by Henry Liu on April 23, 2012
I’ve decided to share some of the thought process that I go through when deciding to take a trade, this is a 7-part series on Trading Strategies that I hope you enjoy.
Forex Trading Strategies #1 – The Real Reason
Far too many times Forex traders get into the market without the right reason, or for that matter, without a good enough reason. Usually the emotion factor is driving the trade, such as greed or fear of missing out on a potential profitable trade… And I have to confess to this as well, because when you take away all of the technical mambo jumbos, the only reason that sometimes compelled me to take a trade was: greed…
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by Henry Liu on April 21, 2012
Equity markets were volatile this week from slew of earnings reports, European sovereign debt auctions, and Chinese rumors on the impending cut of RRR. In Europe, investors prepared for the worst ahead of French, Spanish and Italian auctions on Tuesday and Thursday, amist of dealer rumors of ratings downgrade by one of the three credit rating agencies… Nevertheless, Spanish and ECB both reiterated that Spain would not need support, while the world remained unconvinced.
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by Henry Liu on April 15, 2012
This past week was relatively quiet, with all European markets closed for holidays during early week, but the big reaction took place on Tuesday as European traders got their first chance to sell following last Friday’s disappointing US payrolls report, not mentioning how the Spanish government struggle to convince the world over its ambitious 3% deficit-to-GDP ratio in 2013.
The equity market turned around during mid week, thanks in part to rumors of a very strong preliminary Q1 GDP reading out of China (the whisper number suggested +9%, well ahead of the +8.5% estimates), however the actual reported Chinese GDP figure turned out to be at +8.1%, which added further downward pressure to the already struggling risk aversion driven market…
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by Henry Liu on April 8, 2012
All major market moving events last week were from the U.S., starting with FOMC Minutes on Tuesday which shattered market’s expectation for another round of QE, followed by a NFP release figure that was much lower than even the most bearish analyst’s forecast… as a matter of fact, because of this release, speculation for QE3 is once again alive. Here’s the detail of the release:
March Nonfarm Payroll: 120K versus 205KE
March Private Payroll: 121K versus 215KE
March Manufacturing Payroll: 37K versus 20KE
Birth-Death Adjustment: +90K
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by Henry Liu on April 1, 2012
The last trading week of the quarter was uneventful as investors celebrated the equity market performance… European stocks were had their best quarter since 2009, up 7%, while Japan’s Nikkei index rose nearly 20% in the quarter, for its best performance in 24 years. MSCI’s benchmark emerging equity index was up 13.7% on the year. In the US, the S&P500 rose 12%, for its best quarterly performance since Q3 2009, while the DJIA had its best Q1 since 1998.
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by Henry Liu on March 25, 2012
Fears over economic slowdown in China dominated the general sentiment this week, after HSBC China PMI fell to a four-month low and continued to indicate contraction. In Europe, preliminary March manufacturing PMI data in both Germany and France also came in at four-month lows, both below 50, while UK Retail sales came below expectations, making the recession case more probable throughout Europe.
In the US, some good earnings and otherwise positive equity news held off some of the risk aversion momentum, but trading volumes were still pretty weak. February building permits jumped to their highest level since October 2008, while existing home sales slipped 0.9%, and new home sales dropped 1.6%.
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by Henry Liu on March 11, 2012
Major events that took place this past week were:
- Greece defaulted on its debt this week as the ISDA declared that the PSI exchange and the subsequent CAC clause constituted a “credit event,” thereby triggering CDS… Considering that the Greek default arrived three years to the day from the post-Lehman lows in US equity indices, it is quite ironic in nature.
- Chinese Premier Wen lowered China’s 2012 GDP targets at the National People’s Congress on Monday, as expected, and a slew of data out of Beijing came in softer than expected.
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Forex Market Review and Upcoming Forex Calendar (May 14 ~ 18, 2012)
Forex Trading Strategies #3 – The Correct Trend
Forex Trading Strategies #4 – Support and Resistance
Forex Trading Strategies #5 – Market Psychology
Forex Trading Strategies #2 – The Right Timing
US FOMC Meeting Minutes – May 16, 2012 – Forex Strategy
US Core CPI – May 15, 2012 – Forex Strategy