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     lafee
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Username: lafee
Post Number: 263
Registered: 04-2003
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Votes: 0
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| | Monday, January 08, 2007 - 02:13 pm: | 
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From a long term perspective the yen has been range bound against the US dollar for the longest amount of time. The major weakness in the US dollar 4-5 years ago was only felt approx half as much against the yen as it was with the other majors. The yens strength capitulated many many years before that 2002-3 period.
From an interest earning perspective, the yen has been a good short against other currencies for a while. The US interest rates are higher now. A long term trade will receive good income from the USDJPY on the long side.
On a shorter timeframe we have had a weakening yen against the GBP, EUR etc but at the same time the US dollar has been weakening.
Volatility (usdjpy) has also been falling since feb 06 hence the chart is compressing more and more.
Will we see a major weakening of the yen versus the us dollar this year. I cannot say. But if the US dollar starts to strengthen, the yen has a large vacuum to fill on the long side and, in my opinion, will offer the best opportunities of the year.
It is also worth bearing in mind that we do a lot of trade with Japan. A large shift the the yen is bound to have ramifications in our market.
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
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ingot54
Member
Username: ingot54
Post Number: 1637
Registered: 05-2004
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Votes: 0
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| | Monday, January 08, 2007 - 07:11 pm: |
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Lafee - as an interested spectator - as opposed to an erudite commentator, I am pleased to see this post.
When China raised interest rates by 0.27% last year, that coincided with the beginning of the hedge fund woes, and the correction caused by panic selling (yes, it's complex, but I add "amongst other things").
Around the same time (I only keep poor mental records) the Bank of Japan announced the end of the zero interest rate policy, and added that the official Japanese Central Bank interest rates would be allowed to rise (slowly).
I am wondering if this signalled the winding back and ultimate end of the "Carry Trade" - (where "cheap money" from Japan was borrowed and leveraged by the funds to push prices to records last year).
The Carry Trade is the life blood of several investment groups (jmv) and with the writing on the wall there was a rush for the exits to get out at best prices.
All of the above to provide background to my feeling (not belief) that we may see further strength in the Yen - they have not retracted the plan to step-up interest rates long term.
By comparison the US Fed Res HAS stepped up their rates and this has been neglected by the rank-and-file but certainly not wasted on the investment houses and fund managers.
Contrary to all predictions, the $US did not lie down last year, and has kicked on strongly this year ... so far.
Your chart looks to me like it is about to break to the downside ... thoughts?
Keep Smiling - Don't look back
Trading style: Chartist Artist _ Breakouts and Shakeouts.
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lafee
Member
Username: lafee
Post Number: 264
Registered: 04-2003
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Votes: 0
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| | Monday, January 08, 2007 - 08:36 pm: |
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Ignot,
They may not have retracted the policy but what have there actions been. Not much. The interest rate differental is 5% They still want a weaker currency. Doesn't mean they will get it but I am sure they are doing everything they can to help the process along.
I personally believe that we are more likely to see a weaker yen and a stronger us dollar (ie USDJPY will go up). A key indicator for me would be the Japanese stockmarket. If it rises it will signal to me that the BOJ is getting its way and the yen should weaken. The Nikkei lead the world from sep 05 to march 06 and the usdjpy moved higher during that period. At present the Nikkei is lagging the world - a good time for it to start to outperform.
On a very short timeframe (measured in hours!) I have been buying the usdjpy on the way down today. I will close most of my positions tomorrow morning. I will leave a few mini contracts for the long term. 3 -5 months.
You are right that there has been a lot of speculation that the end of the carry trade is upon us. But the fact is that the USDJPY has not flirted with new lows while the GBP and AUD have been hitting record highs. Maybe the media speculation is wrong - wouldn't be the first time!
Cheers
Lafee
(Message edited by LAFEE on January 08, 2007)
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
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lafee
Member
Username: lafee
Post Number: 272
Registered: 04-2003
Rating: N/A
Votes: 0
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| | Wednesday, January 17, 2007 - 02:09 pm: |
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Still rising.
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
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lafee
Member
Username: lafee
Post Number: 274
Registered: 04-2003
Rating: N/A
Votes: 0
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| | Friday, January 19, 2007 - 08:20 am: |
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The USDJPY rose strongly last night. The AUDUSD is currently playing with 79c. Good enough for me to short the AUDUSD.
Cheers
Lafee
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
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lafee
Member
Username: lafee
Post Number: 275
Registered: 04-2003
Rating: N/A
Votes: 0
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| | Friday, January 19, 2007 - 10:42 am: |
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A ROC based indicator showing relative performance of major cross rates.
Above 0 = positive momentum
Below 0 = negative momentum
Note Data is inversed for the USDJPY & USDCHF
Forget about that big spike in the AUD as it is an error in the data.
Cheers Lafee
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
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lafee
Member
Username: lafee
Post Number: 278
Registered: 04-2003
Rating: N/A
Votes: 0
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| | Monday, January 22, 2007 - 07:48 pm: |
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Currencies love to bounce between round numbers.
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
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lafee
Member
Username: lafee
Post Number: 279
Registered: 04-2003
Rating: N/A
Votes: 0
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| | Wednesday, January 24, 2007 - 11:55 am: |
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Time to cover my AUDUSD shorts.
Cheers
LAfee
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
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lafee
Member
Username: lafee
Post Number: 280
Registered: 04-2003
Rating: N/A
Votes: 0
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| | Wednesday, January 24, 2007 - 07:36 pm: |
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Can I have a show of hands. How many people here trade currencies?
Cheers Lafee
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
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nat
Member
Username: nat
Post Number: 57
Registered: 01-2005Rating: N/A
Votes: 0
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| | Thursday, January 25, 2007 - 03:02 pm: |
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Hi there ,i do on the odd ocassion more for a bit of fun on a 2 and ten min chart ,am starting to think should take more notice of econ calender and take more trades around those times as the moves are quite good ,i just do it on cmc platform ,by the way i do follow your take on the currencies ,just dont feel im qualified enough to say to much about them.Nathan
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lafee
Member
Username: lafee
Post Number: 281
Registered: 04-2003
Rating: N/A
Votes: 0
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| | Thursday, January 25, 2007 - 03:59 pm: |
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Nat,
It can be difficult trading around news with the forex. Unfortunately, it has been my experience that when the market moves as fast as it did yesterday the brokers are reluctant to execute my trades. I know it is a very widespread problem with the market. I can't speak for CMC as I have not experience trading forex with them.
I have noticed that when the market rises or falls leading into an announcement any kind of surprise can lead to violent directional moves. You see, before the news liquidity dries up. This increases counterparties ability to run stops. You see they don't really want exposure during such times and they do there best to minimize there risk. If they are able to move the market before the news it is itself a indicator of the importance of the news. The more people waiting for the number/news etc the less liquidity and more likely everyone will act on mass at the release. Big moves prevail. Problem is that you don't have an indication of the direction until it is released and you have the problems of execution on top of it all.
There may be a way to straddle the market pre announcement but I have not investigated this.
Cheers Lafee.
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
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lafee
Member
Username: lafee
Post Number: 282
Registered: 04-2003
Rating: N/A
Votes: 0
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| | Thursday, January 25, 2007 - 04:18 pm: |
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Speaking of straddles, the following is a monthly chart of the EURUSD. Each Vert. line represents the end of the year. It is remarkable how often the market makes its high or low of the year in January.
Cheers Lafee
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
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lafee
Member
Username: lafee
Post Number: 288
Registered: 04-2003
Rating: N/A
Votes: 0
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| | Monday, January 29, 2007 - 08:43 am: |
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It is likely that the USDJPY will see some higher volatility this week. I hope my resolve will be strong enough.
Cheers Lafee
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
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