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Identifying Market Swings - Medium and Long Term Trading

  • #481
  • Apr 3, 2010 2:01pm Apr 3, 2010 2:01pm
can someone explain to me why the balance of payments balances? im really confused lol.

if we import more than export- how does that mean we have to borrow?!!?
i understand that when we borrow it comes in as a credit (+) in the capital account but why does the economy need to do that when it doesn't need to?
  • #482
  • Apr 4, 2010 2:24am Apr 4, 2010 2:24am
Quoting TGpop
can someone explain to me why the balance of payments balances? im really confused lol.

if we import more than export- how does that mean we have to borrow?!!?
i understand that when we borrow it comes in as a credit (+) in the capital account but why does the economy need to do that when it doesn't need to?
It's no more complicated than a family's income and expenditure
- import more than export = expenditure greater than income
  • #483
  • Apr 4, 2010 2:26am Apr 4, 2010 2:26am
For a laugh,
http://www.macrotactics.com/
  • #484
  • Apr 4, 2010 4:57am Apr 4, 2010 4:57am
Quoting robertw
Very interesting what you write, especially the things about USDJPY are coming true as you have described for the short term since you wrote it. Spot on.
R
Thanks, but I have to admit, that Razorjack said something like this first... I was only technical trader until I found this thread and since than I have read books recomended here, I read Kathy Lien's comments on fx360.com, I watch comments on one local trading portal and I try to combine all this information together... That's all... And I could be wrong of course, so I would like to read comments and ideas of more of you, mainly from more experienced traders then me. Go guys, keep this tread live and with high information value.
I'm looking forward to Razorjack's return :]
Don't touch, just look...
  • #485
  • Apr 5, 2010 1:20am Apr 5, 2010 1:20am
Y[i]es, it has happend on 24th of March. So, the short term trend has changed to bull and the question is, where it will end. I think, it will go at least to about 100.
1) The 38.2 % fibo level of the move from June 2007 to November 2009 is at 99.82
2) There is a head&shoulders formation on the weekly chart. Based on this formation it should go to about 101.
Then can come a correction and I think this trend will continue -> it will become a medium trend because of fundamentals (FED will raise interest rates much sooner then BOJ, Japan need week Yen because they are export based country, ...)
See the attached chart.

Hi AQW3R,
when expecting that Feds will increase feds fund rates, how do u anticipate that?
by inflation figures , job figures ??
cheers mate
alles
  • #486
  • Apr 5, 2010 4:21am Apr 5, 2010 4:21am
I shorted gold on thursday. It plunged when it re opened and my broker took me for a loss. Then I guess it realized it had made a mistake and opened the trade back up, AFTER it had climbed back to almost break even. I was up a fortune and got hosed. This ever happen to anyone else? It was almost like the pricks knew it was going to go back up and didn't want to take the risk of me taking the profit.
  • #487
  • Apr 5, 2010 4:33am Apr 5, 2010 4:33am
if USDJPY looks good for a long; why not go long AUDJPY? bigger differential i would've thought? any thoughts on this?
  • #488
  • Apr 5, 2010 4:49am Apr 5, 2010 4:49am
Quoting TGpop
if USDJPY looks good for a long; why not go long AUDJPY? bigger differential i would've thought? any thoughts on this?

On the long term AUDJPY looks good. I understand that tomorrow the Aussie interest rate might be raisen .25% the carry trade should make this pair a very profitable pair if you go long, but watch out because they might be a retracement on the short term trend any day this week. It might be better wait until it retraces and then enter the long term position. That is just my opinion.
  • #489
  • Apr 5, 2010 5:03am Apr 5, 2010 5:03am
Quoting rac
On the long term AUDJPY looks good. I understand that tomorrow the Aussie interest rate might be raisen .25% the carry trade should make this pair a very profitable pair if you go long, but watch out because they might be a retracement on the short term trend any day this week. It might be better wait until it retraces and then enter the long term position. That is just my opinion.
yes;needs a big retracement but i'd look to go long this pair and hold for a while if the interest rate gets bumped up
  • #490
  • Apr 5, 2010 5:17am Apr 5, 2010 5:17am
Quoting TGpop
yes;needs a big retracement but i'd look to go long this pair and hold for a while if the interest rate gets bumped up
If the interest rate is not bumped up, it might go down for few days, but it still will be a good bet for the long term trade. That is my opinion.
  • #491
  • Apr 5, 2010 8:27am Apr 5, 2010 8:27am
Quoting rac
If the interest rate is not bumped up, it might go down for few days, but it still will be a good bet for the long term trade. That is my opinion.
like razor says it'll be a short term correction in a medium/long term trend
  • #492
  • Apr 5, 2010 3:01pm Apr 5, 2010 3:01pm
Quoting allesf
Hi AQW3R,
when expecting that Feds will increase feds fund rates, how do u anticipate that?
by inflation figures , job figures ??
cheers mate
alles
Hi, allesf. I'm just a beginner in the economic fundamentals, so I will use a part of Kathy Lien's comment:
"... the improvements in the U.S. economy should give the Fed the nudge that they need to unwind emergency measures and tighten monetary policy more quickly."
Fed will have to do those steps, they will have to raise interest rates (Fed funds rate, discount rate, ...). The question is the right timing. The right timing means a lot of things, like healthier labor market. I think, they want to see better numbers (ISM, NFP, sales of xy) for some time first.
What is for sure now already, they will do those steps sooner then ECB and BOE and as the last will be BOJ. This means that BOJ will keep JPY cheap. All that is in long term view. So, for example, in long term will be EUR/USD and GBP/USD bearish and USD/JPY bullish.
Don't touch, just look...
  • #493
  • Apr 5, 2010 3:54pm Apr 5, 2010 3:54pm
im really young and got a bit confuzzled in victor sperandeo's explanation of the open market operations;all this stuff about gross and nominal rate ; i've re read it many times but still don't get it . Anywhere else to 'get' the fed's open market operation? take in mind that i only have trader vic 1 and not 2, i have ashrafd laidi's book and read it twice , i don't have kathy liens; would kathy's and the second trader vic book help me with economics? thanks
  • #494
  • Apr 6, 2010 1:32am Apr 6, 2010 1:32am
Quoting TGpop
im really young and got a bit confuzzled in victor sperandeo's explanation of the open market operations;all this stuff about gross and nominal rate ; i've re read it many times but still don't get it . Anywhere else to 'get' the fed's open market operation? take in mind that i only have trader vic 1 and not 2, i have ashrafd laidi's book and read it twice , i don't have kathy liens; would kathy's and the second trader vic book help me with economics? thanks
I didn't read any Kathy's book, I read only her comments on fx360.com and it's helpful. I think it's good idea to read also Trader Vic 2. There are sections which can help you.
Don't touch, just look...
  • #495
  • Apr 6, 2010 6:12am Apr 6, 2010 6:12am
Hello AQW3R,
That makes sense, however how do we know the right time to get in?
we can not wait until they raise the feds fund rate rite?
you know as u have said this is the correct way to go. study the fundermetals then use your technicals, but theres a catch ! timming?
cheers mate,
  • #496
  • Apr 6, 2010 7:29am Apr 6, 2010 7:29am
to the guy above; it doesn't really matter if you miss the beginning- you can always get in on the trend later anyway; buy pullbacks
  • #497
  • Apr 8, 2010 2:22am Apr 8, 2010 2:22am
Quoting Razorjack
I felt that I needed more knowledge over what was happening in the markets and why they moved the way they did. So I learned all I could about economic fundamentals. This was the best decision of my life and I haven't looked back since.

Now I am consistently profitable and feel that I have control over my trading. Understanding the economic fundamentals has helped me make money in markets other than forex as it is all tied in together.

I am position trader and I trade the medium term and long term trends.

<truncate>

-Razorjack
Razorjack mate, I REALLY REALLY relate to what you're saying here and the road that I've walked is more of less the same also.... including the hundreds of books and a LONG time doing TA.

I kinda know it in my head, but still am rather fresh on the fundies part.
But WHY it works.... very simple, the big boys swinging the yards around, are NOT going to be jumping on a 15min shooting star... they're going to be positioning themselves to profit.

If we wanna ride with the big boys we gotta think like them.

I work quite heavily based on inter-market analysis (john Murphy) and watch the rates market to give me a heads up on what's cooking. Have read Sperandeo as well and am working on economics. Yields are dipping signalling that the big $ is cycling out of bonds, likely back into equities and d/c rates are still at all time lows. Economies also have yet to be fully weaned of stimuli. The "usual" thing is for a weak dollar and strong equities. My personal view is that the strong Doll is event driven by the whole greece situation. Euro-Doll bipolarity.

I was wondering if anyone on FF even thought of using economic fundamentals to speculate positionally. Thankfully this thread exists.

Am currently reading:
The Secrets of Economic Indicators (Wharton press) [I know it sounds cheesy ass...but seems to be detailed enough]
and
International Economic Indicators & Central Banks.

Oh, another decent book is Intermarket Analysis & Currency Trading.
It's not a 'how to' / txtbook guide like Murphy, but it gives a good feel for situational changes. IMO, it should have covered more ground to be more comprehensive, but it's better than nothing.
Would read it after Murphy's (both editions) though.

Will post more abt economics when my thoughts on it are more coherent.
I trade Eurodollar only. Reason being it's easier to focus on 2 economies than a whole buncha other things... Am also gonna keep tabs on the Aussie economy. Just picking one of the commodity ccys for inter-market reasons.

Current outlook is obviously the Greece situation and it's ability to re-fi. even if it does, what's happening is that the strong blokes in EU gotta support the weak ones. Growth in EU just died as well.

On the other hand, the US ISM data has been pretty strong and rate of change of NFP has been slowing. So unemployment is gradually dwindling. Good for Dollar. The main risk is a rate hike, but given unemploymt situation, I do not foresee that in future. Will have to look @ the up coming numbers.

Looking fwd to hanging out here more.
One Mind, Any Market
  • #498
  • Edited 12:46pm Apr 8, 2010 12:30pm | Edited 12:46pm
oh F me sideways. Jack got tired of this place aye?
http://www.forexfactory.com/showpost...&postcount=407
One Mind, Any Market
  • #499
  • Apr 8, 2010 5:54pm Apr 8, 2010 5:54pm
got long USDJPY 92.90 boys; holding onto this
  • #500
  • Apr 11, 2010 4:55pm Apr 11, 2010 4:55pm
hmmm huge gap up in eurusd: big boys buying up as greece gets bailed out? i dunno, i don't think bailing 'just' greece is going to get rid of the rest of the PIGS in the e/u . again though if you were short crap like this happens and is why you enter with small risk (1%) and add as it goes.

i really hope razorjack comes back; i read the thread again and i feel like the 'big picture' is coming more clear....

i'm not saying i can trade consistently profitably right off the bat; but im prepared to go live, trade small risk (0.5-1%) and accept loss and really try learn from my mistakes
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