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Sarrafx's Blog

Un blog de sarrafx în General

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Market view and Trade Ideas

Intrări în acest blog

Spanish Package Deal

So it’s now all about Spain!   It still defeats me that a country getting its house in (some kind of) order prior to asking for a bailout is positive for either risk appetite or the currency.   As relief rallies go yesterdays was pretty impressive but does that really now mean that the market has gone away from the technically significant 1.2930 level?   It seems there is always another potential banana skin on the horizon and already today we have seen dismal growth data from France. The French
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Frayed at the edges

The President of the Czech Republic, Vaclav Klaus, is in New York for the United Nations General Assembly.   In an interview yesterday he made some very valid points regarding the peripheral countries and those on the outside looking to enter.   He called himself a “euro-realist,” saying he supports European integration while not embracing the shift towards “unification, centralization, harmonization, standardization” of the whole continent, including the single currency.   The term Euro-Realist
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Out of Control

Is the situation in Europe out of control?   It seems that more and more issues are piling up on the already unsolved problems that have been in existence virtually since the crisis began in 2008!   Greece has apparently met only 22% of its responsibilities to cut spending under the latest bailout and has asked for a two year extension to its obligations.   It is hard to imagine that Greece can survive within the Eurozone given its lack of ability driven by social unrest to meet the agreements i
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Has the downtrend resumed?

The market is now well and truly over the euphoria which greeted the EBC’s bond purchase scheme. It also didn’t murder the dollar when QE3 was announced.   The global economy is struggling and there are fewer and fewer bright-spots for the market to focus upon. The Aud, the darling of the risk on brigade has given way to the JPY, the darling of the risk off brigade! We can’t consider the Chf anymore as it is heavily shackled by the SNB.   Now it appears as though the Euro (the darling of no one
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What makes market?

What makes a market?   Yesterday’s blog and subsequent discussion reminded me a lot of how things used to be.   It is important that we share ideas. If it takes someone to be provocative or controversial to get people talking then that is a good thing for us all.   For me it is to understand the mentality and thinking of the participants in these markets but I am also trying to help to broaden the horizons of those who are new to FX or trading in general.   Want to read more? Go to http://www.sa
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Why wear blinkers?

Basically, I think it is impossible to make money trading FX (or any other market) by using technical analysis alone. No matter what indicators, time frame or system you use it cannot work in isolation.   These markets work on so many levels with so many influences, inputs and indicators that to limit oneself to one seems to me a little naïve.   Read more: http://www.sarrafx.com/en/view-blog-article/46/Why-wear-blinkers?
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Delaying the inevitable

In much the same way that markets awaited the first week of September to see the market spring back into life and into the second week for the announcements and measures that would set the tone for Q4 we now await the next peak or trough on the rollercoaster.   Last weeks’ information has been digested and markets looked on Germany, The ECB and The Fed as positive for risk but not so positively that they feel we should shoot for the moon and stars.   The Euro has been on a huge rally that has ta
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The Big Picture

I am Eurosceptic with a capital E!   My views on the Euro were forged as far back as 1992 when the Maastricht treaty was first signed.   I felt like the boy in the children's story of The Kings New Clothes. In the same way that the boy could see that the king was naked, I could see that the single currency was a potential disaster and I was very pleased that my country (U.K.) would not be participating. I do not consider myself a grand sage or predictor of future events. However the vision of on
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Thinking of Social Trading........................Don't!

I have been involved in FX markets in one form or another for 25 years and believe myself to have seen most things that can occur. For example I was in charge of the overnight desk at a major trading bank the night that sterling left the ERM! That is the single most incredible market move I have ever seen. I have executed billion dollar orders manually and seen stop losses get chased by traders because they see that as a legitimate market practice. In this business you are always learning and a
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FOMC & beyond

http://www.sarrafx.com/en/view-blog-article/43/FOMC-&-Beyond     The Federal Reserve's monetary policy statement was as dovish as it could possibly get. But then, surely it was acting in accordance with its mandate. The Committee explained that, "without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions." They outlined their new bond purchase program, pledged to do more if the labor market doesn't improve an
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Know your market

In the banks I have worked in, all the traders specialized in one , two or a maximum of three currency pairs and that was all they traded.   The reason for this is that they got a "feel" for their market and understood what was happening, could align technical and fundamental analysis. This gave then an all round view of those currencies and was a major factor in making them money.   It is important when trading currencies to have that "relationship" with the currencies you follow to build up a
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Euro Analysis

With the event risk ahead and the market slightly in over bought zone and the monthly trend line acting as resistance further gains on close basis would be difficult.   Now that the ongoing momentum took the pair towards the 1.2900 plus zone, one can expect a failure.   Dollar bulls lost the plot across the board.   Presently Euro price action is near 34 WMA and the Ichimoku has not thrown any change in the trend.   As we have been indicating in the big picture 1.2780 is the conversion point for
  • sarrafx

Take a look at sterling today

The up move is overdone and ditto in most of the spaces thus one can expect corrective move.   More or less the pair achieved the closer to the max range of 1.6100-1.6130.   Further gains would be tough to negotiate and thus would prefer a dollar rally.   This is despite the fact that the dollar has broken the trend line in weekly and thus posted one of the bear pictures in the recent months.   However most of the pairs are in critical junctures like Euro near the monthly trend line, Sterling ne
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What is a Carry Trade?

By early 2007, it was estimated that some US$1 trillion may have been staked on the yen carry trade. The risk in carry trading is that foreign exchange rates may change to the effect that the investor would have to pay back more expensive currency with less valuable currency. In theory, according to uncovered interest rate parity, carry trades should not yield a predictable profit because the difference in interest rates between two countries should equal the rate at which investors expect the
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Success in Margin Trading

Before getting started with a live account using your own funds open a demo or practice account (with Sarrafx). Use that account first of all to navigate around the site and monitor how it functions. Get to know the platform as you aren't really ready to trade yet understand the functionality you can't do any harm. It is more than "kicking the tyres". Hopefully going forward this will be the engine that drives your profits. FX margin trading and indeed all FX trading is driven by two major facto
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The Concept of Leverage

more general explanation of this term can be found in the glossary section of education corner on our website www.sarrax.com. In the retail foreign exchange market, the term leverage determines the amount of risk an investor is able to take as a multiple of his margin. Clearly, the higher the leverage, the more at risk his capital (or margin) is at. For example, an investor places Eur 10,000 in his margin account. At his account opening, he has specified that he wished to trade with a leverage o
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Forex Factory

In the not so distant past before communication reached the level it is now, pricing FX transactions was extremely slow and complicated. For example, slang for the Gbp/Usd rate is "cable. This is because each price was made by cable (or telegraph) and as markets didn't move like they do today it could take the best part of a day to receive a request, make a price and confirm a deal. Contrast that with todays FX markets where trades take place in milliseconds. In the City of London,
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Experience is Everything

Suppose for a moment you are given the opportunity to drive a two seat saloon car around Brands Hatch or Hockenheim race tracks.     Would you opt to do it either alone or with another novice driver or would you opt to have Michael Schumacher sitting next to you?     Of course most of us would choose Michael Schumacher. More of this later!     The interbank market is the driving force of the price action in FX markets yet to all but a handful of retail or margin trade its workings are a mystery.
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Todays Risk/Reward Trade

Today's Risk/Reward trade   Today we see the decision of the German Constitutional Court on the legality of the ESM.   Markets are on the starting blocks to buy Euro assets of every type and see the 1.30 level against the USD as ready to be broken in an instant.   Being contrarian for a moment and looking at the possibilities that the court either finds the ESM illegal (unlikely) or attaches some quite major conditions (possible) where will the Euro trade then.   Technically the Euro looks overb
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