Monday, August 31, 2009

August trading performance


For the month of August, I placed a total of 9 trades and made a profit of 319pips. Below is a summary of all the trades:

Could have done better I think..but maybe because it is the first month I'm trading with a standard account and being extra cautious.

Looking forward to September..where hopefully I could get more pips and some 'duit raya'..heheh


Wednesday, August 26, 2009

My first withdrawal - RM700


Remember that earlier this month, in one of my posts, I said that new month, new ball game. Well, this month is the 1st month I am trading using standard account. What this means is that for every 1pip, it is equivalent to USD1 for 0.1 standard lot.

So far for this month, I've earned 387pips. I'd decided to withdraw 200pips which is equivalent to USD200 and retained the rest as I build up my capital. Through local bank, the money was transacted into my account this morning and as the current exchange rate set up by my forex broker at USD1=RM3.50, RM700 was credited into my bank account :) Alhamdulillah..

Hopefully this would be the start of consistent performance from me and that I can withdraw regularly on a monthly basis. Let's hope that the month of Ramadhan would bring more rezeki for me and my family.


Saturday, August 22, 2009

Technical Analysis for last week of August

Salam friends,

Here's my technical analysis for this week:

If the trendline holds, we could potentially see cable moving up possibly to 1.6600-1.6620 as the nearest resistance level, provided that stock markets rally holds. However, if the stock market continue further correction and the trendline is broken, we could potential see cable dropped to 1.62 -1.63 levels.
My indicators (RSI and deMarker) are at the half way line while stochastic is at the oversold level.

This pair could break the red line and go beyond 1.44 levels, with next strong resistance is 1.4687, which is the 61.8 Fibo level of 1.2501 and 1.6038.

Similarly, Aussie could also reach the 61.8 Fibo level (0.6229-0.9850) at 0.8467, if supported by favorable risk sentiment trend in the week ahead.

Could also reach 61.8 fibo level at 0.6945 however my indicators are all showing that this pair is at the overbought level and poise for some corrections.


Analysis for the last week of August


First of all, I would like to wish all my dear muslim friends - 'Selamat Berpuasa dan beribadat di sepanjang bulan Ramadhan'.

Review of last week
At the start of the week, we saw USD strengthened against other currencies as questions on recovery arose from weak US consumer confidence, driving up risk everse sentiment. However towards the end, stock markets recovered helped by several factors that included oil reserve shock in the US which spurred EUR due to its high correlation with crude oil. EUR also gained on the back of strong PMI data. German services PMI surged to a 16-month high of 54.1 while French manufacturing PMI hit a 15-month high of 50.2, signaling an expansion in activity after growth had contracted for more than a year.

Finally, the strong rebound was also due to Bernanke’s remark at the end of the week that “the prospects for the return to growth appear good” – signaling growth is on its way. He also took pride in the fact that the Fed has spared no effort and that things would have been much worse if they did not act the way they did.

Fundamental Analysis

Outlook for this week: While we have seen investor sentiment steadily rise over the months, with the S&P 500 just recently hit new highs for the year; there are signs that optimism is flagging. Taking a look at the volume data that accompanies the steady trend in equities, there is a clearly diminishing trend in conviction behind this move. I would go for sell orders on corrections opportunities this week. Stock markets needs to feed on positives news to support its rally between now and the 4Q09 where we’ll see investors coming in (after summer holiday) with more liquidity.

Cable – slightly bearish
The primary driver for cable this week would be risk sentiment instead of economic data due out this week. Revised 2Q GDP is due out on Wed – barring any meaningful shock revision, the impact on cable is expected to be alredy priced in. CBI Realized Sales (Thu) is expected to report a better figure although it would be still negative (-11) – this data is a leading indicator for consumer spending. A lower figure indicates low level of sales volume.

Fibre – bullish
After impressive results from PMI data last week, our attention would be on German’s Ifo business climate data out on Wed – it’s a leading indicator of business condition such as spending, employment and investment, where 7,000 companes were surveyed for the data. Economists are expecting an improvement to 89.1 vs 87.3 last month.

On Thursday, the German GfK survey of consumer confidence is projected to rise to a more than 1-year high of 3.6 in September from 3.5 and on Friday, Euro-zone economic confidence is anticipated to increase to a 10-month high of 78.0 in August from 76.0. Overall, a steady stream of positive news could be the impetus to drive fibre to fresh 2009 highs.

Aussie – bullish
Key macro data for AUD this week includes Construction Work Done (Tue) – expected -2.7% vs -3.7% last mth and Private Capital Expenditure (Wed) – improvement to -4.7% vs -8.9% last mth. Both data are important as it indicates the health of the economic and if the actual data came out as expected, we could see Aussie making new highs for 2009.


Tuesday, August 18, 2009

It's just a healthy consolidation


What did I tell ya'? Market is now on consolidation mode. After last Friday's University of Michigan's consumer confidence data reported dismal result, market took cue and come yesterday, we saw market took a huge tumble after four weeks of rally (supported by earnings season).

I don't know if there is anyone following my blog, but this week if you guys noticed I didn't update my research for the week due to time constraint - however my view still remains the same from the previous week - looking at selling opportunities as the market corrects.

Hence, yesterday I placed 2 sell orders on kiwi and cable and managed to took +201pips in a matters of hours as the stock markets plunges worldwide and investors became risk averse, dumping riskier,higher-yielding currencies.

Looking ahead for the rest of the week, I will look for further opportunities to short the major currencies against USD as I firmly believe that we are in a consolidation period and 2% drop (on average) in the stock market on Monday is just a start to a healthy correction.


Wednesday, August 12, 2009

Correction is underway


Today I managed to secure another +94pips. Kiwi gave me 101pips gain but I gave back 7pips thru cable..

I think I entered the sell order for cable late, after it had fell more than 200pips on Monday when it had break the UTL support. The price ranges around the 1.6440-1.6500 level yesterday, suggesting bearish might have exhausted..before I decided to manually close the trade..

It turns out that the bear has some fuel in the tank (boleh ker ckp camni? belasah jer la..hehe) If I had waited longer, I could gain as much as 80pips. Well, need to improve on my confidence level as well as my patience..huhu


Saturday, August 8, 2009

Potential Correction Ahead?


Last Friday, we saw volatile movement in the currency market after the announcement of Non-farm Payroll (NFP). The data was actually better than analyst estimated. -247k against -320k. Normally what we would expected is USD would take a hit and other currencies benefited due to risk appetite sentiment. And that’s what happened briefly, Cable, Fibre all went up by 60-100pips, but before u knew it, the pairs went down crashing by more than 100-200pips. Luckily, I didn’t trade last Friday because I don’t like the volatility caused by NFP.

Could it be a sign that positive US fundamental data now would trigger a dollar rally instead of further risk appetite? This is because US is expected to recover 1st from the current economic turmoil than UK, Japan and the Euro Zone (which will be confirmed with this week’s GDP numbers). But such expectation is too early to tell and better yet, difficult to muster, as USD is considered as the world’s reserve currency and would be hard to shake off its safe haven currency tag.

Looking ahead to this week, here’s my fundamental analysis based on my favorite pairs:

Fundamental Analysis

Cable – The decision by BoE to increase Quantitative Easing further by GBP50bil to GBP175bil caused a sharp fall in the pair last week. This just further proves that the UK economy is recovering slower than the US.

Recent UK economic data has broadly shown relative improvement in domestic activity and said trend will be put to the test by upcoming Jobless Claims results. Consensus forecasts call for a 28.0k increase in Jobless insurance claims and a marginal increase to the national jobless rate at 4.9 percent. The result would represent the worst unemployment since 1997, but as recent market reaction to US Nonfarm Payrolls data clearly shows, financial markets are mostly interested in the rate of deterioration.

Short-term Cable momentum points to further losses, but it will be important to monitor financial market follow-through and key UK and US economic event risk.

Fibre – Sharp sell-off on Friday from macro perspective, shows that US is more bullish with their market and interest rate increment may be just down the line sooner rather than later. This is a sharp contrast to the neutral tone from ECB’s announcement last week.

Fibre could continue to fell this week if the 2Q GDP fell more than expected. It’s forecasted to show a 0.5% decline in 2Q compared to -2.5% in 1Q.

Aussie – Last week, the pair ended higher than previous week, helped by a bullish tone set by RBA, boosting growth forecasts and pointing an improved economic activity. They indicated that current rate is suffice to boost the economy and even said that they might increase rate later.

Currently, commitment of traders on the pair is at the extreme bullish. It’s hard to say whether the top has been reached but any negative data coming out this week could potentially see some corrections.

Kiwi – I am adding kiwi (NZD/USD) for this week’s analysis as I noticed that there’s some potential trading for this week based on technical. On the fundamental side, with stock market could potentially correct this week, we might see some unwind in the risk appetite for this pair.

Futhermore, retail sales will be announced on Thursday and it is expected to decline to -0.3% m/m compared to the previous mth’s 0.8% increase. If the data came out as expected, it shows that consumer spending which is a reflection of the overall economic activity, is still weak and does not bodes well for the pair.

Technical Analysis

Cable – Looking at the daily chart, Cable has almost reached the Upward trend line (UTL) for its support. At this level I am not looking to place any trade after considering last week’s huge swings, daily average movement now has surge to 214pips and there is no worthy risk/reward potential to take.

Fibre – Similarly, this pair has also reached it support at the UTL, which is also within an upward channel. Again, at this level, I am not taking any trade on this pair. However if it does break through the support level, I could possibly reconsider taking a short position.

Aussie – The pair could potentially have reached a top, and possibly completing a wave 5 of Elliot Wave, which in theory, this would follow with correction wave. I could take a calculated risk and place a sell trade at current price, with a target pips of around 100-150pips for a risk/reward ratio of 1:1.2 (23.6 fib level) or 1.5 (38.2 fib level).

Kiwi – The last candlestick on Daily TF is forming a shooting star. This is a sign of reversal. While in terms of Elliot Wave, we could be seeing the starting of a consolidation wave (a) – refer to chart. If these analysis holds true, we could see correction in this pair. I would take a sell trade on this pair, with a SL of 50-60 pips and a minimum of 100pips profit target, until it reached the UTL.


Friday, August 7, 2009

Nice and slow start to the month

Salam Friends,

This month went off with a good start. I bagged +92 pips, shorting GBP against the USD, as the stock markets finally consolidates this week.

Could have added more pips but since I am working within a new money management condition, my SL is pretty tight..hence my low return this week..still Alhamdulillah, positive returns that's what counts.

I would also like to take the opportunity to congratulate my friend who had just won his 1st property auction today! Finally after several attempts, you won! :) This is a big step for him to become a successful property investor and achieve financial freedom. Just imagine from 1 property you can earn RM200-300 positive cashflow each month. What if you have 10 or 20 properties? It would provide you with a stream of passive income while at the same time maintaining your current work. Imagine buying new car or a new house using other people's money, isn't that great!! Wowowww..

Congrats bro on your winning!!..Now u can join the TT session! Hehehe..


Monday, August 3, 2009

A new month, a new ball game – bring it on!

Salam friends,

What a month it was last month. Now let’s look to the future and target more pips..huhuh


Currently, higher-yielding currencies are buoyed by the rally in the stock market. This gave confidence to investors to invest in riskier assets as can be seen by the Commitment of Traders (pls refer to fx websites and just type the phrase in its search tool) whereby net shorts of USD has been at the extremes. It is a matter of ‘when’ rather than ‘if’ the USD will post a correction. And it would take a single (given the significance) or strings of bad economic data like the ones that are coming out this week to see investors unloaded their short position of the Uncle Sam’s currency.

Having said that, my bias for the week is to follow the market but cautiously; i.e by putting tight SL for fear of any strong reversal. It could be volatile this week looking at hordes of important data coming out.

The most important and anticipated data is coming out this Friday, the non other than the Non Farm Payroll (NFP). As usual, economist are targeting good numbers but what we did learn from last time? Expect the unexpected. Last month, the number came out worst by more than 107k than estimated.

Last week, advanced 2Q GDP result shows that the economy contracted less than expected. However, the revised 1Q GDP shows that the US economy suffered its worst q/q performance in 27 years. Personal consumption is still heavily subdued, so I am personally think that current strong rally in both the stock and currency markets are overly done and some correction looms.

Other important data coming out: ISM Manufacturing PMI (improve 46.4 vs. last mth’s 44.8), Pending Home Sales m/m (0.6% vs 0.1%), ISM Non-Manufacturing PMI (48.1 vs 47)

Sorry but this week I was pretty tight on time so I didn't update views on each of my favorite currencies.

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