Anyone here into FOREX?

[~Shard~]

Quick question for you Music_Producer. I thought that the forex markets were open 24 hours a day, 7 days a week. However it appears as though (at least from Oanda's real time charts) there is no activity/movement on the AUD/JPY pair at all for the weekend and previous weekends as well. Is there no trading for the next day or so, or could I still buy right now if I wanted to? I didn't think the forex markets closed at any time...

 

[Music_Producer]

Shard, the markets *are* open 24 hours/ 7 days a week.. but from Friday 2 pm PST (somewhere near there) to Sunday 2 pm PST.. the spreads widen to 10-20 pips.. because the banks/govt. agencies are closed.. and they are the ones who do major trades. So you won't see any spikes or anything of that sort.. however you can buy/sell.. but it makes no sense opening a new position as you'll be hit by a 10-20 pip spread rightaway.

 

[~Shard~]

Shard, the markets *are* open 24 hours/ 7 days a week.. but from Friday 2 pm PST (somewhere near there) to Sunday 2 pm PST.. the spreads widen to 10-20 pips.. because the banks/govt. agencies are closed.. and they are the ones who do major trades. So you won't see any spikes or anything of that sort.. however you can buy/sell.. but it makes no sense opening a new position as you'll be hit by a 10-20 pip spread rightaway.

Thanks for the clarification Music_Producer. As I mentioned above, I had closed out my AUD/JPY position until I had sorted out how CMC was handling things and now I am eager to get back in. Hmm, I should fire up CMC and see if they still have their 4 pip spread on the pair or if they widen it as well...

So what catches your eye this week for announcements? I'll be watching the CAD housing starts Wednesday and the AUD employment #s on Thursday for sure along with all the USD news...

 

[Hoef]

Thanks for the clarification Music_Producer. As I mentioned above, I had closed out my AUD/JPY position until I had sorted out how CMC was handling things and now I am eager to get back in. Hmm, I should fire up CMC and see if they still have their 4 pip spread on the pair or if they widen it as well...

Just noted that OANDA pays out interest daily ... I never hold on that long so it's the first time I see it.

 

[~Shard~]

Just noted that OANDA pays out interest daily ... I never hold on that long so it's the first time I see it.

Yep, it sure does. My CMC pays you interest on a daily basis as well, however for whatever reason they don't actually pay you/deposit it in your account until the end of the month. <shrug>

 

[Music_Producer]

Shard, that's not being paid interest on a daily basis.. if it gets deposited at the end of the month. Your balances are not updated daily.. only monthly. Same as a bank.. you could have a savings account @ 5% but interest is deposited monthly.. whereas Oanda pays you daily. I think that's the best feature about Oanda.

Also, just posting some info I got from the CMC markets web site (but then you already know this ) which explains your AUD/JPY trade (why it was closed and re-opened)

'How is Financing Charged and Calculated?

At (17:00) 5:00pm EST (Standard FX market Value-Date change time) each day CMC Markets will settle all Spot positions by closing the trade at the current market rate and re-opening it for the following day’s Spot date at a rate that will reflect the interest rate differential.'

 

[~Shard~]

Shard, that's not being paid interest on a daily basis.. if it gets deposited at the end of the month. Your balances are not updated daily.. only monthly. Same as a bank.. you could have a savings account @ 5% but interest is deposited monthly.. whereas Oanda pays you daily. I think that's the best feature about Oanda.

Ah, I see what you mean. I guess what I was meaning was that it's not like I have to hold something for a month for them to pay me interest on it. If I hold it for 2 days, then I get paid 2 days' worth of interest and instead of it being deposited immediately, it's deposited all together at the end of the month - that's what I was meaning I guess.

Also, just posting some info I got from the CMC markets web site (but then you already know this ) which explains your AUD/JPY trade (why it was closed and re-opened)

'How is Financing Charged and Calculated?

At (17:00) 5:00pm EST (Standard FX market Value-Date change time) each day CMC Markets will settle all Spot positions by closing the trade at the current market rate and re-opening it for the following day’s Spot date at a rate that will reflect the interest rate differential.'

Yeah, thanks for that - I did find that little bit of info on their website eventually, but it would have been good to know ahead of time as well. Guess I missed it the first time around. I had their Trading Desk sort me out on it as well, so it's all good now. Lessoned learned for next time.

 

[Music_Producer]

Just traded the GBP report.. 6 pips.. simple trade and quite boring.

 

[~Shard~]

So what are your thoughts Music_Prodcuer on the AUD rate announcement tomorrow? Consensus is that they will raise rates, which should in theory cause the AUD to rise, however is it possible that traders have already factored in this rate hike into the currency? As a result, if the hike is announced as expected, could the AUD actually go down a little?

Regardless, if they do not raise rates, the AUD will go down, and if they lower rates (will NOT happen) the AUD would absolutely tank. Do I have it right?

 

[Hoef]

So what are your thoughts Music_Prodcuer on the AUD rate announcement tomorrow? Consensus is that they will raise rates, which should in theory cause the AUD to rise, however is it possible that traders have already factored in this rate hike into the currency? As a result, if the hike is announced as expected, could the AUD actually go down a little?

Regardless, if they do not raise rates, the AUD will go down, and if they lower rates (will NOT happen) the AUD would absolutely tank. Do I have it right?

Yeah I am thinking the same .... give up my long position before it tanks (maybe)

 

[~Shard~]

Don't get me wrong, I still lie AUD/JPY as a carry trade (and it will be even more attractive after a rate hike) but I was just thinking that today it might be best to get out before the announcement "just in case". Plus, I will (alas) be at wrk during the announcement and will not be able to trade on the news although I would love to. I guess the best thing I can do is buy some when I get home (presumably after it has settled down from however it reacted) and continue with the carry trade...

 

[Music_Producer]

Shard.. sorry for the late reply.. but yes, the interest rate hike has already been priced in. Everything you said was correct.. about getting out before the rate hike.. but its still at 90.83 or so.. so if you got in much before that you're still ok. If they had not raised the rates.. the AUD would have dropped.. probably 100-200 pips or so.

Again, this is like 'buy the rumors and sell the news' Everytime the markets expect that interest rates will be hiked.. they buy that currency and it keeps going up.. then the day it actually happens.. there are shorts everywhere. Of course, I still feel that AUD will go up simply because of the interest rate differentials.. and nothing else. Fundamentally.. there is not much to support the AUD.

Btw, I just signed up with CMC markets this afternoon, so hopefully my account will be set up by tomorrow and I will try a few trades on that platform

 

[Soverc]

Question about news

I have a easy question, mainly want clarification on what I understand.

X/Y if we have GOOD news for X, this would point towards BUY
X/Y if we have GOOD news for Y, this would point towards SELL
X/Y if we have BAD news for X, this would point towards SELL
X/Y if we have BAD news for Y, this would point towards BUY

Thanks in advance.

 

[~Shard~]

Shard.. sorry for the late reply.. but yes, the interest rate hike has already been priced in. Everything you said was correct.. about getting out before the rate hike.. but its still at 90.83 or so.. so if you got in much before that you're still ok. If they had not raised the rates.. the AUD would have dropped.. probably 100-200 pips or so.

Again, this is like 'buy the rumors and sell the news' Everytime the markets expect that interest rates will be hiked.. they buy that currency and it keeps going up.. then the day it actually happens.. there are shorts everywhere. Of course, I still feel that AUD will go up simply because of the interest rate differentials.. and nothing else. Fundamentally.. there is not much to support the AUD.

Btw, I just signed up with CMC markets this afternoon, so hopefully my account will be set up by tomorrow and I will try a few trades on that platform

Thanks for the reply and better late than never! I appreciate it regardless.

As for the fundamentals on AUD, I've heard reports that their economy, etc. should behave in a manner that would bolster their currency in the future - is this not what you've heard? I have heard reports that AUD over the long term could go to 96 against the JPY...

Regardless, I agree, I think now more than ever people will look at it as an excellent carry trade vehicle and that alone should keep it from huge price drops. I'll probably pop in again soon.

As for CMC, please let me know how it works out for you and if you have any questions. As I said, it is good enough for me so far and for the (beginner) stage I'm at, but perhaps someone with more "professional requirements" as yourself will not find it up to par. Let me know though. Keep in mind the default is 2 clicks to execute a trade but you can make it one, and then once your order is executed right on that screen you can click "New" and get a new order to close the trade off. Anyway, I'm sure you'll play around with it and see it if will work well for you or not. Just remember that you need to use it in league with Oanda for the news and 5 second charting intervals.

 

[~Shard~]

X/Y if we have GOOD news for X, this would point towards BUY

Correct.

X/Y if we have GOOD news for Y, this would point towards SELL

Correct.

X/Y if we have BAD news for X, this would point towards SELL

Correct.

X/Y if we have BAD news for Y, this would point towards BUY

Correct.

4/4, good one!

Yep, that's generally how it works, but keep in mind there are many factors. Take an announcement like today's with the AUD/JPY pair. Australia raised its interest rates (good new for the currency) however since everyone was expecting them to, this was essentially priced into the currency, and as a result the AUD/JPY weakened a bit if anything.

Also, you have to keep in mind what other currencies are doing as well. just because there is good USD news, don't automatically sell EUR/USD, as there might be reason why the EUR will go up regardless!

Many factors at play, but you have the basics. If you have any further questions just ask!

 

[Crimson]

Oil Price Article

I need help understanding why I can't interpret this info in the attched Oanda chart!! (This came from a Forex beginner newsletter that I just happened to get my hands on!):

"Oil prices, which had been edging up for months, suddenly jumped 11%, breaking through $53/barrel to a 19-week high. Abrubtly the US Dollar (USD), which had risen to just below $1.25 Canadian (CAD) the previous day, reversed direction and fell back. On Tuesday, when it was obvious that oil prices weren't moderating, the Dollar fell another two cents (200 pips!), then bottomed on Wednesday at $1.20 for a total losss of five cents."

Question 1:
I guess I can see that there were a strong movement around that very time (about 300 pips UP) and I thought that meant the USD got stronger, and the article above says it got weaker.

Question 2:
Also, why can I not read the numbers they are talking about? $1.25?? All I get it to be is $1.1650 - urk, I feel really stupid!

Grateful for replies, as always!!

 

[Music_Producer]

Crimson.. I have no idea why the report doesn't match the charts Maybe there's something wrong somewhere.. either the report itself.. or the timing of the chart.

Shard.. just bagged 14 pips on cmc.. my first trade with them I didn't have to do the demo thing.. it's a very easy platform to work with and you explained everything perfectly.. except when closing the trade. I clicked on 'new' after selling the gbp/usd.. and clicked on 'buy' immediately.. but it didn't register that. I clicked again.. and the trade was closed. So I guess you have to double click to close

Edit - btw.. cmc gave instant execution and a fixed 3 pip spread.. quite impressed.

 

[~Shard~]

Shard.. just bagged 14 pips on cmc.. my first trade with them I didn't have to do the demo thing.. it's a very easy platform to work with and you explained everything perfectly.. except when closing the trade. I clicked on 'new' after selling the gbp/usd.. and clicked on 'buy' immediately.. but it didn't register that. I clicked again.. and the trade was closed. So I guess you have to double click to close

Edit - btw.. cmc gave instant execution and a fixed 3 pip spread.. quite impressed.

That's great news Music_Producer, I'm very happy to hear that CMC performed well for you. As for the double-clicking to close issue, are you sure you didn't have that new trade set to the 2-click default? Honestly, on my trades I don't think I've ever had to double-click (unless I've done it subconsciously ) Regardless, I'm glad everything worked out well for you and that the CMC platform didn't make a liar out of me.

As for myself, I ended up ahead this morning, but barely. I traded the EUR/USD this time, as I wanted to stay away from the GBP/USD just due to the recent BoE announcement - wasn't sure if that would skew its reaction to the news. Anyway I sold EUR/USD and made a nice 8 pip profit - I'm still a little slow on the gun, but practice makes perfect! I also simultaneously traded the USD/CAD on the CAD surplus report, however it didn't move as I thought it would. Hindsight tells me I shouldn't have used the USD/CAD pair due to the USD announcements, rather another currency with CAD would have been better, but chock ity up to a lesson learned for next time. At any rate, I lost 6 pips on that, but since I was still ahead overall, I just closed my position for the loss and was fine with that - you can't win every single time!

Lots of news next week to trade on though - PPI, CPI, etc. Should be fun!

Once again, glad CMC impressed you and worked well for you Music_Producer!

 

[thebear]

have a question for anyone. Has anybody heard of or used such a service as this below?
http://www.wfxadvices.com/

 

[~Shard~]

have a question for anyone. Has anybody heard of or used such a service as this below?
http://www.wfxadvices.com/

Ah, looks like you found Music_Producer's and my website!

Seriously, I'm not familiar with this service myself. I'm guessing it's like those investment "clubs" out there whereby you join up, they take your money, they tell everyone what to buy (after they've bought in at a much lower price) and there you go. Some hits, some misses.

I'd have to do some more research to see if this would be any good. I have my doubts though...

 

[Music_Producer]

Thebear.. such websites promtoting these services are everywhere. I would absolutely avoid them. The methods I use - always, always work. Sure, like Shard mentioned.. these sites might give some hits but usually they are like 2 or 3 while the losses will be 20. You really don't want to pay $200 or whatever every month to make losses!

All of them will have a substantial 'proven track record' Thats bull****. I can bet that if you looked at their real records they would all have major losses. So stay away from those.. or, if you have money to spend.. you can try such services.

Shard.. I did have the one click option set.. so when i hit 'sell' it executed in one click. Then i clicked on 'new' and then i hit 'buy' to close the trade.. but nothing happened.. so i hit 'buy' again. Then it executed. I tried the demo right now and the same thing.. lol, maybe i have a special cmc account

Ad yes, don't trade the CAD at all when there are other announcements.. come on, you know the world ignores the CAD just kidding.. seriously though.. the CAD won't move.. or might even move in the opposite direction when another USD news is going on.. because the entire world trades $, and unfortunately not CAD $ that much. When there's 1 trillion US $ being bought/sold.. 1 million CAD $ just won't break that kind of USD volume to create any fancy moves.

I only trade the USD/CAD when there is no other report at that time (or its a *very* minor report)

 

[~Shard~]

Thebear.. such websites promtoting these services are everywhere. I would absolutely avoid them. The methods I use - always, always work. Sure, like Shard mentioned.. these sites might give some hits but usually they are like 2 or 3 while the losses will be 20. You really don't want to pay $200 or whatever every month to make losses!

All of them will have a substantial 'proven track record' Thats bull****. I can bet that if you looked at their real records they would all have major losses. So stay away from those.. or, if you have money to spend.. you can try such services.

I agree - good advice.

Shard.. I did have the one click option set.. so when i hit 'sell' it executed in one click. Then i clicked on 'new' and then i hit 'buy' to close the trade.. but nothing happened.. so i hit 'buy' again. Then it executed. I tried the demo right now and the same thing.. lol, maybe i have a special cmc account

Haha, maybe then. I'll have to pay more attention myself then. Ah well, regardless at least now you know for sure.

Ad yes, don't trade the CAD at all when there are other announcements.. come on, you know the world ignores the CAD just kidding.. seriously though.. the CAD won't move.. or might even move in the opposite direction when another USD news is going on.. because the entire world trades $, and unfortunately not CAD $ that much. When there's 1 trillion US $ being bought/sold.. 1 million CAD $ just won't break that kind of USD volume to create any fancy moves.

I only trade the USD/CAD when there is no other report at that time (or its a *very* minor report)

Yep, as I said, a lesson learned for next time. Thanks again for the insight.

 

[~Shard~]

So what are your thoughts Music_Producer on doing carry trading with the AUD/JPY right now? It seems to have backed off a bit, and with the recent news (on both sides) and so forth I was wondering if you still liked it or not. Just curious.

 

[Hoef]

So what are your thoughts Music_Producer on doing carry trading with the AUD/JPY right now? It seems to have backed off a bit, and with the recent news (on both sides) and so forth I was wondering if you still liked it or not. Just curious.

Indeed, I am 40 pips in the minus .... I'll leave it but it's getting iffy

 

[~Shard~]

Indeed, I am 40 pips in the minus .... I'll leave it but it's getting iffy

I assume you are also aware of the recent Japanese news which I eluded to above, regarding how Japan may raise its interest rate again? That would probably bring down that currency pair as well at least to some degree...