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Identifying Market Swings - Medium and Long Term Trading

  • #181
  • Feb 10, 2010 7:35am Feb 10, 2010 7:35am
Quoting Razorjack
Hi Pilatus,

Welcome to the thread.

So, as I understood you correctly, you pay attention to find a pair which can be good for carry trade.

This is wrong, I'm not sure where you got this from.

Please re-read post #1 and #10.

What I wrote is that I look at the overall global economy and determine what those conditions are. Then go further down to determine where the biggest trends will be.

It could be carry trades or equities driven currencies, etc.

[color=#0000ff]That is the main goal, to find a pair which can have...
Thanks for answer buddy. I will reread the thread again and follow your posts.
  • #182
  • Feb 10, 2010 7:50am Feb 10, 2010 7:50am
It looks like Dubai World is asking for a debt freeze of $22 billion this month. Last time this happened, the markets received quite a bit of a shock Nov 25-27 2009.

Well it looks like more fuel for risk aversion.

I could be wrong, but it doesn't look like this has been factored into the markets yet. Or maybe it won't have as a great of an impact as before.

However I think that this will just add more fuel to the fire in sovereign debt risks. Let's see how it develops over the next few days.
-Razorjack
  • #183
  • Feb 10, 2010 8:18am Feb 10, 2010 8:18am
Quoting Razorjack
It looks like Dubai World is asking for a debt freeze of $22 billion this month. Last time this happened, the markets received quite a bit of a shock Nov 25-27 2009.

Well it looks like more fuel for risk aversion.

I could be wrong, but it doesn't look like this has been factored into the markets yet. Or maybe it won't have as a great of an impact as before.

However I think that this will just add more fuel to the fire in sovereign debt risks. Let's see how it develops over the next few days.
Hi Razor

How did this news come to your attention ? There doesn’t seem to be much news on it yet which probably explains why you say it hasn’t been factored into the market.

I would have thought though that a story like this would have got more attention immediately.
  • #184
  • Feb 10, 2010 8:31am Feb 10, 2010 8:31am
Quoting Astellas
Hi Razor

How did this news come to your attention ? There doesn’t seem to be much news on it yet which probably explains why you say it hasn’t been factored into the market.

I would have thought though that a story like this would have got more attention immediately.
http://www.cnbc.com/id/35326845/site/14081545

Yes, I agree. I also would have thought that this would have made the news everywhere by now. But then again maybe everyone is so occupied with Greece and the other EZ debt problems.

Or maybe markets don't see this as a big problem yet, so it's hard to tell.

Anyways at worst, it won't push the markets at all, at best it will add more fuel to the fire in risk aversion.
-Razorjack
  • #185
  • Feb 10, 2010 8:40am Feb 10, 2010 8:40am
Hi Razor,

I like to thank you for your sharing and starting this very educational thread.

Would like to share 2 articles that paints a very bleak picture, both for the US economy and the Eurozone.

Assuming both are credible, which I think the arguments are quite strong, can I have your comments on how to translate this into forex trading info?

http://www.businessinsider.com/20-re...recover-2010-2

http://www.stratfor.com/weekly/20100208_germanys_choice
  • #186
  • Feb 10, 2010 9:23am Feb 10, 2010 9:23am
Quoting SamTIF
Hi Razor,

I like to thank you for your sharing and starting this very educational thread.

Would like to share 2 articles that paints a very bleak picture, both for the US economy and the Eurozone.

Assuming both are credible, which I think the arguments are quite strong, can I have your comments on how to translate this into forex trading info?

http://www.businessinsider.com/20-re...recover-2010-2

http://www.stratfor.com/weekly/20100208_germanys_choice...
There are some valid points in those articles, but there is also a lot of exaggerations IMO.

Assuming both are credible, which I think the arguments are quite strong, can I have your comments on how to translate this into forex trading info?

Assuming both will come true, why don't you do the analysis? I have provided all the tools in this thread.

I will start you out with the first step. Will these 2 occurrences cause risk aversion or risk appetite?

If you know the answer to this question then it's quite simple for you to figure out what will probably happen in the forex markets.
-Razorjack
  • #187
  • Feb 10, 2010 10:53am Feb 10, 2010 10:53am
Quoting Razorjack
http://www.cnbc.com/id/35326845/site/14081545

Yes, I agree. I also would have thought that this would have made the news everywhere by now. But then again maybe everyone is so occupied with Greece and the other EZ debt problems.

Or maybe markets don't see this as a big problem yet, so it's hard to tell.

Anyways at worst, it won't push the markets at all, at best it will add more fuel to the fire in risk aversion.
So, with the belief that it is European Banks that have lent much of this money to Dubai then this will only weigh on the Euro further.
  • #188
  • Feb 10, 2010 11:44am Feb 10, 2010 11:44am
Quoting Astellas
So, with the belief that it is European Banks that have lent much of this money to Dubai then this will only weigh on the Euro further.
Key word: IF

IIRC, European and US banks had very little exposure to these debts. It's was more of the local and middle eastern banks that had the biggest exposure. So it may not have as much of an impact.

But only time will tell. We could see it get more and more urgent as it gets closer and closer to the bond maturity dates.
-Razorjack
  • #189
  • Feb 10, 2010 2:04pm Feb 10, 2010 2:04pm
Quoting Razorjack
Key word: IF

IIRC, European and US banks had very little exposure to these debts. It's was more of the local and middle eastern banks that had the biggest exposure. So it may not have as much of an impact.

But only time will tell. We could see it get more and more urgent as it gets closer and closer to the bond maturity dates.
Right, Ok. I got that from an older news report that couldn’t have had the facts at the time. Something to watch out for.

How frequently do you check for news ? Is it a once daily thing ? I have found today that I kept checking about every hour. Seems like it’s easy for it to become an addiction.
  • #190
  • Feb 10, 2010 2:13pm Feb 10, 2010 2:13pm
um, so what does this debt freeze mean for currencies?!?
  • #191
  • Feb 10, 2010 2:17pm Feb 10, 2010 2:17pm
Quoting Astellas
Right, Ok. I got that from an older news report that couldn’t have had the facts at the time. Something to watch out for.

How frequently do you check for news ? Is it a once daily thing ? I have found today that I kept checking about every hour. Seems like it’s easy for it to become an addiction.
Also Dubai World has a enough money left over from the bail out to cover some but not all of the bonds due to mature this year.

In regards, to the news, yes, I check it as often as I can. Not so much an addiction more like a habit. After a while, I've learned to quickly scan the headlines and get a feel for the most important news.
-Razorjack
  • #192
  • Feb 10, 2010 3:08pm Feb 10, 2010 3:08pm
Quoting Razorjack
Also Dubai World has a enough money left over from the bail out to cover some but not all of the bonds due to mature this year.

In regards, to the news, yes, I check it as often as I can. Not so much an addiction more like a habit. After a while, I've learned to quickly scan the headlines and get a feel for the most important news.
Now I feel like a News Junkie
  • #193
  • Feb 10, 2010 3:13pm Feb 10, 2010 3:13pm
Quoting TGpop
um, so what does this debt freeze mean for currencies?!?
i guess this is what you meant when you said there will be little or large fluctuations within the long term trend...
  • #194
  • Feb 10, 2010 3:52pm Feb 10, 2010 3:52pm
Razor, i came to a conclusion on economics on forex a few weeks ago- that they are important and are ultimatley what drives the market, and that if we are uptrending and say, GDP is increasing, and low interest rates, then that must be/could be the variables that are driving this trend, and therefore we should watch them . Also, despite economics price may not do what we expect, an uptrend we expect higher highs and lows.

Howeverm this conclusion means that you have to wait for a trend to form rather than getting in before the herd. But i'm changing, im slightly confused, i used to think it was impossible to trade just with economics and be able to have a plan and anticipate changes...then you come along and say it's possible.

I suppose it's a constant and very steep learning curve isn't it? Once you think TA is enough (which it may be btw) you realise you should be learning economics too.....
  • #195
  • Feb 10, 2010 7:31pm Feb 10, 2010 7:31pm
Quoting TGpop
um, so what does this debt freeze mean for currencies?!?
Increasing the risk of aversion makes the so called "safe heaven" currencies gain strength. JPY, USD and CHF go up and the "riskier currencies" loose strength, then EUR, CAD, AUD, and NZD go down. making pairs like AUDJPY go down by hundreds of pips very quickly.

Now, razorjak takes his time to answer our questions, but I don't blame him if he sees the same questions over and over and he decides not to answer them. He tries to help us all but some of this information was discussed in earlier post, it takes effort to go to previous posts and read it, but it is worth it.

Razor, thank you for your patience
  • #196
  • Feb 10, 2010 7:47pm Feb 10, 2010 7:47pm
Quoting TGpop
Razor, i came to a conclusion on economics on forex a few weeks ago- that they are important and are ultimatley what drives the market, and that if we are uptrending and say, GDP is increasing, and low interest rates, then that must be/could be the variables that are driving this trend, and therefore we should watch them . Also, despite economics price may not do what we expect, an uptrend we expect higher highs and lows.

Howeverm this conclusion means that you have to wait for a trend to form rather than getting in before the herd. But i'm changing,...

TGpop, Razor recommended two books that help to put things together and come up with educated conclusions.
  • #197
  • Feb 10, 2010 8:12pm Feb 10, 2010 8:12pm
Razor,
If i'm correct you see how prices react to the news in order to "feel" where the risk is going.
I learned from FPA that news affect the price very drastically in the first 45 minutes.
We had the AUD employment rate unveiled hour and a half ago and prices are moving like if risk of apetite is growing.
Is this reaction a small indicator that the risk of apetite is slowly taking over?
I know that there are much bigger things going on in Europe and Dubai, but the trends already changed direction in the short term.
Also it seems that tomorrow they will be anouncing news about Greece and.
I don't know fundamental to read the market. I use a paid service to read where it is going and this paid service show that the momentum is definetilly going to risk of apetite. This momentum is about to take over on the medium term charts.

Thank you for opinion.
  • #198
  • Feb 10, 2010 8:25pm Feb 10, 2010 8:25pm
Just realized that I didn'r finished this sentence.

"Also it seems that tomorrow they will be anouncing news about Greece and... if the market moves towards risk of apetite after the news are released, are you going to build up your positions? (I remember that you want to catch the reversal as soon as possible)
  • #199
  • Feb 10, 2010 11:42pm Feb 10, 2010 11:42pm
Good little thread going on here, congrats to Razor.
Even though i'm not a purely long/medium term guy, and i do use mainly TA, with a "whole" picture in mind, seeing someone using common sence and a simple approach, is refreshing.
From my point of view the EUR/USD has offered almost a predictable turn,
but it is the AUD/USD that has had some excelent opportunities (including a major TL break), and my favorite type of reversal.
I think we may be overdue for some "consolidating" type action, probably to the upside, we'll see.
I use fibs, and only trade the majors.
Biggest joker
  • #200
  • Feb 11, 2010 12:06am Feb 11, 2010 12:06am
Quoting Kristopher01
Even I use fibs. I think AUD/USD has the limited opportunities. From the profit point of view, EUR/USD can predictable and we can make profits.
Hi Kristopher, talking about last 4 days hourly action on AUD, better than EUR, normaly, yes, i'd agree.
Biggest joker
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