good bonus (ntg special), BUT, if I pushed the envelope I could have gotten ab it more. Or when I managed a group of traders, I could have listened to the direction of upper management (been basically a Yes man) or fought for what I believed in and made a few waves. To be honest, I think there is a happy medium here. I think it is the ability to manage both up and down. This is something I have learned in the last 3 years. Prior to that I was a very poor manager but now I think I am quite good (although I have no one working for me) as I have learned the skills (and still learning)of managing.

Back to Beckham. It seems that Beckham is a guy looking to branch out. His contract is not just to play Soccer but I am sure TV/Movies deals also. He is not someone who sits idly by and lets life direct him but rather he directs life. I think that is a good thing. In 2003 I was told by a previous employer that although they felt I was a good trader, they did not feel I was a good manager. Therefore they were taking away my managerial responsibilities and were going to "let you sit in the corner and trade". Well although I now agree that I was not a very good manager at the time, I could never let anyone put a cap on me so I accepted that role until I could find another opportunity. Is this what happened to Beckham? Remember earlier this year he was first relieved of his captain title on the British national team, and later taken off it all together. I am not sure but I do think that moving on, looking for new opportunities and situations, although quite scary at times, is a good thing.

Here is the story of Beckham's first LA Galaxy game from the
USA Today.

Good Luck and Good Forex Trading.


Friday, July 20, 2007

Get ready for a slow few weeks.

I am preparing myself for a few weeks of slow trading. This is usually a very poor environment for me to trade. I tend to get "chopped up". Looking for breakouts, leads to buying tops and selling bottoms (I am currently short Euro's at 1.3760!!). So this time I hope it will be different. I am going to place on smaller positions with well defined stops (1.3840 is my stop on the Euro) and stick to it. Also I will continue to look for positive carry situations. Mexican forwards are giving you very little to play with, unless you are looking for rates to come off, and in Brazil there is talk that Wednesday's 50bp cut in rates could be the last one and in the future officials may revert back to the 25bp cuts seen earlier this year. I think it is a good time to circle the wagons and look for another opportunity as nothing at the moment looks overly exciting to me.

Good Luck and Good Forex Trading



Saturday, July 14, 2007

I should listen to myself more often

I have been looking over previous posts and have realized that if I just listened to myself my P/L would have alot more "P" and a little less "L". Yes 2007 has been a pretty good year so far (I knock on would as I type this) but it could be a GREAT year. Things have worked out pretty much as I had anticipated. Yield has been king. EM currencies and have been on a pretty consistent strengthening trend all year (Brazil,Mexico,Iceland and Turkey leading the way). The dollar against major currencies has been in a consistent down trend. So that is the history, but what more importantly is the future. Well if I knew that I would be sitting on a tropical island somewhere downing a drink with a little umbrella in it. But I do THINK that we are in for more of the same. Why not, the U.S. economy is moving along nicely and as go us, usually goes the rest of the world. Sure there will be hic-ups along the way but come December I would expect:

1 The Euro to be near 1.4000
2 Brazilian rates to be lower
3 Argentinian rates to be lower
4 Iceland and Turkish currencies to be stronger
5 U.S. and Mexican rates to be the same

I also feel that oil is heading to 100 dollars per barrel real soon. As such I am looking at a basket trade to take advantage of this as well as yield. Long Mexico,Norway and Canada against short Taiwan and Japan. This has been the basic trend and is a positive carry trade. I do not have it on yet but I think it is an interesting trade. Risk aversion would certainly hurt this trade so I need to do some analyse on this trade next week to find an exit strategy in case it goes bad.

Good Luck and Good Forex trading, I am now off to my Son's Baseball game.



Monday, July 09, 2007

More than half of teens forgo summer jobs

According to an article in today's USA Today more teens are forgoing summer jobs in favor of studying and attending classes. Although I certainly encourage studying I think it is also very important to get the experience of "working" for a living. I think it gives you a better appreciation of why an education is really important.


Thursday, July 05, 2007

So you never know....

Under the catogory of "You never know what the future brings" comes this story for the USA Today. Susan Wojcicki, the woman who gave the Google guys a place to start their company, reminisces about the good old days. This is a story that I didn't know about. It also is a good example of never knowing where your next opportunity is going to come from, oh and to take care of those who help you!