Archive for August, 2007
Ted Bernanke: Mystery Man!
By Marek W. Stupka | August 31, 2007
Today at 14:00 p.m. GMT FED’s Chairman Ted Bernanke gave his speech in Jackson Hole, Wyoming. His report was full of hidden indices and mysterious signals…
This afternoon the whole FOREX forum has been listening closely to what Ted Bernanke has to say about FED’s possible interest rate change in September. Just in case you don’t know, whenever a central bank (e.g. FED in the U.S.) changes interest rates, it has immediate impact on the country’s economy and, consequently, on its currency as well.
Out of the eight world’s top central banks, FED is the only central bank expected to change interest rates in September. Have a look at the sheet above.
Basically, we have been waiting for Ted to give us clues on the expected September rate cut. But Ted’s speech was full of those sleek, diplomatic terms like “the FED will act as needed…”, “the FED stands ready…”, etc.
In other words, Mr. Bernanke does not want investors to know yet. And so, he leaves us with one and only clue what FED might do in September - the NFP report due next Friday.
Mr. Bernanke, if there ever was a FED Chairman who deserved the title “Mystery Man”, it is you after your today’s speech in Wyoming!
[ To read full transcipt of Bernanke's speach visit the FED's official website at:
http://www.federalreserve.gov/boarddocs/speeches/2007/20070831/default.htm ]
Topics: Uncategorized | No Comments »
Yen Crosses: Extreme Moves!
By Marek W. Stupka | August 24, 2007
12 days ago I published an article about the carry trade unwind. Plenty of responds. Mostly, you wanted to know if it is safe to trade Yen crosses long now!
I decided to publish my reply to an email from my 1-on-1 student, since it answers most of the questions on today’s topic that I received from the others: It is important for you to understand that what have seen last week is not the volatility level “typical” for the world of FOREX. In fact, many of the market analysts agree that this high level of volatilty hasn’t been present in the markets for many, many months, if not years.
You asked: what exactly happened last week? As I have already explained in one of this month’s blog posts, there has been a liquidity crunch in Wall Street. Basically, this means that many big time investors adopted the risk aversive attitude, and started to walk away from their high-risk / high-yield investments.
In the FOREX world, this had instantly meant returning to the so called “dollar safe haven” philosophy, and immediately influenced the carry trade performance (if you don’t know what the carry trade means, visit my blog’s Archives and search for corresponding titles).
The extremely overbought Yen-denominated currency pairs began to unwind (read: fall), and the undervaluated Yen currency got stronger. This has been happening mostly due to the fact that FX carry strategy is considered the “most risky”, since it is not backed by any other technical or fundamental assumption than the yield-bearing factor.
Well, the price action has been so immense, that it actually broke several records. Take GBPJPY - the week’s most moving currency pair. More than 1,000 pip change in price extremes in just one day! Volatile. Very volatile, indeed.
You’ve been through the Technical Analysis Vol.2 module already, right? So you know that we tend to base our trading on technical, not fundamental analysis. Look at the chart I am sending you attached. The GBPJPY pair’s price action was actually easy to trade (and to cash-in) - even by the use of the simplest tools of technical analysis drawn in the chart!
Anyway, regarding your last question, I strongly recommend you don’t do anything unwise at this point. Yes, it is true, all of the Yen-denominated currencies post temporary correction, if not a partial, bullish trend reversal. And yes, it is also true that it is POSSIBLE that the overall downtrend is going to completely reverse in the days to come.
But it wouldn’t be wise to expect the same movement intensity on the pair’s way up, as we have witnessed on its way down. Many people are about to get burned on this simplified presumption. Remember: FOREX is not a look-and-shoot game.
I advise you to be patient with taking a long-term, bullish trade right now. You are on the Ichy Freak list. Please wait for my Ichimoku long-term planner that will be out tomorrow. In it, you will find specific trade suggestions for long-term trading of this pair - and other Yen crosses as well - over the course of the following week.
Topics: FOREX Trading Analysis | No Comments »
Ichimoku Long-term Planning
By Marek W. Stupka | August 20, 2007
If you followed the posts published previously, you know by now that Ichimoku Kinko Hyo is a traditional Japanese strategy that I prefer for long-term trading.
Have a closer look at the 1d chart for GBPJPY above. GBPJPY is my most favorite currency pair when it comes to carry trade. The chart above comprises the Ichimoku Kinko Hyo trading strategy, and this time I made it clickable, so that by double-clicking on the chart you can see the picture with higher recognition.
Note that there are two yellow arrows in the chart. One of them represents the entry point of my long trade, and the other one stands for my short trade entry point. To better depict the price levels of both of my entry points, check out the 4h chart for the same currency pair below (and again, double-click on the chart to see better detail).
See, Ichimoku is simply the best trend-following system I know of. It works best on higher time frames, e.g. 1w, 1d and 4h. The complex guide on how to use this strategy is fully covered in one of the lessons of my 1-on-1 Training.
Let me just repeat the info from last month: If you like Ichimoku, you are encouraged to send me an email with the request to add you to my Ichimoku Freak List. Once on the list, you will receive updates on the real mid- to long-term Ichimoku trades that I plan for my own trading.
Topics: FOREX Trading Systems | No Comments »
And the Winner Is…!
By Marek W. Stupka | August 19, 2007
In the beginning of July, I have announced a trading contest. The winner was to: A. Only trade THE CONFIRMATOR (my trading system), B. Make most pips!
The CONFIRMATOR Trading Contest was announced to all of my 1-on-1 students over the email. To participate, they had to trade THE CONFIRMATOR and THE CONFIRMATOR ONLY, for the whole month (from July 16 to August 15), and to produce the best score in terms of net pip amount earned. The decisive factor was not the money made, but the pips made, so even the participants with small accounts, or mini demos, had the same chances as those trading higher loads.
Part of the game was that the participants had to send me their original track records covering the contest time period to be able to aspire for the contest Grand Prize (two tickets to Sting’s concert in Stockholm, SE, in late August). I promised to check every single trade of the highest scoring trader in order to determine if the rules were adhered to.
The absolutely highest score - 790 pips - belongs to Mr. Amir Mustafa Bhraim from Suisse, Tunisia (amir.bhraim@gmail.com). Congratulations!
However, after checking Amir’s track record for compliance with the rules, I had to kick him out of the winner’s throne! The reason is that you, Amir did not play by the rules - some of the trades you took were based on your own “scalping” strategy, rather than THE CONFIRMATOR. I’m sorry.
The second highest score was in the track record of Ms. Ria Wojciechowska from Krakow, Poland (wojciechowskaria@gmail.com). Ria, you kapt all the rules!
Congratulations! RIA, YOU WIN THE PRIZE!
I’m sending you the tickets via UPS.
Ria did not want me to publish her track record, so I respect her wish. Anyways, this is the brief summary: she made 713 pips profit in a single month, on 16 CONFIRMATOR trades, with the average pip profit per trade 56.6 (That’s wild! Congratulations!!!), and with the win-to-lose ratio 78.95% (That’s even wilder! Ria, I’m proud of you! Stay on this road).
[ Jurgen Steiger from Graz, Austria, scored 48 pips. He ended up last, and thus wins the Consolation Prize - one free month of the 1-on-1 Training! ]
Topics: FOREX Trading Systems | No Comments »
Carry Continues to Unwind!
By Marek W. Stupka | August 12, 2007
Over the last week the USDJPY recorded the highest percentage decline in history. What happened? Risk aversion in Wall Street holds the answer.
Wall Street has seen some of its major market players liquidating their entire credit facitlities and thus withdrawing from the risks associated with keeping their credits alive. Countrywide Financial has executed credit of $11.5 billion, and Canada’s Coventree was not able to find buyers for its assed based commercial paper.
Despite over $300 billion worth of liquidity injections from central banks around the world, this liquidity crunch shows no signs of ending. For the world of currnecy trading, the Wall Street risk aversion translates to liquidating the long carry trade positions. In case you don’t know what the carry trade means, you should read the archived posts. Carry’s representative currency pair is USDJPY, and the so called “carry trade basket” usually includes all of the high interest-yielding Yen crosses, e.g. NZDJPY, AUDJPY, GBPJPY, etc.
The referential carry trade currency pair - USDJPY - thus posted huge unwind from long positions. In fact, the move was so strong that it broke the history record. Check it out!
Note the simplified technical analysis in the USDJPY weekly chart above. Can you see the yellow marked areas? Those are the basic technical signals that, at the appropriate time, notified us of the coming trend reversal.
See, we did not necessarily need to know about the Wall Street liquidity crunch (although the more you know about the Fundamentals, the better). Anyway, we are Technical Traders. We base our trades predominantly on the technical analysis. Sure, we keep staying tuned-in the major economic reports, but we watch our charts!
The simplified technical analysis above must, of course, be confirmed by additional techincal tools to actually form a trading strategy. But even after you apply them, the signal would have remained strong…
I obeyed the signal resulting from my complex analysis, and I made money on this bearish move. And I’ve made more than 400 pips of profit on this single long-trade setup over just 3 weeks! And I still kept the rules of conservative trading. Want to know the best part? I’m still in the trade! The pair has the potential to actually near to the 110.00-111.00 level…
If you, too, would like to learn how to make consistent profits, be it on the long-term, mid-term, or the session trades, you are welcome to participate in the 1-on-1 Training course. The simple technical analysis presented to you above is just a small glimpse of what you will learn in the course, and what you’ll be able to benefit from immediately.
Apart from the comprehensive, assorted, on-line trading education available to you for download any time you want, as the 1-on-1 Training participant you will receive periodical updates on technical charting, video updates on the session-based trading system, high number of explanatory ebooks, support materials, and much, much more. You will even be able to communicate with me directly (emails, videoconferences, instant messaging) about any issue that is not fully clear to you, or any area that you feel you need to grow in.
Ask for more information by clicking here. Reserve your training by clicking here.
Topics: FOREX Trading Analysis | No Comments »