This blog used to be a haven for forex traders and online investors. It will now contain my political views and opinions about the current state of affairs in my country the Philippines from here on. Please feel free to comment on my posts.
With the U.S. markets closed for the 'President's Day' yesterday, the currency market was nothing but boring ! Trading was limited to a narrow range of only 50 pips between the high and low.
Early in today's Asian session, traders were already anticipating the re-opening of the U.S. markets and are picking up from where they left off last Friday with a slight bias for the U.S. currency.
USDYEN has already broken our 92.05 reference point in early Asian trading and is now poised to break the 92.30 which is the next resistance point. Although our initial profit objective (set at 92.05) has been reached, we will still hold on to our position for an anticipated assault on 92.30. A clear break above this level will again warrant us to continue to hold on to our current position established at 90.11 on February 11, 2009.
USDYEN needs to close above 93.55 this month to retain it's bullish dollar outlook on the monthly candlestick chart and to confirm the Bullish Bottom Ladder Pattern. If the 92.30 level is breached (which I believe is likely to happen towards the opening European session today), then it is likely to test the 93.55 month end objective.
We currently have a floating profit of $2400 from our open position and we shall adjust our stop higher to 91.11 to protect our profits in case the market retraces below 91 again.
I summarized my near term dollar outlook for the weekend with an update of my demo trading.
I made it into an online presentation made possible through ZOHO SHOW, a beatiful website offering a lot of online website services for free. (Visit the site at http://zoho.com/.)
Click on the enlarge icon at the bottom of the frame above to view the presentation in full screen mode.
Please feel free to send me your comments, questions, or whatever suggestions you may have. Click the comment button below to post your comment or chat with me through my Yahoo
Both the USD JPY Monthly and Daily Charts are now clearly showing key reversal patterns with the daily chart poised to break the initial resistance at 92.08. A break of the 92.08 level looks up to 93.55 as next target.
On the monthly candlestick chart, the U.S. Dollar needs to close above 93.55 by the end of the month to confirm the reversal formed from October, 2008 to January 2009. As the confirmation candle, February needs to close above the 93.55 level which is the midpoint of December, 2008 candle which now serves as our reference point for this month's trading.
Over-all, the candlestick chart is showing market expectations for a dollar surge near term against the majors. With every one at G7 having crafted their respective economic stimulus packages, the market will be watching who can rev up their economy first. This will be a race to get out of recession with cards slightly favoring the U.S.
My demo trading update: I re-established a buy at 90.18 yesterday. Maintaining my stop at 88.50 with an immediate near term target to take profit at the failure of 92.08!
Today, I was totally surprised and overjoyed to see that I finally have a page rank of 2. It was only last night when I had this site graded at http://website.grader.com/ ( a website I stumbled into while doing my daily entrecard runs), and I was disappointed to have gotten a grade of only 61.
So, today's page rank discovery has totally and completely overwhelmed me!
A struggling newbie, I was for a long time!....awkwardly feeling my way around....impatiently
picking up a lesson or two from the other bloggers whom I have included in my fave list...trying too hard to get noticed...hoping to discover the secrets of those successful bloggers who have profitably monetized their blogs.
But alas, disaster hit my upstart blogging adventure many times!
There was that time I panicked when I suddenly lost all my links, and my site counter numbers went zero for days, after I unknowingly followed a SEO tip I read somewhere saying I must simplify my url name into one which reflects my blog content, so that search engines will easily find me and rank me.
T
he stupid me, without realizing the implication of what I was going to do, simply followed the advice literally and changed my url into another customized, concise, and attractive name. I realized what a big fool I was only after a few days when I reviewed my site's performance at my 'feedburner page'. To my horror and surprise, no one has visited my site since I changed my url name! My readers disappeared! Their links to my site were no longer working.
My problem now was how I can keep my new url name and recover my already established links and increasing readership all at the same time. Being a newbie to blogging then, I was totally at a loss! And so I just reverted back to my old and long url name http://bigdaddyrichard-swirlingthoughts.blogspot.com/ and shelved the idea of optimizing my site's visibility among search engines.
There was also this time when I got kicked out of entrecard 'for having copied content from other sites'! It turned out that the other sites they were referring to were my own mirror sites (Swirling Thoughts at blogspot and Big Daddy's Trunkated Ideas at wordpress). Again, being a stupid newbie that I was then, I always published my write ups in all three blogs at the same time! So, when copyscape finally caught up on me at wordpress, a report of a serious violation at entrecard was tagged to my profile and served as ground for my expulsion! I tried explaining the matter to entrecard to no avail. I could have easily corrected the matter then by deleting redundant posts in all three blogs but my standing applications with several paid to blog forums would be jeopardized if I start deleting some of my posts in any one of those blogs.
So, I just made myself believe that perhaps by writing good content I would still be able to keep my readership level afloat. It didn't! Finally, after I got my membership to the paid to blog forums approved, I hurried to do what I should have done before. I made deletions and additions to my posts in all three blogs to make each one unique. I also streamlined the content of each blog - Traders' Hub for online investing ideas only, Swirling Thoughts for my political views and opinions and my blogging experiences, and Trunkated Ideas for general topics that interest me.
After I've done all that, I went back to entrecard and re-applied. It was a good thing that they immediately reinstated both blogs. I truly felt bad about it when entrecard deleted my blogs since I knew my page visits will drop tremendously, which it did! I tried to console myself with the thought that it was stupid anyway to be part of a group where members visit each other's site just to drop ec cards without ever bothering to browse the blog's content. I also made myself think then that good content is enough to get people to visit your blog. I was totally wrong! How would people know your site exists at all in the first place? Oh yes, perhaps, they will, ... when someone stumbles on your site and happens to like it. But hey, they need to like it so much for them tol Diggit, or Stumble it, or Twit it! But nah, it can be a long ardous process for a newbie.
So, I thought of just eating up my own words and decided to go back to entrecard. I know that at least there will be ec members who will drop by the site to drop their ec's every once in a while! It will now be up to me how I shall take advantage of those few precious seconds of their fleeting visits to my site ... how my site wll attract them enough to stay a bit longer and browse the site for a few minutes more or bookmark it for later browsing!
I guess this is what entrecard is all about! And I guess that you guessed it right - the blog content and design are the keys to achieving this.
Anyway, no matter how late this jarring realization came to me, at the very least, my return to entrecard brought life back to my site! More bloggers are linking up with me now, my page visits has soared, and the most beautiful thing of all...I now have a page rank of 2.
So I'd like to thank all my Entrecard droppers, my MyBlogLog communities, and my Blog Catalog friends, without you, all these will not happen.
My trading stop was triggered at 90.30 during the early Asian trading!
Our initial over-all outlook however, has remained bullish for the dollar. Yen has remained range bound with the 90.00 level currently holding solid for now. I look to re-establishing a buy position at this level if it holds just before the U.S. Market opens today.
There are peculiar aspects inherent in spot currency trading that a forex trader has to contend with and which were evident in our first trade. One of which is the fact that online currency trading is a 24 hour activity which starts Sunday 22h00CET and ends Friday23h00CET. This means that if you leave positions open overnight (open at the close of U.S. trading), you must be ready to experience the low volume trading during the Australian and Asian trading hours, which is characterized by peculiar market moves and does not necessarily reflect the true sentiment of the market players in general. The true sentiment of the market starts to rear its head when European trading commences and becomes more distinct just before the U.S. market opens.
In short, in a very volatile market such as one which is seeking a bottom as in the case of USDYEN, price may range from a hundred to two hundred points between its highs and lows for the day; while the range between the opening price(Australian open) and closing price (U.S. closing) is narrow forming a short candle body (like a shooting star). If you are doing leveraged trading (margin trading), a movement of such magnitude against your position can force you out of the market unnecessarily before it resumes favorably in your direction. I have seen this happen often in my more than twenty years of trading currencies.
There are three ways by which micro account holders (those with $5,000 or less capital) can avoid this situation. One, he can choose to square all his positions at the close of the U.S. Market. Two, he can deposit additional capital before the U.S. market closes. And third, he can simply avoid a situation like this by opening a bigger account from the onset.
In my case, I left my position open at the close of the U.S. market yesterday (at 91.28 and I was still earning). When I turned on my computer again at about the time the Tokyo market opened, the price was already at 90.28 and my stop was automatically triggered causing me to actualize the loss.
It was both good and bad! Good because the stop limited my loss from further increasing as the price went further down to 89.94 before going up back to its current level of 90.08. Bad, because now I am looking forward to re-establishing my position to buy in again but with an impaired capital and in a very volatile market at that. This is basically where the risk of leveraged trading (margin trading) lies. An impaired capital(due to a prior loss) limits your effective trading range since you will be trading closer to your cut point, your margin call point. In online trading, the broker will automatically liquidate your position at a loss when the margin call point is reached without giving prior notice to you. An impaired capital can turn you to a very emotional trader unless you have a trading system you are following.
This leads me to another point which I want to bring up. One of the many things a forex trader can do when the market moves against his current position is to lock his position. This entails establishing a new trade which is opposite your already established position. For example, as in my case, I bought the dollar against the yen at 91.14 and when the price broke 91.00, I could have sold the equivalent amount of dollar against yen without liquidating my previously established buy position. This will effectively freeze everything and no additional loss will be incurred. From this point on, and where ever the market goes, whatever either one of the position losses the other gains back. This is an effective technique that you can use when you get caught in a sticky situation or when suddenly you find yourself in a totally different playing field.... when economic fundamentals turn out to be not as expected or when unforeseen developments occur. After the dust has cleared and the candlesticks is ready to resume its course, you can liquidate the position used to lock the original position at a profit. And when the market has recovered, you can now liquidate the original position at a profit.
MY OUTLOOK FOR THE DOLLAR AGAINST YEN HAS REMAINED BULLISH!
The monthly USDYEN candlestick chart still shows a bullish reversal pattern which is initially targeted at 92.40. Any dollar bull like me will just have to contend with a possible re-test of the 87.00 level in the near term.
The daily candlestick chart is also showing that players are hesitant to push the prices further down. A breach of 89.42 on the daily chart will warrant a re-test of the 87 lows.
Buying in at the current levels of 90.05 is recommended before the U.S. Market opens. The risk factor remains at 89.42. The worst case scenario for this recomendation is a 63 pip loss!
Forex - U.S drops ‘Bad Bank’ idea, while the Russian debt renegotiation allegation rattles risk sentiment – Euro declines.
Forex News and Events: FEBRUARY 10, 2009
The Euro declines against the dollar and the yen after Russian banks ask its government to mediate talks with foreign creditors on the issue of $400Bn – the market reads this as a tell tale sign the situation in Europe is worsening – meanwhile the U.S is finalizing a financial stimulus plan. Overnight the EURUSD traded from a high of 1.2902 to a low of 1.2810. A plethora of news saw the Euro drop and give away yesterday’s gains.
The USDJPY traded a range from a high of 91.67 to a low of 91.23 – the pair witnessed heightened volatility as risk sentiment drove the dollar lower on the news the “bad bank” idea had been scrapped. Further delays in the financial stimulus plan (which the Senate has managed to cap at $800Bn) don’t seem to be a problem for the Greenback’s continued advance as risk aversion remains central theme to the currency’s price action.
The main focus today is how the markets digest Treasury Secretary Geithner’s remarks and description of the revamped TARP – to be named the “Financial Stability Plan”. The plan, which so far won’t seek additional government money, is designed to support about $1.5 trillion in new lending and handling of distressed assets. The plan will also drop the “bad bank” proposal which consisted of buying all toxic assets from distressed institutions. It has three main components: more capital for banks, financing for as much as $1 trillion of consumer and business loans, and public financing for investors willing to buy the distressed assets. The announcement is due at 11:00 EST (16:00 CET).
The Risk Today:
EurUsdThe Euro continues to feel the considerable pressure as recent decline shows that ephemeral Euro strength is unsustainable. The 1.2953, 50.00% retracement from yesterday’s 1.3095 – 1.2810 decline remains initial resistance, then 1.2973 if Euro holds strong and breaks current dollar domination. Focus on the downside sees initial support at 1.2878 and strong support at 1.2811 in the near term – A break through this level would see doors wide open for 1.2748 then 1.2707 (Feb 2nd low).
UsdJpyNews developments during Early Asian session has seen the pair trade a very volatile 90.90 – 91.80 range, with the Yen extending gains from Sunday’s culmination at 92.39. Initial support sits at 90.74 (Feb 6th low). Further dollar weakness and risk aversion could see the yen fight back and regain 89.56 levels (Start of Feb 5th move) – this would be exacerbated by a dollar bull in the form of a solid economic stimulus plan to be announced could see a retest of 88.83. This decoupling (risk aversion) of the pair with regards to the usual dollar dynamic would see a dollar bear signal push the pair higher – initial resistance at 91.80, small target at 92.43 if impetus and news suffice to sustain overselling of the Yen.
Today's Key Issues (time in GMT): 08:15 CHF Swiss CPI (MoM) -0.8% vs -0.4% 08:15 CHF Swiss CPI (YoY) 0.1% vs 0.6% 09:30 GBP Visible Trade balance -8’100 vs -8’330 09:30 GBP Total Trade balance -4’250 vs -4478 09:30 GBP Trade balance Non-Eu -4’800 vs -5304 15:00 USD Wholesale inventories (DEC) –0.7% vs -0.6% 15:00 USD Treasury Geithner Testifies on TARP at senate panel 18:00 USD Bernanke Testifies on Fed Programs at house panel 22:00 USD ABC Consumer Confidence (FEB8) -52 vs -52 23:30 AUD Westpac Consumer confidence (FEB)
I saw my profit go up to around $754 towards the close of the U.S. market yesterday and saw it shrink to zero in today's early trading in Asia. In fact, USDJPY retested the 91.00 support level. Currently, I am still up $450 at the current levels of 91.32.
A weakness in the daily chart seemed to have formed at the current price levels. A pattern similar to an "Evening Star" has formed on the daily chart (see the figure below).
As I have discussed in my previous post, for the market direction, I always take my cue from the monthly candlestick charts as a general rule. Although the above candlestick pattern formed in the last three trading days shows a possible reversal pattern, I consider this merely as a sign of a market weakness in the current market direction (uptrend), and does not warrant any action to be taken. Besides, the reversal of the USD downtrend in the monthly candlestick chart has remained intact.
Today's trading will be very volatile as the market anticipates important developments on Obama's bailout plan and the U.S. Fed's announcement on it's rescue plan for the banking institution. The jobless claims numbers may also add up to today's volatility.
I shall be holding on to my current position and will maintain my stop as well as my objective.
Please feel free to send your comments or questions regarding any of my posts.
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_vU8KHU4Jr3id3rNFYTzSn_5xMvDY87ftGnyDFEVajk6tmQ2fElr9e5IX4-nS8fhmRrLdk8eiwfGr7mpXjEv5nGWEg8qMSvDhYSu8xzTm7knwDwxRBBOnngt9O7uNwaAl3TtCcXztOnRmc25muQ1X4=s0-d)
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_tCGZRVPtjhD1vs-22mXHDnk1JMgxvSOonO7mmBSSwiUCUoZsnHzVXWCVmZa19457IsbJ8nPR0HKKRYIKcz76BLc2NS5ci32Xy3Faag1whRlUP6KJcG1tFwk-SSWSMpaEYmptPW65L1i6FA5U16Ef4=s0-d)
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_uiKUwiw_02nKxOspPHl5BKLeyveykh-uyBIoo-c3m_OwxigRtyWhi1kvi5sfaxDopxhWf1p-EuSxosDMfzRLLJy8MSU4daT0emZBe0V1tWq8LHRm2-tfPTq7k01XUxJ5akH0u4PZlzg05ebQeQ2Vw=s0-d)
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_vztmunNR4TC9JBo_mmJ70EKkP59_5k_8FRY_RT-uECEYuM9_p7HOJo_YBisu6flRb37xt6VoNgHfQkMJulO1s-hOQoArPa6hxdGU90cAU3XIvLBjBU-676H9jk3TJBb1bGKftc3yCGhGTdFqtKi_zH=s0-d)
