Hey guys, just wanted ur input on this article ,,, if the big players in FX had such a bad year with all their high tech analysis and $10 million hot shot traders,,,,,, r we smaller retail investors just lost sheep and stand a chance? 
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Merrill Lynch Explains Failure Of Forex Trade Ideas
Dow Jones International News - 30 Nov 2005 - By Katie Martin
LONDON (Dow Jones)--Merrill Lynch & Co. (MER) has become the latest large bank to reveal the scale of its losses on this year's key currency trading recommendations, with a 4.68% hit on its main thematic trade ideas.
The bank said Wednesday some of its central assumptions about economic trends failed to materialize, undermining most of its dollar-bearish key calls.
But it's not all bad news: combined with the rest of its discretionary forex trading portfolio, the bank made positive returns of 6.42%. And while those thematic returns make grim reading, they're still stronger than rival Goldman Sachs Inc.'s (GS) 10% losses for the year.
As year-end approaches, a series of other banks is likely to offer explanations for gains or, more often, losses on currency trades.
"This has been a very challenging year for dollar bears, such as this group," said the bank's global currency strategist Yianos Kontopoulos in a research note to clients Wednesday.
"Despite this, good risk management and discipline softened the blow by helping us produce a positive performance in our discretionary trades during the same period."
Kontopoulos said the absence of dollar weakness, particularly against the yen, was a problem for the bank's strategies. The Chinese currency revaluation, which was much smaller than the bank had expected, was also an issue.
"Looking into 2006, it seems that getting USD/JPY right is critical in getting USD/Asia correct in the absence of a very large USD/yuan move," the bank said.
Another of the bank's key themes, which was that the currencies of Australia, New Zealand and the U.K. would underperform, also disappointed. Although the bank said its economic projections were broadly right, they didn't translate into the degree of currency weakness it expected.
However, a further theme of Mexican peso strength did work.
Of the bank's 49 discretionary trades, 24 were linked directly to the bank's key themes.
The bank said the remaining 25 trades didn't clash with those key themes. "Unless we change a theme, we do not recommend trading against it, save for tactical reasons such as temporary seasonal factors," the bank said.
The bank's worst return on a currency trade was -5.49%, while the best return, which didn't come from a thematic trade idea, was 5.28%.
In early November, rival bank Goldman Sachs blamed its 10% loss on currency trade recommendations on both errors in its key views and poor risk management.
=========================================================
Merrill Lynch Explains Failure Of Forex Trade Ideas
Dow Jones International News - 30 Nov 2005 - By Katie Martin
LONDON (Dow Jones)--Merrill Lynch & Co. (MER) has become the latest large bank to reveal the scale of its losses on this year's key currency trading recommendations, with a 4.68% hit on its main thematic trade ideas.
The bank said Wednesday some of its central assumptions about economic trends failed to materialize, undermining most of its dollar-bearish key calls.
But it's not all bad news: combined with the rest of its discretionary forex trading portfolio, the bank made positive returns of 6.42%. And while those thematic returns make grim reading, they're still stronger than rival Goldman Sachs Inc.'s (GS) 10% losses for the year.
As year-end approaches, a series of other banks is likely to offer explanations for gains or, more often, losses on currency trades.
"This has been a very challenging year for dollar bears, such as this group," said the bank's global currency strategist Yianos Kontopoulos in a research note to clients Wednesday.
"Despite this, good risk management and discipline softened the blow by helping us produce a positive performance in our discretionary trades during the same period."
Kontopoulos said the absence of dollar weakness, particularly against the yen, was a problem for the bank's strategies. The Chinese currency revaluation, which was much smaller than the bank had expected, was also an issue.
"Looking into 2006, it seems that getting USD/JPY right is critical in getting USD/Asia correct in the absence of a very large USD/yuan move," the bank said.
Another of the bank's key themes, which was that the currencies of Australia, New Zealand and the U.K. would underperform, also disappointed. Although the bank said its economic projections were broadly right, they didn't translate into the degree of currency weakness it expected.
However, a further theme of Mexican peso strength did work.
Of the bank's 49 discretionary trades, 24 were linked directly to the bank's key themes.
The bank said the remaining 25 trades didn't clash with those key themes. "Unless we change a theme, we do not recommend trading against it, save for tactical reasons such as temporary seasonal factors," the bank said.
The bank's worst return on a currency trade was -5.49%, while the best return, which didn't come from a thematic trade idea, was 5.28%.
In early November, rival bank Goldman Sachs blamed its 10% loss on currency trade recommendations on both errors in its key views and poor risk management.
