What is it? Race to a zero? It seems to be latest activity world central banks are engaged in. Zero being 0% interest rates. looks like we have an ongoing competition. Yesterday Bank of England announced that is considering another very large rate cut. That was perhaps one of the reasons Pound took a turn from very sick to critical and plunged again. Not be outdone, FED is constantly hinting of another cut if necessary. Bank of Japan is only 0.3% away from, what seems to be, a target. Is there some grand prize awaiting those who reach that magic level? One really has to wonder, as consequences might be dire. We would dive from problem into another. I’m not even getting into details, that can be left to academics, economists and people who voice very smart sounding opinions, but, curiously enough, are not known for any trading skills. But seriously, is it where we are heading? Zero percent rates?
Yesterdays dive in GBP-Jpy put a kibosh into my longer term trade. It started really good, running up about 140 pips my way only to reverse on a dime and fall like rock.
I decided to dump it with a 100 pips loss, well, 103 pips. Turned out to be a right decision.
Friend of mine, a well known trader, called me yesterday and asked “What are you doing?”. “I’m trading”.”Why? You should use this time to go to a doctor and have your head examined. And everybody else who is trading now. Take a vacation and start again after New Year”.
He might as well be right, but the truth is, I see current environment as a challenge. Furthermore, I believe we are experiencing rare market conditions, and from a long term perspective, it is important to be reasonably active now. Huge, hands on learning opportunity. A lot of lifelong traders claim these are the most difficult market conditions they ever faced. I don’t want to miss it.
Next trade from last post, EUR-CHF.
Breakout was nice and price moved swiftly to my target, only to reverse within 10 pips of a target. I managed to get out at 1.5275 with 35 pips.
With only one day left in a trading week, I’ll focus on GBP pairs in this blog.
I’m going to try a buy here at 1.8200, with 100-120 pips objective. Also, tomorrow I’ll post Friday’s GBP-JPY trades on 5M charts. One final thought, we should know rather soon if the Pound finds some legs here or is going straight to hell, with AUD in tow.
Mike K.
Pound is going straight to hell, with AUD in tow.
That’s very funny.I like it.
Your friend might be right to take a vacation here. I’m having really hard time. You seem to be doing OK. You’ve mentioned many times that this blog only covers small portion of your trades. Can you share what else you are doing? Here it looks that most of your trades are done with 1H charts.
My trading is split into 2 parts. There is an automated trading system I use that trades number of accounts and I just leave it alone most of the time. Only the major dollar crosses are traded there. And then is the discrationry trading, where I use few simple strategies. Trades in this blog, using 1H and 4h charts that is only about 10% of my total trading. Maybe less.
[...] that long ago central banks were in a race who can slash interest rates to zero first. Seems like a distant memory, but the Bank of Japan was the winner then. Now a new competition is [...]
[...] that long ago central banks were in a race who can slash interest rates to zero first. Seems like a distant memory, but the Bank of Japan was the winner then. Now a new competition is [...]
[...] 6th, 2010 Goto comments Leave a comment Not that long ago central banks were in a race who can slash interest rates to zero first. Seems like a distant memory, but the Bank of Japan was the winner then. Now [...]