Forex
Who is the Forex Trader?
The Forex Trader is a mysterious citizen of good ole' Britain. After a long career in the City of London, he has thrown in the towel and started life as a full time currency and options trader, with occasion dabbles in the equity market too.
Who is the Chimp?
The Chimp is based on the laws of probability and originated with studies showing that a monkey could pick winning stocks just as efficiently as fund managers by throwing darts at the shares page in the Financial Times.
The Chimp trades by tossing a coin instead of throwing a dart and has to deal at 7.00am each day, regardless of economic events, central bank speeches etc. His rules are quite simple, but may be refined over time; Heads- he buys the market; Tails- he sells the market, at the prevailing price when he tosses the coin. He deals in £6,taking profits on £3 at +20 pips and the remaining £3 at +50 pips. His stop is -25 and is brought up to break even once a 20 pip profit is achieved.
Diary of a Novice Forex Trader
I wonder how much Irish blood is boiling at all this Eurocrap talk about their ‘No’ vote being an Irish problem. “Bullocks,” firstly it’s not a problem at all, it’s called a democratic vote, something alien to EU members. And secondly, the only reason it’s seen as ‘Ireland’s problem’ is because the Irish government had the courage to ask the people who elected them what they thought. If other governments had the courage to do likewise then the perceived problem would span several countries, including this one.
Oops, it’s Victor Meldrew time again. I’m quite happy with high petrol prices keeping a few thousand motorists off the road a bit more often. And if it leads to a few more caravans being left in caravan parks, rather than clogging up her majesty’s highways, than that’s another bonus. But what’s really getting to me is the growing number of ‘careful drivers’ who drive everywhere at 12 ½ mph in the mistaken belief that they’re saving money. I live in Traffic-light City where a journey in any direction is hampered by red-light fever. And what these ‘careful drivers’ fail to appreciate, as they coast through amber at 12½ mph, is that due to their actions three other cars have just had 5 minutes added to their journey. Get a bloody move on or get a bike!
OK, so David Strettle is set-up for life, after his ‘better than a Rampant Rabbit’ recommendation from a Kiwi girl. But what fate awaits the others? Will Johnno bin them for a lack of discipline or will he give them just a yellow and tell them to prove themselves on the pitch? On the field there were one or two encouraging signs, mostly in the back-row, but also at scrummie. Outside that though, I could see little to excite or re-assure me about our future prospects. Nine-man rugby, that’s what we need.
I’m trading like Gordon Brown at the moment; everything I touch is going wrong. Actually, that’s not strictly true. Of three trades this week I had one win and one loss, the other loss was from my forex advisor group. Over the week I lost a net 130 pips and just clung onto the 4000 level at 4030 pips for the year. My trial forex system produced a weekly loss of 293 pips. Chimpy was flat on the week, leaving his cumulative loss at 1400, but this was because I gave him the benefit of the doubt. I’ve still been trialling 7.30 verses 8 o’clock starts and Thursday produced opposing results. I allowed Chimpy his 8 o’clock trade, which produced a 300-pip profit; the 7.30 trade would have given a 200-pip loss.
Friday 20th June. Having survived option expiry with a good result on the month I decided to chill for the rest of the day. At the end of last season my mini-rugby boys presented me with a set of barbeque utensils. It was a great thought, and a really good set, so I felt obliged to go and buy a barbeque. This would also scratch one of Mrs F-T’s moans off the long list so off I went to my friendly B&Q store. After buying my half-price bargain two things struck me: firstly, buying the necessary gas, including a deposit, cost almost as much as the barby. Secondly, it was a fair old size for me to lift into the car on my own. Oh, and thirdly, I had to build the damn thing myself. With the help of two F-T ‘children’ we had the thing up and running in time for Saturday evening and it suddenly seemed worthwhile. But I hadn’t realised how much the price of steak had gone up!
Tuesday 24th June. It had to happen, didn’t it? My forex advisors (the ones whose recommendations had cost me money on the past 5 calls) phoned through a sell on $Yen. I decided to sit this one out and see if their luck had changed. It had, and I missed out on a 30-pip profit per £1.
Wednesday 25th June. I kissed goodbye to one of the forex systems I was trialling. All that’s left is to queue at the post office then hopefully in the next month I’ll get my money back. Unfortunately it looks like another major arm-wrestle with bureaucracy to get AMEX to refund my money, rather than just leave the credit on my account.
Back into the fray with a couple of home-made deals today; the first was an expensive token gesture, the second worked OK, but didn’t re-coup the morning’s losses. My first deal was a sale of Cable after it had settled below the pivot point. But the move wasn’t strong enough and I was stopped out for a nasty 200-pip loss. My second trade was on the news that Norway had raised their interest rates by 0.25%. My squawk had warned me of the impending announcement and that the expectation was for no change in rates. I got a trade ready, reasoning that if they did move rates, it would be seen as a small prod at the ECB, not that they need it. There was no immediate reaction to the decision, except my buy bet at $1.5589. For a while I reckoned my logic must have been wrong, but after a while the rate pushed up to $1.56. The problem though was it was now time for US durable goods data so I closed out for a 95-pip profit. It goes without saying that the move continued upwards without me after the data.
Whilst having a quiet cider with a couple of mates I received a forex trade from my advisors. Buy KiwiUS$ at market. Not having a clever phone with the Internet on, I left it until I returned home. The rate was more attractive now and they’ve been better on the Antipodean trades so I placed a £1 bet to see if their luck was changing. It wasn’t; the basis for the trade was the expectation of a strong trade balance. The figure was weak, sending the trade into the red. As it was well clear of the stop loss I left it to see what the new day brought.
Thursday 26th June. The new day brought a 25-pip loss. The Kiwi never recovered the ground from my purchase and eventually I stopped myself out to save my money for another day. This system is up for review in July and it’s not looking promising. Plenty of fun and games in equity markets today. Rumours of Chrysler hitting the barriers and another gloomy report on the banks from Goldmans sent shares tumbling to the lowest since March. FTSE’s looking oversold in the short-term, but that’s not counting for much today.
Hah, the front page story in the Sun was a series of UFO sightings. I think it’s as likely as Posh Spice learning to sing, but the beard and Sandals brigade are swinging into action. They’ve already arranged a council house, mobile phone and comprehensive benefits package, and they’re going to ban the term ‘UFO’ in case it offends anybody.
It’s always good to end with something from Australia, and this is vintage stuff. Police charged a man from Cairns with being drunk in charge of a motorised wheelchair. This guy was six times over the limit and, after falling asleep in his chair, ended up on a four-lane major highway.