Thursday 11 July 2013

The water's cold and the markets bight currency traders in the bottom

I've jumped in and the water's cold. On Tuesday I added purchases of GLE SDY and TW to my original seven. And as always seems to happen I bought at something of a peak. So in addition to the stamp duty and dealing costs I had a pull back in prices.

I am in contact with one of my readers who is using a system for improving the short term timing of entry by putting in limit bids. I shall investigate this more to see if it might help me to achieve better entry prices. Part of my reason for writing this blog is in order to generate an exchange of information. So thanks for that idea and please keep them coming. Apart from anything else I feel as though I have a friend across the ocean.

In the mean time, including those costs I am sitting on an overall loss of 1.3%. But it's early days. In all I have 5 winners (after costs) and 5 losers.





The US FOMC minutes and questions following a speech by Bernanke set the market into turmoil. It was Bernanke that made the biggest impact. He reiterated the need for a "highly accommadative" monetary policy for the foreseeable future and he sited the fact that the unemployment rate at 7.6% might be overstating the health of the labour market. The market read this as a signal that QE would continue. The $ went into a nosedive. The comments were made after the US market had closed so the price action all happened overnight in the Asian market.




The FTSE climbed along with the DOW overnight but has pulled back sharply with the light of day.

I thought it would be interesting to show what happened to the $ against the € too. It shows just how sensitive the currency markets are. Traders get caught with big short positions and suddenly the markets bight them in the bottom and they are forced to liquidate because they are so highly leveraged.

I find it interesting to note that writing these blog posts is much quicker when I am active in the market than when I am sitting on my hands and have to think up interesting (hopefully) things to say.




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