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Discussion Starter · #1 · (Edited)
Hi to all 2coolers! It has been a long time since i posted here. I hope all is well with everyone.
I had an old thread here on Forex at one time.
Forex Trading is risky, but there are ways to reduce that risk.
Here is a chart for the GBP/AUD currency pair (british pound/aussie dollar)
I opened 3 short positions in october of 2012 around the 1.5785 price level. The price has earned a daily interest and a substancial pip gain.
I closed 2 positions for profit and kept the 3rd position open as an interest bearing savings account.
I set the stop loss to to lock in +10 pips, so there is no longer any risk to the original principal.
Worst case scenio = +10 pip profit plus interest earned.

As I stated before, forex is risky. The leverage on this pair is 20:1.
To me that is acceptable risk to reward.
20:1 leverage means that if you place a 100 dollar position, you are trading times 20, or 100 x 20 = $2,000 dollars. You win or lose @ $2,000 and get paid interest on $2,000 dollars.
I am not here to gain anything, only to share with 2coolers, that there is a relatively safe way to invest long term small positions in Forex.

I am short this pair from 1.5785 (Oct 4, 2012)
Fundamentally, the GBP is in trouble short term to mid term.
Aussie will hold value.
I had 3 short positions from October. I closed 2 of them for nice profit.
The swap interest on this pair is very nice.
Positive stop loss = no risk of loss to original principle.
In a short time, the interest will be larger than the principle and the position will be pure house money.
I have been selling into every rally and booking short term profits.
I see no reason to change this pattern at this time.
I use this pair as an interest bearing savings account by placing long term positions.
 

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Discussion Starter · #2 ·
I am placing a few small test sell orders at resistance areas that are likely to hold as a ceiling.
Stop loss is placed above resistance.
downside target is 1.4300 price.
My stop loss is just under the 1.4800 price.
The entry is around 1.4735 or so.
Risk of loss if price breaks up above 1.4800 would be around 50, 60 or 70 pips, depending on where you place your stop loss.
Risk of reward to 1.4300 price in the future would be over 400 pips profit.
Risk to reward is acceptable to me for this position.
 

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Discussion Starter · #3 ·
i shorted the eur/usd at 1.3043 and 1.3042 on the asian session. Booked profits at 1.2975 and 76 price on the U.S. session.
+ 68.30 pips
+65.80 pips
Get in and out fast on this pair. it is volatile lately.
This pair broke below a double sma support today. I am selling rallies short term until the dollar index tops out.
 

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Discussion Starter · #7 ·
  • New zealand central bank rate announcement tanked the currency.
  • Expects to keep overnight cash rate unchanged through the rest of the year
  • Sees signs of stronger growth since Dec
  • Does not want to see financial stability or inflation risks accentuated by housing demand
  • Overvalued dollar undermines export profits
  • Economy to grow 2-3% over forecast period
  • Fiscal consolidation slows demand, helps reduce upward pressure on NZD
  • Drought conditions worsening, may hit output. Sees impact of 0.2-0.3% to H1 GDP
  • Inflation to head back to mid target range
NZD getting sold across the board
NZD/USD falls from 0.8270 to 0.8200
NZD/JPY to 78.78 from 79.40
AUD/NZD at 1.2560 from 1.2460
The main emphasis on the statement is towards the currency and stemming it's appreciation.
 

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Discussion Starter · #8 ·
At 7:30 p.m. is the australian employment news release. Expect volatility on the asian session, depending on a hot or miss of market expectations.

Risk is high short term on this currency until the news hits the wires.

The market has been selling rallies and buying dips lately, on this pair.
The aussie central bankers want to to see a weaker currency price.
The u.s. dollar index has been bullish lately, but shows signs of topping out.
 

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Discussion Starter · #9 ·
Aud/usd jumped quite a bit on the employment news.
Correlation with China is strong. As China goes, Aud follows to a certain extent. Healthy China = healthy aud economy.
My buy order was not activated. I missed it by less than 10 pips, i think.
Aussie Dollar jumped 70 pips up or so, in minutes.
 

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Discussion Starter · #11 ·
Lots of uncertainty over the weekend, in the economic world.
Currency pairs gapped quite a bit from Friday's close to Monday's open.
This 1 hour chart for gbp/aud shows the gap and the attempt to close it.
i mostly stood aside until the dust settles.
I did manage to short the gbp/nzd for 88 pips, and bought the dip in usd/jpy for 23 pips, and shorted the eur/usd for 13 pips.


This chart shows price approaching my sell orders that i posted last week.
 

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Discussion Starter · #12 ·
In the previous chart, the aqua colored 100 sma (simple moving average) is acting as a floor of support.
The red 200 sma is acting as a ceiling in conjuncture with 2 shorter time frame sma's (green 22 and brown 55).

my simple moving averages are set to the close price, meaning that the colored lines representing sma's are an average close price for the last x number of candles.
 

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Discussion Starter · #13 ·
today i shorted the eur/usd at 1.2941 and took profit at 1.2890for +51 pips.
I have one open short eur/usd from 1.2956, which I will close now for +89 pips at 1.2866.
 

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Discussion Starter · #14 ·
Chart explanation:
I use a candlestick chart set up.
Here is shown a weekly chart for eur/usd. Each candle represents one week. Red candles are bearish (selling interest), and blue candles are bullish (buying interest).
There are 4 elements that make up one candle.
1. open price
2. high price
3. low price
4. close price.
wicks form above and/or below the body of the candle, indicating high price and low price.
The pattern in the chart is showing a strong move down from 1.3710 to 1.2860 or so as of this post.
if you look left an area of consolidation in a tight range around this same price level.
I have exited my short positions and will watch for buying interest to show up in this price range. today the price has broken the brown 55 sma and could go lower.
Shorting every rally has been a good trade as long as the u.s. dollar index stays strong. They are correlated. Buying dips in the u.s/japanese yen has also worked very well.
i wait for pullbacks and buy it cheap as i can and sell for profit, short term.
long term, I look for interest bearing currencies, also called commodity currencies. Chiefly the aussie dollar and N.Z. dollar.
They pay daily swap interest that beats the banks bigtame.
In october, I shorted the gbp/aud at 1.5785.
The size of the position was .10 lot. At 20:1 leverage.
My cost was about 334 usd (principle).
It is trading at 1.4563 now.
interest earned to date 276 usd.
Stop loss is place at +10 pips so there is no risk of loss of principle.
Worst case scenario is +10 pips profit and keep the interest.
 

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Discussion Starter · #16 ·
I shorted the gbp/nzd at 1.8438 wednesday the 20th.
It is trading at 1.8232 at the time of this post.
Locked in +3 pips stop loss.
earning daily interest.
No risk of loss of principle.
.10 lot size earns 1 usd per pip.
up about +171 pips at this time. (plus interest)
20:1 leverage.
 

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Discussion Starter · #17 ·
i will take profit here on a short eur/aud from yesterday.
looks like some support is forming here.

i closed for +22 pips.
.10 lot size
1 usd per pip
 

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Discussion Starter · #18 ·
looking at the 4 hour chart for gbp/nzd (Pound/new zealand dollar), I see a reversal formation so i will book profit here.

A morning star or maybe a pin bar with a long wick, indicates buying intrest has occurred at this price level.

Could be profit taking or short covering.
Price is trading above the cluster sma support.

i will close it at 1.8250 for 188 pips profit.
entry was 1.8438.

$4.93 in swap interest for 2 days. from 3-20-13
 

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Discussion Starter · #19 ·
The market is awaiting the Cyprus decision. I am mostly standing aside at the moment. Risk is very high in currencies and the market is spooky.
if the market hates the decision on Cyprus, then the euro will crash.
if the market likes the decision, then the euro may soar.
Flip a coin at this point.
there will be plenty of opportunities after the decision, next week to go bargain hunting or to add to a continuation of a certain trend.

i expect a lot of choppy volatility in the next 24 hours.
We could see some big moves across the board.
 

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Discussion Starter · #20 ·
Note the last candle on the weekly chart for eur/usd and compare it to the previous weekly chart i posted earlier.
Quite a big change on news and rumors about the Cypress situation.

I still have a bearish bias for this pair short term.
 

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