US automakers are not alone in feeling pain. Toyota, which just recently has passed GM as the world’s largest producer of cars, has taken a rare step of shutting down production for 11 days. Only plants in Japan are scheduled take this drastic step. This follows three days shut down that took place in December. This step highlights the impact of the relentless decline in global demand for cars, which plunged over 35% in December. To be fair, Detroit’s troubles started well before recent economic slowdown, and were somewhat different that Toyota’s. Regardless, most, if not all, world’s car producers are suffering.
Forex commentators were quick to link this development with Yen weakness, which is probably pile of crap. Let’s not forget that over last few months there were NO good news coming from Japan and Yen still managed to stage a great rally, which is overdone now. I strongly suspect, any news from Japan could be used as an excuse for falling Yen. Well, reporters have to write something.
Weakness in JPY came at perfect time, when I was ready for it. Some pips were made yesterday, few more today.
This is a trade form the post “Scandal is spreading“. It took about two weeks before my buy order at 54.20 was filled, and 2 more days to yield 200 pips. This kind of waiting time is not unusual when 4H charts are used, especially when it spans the holiday season. I’m very happy with this trade. Speaking of Yen, I was also active with GBP-JPY.
Three trades, all winners. For the last trade I used 15M chart, that’s why target was a little bigger. In the interest of simplicity it is easier to show them all on 5M chart. I like falling Yen and hope it keeps doing so.
Pound had shown decent gains last few days, but is this turn around for real? It moved together with the “commodities currencies”. If this is real strength in GBP, it should also appreciate against other members of this pack. I will test it by placing a buy order in GBP-AUD.
This is not a typical trade I’d be looking for. I think chances are high for price moving sideways for a some time- long time in relation to the chart used. However, I will not be updating this blog tomorrow, so it gives the price time to decide what it wants to do before next post. I’m meeting with clients, real people, which means I have to leave the comfy environment of my office and venture out into the world out there. Scary.
Mike K.
Well, Mike, you started 2009 just like you ended 2008. Very impressive. The longer I follow your blog, the better it gets. You know, Heather was right. You might want to consider creating some educational material. Surely they’d be more than 1-2 buyers.
Maybe. But then I’d have to create some support system and be able to answer all calls/emails. Very time consuming and I simply don’t have it now.
I see. I guess you have to care of current clients first. Does it mean you manage money for people? Like a fund or pool.
No, not really. I mean, we don’t accept money for management but have advisory service for companies who sell products oversees. Hedging of future sales.
Man, this is crazy. Over 1000 pips in 2 days, and this is just on the trades shown here. Most traders, even the good ones, would be happy to have these results in a month or two. What leverage do you use 10:1, 20:1, more?
These are above average results. If the markets move a lot, it is possible, but not all the time. 20:1 leverage? Bob, for the trades posted here vast majority is taken at only 1;1, or 2:1. Very short term GBP-JPY trading I talk about maybe as high as 4:1, but no higher. Using even 10:1 exposure and taking a loss of 150 pips means about 15% loss in the account. And this can happen few times in a row. No high leverage for me. This is different, however, when trading mechanical systems.
Afraid of real world, arn’t you? It is scary indeed away from computer. Those people think in different manner.
You placed NZD/JPY buy order at 54.20 two weeks ago. Objective was 200 pips. Price moved to just above what you projected and is falling now. How did you know the top would be right there so much in advance? I hope it is not a secret.
I didn’t “know”. There are no certainties in trading. Every single trade is a function of a calculated risk. You develop trading strategies, which should help to estimate most likely market behavior, and hopefully you are right more often than wrong. I didn’t project a top there only that chances were high market would reach this level once the trade started.
I closed all of my EUR-GBP trades today. I made some profit, but the experience was really nerve shattering. Sitting at work and checking price every hour because it was that close to disaster. It was an eye opener to watch you wait for the sell off to start and only then getting into it. Lesson learned. THX.
Congratulations. It sounds like you simply overleveraged your account. It is very uncomfortable feeling, when trades go against you and there is a chance of getting completely wiped out. I know this feeling. No fun.
Looks like GBP-AUD went your way, too. What was your objective there, 2.1200?
It was 2.1150. I will go over it in the next post.
What is your take on EUR-GBP now? Are you still bearish minded about it? To me it looks that the drop is over.
See next post.