Time Away

I’m taking some time away from ISYN (not that I posted regularly anyway). Check back in a few weeks.

Thanks

ISYN

FX Trade

Just opened another trade in my micro account.

I went long EURAUD at 1.9750 with a target of 2.0000 and stop of 1.9675. Should be a fun ride – this pair rips up and down daily.

Interlude: Let The Good Times Roll

Updates

Do your own research prior to investing/trading in any of these names. All ideas expressed here are my own opinion and should not be relied upon or taken as investment advice. Also please recognize the high level of risk present in leveraged-financial instruments and small-to-micro-capitalization stocks.

A couple names I like here are MPEL (Macau gaming) and DXO (leveraged oil).

First, I believe oil is undervalued at this level. DXO offers an excellent way to have a leveraged-long position in oil. Crude went from ~$140+ to ~$36 very quickly following a path of $140 to $70, then $70 to $36. Those are essentially the inverse of two-100% moves… 100% of 100% is a level at which I’ve been told many significant moves end. I expect the main risk here is missing upside instead of  losing on the downside.

Second, MPEL has recently come down hard and may be worth looking for the long side. This is something to think about.

Third, I made tons of green (%-wise) on the GBPUSD short and lost tons of green (%-wise) on the USDCAD short. The micro-fx experiment continues…

-ISYN

Forex Update

Added another trade. Short GBPUSD. Same applies – this is not a recommendation. These trades have already been placed and this is merely an exercise in getting to know currencies. Chart below.

Forex Trading

Thought I’d post a trade I’m currently in within a mini-forex account. We’re talking peanuts here but I wanted to get some experience trading some pairs and figuring out the various trade setups.

First – the spreads on mini accounts are HORRENDOUS… I’m paying about a 4-7 pip spread on every USDCAD trade I do… that means to hit the breakeven point I need the pair to go in my direction 4-7 pips. I don’t recommend opening a mini account for any reason other than to try out forex trading and get a feel for how the various pairs move. Second - this is a cheap way to give forex a try…. you can initiate a position in microlots of $1k. Mistakes can be made without breaking the bank. Third – forex is extremely risky. This is more to feed my curiosity and try out a new asset class than anything else. I don’t expect to see large profit from it as I’m only risking a few hundred dollars.

The following information is NOT a recommendation to trade and/or invest. This is an after/during-the-fact trade example that I thought may be helpful to some.

Now that that’s all out of the way, here is a chart of the USDCAD.

My thought process is two-fold. A fundamental argument can be made that the CAD has depreciated against the USD too much too quickly. The US is going through some economic issues that I suspect outweigh our neighbors to the North to a significant extent. They’ve also got their hands on ample quantities of natural resources which have enjoyed a very steep decline in recent months. Those resources will bottom soon if they have not already. Also I suspect some of the USD’s appreciation stems from the massive rally in Treasuries over the past month. As these positions unwind and people become less risk-averse capital should flow out from USD into other instruments.

The technical argument is a fairly strong one as far as technical analysis is concerned. The daily trend’s direction is down (which means the CAD is getting stronger against the USD). I’ve drawn in two simple trendlines to evidence this. I also completed some simple Fibonacci work using two admittedly questionable points for A and B (A = 1 thick line, B = 2 thick lines). Based on the information provided below, our resistance levels were 1.1986 and 1.2123. The (hopeful) completion of point C ended up being in between the two @ 1.2079. From there our profit points look to be 1.1719, 1.1496, and 1.1136. After factoring in the overall trend I suspect USDCAD will retest the ~1.1500 low made at the beginning of November. If things go well I’ll be taking profits in that area. If not I’ll close out the position.

 

Finally, click on the picture of the Bacon & Cheese Roll below for the ingredients/directions on how to make the best meal EVER!

Stay The Course

I believe we’re still headed higher – this looks like a healthy correction (Wed & Thu). I’d be buying this dip while paying close attention to the global political environment (Israel & Gaza, Russia & everyone, India & Pakistan & Fraud).

Also, oil’s come WAY off in one day – probably an exaggerated move… might be worth opening a long position today via DXO or short DTO.

Too many doomsayers out there still.

For your enjoyment…