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Hi AshleyJum and All:
Ashley wrote:
Hedging: You can go long and short in the same currency to hedge
completely
or partially for example you can go long $200,000 worth DM and go short
the
same or less and have both sides open unlike futures.
Jeff wrote:
By doing that, you've essentially closed out your positions. If you're
dealing with a bank, I'm quite sure that they wouldn't allow you to
treat both both positions (long & short) as open end. However, I do
have friends whose brokers allow for such practice. Basically, it
really comes to the size of your trading account and how important
you're to their business. But the general pracitce is simultaneous long
and short positions aren't acceptable.
Ashley Wrote:
A forex trader would require 1) good reliable internet
connection 2) live real-time quotes preferably free from the
market-maker
3)a cheap or free source of real-time news that could move the currency
markets - also most important good judgement. Any
input would be welcome. For forex traders - anybody using news and/or
technical analysis for trading and your views on it. About trading on
fundamental or news, any recommendation on sources ,books for learning
about how to use news to trade profitably would be welcome.
Jeff Wrote:
I've been trading forex without internet connection for a long time
since I'm a position trader. Staying awake for 24-hours is totally
unjustifiable and unnessary. All you can do is staring at the movement
of prices; it's won't do any good to your health anyway. As to the
question of trading on fundamentals, this is the kind of approach that
most bank 'dealers' would go for. To me, such approach is totally
unprofessional. I've seen them in action for the past ten years and I
still can't single out a bank dealer who can make money consistently
simply by following fundamentals. Anyway, if you're interested, watch
for all the major U.S. indicators such as non farm payroll, leading
indicator etc. in forex trading. Forex markets tend to react to the
U.S. figures only. I must point out though technical would've reflected
the subsequent move DAYS before the actual release of figures.
Ashley wrote:
Disadvantages. 1. Individual trader
cannot keep awake 24 hrs. 2.Since margin is less, trader with poor risk
management can get wiped out quickly. 3. Ray Barros said that you have
to
pay interest rate differential - I don't understand this clearly but
paying
it may take away most of the advantages. 4. Other costs charged by
trading
houses 5. Safety of the money in the account. 6. Adaptation of technical
analysis required. How do you chart the open,close,high,low for bar
chart
or candlestick when there is no open or close. I use mostly candlestick
charting and require the open and close.
Jeff wrote:
As with any kind of financial trading, money management is the most
important aspect in trading. Ray Barros is right: Let's assume you
short the dollar against the yen. Since interest rate for the dollar is
way higher than the yen, you must pay interest for shorting the dollar
and you have to keep paying for as long as you hold the short
dollar/yen position. Many are reluctant to short currencies such as
U.S., Aussie, and Kiwi due to their relative high interest rates as
compare to other currencies, but forex traders DON'T really care about
those interest they have to pay if the subsequent move is expected to be
a few hundred points move. Personally, I have never had experiences
where the interest payements dissipate my floating profits. Forex
markets are just like any other markets, they react to technical
indicators and systems normally. I strictly utilize technical analysis
in any kind of trading. Currently, I'm a real-time technical analyst
for the global currencies. Charts in hourly, to the minute time frames
react accordingly with RSI, MACD, SLOW STOCHASTIC, TIME CLUSTERS,
ELLIOTT WAVE, FIBONACCI RETRACEMENTS & EXTENSIONS etc. Finally, to give
you a better idea of the character of various markets: Dollar/mark is
the most 'well-behaved' amongst others. It pays a lot of respect to
fibonnacci clusters and trendline analysis and wave counts are almost as
clear as a bell. Dollar/canadian is a slow moving market and it takes
patience in order to reap the full benefits. Even during a trending
phase, it loves to visit deep pullback (.618) before the resumption of
current move. Aussie and Kiwi are markets that need patience as well
and seldomly encounter complex wave counts. RSI doesn't do too well for
these markets. Dollar/yen: Dangerous and powerful market. Very
complex wave counts and loves to perform wedge formation towards the
final fifth. General volitility is about 200 hundred points. Unlike
other markets, once the completion of a wave cycle or break of an
important support/resistance clusters, it will NOT pause at all until it
reaches the next fibo level. For this reason, profit taking and stop
loss should be followed closely. Dangerous: Yes, but the most
profitable of all. Here is a wave counts of the kiwi for a taste of
forex trading. Hope this helps
Have a good one
Jeff Harteam
Hong Kong
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