By the time you hear that “stocks are going higher” I can assure you – I am selling you my shares. Right around the time your broker calls and suggests that “now is a good time to buy gold” guess what? – I’m unloading. Your T.V provides you with the exact information needed – to empty your bank account and fill mine. The entire system is a complete scam and oddly….you still keep asking yourself – what am I doing wrong?
It’s bigger than you. You can’t win. Stop now. Give up. Don’t quit your day job and god help you if your wife finds out you just bought Apple. Well…..truth be known – you can win. Don’t give up ( but seriously…don’t quit your day job) and be proud of your recent Apple purchase.
Turn off your T.V and Internet for one week, then ask yourself – “do I really know what I am investing in/what I am doing?” Seriously…..do you really think you know what you are doing?
I like to use the analogy of boats on the ocean – where currencies are a gigantic cruise ship and U.S equities are a speedboat. Sure there are waves (in this case volatility) but it takes a long time to turn the cruise ship around, while the speedboat is already sinking. Fact of the matter is – currency markets are far more stable than equities, and it takes more than a rainy day and a little storm to put that cruise ship on its side.
Granted I think you can get a speedboat/license, and be out on the water in a in an afternoon – where as… not every Tom Dick and Harry putz around in a cruise ship. Fair enough.
I promise you – keeping your eyes on the currency markets ( and not just the silly EUR/USD ‘cuz they’ve got you on that one too) should keep you one step ahead of the next guy.
Check this out:
Making a prediction for the future is easy. (In response to a valued readers questions)
The precious metals have decoupled from the dollar to a certain extent, so putting a time frame on the future prices of these two “asset classes” based on the usual correlations is difficult. I do predict that gold will go up and the dollar will fall. (go figure eh?)
I expect the USD to make its way lower through the first couple weeks of January – then take a usual oversold bounce, and then at least one more leg even lower into the middle/late February. During this time equities will likely push to near term highs then top out and trade sideways. As I am constantly moving in and out of the market I plan to be 100% cash sometime late February early March at the absolute latest, but in a different sense than my usual trading. I will continue to play the safe havens against the risk related currencies with possible addition / focus on EUR.
I plan to completely re-evaluate my trade plans come March.
A previous article worth reading : click here.
Considering that I trade the fundamentals coupled with an extremely accurate shorter term technical system – I will really just allow price to guide me. As per my usual shorter term entries and exits – I am (more often than not) sitting in cash during times of “trendless market direction” so regardless of exact dates / predictions I will trade what I see – as I see it.
I will continue to post real-time trade activity here via twitter, as well through the daily posts. I suggest extreme caution after this next (and possibly final) move up in equities and risk in general – come mid Feb or early March.
I’m usually not one for moment to moment market commentary – but on occasion (for example my “risk on” post some weeks ago with reference to getting short JPY) I have been known to do so.
Take it for what it is…as this is a free blog – but if I was ever a buyer of U.S equities (which as a general rule I am not) – I would buy this close – HARD.
Forgive me for a small poke as well but….the American politicians should be absolutely ashamed of themselves. I’m not sure if anyone living in America still thinks they live in a “free country” – but once again stock holders are more or less “held hostage” till (let me guess) late Sunday night…before getting on with their lives – some I’m assuming worried if they will still have a job in 2013 and/or if additional tax hikes will break them.
Its appalling. Its embarrassing. Shame, shame, shame…..
So….obviously – buy stocks!
Im getting short the USD hard as well staying short JPY – long the commods here, as well getting long EUR late this evening or sometime tomorrow.
Good luck America! Good luck!
This is getting really interesting.
Getting this right could provide some of the absolute best trade opportunities of 2013. I plan to take full advantage. Considering that I expect the coming year to be extremely difficult to trade (and a real minefield for those with little experience) focusing on “what works” will be essential for survival.
As I’d mentioned in a previous article, the dynamics surrounding the U.S Fed’s plans to “print their way out of debt” and the dynamics of Japan’s recent foray into the “monetary easing business” are very different – and well worth pointing out.
Bottomline – Japan’s public debt is predominantly domestically owned (95% is owned by Japan’s own citizens) while the U.S owes more than 50% of its debt to foreigners. Japan’s printing will have little ramifications (globally speaking) and essentially they can print forever – managing this domestically, with almost no risk of default.
Sooner or later holders of U.S debt are going to get extremely “choked” as the dollar denominated paper they own is driven into the ground…and worth less and less and less…….
A quick look at a long term weekly chart of the AUD/JPY.
The recent monetary policy shifts/ implications out of Japan are a game changer if you ask me – and will likely be cornerstone to my trading plans moving forward. Eventually (as well with consideration of “eventual” rising interest rates in America) the U.S game will come to an end. It’s gonna be messy, and it’s gonna be tricky to trade.
The Yen (at least for now) appears to have a much clearer path on its road to “devaluation” than the USD – as the currency wars are now really starting to heat up. Opportunity will be found shorting both, but the fundamentals suggest that the Yen may provide an easier path to profit.
There is much debate on the subject of “gaps” in charts, and it’s been my experience that the vast majority of these gaps do indeed get filled. A large percentage (somewhere around 80%) filled during the following day of trading.
A gap in a chart is essentially an empty space between one trading period and the previous trading period. They usually form because of an important and material event that affects the given security, such as an earnings surprise or a merger or in the case of foreign exchange – announcements pertaining to a given countries monetary policy.
Incoming Japanese Prime Minister Shinzo Abe kept up his calls on Tuesday for the Bank of Japan to drastically ease monetary policy by setting an inflation target of 2 percent, and repeated that he wants to tame the strong yen to help revive the economy. Abe, a security hardliner who will be sworn in as premier on Wednesday, when he is also expected to appoint his cabinet, is prescribing a mix of aggressive monetary policy easing and big fiscal spending to beat deflation and rein in the strong yen.
This has produced some very large gaps in nearly every single YEN (JPY) chart I follow – as well as over 7% account profits practically overnight. Generally these kinds of “gifts” don’t fall in your lap very often, and I have a hard standing rule to take this off the table immediately – and then likely wait for the gaps (in some cases 80 pips) to be filled as price dips back down to fill the “empty space” before resuming its trend.
I am expecting the dollar to make its last stand here sometime this week – and then roll over hard into its next leg down – while risk in general looks full steam ahead . The Yen crosses have been absolutely fantastic and are now either on the cusp of full-scale break out, or a possible breather. I am planning to stay on aggressively until proven otherwise – booking profits along the way, and jumping back in the trade.
As I’d mentioned previously – Sunday’s are sacred.
With no lights flashing on my screen, no announcements scheduled, no scandals hitting the wires, no “fed speak” etc – Sundays are truly a blessing, for the hard-working and ever diligent currency trader. Unfortunately the spaceships didn’t show up last night (here on the Mayan Riviera) so the world is saved. Back to business for me.
Don’t think for a minute that markets are going to just sit idle – while you stuff your face full of turkey.
This week could just as likely” rip your face off” in either direction – should you decide to turn a blind eye. I suggest sneaking away (if ony for a minute or two) check a couple of charts, levels, prices etc…and take advantage of this small window of “down time” to check yourself, your trades and your overall market position and exposure.
Never take anything for granted when trading currency – or any other asset for that matter!
Sure its the holidays…..and I do wish you (and all of your families and friends) the best – and all the best in the coming new year BUT! I encourage you to stay diligent, stay focused and never EVER take your eye off the ball – even when those presents under the tree appear far more interesting.
Happy holidays everyone – and best of luck to you in the new year!
I do expect relatively light trading in coming days – and imagine the dollar will flounder here on its bounce, then continue in its downward direction. This being said – keep your eyes on equities ( and in particular gold/ silver related stocks) as well tech for buying opportunities as we still look poised to move higher.
I can’t be bothered to comment on this again….and just figured a repost of prior thoughts would sufice.
The world isn’t going to end….. so for those of you hoping to take the “easy way out” of your current gold positions – please……if only it where that easy.
The Solstice on December 21, 2012 ~ precisely at 11:11 AM Universal Time ~ marks the completion of the 5,125 year Great Cycle of the Ancient Maya Long Count Calendar. Rather than being a linear end-point, the cycle that is closing is naturally followed by the start of a new cycle. What this new cycle has in store for humanity is a mystery that has yet to unfold…
2012 is also considered the completion of the 26,000 year Precession of the Equinoxes cycle, and some say it also signifies the end of a 104,000 year cycle. That is some serious SERIOUS math on the part of the Maya – and as an avid student of “all things Maya” I will be in attendance at the ruins of Tulum – here on the Mayan Riviera, Yucatan Mexico.
As my spaceship is still in “ill repair” perhaps my fellow space brothers will make an appearance, saving me some time and effort. We’ll see……but if all things go right – well………… “It’s been a slice!”
I wish you all the best of luck with your trading, and encourage you to continue looking to the future – as the past will provide little guidance for the “financial reckoning” coming soon to a theatre near you.
The Bank Of Japan is set to release its Monetary Policy Statement here this evening.
It’s among the primary tools the BOJ uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it projects the economic outlook and offers clues on the outcome of future rate decisions.
It’s widely expected that the BOJ will announce further easing of monetary policy – the extent of which remains to be seen.
Looking further out – I see that a fundamental shift in value of the USD/JPY has finally completed its long-term bottoming process and is now decidedly reversed. As both countries now battle in the “race to the bottom” it makes for some interesting debate when one considers “which will go down more”? when both countries throw everything they’ve got at currency devaluation.
Who’s got the larger printing press?
This is the kind of thing that currency traders must consider when looking out at longer time frames and potential trends. Monetary policy drives currency markets, and sudden changes or surprises (like an interest rate hike for example) can blow a newbies account overnight. I cannot stress enough – the need to be well-informed on fundamental issues surrounding a given currency or pair – in order to effectively trade it. The technicals and charts always come second for me, after I’ve got a firm understanding of the current and “forward moving” fundamentals.
Short term I have sold all of JPY trades as of last night as well most everything else for a 6% return since Sunday night’s risk on release. Looking at the shorter term charts – I see the Yen /JPY has fallen fast to a well-known area of support and would likely expect a bounce on the release tonight as opposed to further selling.
As well the USD looks to have run its course as expected in falling hard over the past days. I expect a bounce/retracement there as well.
I get the same response from people almost every single time I mention that I trade currency for a living. The vast majority have absolutely no idea what I’m talking about (well…certainly here in Mexico) or perhaps have “heard of such a thing”… but never imagined it was actually possible.
Trading currency is not unlike trading any other asset class – you want to buy low and sell high. In this case instead of buying gold with your money, or buying stocks with your money – you are buying or selling “money” with your money.
Online I come across many “arm-chair investor types” who suggest that trading currency is a fool’s game, and that I will soon disappear into the sunset “broke and shattered” – the victim of over leveraged trading… and a blown up account.
Have you taken a shot at trading gold / silver or equities in general lately? Oh ya? – Tell me…how’s that going for you hotshot? Making lots of money then are you? – Ridiculous.
Trading currency through November and December have been my most profitable months all year.
A quick peak at a chart I’ve recently been looking at – while teaching my girlfriend how to trade. Can you spot the trend?
Currencies generally trade in familiar and recognizable “trade patterns” and are well-known for long-term trend trading behavior. Granted, the money management side of it can be a challenge when first getting started – but anyone suggesting that “it´s way to risky” or “you’re gonna get killed” only needs to have a good look at the example above to clearly see this isn’t the case.
These days…currency markets are much easier to trade.
My girlfriend is doing quite well.