Unlike buying actual currency notes or bars of gold or stocks, highly leveraged accounts can really bite you.
I am looking at the USDCHF as a long term play right now, long position. The bet is that the dollar will strengthen. There is positive daily swap on the long.
The pair is at 30 year lows. I think that averaging down would be a good play too, if USD keeps weakening.
The beauty of the trade is that the pair can only fall 10,000 more pips. Before you laugh, think about it.... only 10,000 down to zero, but climb up to whatever the upper PPP bound is.
This is an INVESTMENT instead of a trade.... a stop of around 2,500 pips or more for me.... maybe 10% of my account at risk. If the pair keeps falling, I might average in another 20% with a new 2,500 pip stop.
I mean, this is the USA we are talking about, not a penny stock. My bet is that the dollar strengthens with a new president and a victory or withdrawal in Iraq. The Bear Stearns take over had little impact, although it was rather devastating news. It can get worse. The US can go into a depression. But that's why averaging in is key. I'm not trying to call a bottom.
I am looking at the USDCHF as a long term play right now, long position. The bet is that the dollar will strengthen. There is positive daily swap on the long.
The pair is at 30 year lows. I think that averaging down would be a good play too, if USD keeps weakening.
The beauty of the trade is that the pair can only fall 10,000 more pips. Before you laugh, think about it.... only 10,000 down to zero, but climb up to whatever the upper PPP bound is.
This is an INVESTMENT instead of a trade.... a stop of around 2,500 pips or more for me.... maybe 10% of my account at risk. If the pair keeps falling, I might average in another 20% with a new 2,500 pip stop.
I mean, this is the USA we are talking about, not a penny stock. My bet is that the dollar strengthens with a new president and a victory or withdrawal in Iraq. The Bear Stearns take over had little impact, although it was rather devastating news. It can get worse. The US can go into a depression. But that's why averaging in is key. I'm not trying to call a bottom.