Forex Trade Ideas – October 11 – 14, 2013
The US Dollar has now made a “swing high” here, at a very important and critical junction.
As usual ( these days ) the implications are considerable, depending on which camp you’re in.
Off the top of my head, further ( and continued ) downside here would see USD trading “lower” in tandem with “risk” (also trading lower) – which in itself is troubling, as we would “usually” consider “risk off” activity to be good for USD.
In a situation where both USD as well U.S Equities where to fall in tandem ( as we have seen on several occasions over the past year ) it is also very plausible that we see both NZD as well AUD fall “even more”.
There would be absolutely no question that JPY ( The Japanese Yen ) would rise.
Trade ideas “would include” some pretty bizarre set ups – in that I would consider things like:
- short: NZD/USD as well AUD/USD ( where USD falls…..but gulp – commods fall even more).
- long: GBP/USD as well EUR/USD ( where USD falls, and these two take in flows straight up).
- short: USD/CHF ( where USD falls and the Swisse France takes safety trade ).
- long: JPY vs nearly anything under the sun, but especially AUD and NZD.
It’s far to early to tell, and the outline above is highly speculative but…..should further evidence of this unfolding be seen – I WILL IMPLEMENT TRADES IN NO LESS THAN 12 PAIRS IN A HEARTBEAT.
You’ve got to “at least” have a trade idea / plan in mind, then allow it to either play out or fail, as opposed to just turning on your television. Getting this one right could generate some serious, serious profits but again……………you’ve got to have an idea, a plan – before heading out on the field.
Kong! once it was Ali, now it could quite possibly be Kong – great(est) trades and a sense of humor to match 🙂
Considering the “proposed outline” I’m not 100% sure that “the humor” isn’t in the trades! as it might take the odd reader ” a little bit o research / chart time / fundies / macro / ” to jump all over it but……I just call it like I see it.
Hope you have a good weekend Power Corrupts!
Going by your trade ideas, wouldn’t the ultimate trades be long EUR/ AUD, EUR/NZD and long GBP/AUD, GBP/NZD?
“Insanity trade” is back in fashion.
I really like short NZD/CAD (been playing it for a while now with good profits), it’s a safe bet with limited risk in my opinion.
A couple issues surrounding that plan David.
1. The cost / margin requirements for the pairs you’ve suggested ( however attractive ) make any sizeable position a real “chunk” of usuable reserves. You’ll note “somewhere” in your trade platform that holding a single contract of EUR/NZD requires substancially larger margin than a pair such as NZD/USD….as an “off the top of my head” example.
2. I never trade one commod currency against another, as the fundamentals are “less” clear.
You are most certainly barking up the right tree…and have got the “concept 100%” – but then of course…the actual “legisitics of the trade”.
Ugh…..”one more thing” a forex trader needs to consider right?
Go gettem David – you’e really got a handle on this!
Those definitely do eat up margin, but I’m used to playing the Turkish Lira, Indian Rupee and South African Rand lol, so the GBP/NZD for example is not nearly that bad margin wise for me. Though, I do hate “waiting” for these trades to pan out as they do slowly bleed your account everyday after the swap.
Great advice though that many traders may not consider, sometimes it’s best just to play these against USD due to what you mentioned.
The fundamentals are definitely less clear playing commods against each other, but I will say the NZD/CAD tends to invariably sells off on Risk aversion.
Bang on David.
You are a mad man.
I generally treat these types of pairs as “flyers”. Adding them to my over all trade plan in very small amounts in order to “get a bang” out of them – but not take on any added risk.
They move “huge” and need to be treated with respect, as you know!
Great work David – have a great weekend!