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

  • #21
  • Apr 1, 2008 10:01pm Apr 1, 2008 10:01pm
Quoting tdion
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.
Ouch, good luck with that...
  • #22
  • Apr 1, 2008 10:19pm Apr 1, 2008 10:19pm
USD/CHF on 1 to 1 each pip is worth $10.
When chf doubles compared to usd each pip will worth $20, so you will be down $10,000 not $5000. and if USD is worth only 1/4 CHF you will be down 30,000 and so forth.
Remember that you invest $100,000 for every standard lot so if $100,000 is worth nothing you have lost $100,000. Of course margin will kick you out much earlier.

Correct me if I am wrong in these calculations.
  • #23
  • Edited 11:44pm Apr 1, 2008 11:29pm | Edited 11:44pm
I hadn't thought of that.

EDIT) That can play into your advantage if you trade into a direction that increases your $/pip value.

Quoting irusoh
USD/CHF on 1 to 1 each pip is worth $10.
When chf doubles compared to usd each pip will worth $20, so you will be down $10,000 not $5000. and if USD is worth only 1/4 CHF you will be down 30,000 and so forth.
Remember that you invest $100,000 for every standard lot so if $100,000 is worth nothing you have lost $100,000. Of course margin will kick you out much earlier.

Correct me if I am wrong in these calculations.
  • #24
  • Edited 11:47pm Apr 1, 2008 11:34pm | Edited 11:47pm
The idea was good old buy low, sell high. Bear Stearns hasn't pushed USD any lower. That was bad, but because price stayed level we might be at the bottom.

Again, a great depression like the 20s could be around the corner. USD can fall further, but at some point a limit will kick in because of America's wealth. Foreigners will invest in us. Send students here. Etc...

So even if the USD continues to fall, averaging down might not be bad.

I'm thinking about risking 10% of my account with a 5,000 pip stoploss.

I am also considering a hedge that has good advantages: 1) If price starts moving up, I can exit both long and short for breakeven. 2) If price falls, I can scale out my shorts, and then take profit when price returns to where it is now.

Quoting 4XWeezal
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.
  • #25
  • Apr 1, 2008 11:42pm Apr 1, 2008 11:42pm
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

I couldnt agree more. The truth is fundamentals are not what they used to be. Do you want to hold a position for another presidency? Two terms?? Trading on techs is the only way to trade this market cause the fundamentals can change on a dime. Know this the fed can keep this market anywhere. ANYWHERE. You are actually protecting yourself by trading short term tech.

Keep it up. put it in the bank.
piitb
  • #26
  • Apr 2, 2008 12:22am Apr 2, 2008 12:22am
The direction of the dollar in the next 5 years should be pretty easy to figured out. Simple supply and demand will tell you that. The Fed has "printed" something like 4.3 trillion dollars in the last 2 years. Said differently gold and oil prices are not high...the dollar is just really low! And if someone like MCcain is elected it doesn't seem that war and the over spending will come to an end anytime soon. Added to this is the flow of retiring babyboomers over the next 10+ years. Where will all the money come from to pay for all this??? Maybe the Fed will continue to devalue the dollar...I mean cut interest rates!!
  • #27
  • Apr 2, 2008 12:34am Apr 2, 2008 12:34am
Quoting Master PIPS
The direction of the dollar in the next 5 years should be pretty easy to figured out. Simple supply and demand will tell you that. The Fed has "printed" something like 4.3 trillion dollars in the last 2 years. Said differently gold and oil prices are not high...the dollar is just really low! And if someone like MCcain is elected it doesn't seem that war and the over spending will come to an end anytime soon. Added to this is the flow of retiring babyboomers over the next 10+ years. Where will all the money come from to pay for all this??? Maybe the Fed will continue to devalue the dollar...I mean cut interest rates!!
Sounds about right...
  • #28
  • Apr 3, 2008 4:13pm Apr 3, 2008 4:13pm
Hi, this what i also believe. USA needs to afford their spending trend, both, inside and outside. So, they know how much this affect the other countries, but they don't really care. The way them to keep their economy "floating" is devaluation. This means LONG, in a mid.term meaning to me.
  • #29
  • May 22, 2008 2:41am May 22, 2008 2:41am
the thread is about buying the US$ because of the fundamentals.

I haven`t seen the thread starter mention anything about the fundamentals to support his strategy to buy the US$,
ie the difference in inflation and economic growth in the two countries.

I think it would be wiser to wait for a trend to develop, say up 5% + a shift in fundamentals before buying the US$.

nobody knows when this will happen and in the meantime you`ll might have heavy losses and/or opportunity costs.
  • #30
  • May 22, 2008 2:02pm May 22, 2008 2:02pm
What if in the worst case scenario, Switzerland decides to completely forfeit their currency and use only Euro. The broker will cancel your trade and take all your money.
  • #31
  • May 22, 2008 2:14pm May 22, 2008 2:14pm
Quoting good
What if in the worst case scenario, Switzerland decides to completely forfeit their currency and use only Euro. The broker will cancel your trade and take all your money.
See original post about CHF going to zero.
The basis of a democratic state is liberty. ~ Aristotle
  • #32
  • May 23, 2008 10:09am May 23, 2008 10:09am
Quote
What if in the worst case scenario, Switzerland decides to completely forfeit their currency and use only Euro. The broker will cancel your trade and take all your money.

Actually what happens in that case is the currency is pegged to a euro exchange rate. At that point you might as well close the trade since it won't change much.
  • #33
  • Jun 16, 2008 6:14pm Jun 16, 2008 6:14pm
this is not a "i have ability to call trades right" post but....

up 450 pips from me starting the thread.... as luck would have it
  • #34
  • Jun 16, 2008 8:12pm Jun 16, 2008 8:12pm
Quoting tdion
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.
Not being a Poker Player, I am definately going to screw this up but here goes:

USD is Weak Until New Pres is "Predicted" Then Bull Run;
After Pres is Decided, USD is Strong until "The Winds Of Change" {Policy} intervenes.
Keep your Powder Dry during an 'Election Year'
  • #35
  • Jun 17, 2008 6:10pm Jun 17, 2008 6:10pm
I cannot remember a time when I have even remotely agreed with tdion. However, there is always a first, and I believe this is it.

What he is saying is that this is a long-term, LOW LEVERAGED trade. For example, If his account is 5,000 USD - these pips are not going to be $15/pip.

What does he have to lose? (To all the nay-sayers.) 10%? So what? I am sure he can find a way to make that back in other trades.

Besides, everyone thinks the Dollar is a thing of the past. Which makes me think it's time to start looking at buying it. Because as all of you still living in 1999 know.....INTERNET STOCKS ONLY GO UP.

This is the same kind of non-sense that is going on with the Dollar at the moment. Central banks use the Dollar, and a lot. They are not going to get it handed to them overnight.

I think I would use technical analysis to plan entries, but in general, I think he's on to something. It is ridiculous to think that the Swiss Franc, and therefore economy is stronger than the US. Just the sheer magnitude of the US economy certainly makes this unlikely.

So what the hell? I think I am going to be looking for that long with you tdion. We can argue about it on the beaches of St. Maartin when we close this trade. If we lose out, it's only a loss, and certainly can be overcome.

Also, it's not like there won't be profits on other trades WHILE this one is running. A lot of short-sightedness in this thread I am afraid. (Although I love you all. )

Clockwork
  • #36
  • Jun 18, 2008 7:17am Jun 18, 2008 7:17am
Quoting tdion
this is not a "i have ability to call trades right" post but....

up 450 pips from me starting the thread.... as luck would have it
Tdion i cant resist the easy point score....it wasnt luck it was great analysis on your behalf that scored you those pips.

Hope your 'luck' continues!
Lemming Forex! The Way to Trade....
  • #37
  • Jun 25, 2008 7:54am Jun 25, 2008 7:54am
It's a solid idea. USDCHF is way below PPP and banks know it. Banks have already started correcting GBPUSD PPP overvalue. If you read my posts from 3+ months ago I said AUDUSD and GBPUSD will drop 20+%. Those are definitely not interest positive carries though.
If US repeals Patriot Act you will see large banks open accounts up in the US again for investment purposes. These foreign banks left because US could sieze assets for no reason what so ever with the Patriot Act. (Ron Paul is still the best choice for 2008 regardless of party affiliation/ignorance.)
If the US pulls out of the two simultaneous wars it is currently engaged in the dollar will appreciate. I have to disagree with Jay on this one. It's rare but I have to stick to my guns on this one. I've offered up speculation on this many moons ago. We are spending 400million a day on the two wars. Even if we pull out of one we'll see a dollar rally. You can't win a war in the middle east. They've been fighting for 2,000 years killing in ways Americans can't fathom. So if the US pulls out of the middle east as a whole the progress of lack thereof makes no difference. (With comments like these I'll never be president.)
Oil is a dollar hedge right now and has been for 2 years at an efficiency of 90% so it's pretty safe to hedge against dollars with oil. Is oil going higher? No. At least not much higher. In 2003 there were 13billion invested in oil and mostly as a hedge by bona fide hedgers like oil producers or refiners. Today that number is 300+billion and growing. What happened? We allowed deregulation of energy hedging and ICE opened up in London. ICE is going to be regulated very soon and has agreed to allow CFTC to see all positions, so we can expect to see a steady price decline as contracts expire and corporations get scared. Oil should be valued around $60-$80/bbl based on supply but I doubt we ever see those numbers again. When oil finally sells off the dollar will be a massive benefactor.
Thanks for your time. I hope I have written something that will assist you in your day to day life and future. This is all daydreaming speculation and not trade advice. Thanks again.
It really is that easy.
  • #38
  • Jun 25, 2008 7:58am Jun 25, 2008 7:58am
So as far as a trading concept to follow with this long USDCHF investment; you could just buy when weekly stochastics go oversold. I see my zero lag MACD is showing daily positive divergence.
I think a lot of banks positioned on Monday long USD anticipating today's FOMC release as bullish. Most of the FOMC related speeches lately have been leaning more bullish so this highly anticipated release should solidify the front of the FOMC.
It really is that easy.
  • #39
  • Jun 25, 2008 8:06am Jun 25, 2008 8:06am
Can I ask a dumb question? What is PPP?
  • #40
  • Jun 25, 2008 8:08am Jun 25, 2008 8:08am
Good question. At least someone is paying attention.
http://en.wikipedia.org/wiki/Purchasing_power_parity
It really is that easy.
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