Silly Trader... When will you learn that fundamentals are the only way to trade? | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

What is the best way to learn the fundamentals? 32 replies

How can someone learn to trade fundamentals? 7 replies

trading with fundamentals is the only way to go 129 replies

Here's a REALLY SILLY question! 9 replies

Lessons you learn only when you blow up your account. 7 replies

Attachments: Silly Trader... When will you learn that fundamentals are the only way to trade?
Exit Attachments

Silly Trader... When will you learn that fundamentals are the only way to trade?

  • #1
  • First Post: Mar 30, 2008 9:42pm Mar 30, 2008 9:42pm
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.
  • #2
  • Mar 30, 2008 9:46pm Mar 30, 2008 9:46pm
I think the USD/CHF will stop paying on the buy side if the FED cuts interest rates again.
{Link Removed}
  • #3
  • Mar 30, 2008 9:54pm Mar 30, 2008 9:54pm
hi there, can you please advice me on what position can i take on GBP/USD as per my equity is not that big. im trading on a margin level trade. but i need a sure position so that i can still play with the market.

thanks
  • #4
  • Mar 30, 2008 10:01pm Mar 30, 2008 10:01pm
Quoting onlyson1969
hi there, can you please advice me on what position can i take on GBP/USD as per my equity is not that big. im trading on a margin level trade. but i need a sure position so that i can still play with the market.

thanks
There is no such thing as a sure position in Forex...

You'll find plenty of traders posting live in the journal section of this forum.

Why are you only seeking advice on the GBP/USD?
  • #5
  • Mar 30, 2008 10:01pm Mar 30, 2008 10:01pm
The USD is gaining strength... but there's a rule "never catch a falling knife."

I have no idea how stable that strength is, whether it's just a temporary ledge or whether it's more long term. The interest rate decision and the upcoming data over the next month will certainly tell the story. There's been a push to devalue the USD to help export industries and reduce national debt... I don't know if that will continue.

Just seems a bit too early to call USD long. We might only have 10k pips left, but we could lose a 3rd of that before it's all done.

But I guess if you're talking long term, ie: the next 10 years, and are willing to average down your costs (can afford to) then I suppose it's as good as any. Guess it depends on your time frame.
  • #6
  • Mar 30, 2008 10:17pm Mar 30, 2008 10:17pm
Not 10 years.... more like the next year or two, with an expected 100% return.

There is a lower limit to how far the USD can fall. Could we see the USDCHF at 0.50? I don't think it is possible unless there are more terrorist attacks on US soil.

So a 5,000 pip stoploss with a cash out at 1.50 would be the general idea.
  • #7
  • Mar 30, 2008 10:33pm Mar 30, 2008 10:33pm
a most interesting idea..............

the Swiss won't want to be too strong to the point that they have problems exporting too.

and if US goes into recession or even depression, other countries will suffer as well................

only problem will be the negative swap for usd/chf when the US cut interest rates again..........

so it's an investment, a long-term one............

what about eur/chf ? there's positive swap and you can average in too ? after all, it has fallen quite a lot already and long-term should be to the upside.................
  • #8
  • Mar 30, 2008 11:47pm Mar 30, 2008 11:47pm
i agree on the idea that fundamentalist might survive with a proper averaging

but totally disagree in the idea that analyst bound to fail

i can even teach someone who doesn't know new york is in the US how to trade with high winning percentage

also being a fundamentalist requires large capital in order to gain meaningful profit (it depends on one's goal though)

I still love being intraday short - medium term as the ROI is high and I believe I'm good at it

one just need to find the right strategy for him/herself that's that

happy pipping
  • #9
  • Mar 31, 2008 12:53am Mar 31, 2008 12:53am
Quoting Gift_Art
i agree on the idea that fundamentalist might survive with a proper averaging

but totally disagree in the idea that analyst bound to fail

i can even teach someone who doesn't know new york is in the US how to trade with high winning percentage

also being a fundamentalist requires large capital in order to gain meaningful profit (it depends on one's goal though)

I still love being intraday short - medium term as the ROI is high and I believe I'm good at it

one just need to find the right strategy for him/herself that's that

happy pipping
Are you being serious?? newyork..... in the US?!

Teach me, teach me. lol
Living the adventure in my head.
  • #10
  • Mar 31, 2008 3:42am Mar 31, 2008 3:42am
Quoting Leonlorenzo
Are you being serious?? newyork..... in the US?!

Teach me, teach me. lol
yes I'm serious

I dun teach, I spread clues over this forum

thus only those with serious eagerness will find it

since afterall the key to win any games is to have high determination
  • #11
  • Mar 31, 2008 12:07pm Mar 31, 2008 12:07pm
Quoting tdion
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.
how can it only fall 10,000... currency have no bottoms
  • #12
  • Mar 31, 2008 12:09pm Mar 31, 2008 12:09pm
Quoting trevman
how can it only fall 10,000... currency have no bottoms
Broken down into pips, EUR/USD is 15807. This means if you buy it at 15807, it could fall 15807 to zero. That's what leverage is about.
The market reveals who we really are...
  • #13
  • Mar 31, 2008 12:24pm Mar 31, 2008 12:24pm
i don't think it works like that, as one currency increases the exchange rate shifts so if

EUR/USD = 1.0000 (USD/EUR = 1.0000)

and the EUR doubles in strength

EUR/USD = 2.0000 (USD/EUR = 0.5000)
EUR/USD = 4.0000 (USD/EUR = 0.2500)
EUR/USD = 10.000 (USD/EUR = 0.0100)
EUR/USD = 100.00 (USD/EUR = 0.0010)
EUR/USD = 1000.00 (USD/EUR = 0.0001)
EUR/USD = 10000.00 (USD/EUR = 0.00001)
EUR/USD = 100000.00 (USD/EUR = 0.000001)

lol most deff extreme but proves my point
  • #14
  • Mar 31, 2008 12:29pm Mar 31, 2008 12:29pm
There is a lower limit to how far the USD can fall. Could we see the USDCHF at 0.50? I don't think it is possible unless there are more terrorist attacks on US soil.

What if they got rid of the dollar then what? There's talk about the amero how would that effect the value of the dollar
  • #15
  • Mar 31, 2008 12:41pm Mar 31, 2008 12:41pm
tdion,

since you are looking at 30-years time scale, and considering the current state of affairs, default on the US Federal debt within the next 5 years is of very high probability. And yes, the USD/CHF can drop 10'000 more pips then.
The USA has been harmfully managed by corrupt special interest in the recent years, and the systematic damage is too difficult to repair. We are withnessing redistribution of global wealth and global consumption to the new rapidly accelerating economies (China, Russia, India), and gradual shift of investors from dollar-denominated assets. Since the Washington mentality of limitless borrowing and drunken-sailor-spending has not even been questioned let alone changed I don't see a future for the dollar (unfortunately) except few corrections within downtrends across the board.
"Luxury is one of the basic needs", (c), Don Corleone
  • #16
  • Apr 1, 2008 12:06am Apr 1, 2008 12:06am
30 year time scale? No.

Election in 8 months. Withdrawal from Iraq (or victory) will boost sentiment too.

Look how all USD pairs reacted to Bear Stearns collapse. Not much changed, because IMHO the pairs are about as devalued as they can be.

The only thing that will make $$$ fall significantly harder is a depression, due to housing market collapse. We'll have to see.
  • #17
  • Apr 1, 2008 2:12am Apr 1, 2008 2:12am
if US withdrew from Iraq I will buy EUR since there will be less hope for USD to rebound
  • #18
  • Apr 1, 2008 4:51am Apr 1, 2008 4:51am
Quoting Rabid
The USD is gaining strength... but there's a rule "never catch a falling knife."
Unless you've got an exceedingly skillful hand.
  • #19
  • Apr 1, 2008 11:43am Apr 1, 2008 11:43am
Quoting tdion
30 year time scale? No.

Election in 8 months. Withdrawal from Iraq (or victory) will boost sentiment too.

Look how all USD pairs reacted to Bear Stearns collapse. Not much changed, because IMHO the pairs are about as devalued as they can be.

The only thing that will make $$$ fall significantly harder is a depression, due to housing market collapse. We'll have to see.
Withdrawal from Iraq wont make the dollar go up. What it would do is make Middle East equities go down. So if Obama wins and immediately orders a withdraw of all troops, get ready to short UAE stock quick. Also, there is no such thing as "victory" in Iraq. It isn't that simple. It could be ten years before things are actually healthy and stable in Iraq with infrastructure developing without fear etc. It is a worthy goal, though there will never be "victory" because there isn't an actual declared war ongoing.

Overall though, I agree with you in principle about how to trade. Very few, although they do exist, can TRADE daily and make regualr profits. All us normal folk need to take the investing approach. Such as invest and retire at 55. Shucks.
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #20
  • Apr 1, 2008 9:30pm Apr 1, 2008 9:30pm
tdion, what type of return are you looking at? My feeling is that
as soon as the world says the dollar is worthless, you will see an improvment. so you probably are right...but how long do you hold! before it goes in the tank again.
0 traders viewing now