Thread: GBP and JPY Pairs H1 2013

Originally Posted by Pivotal12

What is really, REALLY difficult to understand is on what fundamentals are you short the Euro. Really. Because, right now, and assuming the foregone conclusion that the stress tests are successful, there are NO NEGATIVES in the Euro zone. And by that I mean houses that could have been dirty, have been cleaned up for good. And those houses were dirty long before and after the crisis in the US, precisely when the Euro was trading above 1.50. Now we know there are no more surprises. Now we know the Euro zone is growing much faster and way more solidly than anticipated EVEN when the Euro was in the 1.40s.

On the other side of the spectrum, the US, we just found out that the recoup is slower than initially though, that the outcome is positive... but gloomy and that there are no employment growth while the national debt is sure to increase significantly before it can start to be reduced. Hardly an environment in which the greenback could prosper, as evidenced by all the currencies rally of yesterday against it.

Now, mind you, we are still just below 1.29, making the third attempt at crossing 1.30 and in a significant rally sustained since the under 1.19 of a few months back. Looking at all those fundamental circumstances, and to the channel in the chart since the low of 1.18 and change, how can you make the argument that it will go south? I'm sorry but, pivot or no pivot, it IS wishful thinking.

Could it touch 1.20 again? Of course, anything is possible. Possible, not plausible. The US is very happy with the Euro above 1.30. Closer to 1.40o or even above, even better; The European Community would prefer it in the 1.20s but up to mid 1.45 is fine with it, so there's not going to be central bank intervention one way or the other unless those extremes are surpassed.

Like I said, you may ride millions of dollars and your time-frame may be of decades. For the foreseeable future, all indications, technical, fundamentals and otherwise, point just one direction: North.

Don t argue too much, to go up, you need people who are short and get squeeze. Same when everybody say that the $ will go at 2, (remember at 1.60) we crash to 124. We need both sides, the game is to be with the winners

I hear what you are saying but I believe that currency trading is all about making money for people/entities/governments which enormous wealth. If the Euro speeds off to 1.60 in the next several months, what then? Does it just sit there? Does it go even higher? How much higher can it go? Does it just oscillate around 1.45? Up 5 cents down 5 cents. Like I said, take a look at the monthly chart. Price goes up to extremes and then down to extremes. We hit the upper extreme twice already in the past couple of years. That means we now need to hit the lower extreme. Currencies are not like a stock market. They can't just head in in one direction for 50 years. The price MUST oscillate, it is just the nature of currencies.

Well, ordinarily I would stay fairly silent and just watch from the sidelines, but recent posts prompt me to make the following observations:

I dont care how old or young you are, antagonizing others because you dis-agree with thier methods, analysis, or inputs is just juvenile and we should all know better. Not all of us are going to agree with each others analysis, and we should all be mature enough to either ignore what we dis-agree with, or to communicate questions or concerns without being antagonistic. I find it especially distaateful that anyone who would be a part of this forum would EVER harp on someones mistake, mis-read, or drawdown. Seriously, that is literally the crudest behavior I could ever imagine from adults who supposedly are gathering to share information with the common goal of making more profits. If someone is OK with having drawdowns or reversals, thats THEM, and thier approach, why would you ever care enough to be rude? Personally, this is very distasteful and a bit disturbing.
Just post your analysis, entry/exit points, questions about analysis, etc and lets all concentrate on what we are here for, helping each other make a dollar or four.

Originally Posted by Renegade

I understand from "hanging out" in the forum that most of the traders don't have a relatively significant amount of capital and that is really what makes this work really challenging.

It seems that I have made the significant money trading long term fundamentals, using the charts for confirmation and guidance. Like I said earlier, I really enjoy studying the shorter term charts and looking at all the indicators but it's so darn time consuming and nerve racking.

When you look back over the years at the Euro/USD, you can see how the monthly chart (and for almost every currency pair) oscillates around a central pivot point. If you look at the peaks and valleys, they always mark major shifts in sentiment do to fundamental changes in market conditions.

That is how the big money makes big money. Those guys aren't watching the charts on a minute by minute basis. They keep the ball rolling for months and months if not years, racking up huge profits. When the currencies start to reach extremes, there is always some fundamental reason to shift long term price in the opposite direction. Once the shift occurs, far from the central pivot, price can move the other direction for months/years.

Even Warren Buffet admits that it is almost impossible to catch the tops and bottoms of any market. However, if you have enough liquidity, you can get close. Unfortunately, you know what happens to the novice trader that doesn't catch the exact top or bottom. He/she gets really, really nervous as the account goes negative. If he/she doesn't get margined out, all he/she can think about is "please get me back to even and I will never do this again." As soon as he/she is even they are out, with a huge sigh of relief. Now to their chagrin the pair moves in a direction that would have made profits, nice profits too.

Over the last several years, we have had some extreme volatility that could have resulted in huge profits. Eur/Usd started moving up after 911 and continued to climb for 7 years. Financial crisis of 2008 takes us all the way back to 2004-2006 levels. Raging bull market of 2009 takes us back to 2008 levels. Debt crisis in Europe takes us back to 2004-2006 levels (for now). Ok, what will take us back up again. Certainly not the notion that Greece, Spain, Portugal and Ireland won't die but will merely be on life support for 10 years. We need a major catalyst to turn this current move. Heck, it may be a debt crisis in the U.S., but that is still a while off. That is why I believe we continue down, through that major central pivot to .90-.95. I bet by then the U.S. debt will finally come home to roost and up we go for years and years.

I know exactly what you're talking about and I thank you for the reply.

Even though I only play with a nickel, I could maybe get lucky. I too am hooked on this game, and if I only placed 1k lots, I could hang for the long term. But I'd rather know verses speculate.

That's why I play the shorter game, 1 min to 1 day and sometimes more, but rarely. I can't watch $500.00 disappear like that when I'm wrong. So I choose and try to make or lose $50.00 here/there and then understand why it happened. Obviously you have years of experience on me, but when I understand, that's when I can learn and improve. I've done OK thus far, but honestly, I can mostly attribute my winnings to pattern recognition. I dance with the news, but frequently I see the news having no effect or the opposite effect.

In this pair today, I'm hanging on the news, but only because it has shown prudent to do so. But again, I just want to understand the patterns that I see, so if I see a move based on the news, that makes sense. But, if I see a move that does not correspond with the news, then I need to understand why.

I don't play with much capital, but I do play to understand. If/when I do, then I'd feel more comfortable playing months verses days.

Do you by chance have any advice for me? I'm just a petty player of the game, but a student always!

Thank you,
t3t4

I know that Forex can be crazy Pivot. Take a look at November 18, 2008 to December 17, 2008. Price went from a low of 1.2422 to a high of 1.4718. Think about that! 23 cents in one month. That is insane! What is even more insane is that price was back down at 1.2455 by March 3. I was trading during that period of time and was blown away by the fact that no one was really concerned. Now, we move a couple of pennies and everyone is freaking out. In conclusion, I would like to say that everything in the currency markets is pure speculation and I realize that. I certainly would not bet my life on the direction of the Eur/USD!!

t3t4, take a look at the dollar/yen monthly chart. You will see that we are at an extreme low, not seen since 1995. Taking a long position in dollar yen, even if it is a small position, and letting it ride for a few years could turn out to be a big money maker. As your capital increases from your earnings, add more to your position on pull backs. You may be able to ride it up to 1.30-1.40 and you won't have to watch it night and day. You can do your other short term trading and just let dollar/yen ride. The yen is insanely over valued. The fundamental health of Japan's economy stinks and will only get worse. How much lower can dollar/yen go to the downside? Not to far without Japan imploding!

El Pais Newspaper: Some Spain banks didnot pass the stress tests..

Well, so much for my slow pull back prediction tonight, but how about a fast one instead? I'm a bit shocked, but in a winning position.

t3t4

Originally Posted by t3t4

Well, so much for my slow pull back prediction tonight, but how about a fast one instead? I'm a bit shocked, but in a winning position.

t3t4

If your winning I would humbly suggest to move stops to protect profit, as this could easily correct up. Remember, take profit or the market will.

Cheers.

Originally Posted by dwalker

If your winning I would humbly suggest to move stops to protect profit, as this could easily correct up. Remember, take profit or the market will.

Cheers.

Thank you for the reminder, and I did. I got out on the retrace @1.28752 and went long. I do hope it doesn't turn around to bite me. But I have great expectations of that 1.30 +.

Thanks again,
t3t4

Originally Posted by KUTERO

El Pais Newspaper: Some Spain banks didnot pass the stress tests..

Not exactly. Some "cajas" (minor banks} wont pass the bar required by the Tier 1 tests, which is 6% ownership. THIS IS 50% above the legal requirements of 4%.

According to Price Waterhouse's Justo Alcocer, the vast majority of the Spanish financial system will obtain a very good qualifications, especially the big banks such as Santander, BBV and La Caixa (the three entities represent two thirds of the entire sector).

Slightly different, ah captain?

Originally Posted by Renegade

t3t4, take a look at the dollar/yen monthly chart. You will see that we are at an extreme low, not seen since 1995. Taking a long position in dollar yen, even if it is a small position, and letting it ride for a few years could turn out to be a big money maker. As your capital increases from your earnings, add more to your position on pull backs. You may be able to ride it up to 1.30-1.40 and you won't have to watch it night and day. You can do your other short term trading and just let dollar/yen ride. The yen is insanely over valued. The fundamental health of Japan's economy stinks and will only get worse. How much lower can dollar/yen go to the downside? Not to far without Japan imploding!

I l"ove" the not having to watch the market part, I'm over due for a year of sleep....LOL

But I'll take a good look at the USD/JPY and do my best to choose an entry point.

Thanks for the advice, I appreciate it.

Originally Posted by Pivotal12

Not exactly. Some "cajas" (minor banks} wont pass the bar required by the Tier 1 tests, which is 6% ownership. THIS IS 50% above the legal requirements of 4%.

According to Price Waterhouse's Justo Alcocer, the vast majority of the Spanish financial system will obtain a very good qualifications, especially the big banks such as Santander, BBV and La Caixa (the three entities represent two thirds of the entire sector).

Slightly different, ah captain?

But news was like that as flash..
52 pips falling suddenly..

Details came later..

Thank you for your interest..

I seems to me than not many -if anyone- really know what the STRESS TESTS mean. I'll try to explain it:

It's purpose is to unclog the financial vials returning the confidence to the investment community, and the banks themselves, in the solvency of the institutions and thus allowing credit to return to the economy.

The tests will present three different scenarios:

The basic one, which contemplates the official expectations which already foresee a fall in the economy.

The second one, in which the European GDP falls 3 points more than the EU economic authorities expect in 2011, which produces significant unemployment and defaults increases, strong home and real estate depreciation, much less consumer activity and losses both in the enterprise level and the consumer level.

The third scenario is considerably more drastic because it adds a crisis of sovereign debt, different depending on the countries and different in repercussions depending on the institutions, the size and the quality of the debt that they hold. In other words, we are practically considering Armaggedon in scenario number three.

Obviously, many banks won't "pass" this last scenario, but that doesn't mean that they cannot continue with their normal activities, even if they have already used or are going to need to use some help from the Ordered Restructuring Bank Fund.

In the particular case of Spain, the International Monetary Fund estimated that, in case scenario number three (Armaggedon) comes to pass, Spain's financial institutions would need 22 billion Euro. The Ordered Restructuring Bank Fund has ALREADY distributed almost 15 billion. Spain's ORBF has still almost 2 billion Euro available and has easy access to the other 5 billion, if needed, through institutional loans.

This is, in specifics, what the STRESS TESTS mean and the specific situation in Spain, so we will understand, without unnecessary alarms often used with not very kosher purposes.