currency trading

Mexican Entrepreneurship – Start Young

Forex Kong 3 Comments

So I finish at the gym here this morning and decide to take a little time down at  the beach.

I walk a considerable ways (avoiding  the tourists at all costs) and find myself a nice quiet spot about a mile north of the usual “european action”.

No sooner than I’m sat down, I spot a small mexican boy no more than 5 years old (I’m guessing even younger) trudging down the beach – headed my way. Swimming in his oversized shorts, cute as a button and  brown as chocolate chips, he plunks down beside me, wipes his brow and asks:

“Hola senior. Tienes 10 pesos por fa vor?”

I wrestle some change out of my side pocket while asking “where are your parents little friend? – and why are you walking the beach all by yourself?

“Gracias Senior! Pero, no tengo tiempo para hablar……….estoy trabajando!”

The lil guy says thanks, but he doesn’t have time to talk………..he’s working!

The market “gong show” continues with even more “bad data” out of the U.S and further indication that recession is likely well in play – but of course markets continue higher as the smoke and mirrors continues a little while longer.

You know – there was a time when this kind of poor data / indicators actually meant something – a time before Central Banks intervention. The scary thing is people start to believe……… that things are actually improving.

Implications of JPY Bounce – Risk Off

Forex Kong 12 Comments

You can’t just “write off” the Japanese Yen based in the recent weakness – and the massive efforts put forth by the Bank Of Japan. No matter how you slice it – the Yen “still represents” a safe haven currency based in fundamentals that will likely persist for many years to come.

When things get “tricky” the Yen is gonna get bought hand over fist – no matter what the BOJ wants.

Now…..in looking to draw some kind of intermarket correlation here…it’s simple – JPY bought = risk off.

As bizarre as this may all appear to newcomers – I am currently positioned “long JPY”…..so……

JPY going up = risk off. You can watch any number of currency pairs as well as the symbol “FXY” for further indication.

Eyes open people!

 

Stay safe for now.

ECB Rate Cut Expectations

Forex Kong 6 Comments

It’s widely expected that The European Central Bank will cut it’s base lending rate by 25 bps later this week.

Now fundamentally speaking a rate cut is usually considered to be a negative for the currency, but here we are again in a position where we must look at the “current environment” – then do our best to apply the fundamentals.

Assuming that  every “newbie forex trader” on the planet will take it as a “given” that the Euro will plunge on the news, I’d imagine taking the other side of that trade ( and we know it’s not so fun trading against Kong ) as the current environment will likely absorb any further easing ( or attempt to make things “easier” in Europe ) as positive for world markets in general.

Coupled with the recent weakness in USD across the board – I would expect the EUR to move higher and may even take my long-awaited trade at 1.3170 mentioned here: https://forexkong.com/2013/02/10/long-eurusd-at-1-3170-watch-me/

Otherwise my short USD vs the Commods trades as well CHF have been performing well over the past 3 days, as well the active trading here long JPY “still” looking to see a much larger bounce .

The USD has continued lower as suggested while equities markets still struggle to reach new highs.

 

 

USD Expectations – Trade Ideas For Bears

Forex Kong Got something to say?

The normal correlation of  “dollar up = stocks down”  and visa versa – has been on its head for some time now. As you’ve likely seen over the past few days while stocks have staged a small rebound, the USD has also continued higher. The two have been trading in tandem.

I’m expecting the dollar to turn downward tomorrow or very early next week – with full expectation that stocks will also make another leg lower.

Something else to watch in coming days will be the currency pair USD/JPY, as the BOJ’s recent efforts to further weaken the Yen has spurred buying across markets with carry traders (as suggested month earlier) clearly taking advantage of the easy money. Weakness in USD/JPY will now correlate with weakness in risk, and markets in general.

I don’t imagine the BOJ has much more to  add ( here at their meetings over the weekend ) and in turn – expect this would be a great time for a bounce in Yen, and a further move toward “risk aversion”.

 I’m looking to get short USD and “long” JPY ( at the same time – which some months ago would have been sheer lunacy as they are both considered “safe havens” – and I would never have had opposing trades including these currencies) giving you further indication how significant the moves out of Japan have been for markets in general, and add further credence to the study of fundamentals in trading.

Stock guys…..I would look for hedges, or short-term plays in some kind of inverse or  “bearish” ETF.

Weekend Wishes – Kong Comes Up Short

Forex Kong 4 Comments

Its been a long week. And aside from the smashdown in gold – a very boring and frustrating week.

I could post a couple of charts, show you some levels and again point out that “the topping process” is often a long and arduous affair but frankly – what’s the point? Here we are. Here we “still” are. And “here we may be” for several more weeks, as the struggles between bulls and bears play out at the highs. Short term squiggles are pretty irrelevant, as currency markets continue grinding away at traders accounts ( more so my patience) with nearly everything (short of JPY) trading virtually flat for the week.

For the most part I couldn’t place a  trade worth more than a couple of tacos if my life depended on it….and it does depend on it!

I wish I had more to share with you. Some amazing trade strategy, or some “top-secret insight”  into a potential market move – materializing over the weekend. I wish I had for you the “investment tip of the century” – something to make you rich, something that would change your life forever.

Sadly no – I don’t.

I’ll keep digging here over the weekend, and hopefully plan to “wow you” in coming days. For now I hope you have a wonderful weekend, and we’ll see back here Monday.

Kong………………….gone.

 

Markets – We Are Going Down

Forex Kong 9 Comments

I won’t reference my previous posts. I won’t tell you “I told you so”, or tell you again….to pull your head out of the sand. I will give you the quiet time needed (perhaps crying into pillows or smashing into walls) to reflect and evaluate….. ” what the hell did I do wrong?”.

We are going down people – exactly as suggested.

It’s also been suggested by several of you that I should “pep it up” and try my best to “write something positive”. While this is excellent advice (should I choose to  start a “day care” – or perhaps get into grief counseling) – the day I tailor my writing to appeal to some cry baby, sad sack – is the day I poke pencils in my eyes, run down the beach naked, yelling  I’ve now seen Jesus!

Trust me – ain’t gonna happen. It will never, ever happen.

We all make decisions in this life, and we all hope they are the right ones. We all do the best we can, and we all hope that when “all is said and done” – we’ve lived our lives with some level  of integrity, dignity, decency and respect.

If you’d rather I lie to you – perhaps you need to consider the same.

If you don’t like it – don’t read it.

We are going down.

There will be spikes, and there will be large moves in both directions as we crawl our way through 2013, but as per my latter posts – if not  for “one more pop” higher” I am a firm believer that the highs are in. I mean”the highs” in general – like…..not seeing the SP500 at these levels again – period…..end of story, as wel roll over late 2013 / early 2014 on the road to “zero” as the U.S completely collapses – stocks, bonds, housing,  currency and all.

No Trade – Is A Good Trade Too

Forex Kong 4 Comments

You can’t rush the trade. If there is no trade – then so be it.

No trade – “is” the trade.

I know it’s hard, especially when you are starting out. You want to get back out there, you want to see some  action, you want another shot at making some money. But an important skill to learn (actually a very important skill to learn) is to be able to access the current environment, and evaluate whether a trade is even warranted at all.

Capital preservation needs to take priority over new opportunities for added profits – and when the markets are crazy – finding a  trade (and I mean a good trade) – gets increasingly more difficult. You have to learn to include “not trading” in your trade plan. Embrace it, and consider yourself a better trader for it.

When you can’t find a decent trade (certainly consider that perhaps there isn’t one) and tell yourself “Gees! – Thank god I don’t have any of my hard-earned cash tied up in that mess! – I can’t find a decent trade if my life depended on it!”

As you get better at this – you start to trust yourself. The feeling of “not trading” starts to become a feeling of relaxation and confidence, rather than anxious or stressful.

There will always be a trade….just maybe not today.

For what it’s worth – it’s no picnic out there for me these past couple weeks either. I am still looking short USD with a couple of irons in the fire – but am patiently waiting for a move of some substance. The markets are proving difficult as I suggested 2013 would, and regardless of  smaller / less profitable trades as of the past – I am thrilled to have very little exposure.

 

 

 

Fiat Currency – Paper Money Is Debt

Forex Kong 14 Comments

Fiat currency is money that derives its value from government regulation or law. The term fiat currency is used when the fiat money is used as the main currency of the country. The term derives from the Latin fiat (“let it be done”, “it shall be”).

The term fiat currency has been defined variously as:

  • any money declared by a government to be legal tender.
  • state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.
  • money without intrinsic value.

While gold or silver-backed representative money entails the legal requirement that the bank of issue redeem it in fixed weights of gold or silver, fiat money’s value is unrelated to the value of any physical quantity. Even a coin containing valuable metal may be considered fiat currency if its face value is higher than its market value as metal.

Another interesting point, when we consider how money functions” in our society as a “debt instrument”.  The Central Bank creates money out of thin air, then exchanges that “new money” for  “interest bearing instruments” such as Government Bonds.

You purchase the bonds with an expectation of making some kind of return on that bond (and where do you imagine that “extra few %’ points” come from over time?)

Your taxes go up – that’s where.

Round and round we go as governments keep spending – and you keep paying for it.

It’s been a slow week here and I apologize for the “lack of interesting copy”, but when I’ve not actively trading there usually isn’t a pile to say. I imagine things will pick up here again soon.

Forex Blog – This Is A Forex Blog No?

Forex Kong 3 Comments

This is a forex blog – isn’t it?

You know – I’m a little hurt. As hard as I try, it still appears that our beloved friends at Google still don’t seem to think this is a forex blog. I type “forex blog” and all I get are a number of websites looking to sell you some “forex trading system”, or a couple of videos showing me “what is forex”, or “how I can make money trading forex”….and poor, poor Kong  – still nowhere to be seen.

If this isn’t a forex blog – I’m not really sure what to do about it. Ideally – the gang at Google (who I’m sure “must” have an interest in forex) would be thrilled to have a look into the real life “trials and tribulations” of a real life forex trader…although seamingly – such is not the case.

Oh well..I will continue to do the best I can, and look forward to the day, blessed with a “front row seat” in the listings……….recognized as a  “forex blog”.

Scuze the plug you guys…..but I gotta swim with the sharks here – and every post can’t be a “doozy”.

 

 

 

If You Can't Trade It – Blog It

Forex Kong Got something to say?

I’ve been in and out all day, and again return to my computer – only to find the same. It’s a freakin gong show out there! So if I can’t trade it – I might as well blog about it.

One of the most popular articles I’ve written “2013 – You Will Never Trade It” comes to mind.

The markets have more or less been grinding up a day, down a day for the past 2 weeks – and the direction continues to be questioned. Granted the overall trend is still up, but we’ve seen some relative short-term damage – and many factors have come in to play to suggest a correction is needed. The last week has had the Canadian “TSX” erase the entire 2013 gains to date, “Bank of Japan” has now become a household term ( a little late considering we’ve been talking about it forever) , and earnings are set to kick off with Alcoa after the close today.

If there was ever a time that one would be thankful to be safely sitting in cash – I’d say this it.

I made out like a bandit on the huge JPY slide over the past few months but admittedly – have 100% completely missed the latest ( and most massive ) move. It’s too bad – but its a part of trading, and so is life.

Forex has a funny way of “kicking your ass” so….when anything has travelled so far/so fast – you really can’t go chasing it. You get back at it….you apply what you know – and you find the next trade.

As it stands….and as boring a read as it may be for you guys – I still sit (for the most part) 100% in cash….taking the odd “little trade” here and there to keep the moss from growing.

Be safe – and don’t worry – things will get really, really exciting here soon.

This I can promise.