Thread: $ For The Week Of 10/16-With Some Trade Tips

Originally Posted by ;

what's source do u use for the FED Fund Index....

Rick Santelli of CNBC. . He has great insights as he is constantly dwelving with all the traders on the ground. He has been showing that Fed up Fund index and correlation with USD Index etc....

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I am personally Extended on USD vs EUR, GBP, JPY...

But seeing the way the crap has been beaten out of the USD, I began hedging those extended usds. Albeit I counter with additional lots. .

EUR appears to be the most powerful of the four currencies.
JPY and GBP shed some gains but EUR is still proving 1.2600...

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Originally Posted by ;

I'd look for a feeble number and watch for profit shooting if you would like to trade it. If the shortens additional watch for it to peak, then head beneath the pre-release number. You might want to trade at the point.

Historically, indeed a very good/bad Philly number drives the market into frenzy simply to retrace back to zero. But when the deviation is benign, then it moves the gradually, gradually. .

Looks like you're right about the flow.
It is just made the dollar even more like a sinking boat!

Originally Posted by ;

Nice call on that $ brief BK-BTW what is origin do u use for the FED Fund Index....

Taking a look at the Philly Fed number-with all the sell off seen in the $ today-it makes me suspicious that the info on the number has been leaked or the professioanl cash sees it very weak. I have seen this happen many times before. If that is what is happened along with the # does appear weak, you may observe the $ weaken by another 15-20 pips and see that the $ go another way as a few profits get booked.

I'd look for a weak number and watch for profit taking in the event that you want to trade it. If the $ shortens further watch for it to peak, then head beneath the pre-release number. You might want to trade at that point.

Leak has been the word that is wrong. . .The big investment houses that have FX desks can estimate this number fairly well with their particular connections. . .Other amounts can't be estimated as well and alterations may change things as well. . .so if you see big moves in the lack of fundamental data, you know what is goin on

The major thing to notice here is what the value of those reports are. In the GBP the value for most reports appears to be roughly 60-80 pips. That is about what we saw now with the sell-off prior to the report. After the initial pop off the weak number. . .it was bound to go down.

So all of us learned something really important here. The big traders can esimate this number quite well and they can likely do so with all the Fed surveys. Now we will not find a major version from the consensus each time, but if you find the movement in the hours leading up to these Fed polls, you will know what to do. Sometimes we see this happen in the London session and sometimes during NY. I'll remember that for next time.

None, nada, zilch, zip, zero, no-way, hopeless, absolutely not, nunca. No potential chance exists that the Fed will proceed at another week. No big revelation there.

If you're into long term fundamental positions-short the $ against the 2 currencies most likely to find a rate rise, the GBP and NZD. You'll need to hold those until next Wed after the announcement comes out. You have ta see the cash management though-if you've got $5000 in your account, maybe it's possible to think about a $5 position, only for fun.

Originally Posted by ;

Leak was the wrong word. . .The big investment houses that have FX desks may estimate this number fairly well with their particular contacts. . .Other amounts can't be estimated as well and revisions can change things as well. . .so when you see big moves in the absence of fundamental data, you know what is goin on

The big thing to notice here is what the value of those reports are. From the GBP the value for reports seems to be roughly 60-80 pips. That is about what we saw with the sell-off prior to the report. After the first pop off the number. . .it was bound to go down.

So all of us learned something really important here. The big traders may esimate this number quite well and they can probably do this with all the Fed surveys. We won't see a big variation from the consensus each time, but if you see the movement in the hours leading up to these Fed polls, you'll know what to do. We see this happen during NY and sometimes in the London session. I'll remember that for next time.

I agree with this! In fact, I nominate that selected part of this thread be PINNED for everybody to remember!

I would recommend going Long on NZDUSD. . Not only is it NZD really soaring due to commodities, it is also providing you Positive Swaps everyday.

GBPUSD is another good LONG. I can already smell 25bp rate hike from as far as 10,000 miles over here! Even if it is plain RUMOR, the last 8-2 choice was a very clear indiion that a rate hike is already heavily contemplated final month due to the successive inflation, also this month 5h in a raw is too much strain to ignore.

Tahnks for Your props.. .wish I could get paid to do this. . .lol.

I like to find pairs who is rates are looking to go reverse. . .the FED isn't gonna raise. . .the GBP and NZD are not achieved deals for a rise, but they're looking quite good, maybe too great for the big cash to ignore (not that they have ignored both currency; the $ has lost about 6.5percent in the previous couple of months vs. the NZD and the world appears to be diversifying into pounds). . .but using a very compact position proportional to your account, you are able to hold it for a couple of days, at least before the FOMC second Wed..

Originally Posted by ;

Tahnks for the props.. .wish I could get paid for doing this. . .lol.

I love to find pairs who is rates are searching to go reverse. . .the FED isn't gonna raise. . .the GBP and NZD aren't done deals for a rise, but they're looking quite good, perhaps too great for the big money to discount. . .but using a very small position proportional to your account, you can hold it for a few days, at least until the FOMC next Wed..

I put money where my mouth is, so its either I blew my account or I move home run.

Nahh. . just kidding. I am placing 10% risk with this particular one and ride it off to the sunset! Fundamentally, I am 95% confident that this not going on me!

For those undecided, it's your chance to come aboard! EURUSD and GBPUSD retraced. It knocked out several resistances in its route so going LONG provides you breather that barriers are of no interference. I dont understand about NZDUSD's resistances .

Fresh off the news prints:

Originally Posted by ;

[IFR Forex Watch] [SQUAWK BOX]

[20:38 FOREX: Fed Custody Holdings Slump $11 bln in Oct 18th Week] San Fran, October 19. Fed custody holdings have declined $11.330 bln at the week ending October 18th with custody exemptions dropping to $1.678 bln. The decline notably comes after news this week that Russia wants to diversify reserves into JPY but with signs which central bank diversifiion is showing the EUR preference waning along with the JPY and GBP are finding stronger need. Note that both Germany, who will chair the G-8 following calendar year, and Australian Treasurer Costello have raised the issue this week of Asian international reserves and the imbalance caused by their own holdings of dollars. Average Fed custody holdings fell $1.67 bln to $1.685 tln.

More are clearing away from the USD.

China still holds $1T; and they've been contemplating on EUR book a few weeks back (when powerful USD opinion abound) but averted as adviced by a few european bankers then (recall that story?) . It could be added holes to the boat, if they decide NOW to ditch USD.

Japan holds 2nd biggest FX book followed by Russia (?) . Russia has already revealed their intention to diversify.; I am not sure about Japan but they are always fond of buying other currencies that net high swap rates (carry). . So GBP, USD, NZD, EUR (AUD too?) Are the money that is favored they buy.

Ok now we can get into a money management discussion -

If you want to put up 10% of your account within this trade, that's OK but it is an issue of how you are gonna do it. If you have 2500 on your account and you are willing to risk the 250, how many lots are gont buy? How do you find the upside here?

Let's talk about a GBP/USD commerce first.

Should you buy 1 lot (100k=10 position) you just have 25 pips to play before you are stopped out. You have almost no chance to be successful with this in my opinion; you will get stopped out and that'll be that, unless you have the most incredible luck.

How about 1 miniature lot (10k=$1 position)? I think that's too little. I really don't think you are gonna need a 250 pip cushion here, so you may go bigger.

5 minis-50k-gives you 50 pips to play with. . .still not in my opinion.

2 or 3 minis seems about right to me. . .gives you between 83 and 125 pips cushion. Personally I'd go with 3 myself, since there's no significant US fudamental data due out before the FOMC next Wed..

I'd still wait for the British GDP tomorrow before entering this trade. If it's positive for the pound, choose the long position and continue thru next Wed at the least. . .but only at these levels.

On the upside, given a positive GDP, using a rate incr bonded for sterling and none for the $, that I can watch 150-200 pips here. Opinions?

Originally Posted by ;

I'd still wait for the British GDP tomorrow before entering this transaction. When it's positive for your pound, consider the long position and hold on thru next Wed at the least. . .but only at these levels.

On the upside, given a favorable GDP, using a rate incr bonded for sterling and none for your $, I can see 150-200 pips here. Opinions?

I have decided to try out a hedge on the GBP, with a tiny lot number and a 20 pip stop loss with no limit. We'll see how it goes. The worst I could lose is $10 per transaction ($20 maximum )