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Fundamental Trading with a Directional Bias

  • #41
  • Jan 10, 2015 2:47pm Jan 10, 2015 2:47pm
Quoting verv
I wouldn't expect money to flow into gold, nothing at the moment seems to indicate that is going to happen. Gold is really a hedge against paper money, when the FED started their QE program many thought it would lead to hyperinflation - they were wrong, but that is what drove gold price higher, and down after the crisis went away. Money prefers to move into the US dollar, mostly because it is less volatile and more liquid, investors much prefer a liquid safe haven. The threat of deflation around the world could force the metals much lower again....
I think I have read right Verv that yes that's why we have seen Gold increase in value, as per the chart I attached a link to, because people were moving money into Gold and out of the US dollar as the Dollar was decreasing in value...
  • #42
  • Jan 10, 2015 2:50pm Jan 10, 2015 2:50pm
Quoting jakeparkin
{quote} I think I have read right Verv that yes that's why we have seen Gold increase in value, as per the chart I attached a link to, because people were moving money into Gold and out of the US dollar as the Dollar was decreasing in value...
Sorry I didn't open the link initially. But yes.

It was really the fear of what might happen the dollar that drove money, in reality it didn't drop in value that much to warrant the huge rise in gold.

Gold is a smaller market though, doesn't take nearly as much to move it around.
  • #43
  • Jan 10, 2015 2:59pm Jan 10, 2015 2:59pm
Quoting verv
{quote} Sorry I didn't open the link initially. But yes. It was really the fear of what might happen the dollar that drove money, in reality it didn't drop in value that much to warrant the huge rise in gold. Gold is a smaller market though, doesn't take nearly as much to move it around.
Yes I agree. As long as we understand this supply and demand stuff, we're good to go.

Welcome to FF by the way Verv, and to this thread!
  • #44
  • Jan 10, 2015 5:39pm Jan 10, 2015 5:39pm
Thanks to all for their opinions, post and feedback.
  • #45
  • Jan 10, 2015 6:55pm Jan 10, 2015 6:55pm
https://charts.mql5.com/6/681/xauusd...ices-ltd-2.png


Here is Gold to USD daily. Underneath is USDCAD inverted and CrudeLight Feb futures line graphs of closing prices.
I wish I'd seen this when crude broke in July.
  • #46
  • Jan 10, 2015 8:40pm Jan 10, 2015 8:40pm
Hey very nice post Bobart! That's what I'm talking about. Perhaps we can watch crude prices and catch the reversal trade on the Canadian. However, that may take a while since there's such a glut of oil. If it had been a snake, it would have bit us! lol
I do agree with some of the others about a deflationary atmosphere. Perhaps Gold will stay in the $1200 range, or go down, but a lot of people think it is a bargain at this price,including the Chinese. I'm going to give a quick check on these 2 commodities each morning before I place any trades. Anything to get an edge on the market.
  • #47
  • Jan 10, 2015 8:57pm Jan 10, 2015 8:57pm
http://www.stocktrendinvesting.com/b...-yen-so-strong

Here is a very nice article on the yen and why it so strong against the other currencies at this time.
The only thing about trading the Yen, is those Long Candles it can produce. If your on the wrong side, it's a killer. However, if your in with the trend, it can be like a locomotive and rack up some amazing PIPS. After reading this article, I may go long on a mico lot for the year. Can't see how you could go wrong. Any comments on that theory from other posters? Am I wrong in that assessment?
  • #48
  • Jan 10, 2015 9:08pm Jan 10, 2015 9:08pm
Sorry for the out of date article I just posted, it's from 2010. However, I believe the fundamentals in the article are still intact. It's a long term analysis about the Yen.
I was just wondering what has been behind the YENS performance lately. I guess their niche in the Export business is keeping them afloat. It appears their doing a pretty good job.
  • #49
  • Jan 11, 2015 5:52am Jan 11, 2015 5:52am
@Charismatic

There may be more than these two reasons, in fact there definitely will be, but the ideal currency to hold money in is the US Dollar, so as the recession was ending people must have been feeling more comfortable with holding Dollars. Japan also has a huge QE program taking place
  • #50
  • Jan 11, 2015 1:18pm Jan 11, 2015 1:18pm
We have a much quieter week coming this week but still shouldn't be a problem to make some pips from the market.

Tuesday 13 January 2015

We have some inflation data coming for the UK. Inflation is a major concern for the Bank of England currently, and with expectations at 0.3% lower than previous, this should prove bad for the Pound once again. If inflation does come in this low, then Gov Carney will have to write a letter to the Treasury explaining why inflation has dropped this low. I'll be looking to sell the Pound against stronger currencies such as the New Zealand Dollar, Aussie Dollar and the US Dollar at London open. 30 pips on each would be nice.

Wednesday 14 January 2015

On Wednesday we have Retail Sales reports from the US. I personally won't be trading this as these aren't a major concern of the Fed and they have been quite strong recently so I wouldn't expect them to have much effect on the sentiment of the market beforehand.

We also have a European Court of Justice Ruling. I'll be stopping out of all markets on this day for that reason.

Thursday 15 January 2015

On Thursday we have a PPI release from the US, as well as unemployment claims. The PPI reading is forecast to be worse than previous which will be a concern for the Fed as their major concern regarding the hike of interest rates is that inflation isn't at a high enough level yet. Although this won't be as much of an important factor, the Unemployment figures are forecast to be worse than previous, so it should help the cause on Thursday. I'll be looking to Sell the Dollar against stronger currencies again such as the New Zealand Dollar and the Aussie Dollar. A Sell on USD/JPY may also be effective.

Friday 16 January 2015

On Friday we have CPI numbers from the US. These are forecast to be the same as previous but I personally would favor towards the negative side as the Fed would be wanting an increase in order to be able to raise rates sooner. Not sure whether I will take a trade on this yet, I'll see how the market plays out over the week.

Thanks
JP
  • #51
  • Jan 11, 2015 1:36pm Jan 11, 2015 1:36pm
You are fighting a long term downtrend in the AUD if you are thinking about selling. But I agree that any decision to push back a rate hike by the fed will be viewed as bearish for the dollar in the short term, so certainly cannot fault the logic.

I expect the USD to keep advancing throughout 2015, assuming that rate hike ever comes, but I think it just might this time around. I think inflation is the target, but a rate hike also hurts alot of political enemies of the US too, I know that is not officially a mandate, but in this era of economic warfare it is hard to ignore.

Do we have any idea where all the money is going in the dollar? Lots of money flushing around, if you could identify an area where it was entering you could watch that particular market for any changes which might indicate ahead of time if there is a reversal. US treasuries might be the spot to look but I don't know. The increase rates in the fed fund rates would normally indicate a higher yield on treasuries, but instead treasuries yield have been pushed lower - maybe that is where money is flowing and perhaps the place worth keeping your eye on as well?

https://uk.finance.yahoo.com/echarts...5ETNX;range=6m
  • #52
  • Jan 12, 2015 4:16am Jan 12, 2015 4:16am
Hey all,
I think NZD is looking pretty strong at the moment (see charts) so would be interested mostly in trading against that with the GBP. Would look especially good if it was somewhere around the yellow lines
See what tomorrow brings hey.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: gbpnzd.png Size: 86 KB
Click to Enlarge Name: nzdh4.png Size: 243 KB
nollej is power..
  • #53
  • Jan 12, 2015 9:23am Jan 12, 2015 9:23am
Quoting nollej
Hey all, I think NZD is looking pretty strong at the moment (see charts) so would be interested mostly in trading against that with the GBP. Would look especially good if it was somewhere around the yellow lines See what tomorrow brings hey. {image} {image}
@Nollej

Yes it is looking strong, I'll be looking to use NZD against the Pound tomorrow for sure!
  • #54
  • Jan 12, 2015 12:52pm Jan 12, 2015 12:52pm
Hi guys,

i'd really like this trading style! i did Never traded on fundamentals before, so i would like to ask you guys a couple of questions! How do you guys determine if you are dealing what a strong currencie on a fundamental base?
What makes a currencie strong on fundamentals end what makes them weak? perhaps A healty in flation rate or the height of the interst rate? what to look for in fundamentals?

Regards,
Stanleya
  • #55
  • Jan 13, 2015 1:58am Jan 13, 2015 1:58am
Looks like gbp had a break before the london open.. will chuck a pending sell at the previous support and see where she goes..
Attached Image (click to enlarge)
Click to Enlarge Name: gbpnzd-m15-tickmill-ltd.png Size: 76 KB
nollej is power..
  • #56
  • Jan 13, 2015 4:13am Jan 13, 2015 4:13am
Quoting nollej
Looks like gbp had a break before the london open.. will chuck a pending sell at the previous support and see where she goes.. {image}
@Nollej

Yes it did, noticed this. I still managed to take 40 pips this morning. Done for the day now, good day!
  • #57
  • Jan 13, 2015 4:18am Jan 13, 2015 4:18am
Quoting stanleya
Hi guys, i'd really like this trading style! i did Never traded on fundamentals before, so i would like to ask you guys a couple of questions! How do you guys determine if you are dealing what a strong currencie on a fundamental base? What makes a currencie strong on fundamentals end what makes them weak? perhaps A healty in flation rate or the height of the interst rate? what to look for in fundamentals? Regards, Stanleya
Hi, welcome to the thread, great to have you. Fundamentals are what move the markets, so they're invaluable. When looking for strong and weak currencies, there are two ways, the healthy figures as you've mentioned but also what the central bank are saying. If for example we have some strong data but it is too strong, and the Central bank are looking at dropping rates, this will usually provide some weakness. Vice versa too, like the US. Weak interest rates but the central bank will raise soon, there is tonnes of money flowing into the dollar.

And for the data to trade on sentiment, trade what the central bank are looking at. If they're concerned about employment, trade employment data. If they're concerned about inflation, trade inflation.
  • #58
  • Jan 13, 2015 11:19am Jan 13, 2015 11:19am
Hey,

Thank you for replying @jakeparkin! You're answer clears alot out for me. Can i find the monetery policy of the FED online? What internet site's do you use to gahter fundamental information? i would like to ask you for you're opinion of my longer term vision of the euro economie. So for example in europe the ECB probably starting a scheme to buy up obligations of AAA rated contries to get more liquidity in the market to give the economie a boost, because of this the inflation will rise en the ECB could raise interst because of the rise, it becomes more intersting to buy the euro and overall the euro is getting stronger am i right on this one? i would like to hear you opion!!

Btw. Made some pretty awsome trades selling the pound at Londen opening!

regards.
  • #59
  • Jan 13, 2015 12:27pm Jan 13, 2015 12:27pm
Quoting stanleya
Hey, Thank you for replying @jakeparkin! You're answer clears alot out for me. Can i find the monetery policy of the FED online? What internet site's do you use to gahter fundamental information? i would like to ask you for you're opinion of my longer term vision of the euro economie. So for example in europe the ECB probably starting a scheme to buy up obligations of AAA rated contries to get more liquidity in the market to give the economie a boost, because of this the inflation will rise en the ECB could raise interst because of the rise, it...
@Stanleya

The monetary policies can all be found online. I personally read Bloomberg Currencies News everyday, CentralBankNews.info as it brings together a collection of stories per day, and then here on ForexFactory for the Calendar. I also follow ForexLive with notifications on Twitter to update me on any surprise news announcements or things happening in real time.

Good thinking but technically no. Once a country starts to implement QE stimulus, this is a sign to investors that the currency is very weak and there are large problems. Investors will start to look for havens for their money, so different currencies, and move away. Also, even though technically it will increase inflation, it isn't a true increase because this QE can't last forever. It is as it is called, a stimulus, to simply try and kick start the economy.

You made some good trades? Great to hear, it's good to hear people having success!
  • #60
  • Jan 13, 2015 1:13pm Jan 13, 2015 1:13pm
Quoting stanleya
Hey, Thank you for replying @jakeparkin! You're answer clears alot out for me. Can i find the monetery policy of the FED online? What internet site's do you use to gahter fundamental information? i would like to ask you for you're opinion of my longer term vision of the euro economie. So for example in europe the ECB probably starting a scheme to buy up obligations of AAA rated contries to get more liquidity in the market to give the economie a boost, because of this the inflation will rise en the ECB could raise interst because of the rise, it...
@Stanleya

Sorry, I forgot to say, my broker also gives a quick overview of the coming day, so basically news points to watch. This is good as it ties in with my own research the night before. They release this around 7:00AM GMT, so I can take a look at that too.
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