I had a meeting today on a start-up idea that will be parked under my company. It is always a good idea to increase my non financial assets portfolio and by having a start up as a subsidiary, I am taking a step in the right direction.
It is still in the preliminary stage now and I will update the blog about this start up as we progress.
Saturday, June 28, 2014
Friday, June 27, 2014
Breakfast and going long on USD/JPY
I met Mr Clarence over breakfast today, and we discussed some trading strategies. Whilst in the toilet I was tempted to trade so I entered USD/JPY.
Mr Clarence has mentioned while our fundamentals have been accurate, we have been missing out on opportunities to capitalise the weakening of the US dollar.
Mr Clarence has mentioned while our fundamentals have been accurate, we have been missing out on opportunities to capitalise the weakening of the US dollar.
Thursday, June 26, 2014
US final GDP figures and what it means
The final GDP figure was at -2.9% which saw the biggest decline in US since 2009. This has adverse effects on the US dollar, EUR/USD breaking the 1.36 resistance and USD/JPY falling badly.
The GDP data is presented in a particular format. First, it starts with an advance figure which tends to carry the most impact, followed by preliminary a month later and finally with the final GDP to sum things up. Things did not look too bad for US, the advance GDP on April 30th was given at -0.1% and saw a further decline to -1.0% for the preliminary numbers on May 29th. It was downhill from then on.
It is unlikely Janet Yellen can raise rates anytime soon given the slack in the economy. The dollar has been performing badly ever since. Pairs like GBP/USD have reached new highs of 1.70 and above.
The GDP data is presented in a particular format. First, it starts with an advance figure which tends to carry the most impact, followed by preliminary a month later and finally with the final GDP to sum things up. Things did not look too bad for US, the advance GDP on April 30th was given at -0.1% and saw a further decline to -1.0% for the preliminary numbers on May 29th. It was downhill from then on.
It is unlikely Janet Yellen can raise rates anytime soon given the slack in the economy. The dollar has been performing badly ever since. Pairs like GBP/USD have reached new highs of 1.70 and above.
Wednesday, June 25, 2014
Entering GBP/USD based on value investing
I went in long for this pair at 1.6975 last night as I felt it was already at the support level and a breach is not possible. The pound has been the best performing developed market currency to date and any value below 1.7000 is a good entry for a long.
The Bank of England (BoE) is expected to increase rates in the near future which shall further cause the appreciation of the pound.
I closed my position this morning as BoE Governor Carney is set to speak this evening and volatility is expected to increase prior and during the speech. Historically a speech with this importance would ensure that traders of both long and short positions to hit their stop loss before adhering to the direction based on the content of the speech.
The Bank of England (BoE) is expected to increase rates in the near future which shall further cause the appreciation of the pound.
I closed my position this morning as BoE Governor Carney is set to speak this evening and volatility is expected to increase prior and during the speech. Historically a speech with this importance would ensure that traders of both long and short positions to hit their stop loss before adhering to the direction based on the content of the speech.
Tuesday, June 24, 2014
Holding a portfolio of currency pairs
A trading friend and I have recently been using a new approach to trade where we collect multiple currency pairs when the entry signal permits instead of just focusing on one or two. Instead of closing the trades by the end of the day, we hold them till they reach our target price. By entering smaller units, we can trade without a stop loss and in the event our entry was wrong, we can use a staggered approach or hold the currency pair till it reaches profitability.
Monday, June 23, 2014
US existing home sales
The sales of existing houses in US rose the most since October with a growth of 4.9% from last month. This is one of the key indicators for economic health as the housing market has a ripple effect on the overall economy. The final figure of 4.89 million new houses beat the estimate by a healthy margin.
However the markets reacted in the opposite manner yesterday where the USD failed to gain against major currencies.
According to Mr Tan, an increase in house sales would decrease the demand in the US dollar, which explains why the dollar did not enter a bull run yesterday.
I did not trade based on this data yesterday as I already have open positions in AUD/USD, EUR/USD, GBP/USD, USD/CHF and USD/JPY from a few days ago.
However the markets reacted in the opposite manner yesterday where the USD failed to gain against major currencies.
According to Mr Tan, an increase in house sales would decrease the demand in the US dollar, which explains why the dollar did not enter a bull run yesterday.
I did not trade based on this data yesterday as I already have open positions in AUD/USD, EUR/USD, GBP/USD, USD/CHF and USD/JPY from a few days ago.
Friday, June 20, 2014
Trading on mobile
I was down with food poisoning for the majority of the week and had to use my phone to trade. The mobile application was surprisingly good and fast.
No screenshots of graphs, but my entries were based on either price action or harmonics. Most have been profitable.
No screenshots of graphs, but my entries were based on either price action or harmonics. Most have been profitable.
Saturday, June 14, 2014
Exercise your right to vote!
It is AGM season for a number of listed companies in Malaysia. I would like to stress the importance of voting, every vote counts and will make a difference. It is a responsibility to vote regardless of how many shares you hold. This is the very least one should do if he or she cannot make it for the AGM.
AGMs are usually scheduled on weekdays so it does not appeal much to the working crowd. Hence mostly retirees are the ones who are present. Do ask questions if you`re in an AGM!
The main purpose to attend should not be solely for the food.
AGMs are usually scheduled on weekdays so it does not appeal much to the working crowd. Hence mostly retirees are the ones who are present. Do ask questions if you`re in an AGM!
The main purpose to attend should not be solely for the food.
BoJ monetary policy trend broken for USD/JPY
Linking back to my earlier post on the backtesting done on the USD/JPY pair, the outcome on Friday did not follow the historic movements.
The graph generally slows an upwards movement from the time the statement was released. I shall attempt to see why this happened with fundamental analysis in a future post.
The graph generally slows an upwards movement from the time the statement was released. I shall attempt to see why this happened with fundamental analysis in a future post.
Friday, June 13, 2014
Backtesting the effect of the BoJ`s monetary policy statement on USD/JPY
A backtesting is a type of predictive mode using historic data to forecast future movements. This post shall cover how the USD/JPY pair behaves prior, during and after the Bank of Japan`s (BoJ) monetary policy statement.
For March, the pair was at 103.237 at the start of the new day, while strengthening to 103.195 an hour after the statement was made public. The downtrend continued till 15th March.
In April (8/4). the same trend could be seen where USD/JPY dropped after the statement came out at 10.50 am.
Again, the second monetary policy statement in April shared the same trend as the two before. The lowest level for the day was 57.1 pips lower than the open.
This is the chart during the monetary policy statement in May, the downtrend lasted for a shorter period.
USD/JPY chart from March
This test is based purely on trend and does not take into account the content of the statement which would affect the movements in a greater scale. In conclusion, a drop in USD/JPY is present in every monetary policy statement since February this year. However, the downtrend tends to last for a shorter period every time. This is due to the fact that quantitative easing is expected some time in future and when that happens, USD/JPY is expected to spike upwards instead.
For March, the pair was at 103.237 at the start of the new day, while strengthening to 103.195 an hour after the statement was made public. The downtrend continued till 15th March.
In April (8/4). the same trend could be seen where USD/JPY dropped after the statement came out at 10.50 am.
Again, the second monetary policy statement in April shared the same trend as the two before. The lowest level for the day was 57.1 pips lower than the open.
This is the chart during the monetary policy statement in May, the downtrend lasted for a shorter period.
This test is based purely on trend and does not take into account the content of the statement which would affect the movements in a greater scale. In conclusion, a drop in USD/JPY is present in every monetary policy statement since February this year. However, the downtrend tends to last for a shorter period every time. This is due to the fact that quantitative easing is expected some time in future and when that happens, USD/JPY is expected to spike upwards instead.
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