Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
FOR 2011
CHINA’S
INFLATION
TRADER MAGAZINE I M PA C T S
GOLD
STRONGEST
CURRENCY
SHOULD
HEDGE
euro
FUNDS
TRADE
Forex?
28
the Euro’s survival or
demise.
18
T EC H n I C A L
ANALYSIS:
Majors retrospect
and prospe ct
analysis
36
05 EDITOR’S NOTE TECHNICAL ANALYSIS: CURRENCY VIEW:
MACRO ECONOMICS: 09 Trends for 2011 and trading 62 Quarterly report
12 Will China’s battle with inflation opportunities: analyses potential
trend reversals offering good trading TECHNICAL OUTLOOK:
affect global recovery?
opportunities. 64 Trends & Targets for Major FX
STRATEGY:
Rates
42 “Society Says”: example of FX MANAGERS:
64 Trends & Targets for Emerging
momentum strategy, dictated by the 47 Interview with Michael Aronovitz,
market mood. Markets
Manager of Gables Capital Management.
65 EUR/USD, EUR/SEK, USD/ZAR
FUNDAMENTAL ANALYSIS:
50 FX roller coaster ride draws to a WOMEN IN FOREX:
55 Interview with Jody Samuels, trader, INTERNATIONAL DATA:
subdued close: a global analysis of key 68 FX Spot Monitor
economical and political events and their coach and founder of FX Trader’s Edge
program. 69 Central Bank Rates
forecasted effects on currencies for 2011. 70 Economica Data - FX Poll
34 Gold. Strongest Currency for 59 Interview with Karen Jones, 71 Markets View
2011: why gold can be considered as the head of FICC Technical Analysis at
strongest “money”. Commerzbank . 72 ECONOMIC CALENDAR
Let me start by wishing all our loyal publication has its place in any serious of the Majors, both from a fundamental
readers, contributors, partners and library and will satisfy any paper- and technical analysis point for view.
customers, a happy and prosperous addicted reader. We will extend the We look at how China’s battle with
2011. When a year ends, we usually subscription for all of you who have inflation might affect the global
like to analyze the lessons from the already subscribed, hoping you will recovery. Or how gold could be
past year and to make plenty of good appreciate the initiative. considered as the strongest “currency”
resolutions for the coming year. for 2011. And more…
For FX Trader Magazine, 2010 was a In 2011 we will closely follow the
great year, I would even say the year current evolution of the retail forex
of its consecration and acceptance by industry, which was recently marked
the global market, after a good start in by the launch of FXCM’s and Gain
2009. We’ve reached the remarkable Capital’s IPOs. (There are also rumors
number of 30.000 subscribers and on ForexMagnates.com that FxPro is
a stable growth of 3.000 new online also on its way to an IPO). We believe
subscribers per month, over the that 2011 will be marked by further
last months. But what pleased us consolidation moves and that the
the most during the past year is the more brokers go public, the higher
continuous positive feedback and the transparency between brokers
support from our readers, who have and retail customers will be, taking
perfectly understood and appreciated advantage of the strict regulations and
the approach of the magazine. control imposed on listed companies.
We will continue to provide quality
In 2010 we also launched the paper fundamental and technical analysis
edition of the magazine, to which it articles.
is now possible to subscribe online, We will also continue with the
and again, after considerable interest interviews with money managers, top
and feedback from our readers, we’ve In this edition, we analyze the traders, and the series of interviews
decided to adjust the cost of the entropic development of the Euro about Women in Forex in partnership
yearly subscription (down!) to meet situation. Alessandro Balsotti gives with Fxstreet. Finally, we will inform
demands. The print edition is now a very pertinent analysis of the you about the new trading platforms
available at € 49 annually - under this macro-economic parameters which and tools which you might find useful
threshold it becomes uneconomic to might influence the evolution of to further improve your trading
produce - and although the digital the Eurozone and lead either to the results.
version is still free (and will remain collapse or redefinition of the Euro.
as such), in our opinion, this quality We analyze the latest and future moves Emmanuelle Girodet
David Norman
Clive Corcoran
...and more!
Steve Ward
www.TradersExpoLondon.co.uk
Mention priority code 021436
LONDON | 8-9 APRIL 2011
Queen Elizabeth II Convention Centre International Sponsor Media Partner
(continued from page 6) for the trading system design and which is an independent currency
JW Partners is an independent FX management of the Company and multimanager advisory company.
solution provider, based in Milan, its Segregated Portfolios. He holds
with a strong FX specific know- an Australian Financial Services Stephanie Radkay, is Vice
how. JW supports institutional License with the Australian President of DTI www.dti-fx.com
investors and HNWI in building S e curities & Investment She first joined the “rough” pits of
quality FX multimanager Commission. www.armytageaam. the Chicago Mercantile Exchange
portfolios, and FX underlying com, www.asiancurrencyfund.com as a clerk for a major International
structures. Options and Futures firm. In
Alex and Nicky Ong have been 1993 she began her broker career
Gabor Kovacs is a technical involved in the Forex Markets as the only woman in the Major
analyst, his specialty is Ichimoku since 2005. After successfully Market Index Futures pit. She also
Kinko Hyo. As a qualified managing their own account as joined her husband, Mike, after
journalist with more than 8 years retail traders they moved into the trading hours at the University
experience, Gabor is the writer world of fund management and of Trading to teach eager learners
and editor of the Ichimoku World currently act as Consultants to to pit trade. By 1995 she was
Book Series and the Ichimoku a Private Investor Fund based in awarded the task to fill orders
World website, where he provides Europe. They write extensively in the S&P500 Futures pit. In
articles and video presentations for FXStreet.com, Forex Journal 1998, Stephanie left the S&P500
about trading with the Ichimoku Magazine as well as various other Futures pit and followed the
Kinko Hyo charting system. His publications in the UK. Alex and “Tech Boom” to fill orders in the
regular analyses of the major Nicky also run the trading website NASDAQ100 Futures pit. After a
currency pairs, can be on view www.TradersCorner-Online.com break from trading she is happily
here: www.ichimokuworld.com. where their Forex Analysis and trading and teaching again.
Commentary can be found daily h t t p : / / d t i - f x . c o m / d t i f x /
Andrew McKay began his career via their Blog. education.php
as cash and securities dealer for
the Bank of New York in Sydney. Javier Paz is the President of Kevin Sollitt is an FX Portfolio
He moved to London to work Forex Datasource, a boutique Manager. Previously, he acquired an
for a Shearson Lehman Hutton market research firm that extensive FX trading background
subsidiary where he progressed continues to track and attract in Europe, Asia and North
rapidly to the position of Senior broker evaluations from traders America, managing three bank
Dealer, Futures and Options, with worldwide through its website trading teams. Kevin’s longevity
responsibility for implementing www.forexdatasource.com. in the FX world has been assisted
the hedging strateg y of the by a willingness to embrace a
treasury department, and trading Giovanni Pozzi, worked as key collaborative approach at all
futures, FX and options. On his professional or managing levels. Combining this with his
return to Australia, Mr. McKay director of FX teams in clear grasp of market dynamics &
launched an asset management leader market making banks by using a wide range of disciplines
company, Armytage AAM, to apply such as UBS, Swiss Bank Corp. has achieved positive results in
his extensive knowledge of the and American Express Bank, … and many different circumstances and
markets. Mr. McKay is responsible brokers. Today he runs JW Partners, market conditions over the years.
Since mid 2007 the theme in the direction of the already established breaks to new levels, and scaling back
currency markets of Risk aversion major trend, or at early signs of a at the first signs of a trend reversal.
and the so-called “flight to safety” possible reversal. To identify these
has seen two currencies in particular opportunities we use nothing more The opportunities that we present
gain significant strength against a than price action in conjunction with below are based on this approach
basket of currencies including the US various forms of support and resistance and in fact are among the most
Dollar. Throughout this period there (horizontal lines, trend lines, fibonacci exciting of opportunities, as they
have been moments when the markets retracements). When we talk about are potential trend reversals offering
have rallied against these safe haven price action we are referring to the trading opportunities with a risk
currencies, but for the most part, it has market form, therefore, in an uptrend, reward ratio far in excess of 1:1 or
been a bit of a one way train with the we would be expecting a market to even 1:2. Furthermore, these trades
US Dollar losing nearly 3000 pips from consistently make higher highs and are supported by fundamentals, which
a pre-crisis high of 1.24700 to a low of higher lows, whereas in a downtrend adds further strength to trades.
0.9460 against the Swiss Franc and an we would expect the market to make
astonishing 4500 pips from a pre-crisis lower highs and lower lows. As long as The first interesting setup is that
high of 124.00 to an almost all time the market respects this form we would of the USD/CHF. Having traded
low of 80.00 against the Japanese Yen. be looking to enter in the direction downwards for much of the last half of
Fortunately such moves tend to present of the trend, adding to positions and 2010, the pair is finally showing some
fantastic risk reward opportunities to
profit from the reversals and almost
inevitable recoveries.
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FX Macro economics
I
t i s n o s e cret that the g rowth b a se d on a foundation va l u e d pric e a g a inst the U.S
Chinese economy emerged of a current account surplus. dollar, coupled with a carefully
from the financial crisis Th is p osition wa s derive d ca lcu late d stimu lus p acka g e
in the enviable position of from the c ontentious p e g g ing wor th $586bn over a p erio d
producing robust positive o f th e Yua n at a n un d er of 2 years . The stimu lus,
a s i g n i f i c a nt p r o p o r ti o n for the first thre e quarters of suffering the rise in the cost of
o f G D P, w a s f o c u s e d o n a 2010. necessities including fruits and
r e l e ntl e s s a n d d e t erm i n e d v e g e ta b l e s . Ch i n e s e o f f i c i a l s
H
effort to s up p o r t th e o w e v er, Ch i na’s hav e em b a r ke d o n num er o u s
development of infrastructure p r o sp er i t y ha s c o m e counter inflation programs in
p r o j e c t s tha t r e q u i r e d va s t a t a c o s t . No t o n l y the form of raising the reser ve
a m o unt s o f c o mm o d i ti e s . A s have they drawn criticism from requirements of banks on five
a direct consequence, China’s g l o b a l l e a d er s w i th r e g a r d t o s e p a r a t e o c c a s i o n s th i s y e a r,
v o r a c i o u s a p p e ti t e s up p o r t e d th e i r e xc ha n g e -r a t e p o l i c y, b ut raising interest rates for the
c o mm o d i t y r i c h c o untr i e s are now facing the prospects of f i r s t ti m e s i n c e 2 0 0 7 , a n d
s u c h a s Au s tr a l i a , h e lp i n g inflationary pressures that have e v en l i m i ti n g c a p i ta l i n f l o w s
th e m av o i d r e c e s s i o n a s th e y c o m e a s a r e s u l t o f e xc e s s i v e l y from foreigners investing in
exported iron ore and coal, l o o s e m o n e ta r y c o n d i ti o n s . c o mm er c i a l a n d r e s i d enti a l
w h i l s t c r e a ti n g mu c h n e e d e d With consumer price inflation r e a l e s ta t e i n a b i d t o s l o w
d o m e s ti c j o b s , ena b l i n g th e at 4.4%, sig nificantly hig her th e economic j u g g erna ut .
Chinese economy to grow at a tha n th e 3 % ta r g e t , p u b l i c However, what they have failed
r a t e o f 8 . 7 % d ur i n g 2 0 0 9 a n d d i s c o nt ent ha s escalated. to do is a llow a substantia l
annualised growth rate of 9.6% L o w er i n c o m e h o m e s a r e a p p r e c i a ti o n o f Yua n . S i n c e
C
h i n e s e C P I y / y f i g ur e s
hav e b e en s t e a d i l y
c l i m b i n g thr o u g h o ut
Figure 1. USD/CNY Monthly Chart
2010. Back in Januar y, inflation
s u f f er e d b y c o n s um er s wa s a t
June the Yuan has appreciated o f a s i m i l a r a n d a c c e p ta b l e 1 . 5 % , b y th e m i d-p o i nt o f th e
2.4% against the U.S dollar. r a t e t o th e p r e v i o u s p er i o d y e a r i t wa s up a t 3 . 1 % , a n d
o f Yua n a p p r e c i a ti o n b a c k i n
C
No v em b er ’s C P I y / y wa s o ut
h i na’s r e l u c ta n c e t o 2005-2008, but not substantial of the PB OC ’s comfort zone
a l l o w th e Yua n t o en o u g h t o s a ti s f y th e U. S at 4.4%. With this in mind and
appreciate ag ainst the g o v ernm ent i n th e c urr ent w i th Ch i n e s e o f f i c i a l s l a y i n g
U.S dollar has drawn criticism financia l environment. th e g r o un d w o r k f o r f ut ur e
f r o m th e U. S a n d I M F, w h i l s t a t
I
interest rate hikes, we fe el the
the same time, being threatened n t e r e s t i n g l y, C h i n a’s theme g o ing in to 2011 may b e
w i th th e p o t e nti a l l a b e l l i n g e f f o r t t o s up p r e s s th e o n e o f c a uti o n a s th e Ch i n e s e
a s a c urr e n c y ma n i p u l a t o r. va l u e o f th e Yua n ha s economy is gradually broug ht
Te n s i o n s c o nti nu e t o g r o w be en counterproductive when down to a more sustainable rate
a s th e U. S s u f f e r s a n a na em i c it comes to fighting inflation. of g rowth by a combination of
r e c o v e r y, in c o ntr a s t to Tr a d i t i o n a l l y, a s t r o n g e r h i g h er i nt er e s t r a t e s , a n d a n
Ch i na’s a l m o s t d o u b l e d i g i t currency would slow economic appreciating currenc y. There is
g row th rate . It ha s b e en arg ue d growth and subdue inflationary no disputing the fact that China
tha t th e un d er va l ua ti o n
o f th e Yua n ha s o f f er e d a
c o m p e ti ti v e a d va nta g e to
Ch i n e s e e x p o r t er s , and
resulted in g lobal imbalances.
As we mentioned above, since
China a g re e d to a llow g reater
flexibility in June the Yuan has
ma na g e d a 2 . 4 % r i s e a g a i n s t
the dollar on the backdrop of
un c e r t a i nt y o v er th e g l o b a l
r e c o v e r y. 2 . 4 % s i n c e Jun e
w o r k s o ut t o a n a nnua l i s e d
gain of close to 6%, which is Figure 2. 2010 Inflation Data for China
N
av e r s i o n , and c o n s e q u ent ow that we have f urther de clines, at least until
s e l l- o f f i n r i s k a s s o c i a t e d hig hlig hte d what the U.S re cover y f ully g a ins
c urr e n c i e s , w h i l s t r e wa r d i n g we belie ve to be traction and turns the corner
those traditionally considered the f undamenta l outlook towards susta inable positive
s a f e hav e n s . with reg ard to the Chinese g rowth. Fig ure 3 demonstrates
e conomy g oing into 2011, it is the correlation bet we en the
F
r o m Ch i na’s p er sp e c ti v e important to understand the Yuan and USD/JP Y.
th e U. S d o l l a r ha s potentia l impact this will have
I
e x p e r i e n c e d p er i o d s o f on currenc y markets. Due to t is our opinion that China’s
streng th as investors looked to Austra lia’s reliance on China’s policy of pegging their
the world’s reser ve currency as a g rowth, as well as Aud/Usd currency at an under valued
safe haven play during periods correlation to the market’s level against the dollar in order
of un c e r t a i nt y, th er e f o r e risk- on/risk- off dynamic , we to operate a trade surplus and
i n d i r e c tl y s tr e n g th en i n g th e fe el the Austra lian dollar will finance their fiscal stimulus
Yuan at the same time. Many be vulnerable to downside has brought to the forefront
e xp er ts b e l i e ve the l ikel iho o d pressure as a combination of a inflationar y pressures. Although
o f the Yuan appreciating against de crease in exports to China , many programs have been tried
the do l lar during times of a long with hig her interest rates and tested, inflation has a
dollar streng th to be remote, set by the RBA ta ke their toll stubborn grip that requires the
and with the economic outlook on the Austra lian e conomy. PB OC to loosen their ties on
the Yuan and allow a stronger
currency to prevent their
economy from overheating. Due
to the world’s dependence on
Chinese growth, the potential
slowing will likely have an impact
on risk sentiment in the financial
markets. As a consequence a
period of risk aversion will
reward certain currencies, whilst
punishing others.
Figure 3. USD/CNY Monthly Chart with the USD/JPY Overlay Al e x Ong & Ni ck y O ng
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“People only accept change when they are faced with necessity, and only recognize
necessity when a crises is upon them”
Jean Monnet, father of the European Union
This second crisis (after the one the statement by finance ministers unavoidable, is slowly being
centered on Greece last Spring) is for of the Eurogroup on November accepted. And such an awareness can
sure broader in its effects on markets, 28, made aside from revealing the open the way to an increased degree
with Ireland dragging along Portugal, Ireland package, referring to loans of acceptance of collective fiscal
Spain and to some extent even Italy that would be made, post-2013, in responsibility from the stronger
and Belgium, but it is also stirring a the context of the permanent crisis nations.
wider debate among policymakers. management mechanism (European
On the negative side it has brought a Stability Mechanism or ESM), the Most commentators would argue
re-pricing of financial and sovereign Eurogroup indicated that: that the response from the European
risk due largely to the realization that authorities has, so far, been clumsy
the euro zone is opening the door “In all cases, in order to protect at best. The financial markets do
to the future restructuring of the taxpayers’ money, and to send a clear not believe that the financial bailout
sovereign debt of its periphery. But, signal to private creditors that their packages sponsored by the EU and the
at the same time Franco-German claims are subordinated to those of the IMF will be sufficient to address the
forced co-ordination has given rise to official sector, an ESM loan will enjoy solvency risk plauging the peripheral
a significant recalibration of the euro preferred creditor status, junior only to European nations. In particular the
zone’s new financial architecture: we the IMF loan”. Irish rescue package has not gone far
have begun to receive clarification in assuaging panic. In fact, the debt
about the future of the euro zone’s The need of some kind of debt crisis has initially intensified and
financial rescue mechanism. In restructuring, if and when been spreading since the package was
of us and will likely be the seed anger in this way but unless both the electorate and possibly
of any future crises, even after pro-EMU governments can be political parties as cause for an
controlling this one. overthrown in national elections alternative to EMU membership.
by anti-EMU parties little will At the moment, politicians are
Successfully correcting these change. And right now, there successfully arguing that the
imbalances is going to be a very is no such force for political economic consequences of being
long journey. Along such a journey, change. Generally speaking , outside the EMU are far worse
increased unemployment and major opposition parties are than those of staying inside. But,
steep fall in wages, for those who not seeking withdrawal, just an if things don’t change in coming
keep a job, are almost a certainty alternative way of coping with years this argument may clearly
for the weaker countries. For the pain of the bailouts. But become harder to sell to the
now things like riots or national could this change in the future? electorate. If the Euro survives
strikes in places like Greece Say in five or ten years time? I it could eventually be a smaller
and Portugal are not effective think this is possible because Euro.
forces for political change. with time declining average
The electorate may vent their wealth could be seized upon by Alessandro Balsotti
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CURRENCY TRADING :
T H E S P E C U L AT O R’ S D R E A M
O R A N A C C E P TA B L E H E D G E
F U N D S T R AT E G Y ?
I was asked the other day whether To address the last point first, I would play an important part in almost
I thought that currencies were suggest that any liquid market any investment made by a global
an acceptable asset class for with volatility is a speculator’s investor. But I will come to that later.
hedge funds, the implication, dream and the currency markets
presumably, being that otherwise have, and always have had, those In the context of hedge fund
they were just the speculator’s two characteristics in abundance. managers, probably the best-
dream. The following comments Of course, ignoring speculation known name is George Soros
reflect my own personal opinions. for speculation’s sake, currencies and he became the best-known
He d g e f unds ma ke pro f i ts
by identif ying an d ta king
inter ventions by Central Banks In my opinion, pension f unds advanta g e of ineffi c i en c i e s in
are indeed speculations in their speculate every day by investing the markets, wh ich are o f ten
own rig ht. I would g o f urther in stocks that the y hope will exac erb ate d by h ig h vo lati l i t y.
and sug g est that the y are a g enerate a profit. That is He d g e f und acti vi t y wi l l
blatant and obvious - inde e d, one of the definitions of both ultimately reduce or eliminate
of ten de clare d - attempt to “spe culation” and “investment” market inefficiencies - but, in
manipulate the market, which, in the Oxford Shorter th is ca se, market insta b i l i t y
if carrie d out by a he dg e f undDictionar y. The me dia and or vo latil it y resu lts f rom th e
mana g er, would result in certain political commentators Centra l Ban k’s inter venti on
se verely rappe d knuckles at would have us belie ve that for the (their) “ Nati ona l
best, and possibly a politica l speculation is outright gambling Interest” is l ikely to c ontinu e
me dia inspire d witch-hunt. and, as such, reprehensible. I to provide investment trading
Gordon Brown’s sale of all or find it ironic that, if you g o to and sp e cu lative opp or tun i ti e s
most of the UK g old reser ves a UK racecourse and have a bet wh ich he d g e f und mana g er s
at what is close to the lows of with the Tote, you are advise d can and shou ld ta ke a dvanta g e
the g old market in the last few that you have investe d £5 or of, in the interest o f th e ir
years is a perfe ct example of whate ver sum your capita list investors .
g overnment inter vention that pocket permits - presumably
went wrong . a bet to win is a spe culation My c onclusion, th ere f ore , i s
whereas an each way bet is a that currencies are not only an
When considering speculation he dg e d transaction. acceptable asset class for hedge
rationa lly, if that is possible, f unds, but to day, are rath er
it is difficult to come to any As a fina l word, the headlines more interesting .
other conclusion than a ll and in the Financia l Times today,
any investment is spe culation. as I write this, report that the De rmot S . L . B u tl e r
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FX FUNDAMENTAL ANALYSIS
Throug hout the histor y of render them wor thless) over th e c entra l b an k mana g e s
pap er mone y (fiat mone y) and time. ( There have been 20 the population’s expectations
not lea st in the la st de cade, currencies b e come wor thless regarding the erosion of their
centra l banks print mone y in the 20th centur y a lone). saving by claiming 2-3% is
at will and acceptable
i m p o r t a n t l y, (excluding
in excess of o f c o ur s e th e
their nationa l key consumer
G D P g rowth . s p e n d i n g
This is i tems o f f o o d
i n f l a t i o n a r y. an d en er g y ! ) .
Under a paper
c u r r e n c y C e n t r a l
r e g i m e , banks are
monetar y inflationists
inflation at heart.
results in an That is never
erosion of clearer that
the currenc y ’s the Fed’s move
va lue. This to bail out
is esp e cia lly the economy
beneficial ag ain via
when a QE2. It is
countr y ha s cr ystal clear
debts it cannot repay. Through S im i larl y i t re du c e s th e now, if it was ever in doubt,
devaluing its currency the population’s savings by slowly that central bankers, the world
country can effectively reduce increasing the prices of ‘’real’’ over, fear deflation more than
its debts (or in the worst case assets and goods. Of course inflation.
Over history one of few tangible Similarly the case can be made
assets that has remained for other commodities that are
‘’money’’ is gold. Before America in finite supply.
dropped the gold standard the
world considered gold not as Perhaps the ultimate folly is the
a commodity, but as another belief that a small piece of paper
currency. and cotton, with numbers printed
on it, that has no fundamental
While the world’s major asset backing except “full faith
economies print money at and credit” in the government,
will (money supply growth is worth anything at all and yet
of 10%+ pa) supplies of the it is considered to be ‘’money’’.
metal are growing at only 1.5%
a year. Which is more likely to Previous Fed Chairman
increase in value ? Gold, as a Greenspan Greenspan famously
finite currency, will increase in argued the case for returning to
value against not just the dollar, a gold standard in his 1966 paper
but sterling and the euro too. “Gold and Economic Freedom’’.
While this is probably not realistic
the reality through history is that
no paper currency maintains its
Over history one of few tangible assets purchasing power over the long
term. In the face of globalisation,
that has remained ‘’money’’ is gold no government wants a strong
currency. However some countries
are more desperate and need a
weak currency more than others.
Andrew McKay
MAJORS ANALYSIS
Retrospect and Prospect
On the grounds of the New Year, let’s look back at the majors’ charts of
2010, analyze them with the Ichimoku Kinko Hyo charting system, and
calculate possible directions of future movements..
For a better understanding of Ichimoku Kinko Hyo analysis, please refer to the author’s introductory
article in the October 2010 edition of FX Trader Magazine.
EUR/USD Retrospect trend. From that signal, the price it reached the K ijun-sen level.
fall down more than 1400 pips Then another Tenkan-sen/
On the EURUSD Weekly chart, through the next six weeks, and K ijun-sen cross happened, but
the year started with a weak beat the low record of the last in this case a bullish cross at the
Tenkan-sen/Kijun-sen down three years. During these weeks, ver y end of Aug ust. The price
cross, which was supported by the price marched down ver y fast crossed up the K ijun-sen, and by
the Monthly K ijun-sen. At this and left behind the K ijun-sen. the end of September the Chikou
time the price was clearly below This was the sign of a potentially Span also crossed up the price,
the Week ly K ijun-sen too, the beginning disequilibrium on the however the Kumo future still
Chikou Span crossed down the market. Finally K ijun-sen turned remained bearish. At this stage
price, and the future Kumo f lat and started to attract the the price reached the top of the
started to turn bearish. These price back to set the harmony thin Kumo cloud, and ranged in
facts indicated possible bearish of the market back. This led the the body of it through the whole
movements right in the beginning price to move up from June till October. The facts that the
of the new year. In Februar y,
when Chikou Span was still
moving in the body of the Kumo,
the price started to range, and
haven’t closed below the Kumo
through five weeks. Finally the
price could break out from the
Kumo on the down side, however
the Chikou Span only confirmed
the movement with a Chikou
Span breakout six weeks later,
at the end of April. This was a
perfect sign of the new bearish Figure 1: EURUSD Weekly
USD/J PY R etrosp e ct
US D / J P Y Pro sp e ct
On b o th We e kl y and Month ly
c har ts th e p i cture is ver y
b e aris h , a s a l l Ich imo ku
c omp on ents s h ows the same
b e aris h p i c ture , so these f acts Figure 7: USDCHF Weekly
USD/CHF Prospect
“S o ciet y Says”
As a young girl growing up in the Then it was who had the biggest house the craziest and have the most fun.
northern suburbs of Chicago, I found and the most expensive car. In high Throughout most of h i g h s c h o o l I
competition and pressure regularly. At school depending on who you were wa s a straight A student and it was
first it was who had the cutest shoes (or friends with it was who had the best important to my family (and me, I
if you were a boy, who ran the fastest). GPA, class standing, or who could be guess) to get the best grades.
session low, g et as close to my losing. I was familiar with the recommended to be taken off. I
adjusted midpoint as possible newsletter and told my client suggested he use an indicator
a n d e nt e r w i th a s h o r t . T h er e the newsletter author tended to that adapted to the market as
a r e ti m e s w h e n p r i c e a c ti o n be a longer term trader and held the market unfolded within the
i s a b o v e my m i dp o i nt o n th e positions overnight, for weeks day. This finally put him on the
d a y, b ut i t i s n o t a b o v e th e and sometimes months. When I right side of the market and the
w e e kl y m i d p o i nt . I c o n s i d er started to work with this client right side of his personal time
th i s a m i xe d i n d i c a ti o n a n d I realized he had no patience tolerance. I always stress to my
t e n d t o s t a y awa y f r o m tha t tolerance and could not hold clients the importance of knowing
ma r ke t a n d m o v e their own patience
o n t o a n o th e r tolerance when
one. This is they trade, and
o n e r e a s o n w hy to use indicators,
I l o v e Forex. I strategies and/or
can move from recommendations
pair to pair with that suit their
such ease. personalities.
Michael Aronovitz
Manager of Gables Capital Management, Inc.
Currencies 100 %
JW: How long have you been Management, a discretionary daily basis. We literally watch
trading foreign exchange for? Tell global macro firm, as the head of history unfold before our eyes and
us about your career evolution. trading and currency portfolio weigh its potential effects on the
MA: I have been trading in the manager. After four profitable financial markets. Each day there
FX markets for nine years. I began years at Ronin, I joined Gables is something new to focus on. As
as a trader at Quest Partners, Capital and in February 2009 we recently as this past November, we
LLC, a systematic hedge fund launched GCM Global FX, which were faced with renewed global
firm in New York. For three years is a short-term discretionary tensions between North and
I traded in the Asian, European trading currency managed account South Korea, the European Union
and US time zone trading in the program. teetering on the brink of disaster,
currency, equity, fixed income the impact of the US elections
and commodity markets. After JW: What do you particularly and the Federal Reserve began a
a great experience with Quest, like about your job? new round of quantitative easing
I decided to look for a position MA: I love how interconnected in hopes to lower unemployment
with a discretionary firm. In the currency markets are to all and jumpstart the struggling
2005, I joined Ronin Capital global events and news on a economy. Our job is to be aware
trading in the foreign exchange basis and we know at all times might be correct. Conversely if
markets. Our trading decisions are what our maximum loss is if the you are looking for a day trade to
driven by monitoring the global market moves against each of our make ½ of a percent, then don’t
macro environment, historical positions. On each individual enter your stop loss two percent
asset class correlations, changes trade we risk between .07 and .25% away as that does not make sense
in global interest rate spreads, of our NAV. We have firm stops in for a risk reward ratio.
market sentiment and positioning, the market with banks so even in
central bank policy and economic extreme market situations we know JW: What is your forecast for
data. All trades should have a within reasonable slippage (under the EurUsd, over the next 6/12
minimum risk to reward ratio of .1%) what our maximum loss is. months?
3:1 and there are internal controls Additionally, Eric McKenna serves MA: It is a very difficult time to
monitored by our risk managers as risk manager for additional forecast. As we speak the EUR is
to oversee maximum monthly loss oversight. under pressure in the mid 1.30’s for
and maximum gross exposure at the second time this year on concern
any time. JW: Under which market about the viability of Greece,
conditions do you get the best Ireland, Portugal, Spain to survive
JW: How and when did results? and finance its debts. At the same
you develop your current FX MA: Typically we tend to do time the Fed recently announced
management strateg y? well in times of elevated volatility its intent to engage in a further
MA: It began when I was a (Equity VIX in excess of 18 and round of quantitative easing which
trader at Quest Partners rotating EUR 1m vol greater than 11). is certainly dollar bearish. These
through all time zones getting Times of elevated volatility create major market forces are the exact
a feel for what news, data, and increased trading opportunities reason I am a short term trader
events impacted the market at and increased daily ranges, which and avoid focusing on the long
different times of the day. Then are typically beneficial for my term. The one thing I have been
once given the opportunity as trading performance. We tend to telling my clients is that the slump
a discretionary currency trader underperform in times of declining in 2008 globally was synchronized.
at Ronin, I was able to form my volatility and a strong trend in the The recovery is increasingly less
own short term trading strateg y market place. so. Currently the UK, US, EU
combining the skills I developed and Japan are still relying on
from the systematic side at Quest JW: What should an government support to aid their
and the discretionary disciplines inexperienced trader watch when recovery while countries such as
at Ronin. choosing the time frame to trade Australia, Canada, and Norway have
Being that the markets change on? began raising interest rates. With
every day, it is a constant challenge MA: I think it is most important such differentiation between each
to get a feel for what is currently to size trades appropriately. If countries growth and future plan
moving markets and identifying if you enter a trade looking for a for monetary and fiscal policy, we
that will be the case tomorrow. multi month theme to develop in anticipate that short-term volatility
a currency, you need to place your will remain elevated resulting in
JW: How do you manage risk? stop loss a few percent away from favorable trading opportunities in
MA: We have a very high focus the market or else you risk being the coming quarters for short-term
on risk at all times. In my strategy stopped out with a loss while discretionary currency trading.
we monitor risk on a per trade ultimately your longer term theme
FX roller coaster
ride draws to a
subdued close
Memories of high hopes for the States again bubbling to the In summar y it mig ht be fair
Euro at the outset of 2010 when surface. to say that current market
the Dollar traded at around Euro valuation is not as bad as
1.50 are now somewhat distant. As we go to print the EUR/USD it could have been when the
Despite flirting perilously close rate is heading towards the middle Greek situation took hold in
to its original launch level in the of its most recent range at around the springtime yet an ultimate
springtime amid waves of risk 1.30, the rejection of 1.42 only decline of around 13 percent
aversion and contag ion fears a month or so ago being caused when thing s were looking so
over the Greek debt crisis and by a robust employment number promising at the start of the
associated PIIGS ramifications, from the US and the reassessment year can hardly be welcome, at
1.19 ultimately provided a of sovereign risk in Europe, with least from a purchasing power
springboard sufficient to propel particular attention on Ireland. perspective.
the unit hig her to then retest
what has now become significant
resistance, at the 1.42 region.
This rebound was helped in part
by a market that was exposed
by record short positioning
and seemingly content with the
ironclad ‘sure thing ’ that the
Euro could easily test parity
ag ain. FX markets remain
consistent in maintaining their
peculiar habit of overshooting.
As we now know, these highly
speculative shorts were squeezed
out as confidence in EU austerity
measures reemerg ed, coupled
with perceptions of a ‘more than
likely’ double-dip in the United
most important step on the road to austerity measures over the summer always been cyclical and if official
respective recoveries no matter how combined with Greek and Spanish comments ring true, the markets
long it may take. Given the collective labour parades, just this week in the should not underestimate the power
bounce in global stock markets, the UK demonstrations on the streets of monetary officials who can act at
current mood very much reflects a of London got so out of hand that any time should liquidity conditions
sense that participants seem to have the Prince of Wales’ official car was become strained for any reason. The
come to terms with the fact that attacked by a student mob furious ECB wants to underline its devotion to
everything will be all right in the about the forthcoming hikes in the Euro by encouraging the notion
end and if it’s not all right, it’s not tuition fees. We suspect, sadly, that that membership is irreversible once
the end. We are hopeful that this further unrest may be in the pipeline a state has committed itself to the
sentiment proves true although in as the true monetary and social costs union.
reality we are less optimistic on both of austerity, not seen for several
Europe and America due to the sheer generations, come home to roost and The Fed is apparently buying another
weight of debt burdens, potential bring with them a sour mood that $600 bio of QE-related debt, on the
civil unrest caused by a social unease inevitably spreads itself among those face of it maybe not the best news
about future taxation implications affected. for those fearing a double-dip, yet
and the likely impact on family living perhaps tempered by the underlying
standards. In addition to the 3.5 Not to be entirely gloomy, as the fact that the TARP program ‘only’
million French citizens protesting growth engines of the world have ended up costing a projected $25
billion, a far cry from initial estimates
of $700 billion which more than
covers the perceived ‘cost’ of QE2.
have reached saturation point, market as the influx of large financial coupled with inaction or indecision
causing a wave of profit-taking to institutions expected to take place by EU leaders and perhaps abetted by
set in and sending the AUD back did not quite materialise, in theory a reversal of fortune in the US like the
to around 0.85 USD and the CAD removing some of the anticipated housing market bottoming and the
to around 1.10. That said everyone demand for the currency. The American consumer returning, albeit
needs some commodity exposure so Swiss National Bank intervened perhaps not quite as robustly as before,
given the choice we would select the sporadically during 2010 to arrest with some of those Dollars stashed in
Norwegian Krone to outperform the Franc’s appreciation and with the bank for another rainy day. We
the Aussie next year, bolstered by its some slight detection of a generally think the Fed will raise interest rates
stellar ratings next year while the
and steady ECB may not be
economy and in such a position
under va luation or at least be able
by the market to keep pace and
given its perceived see potential for
peripheral status, a range like of
targeting 5.35 1.05-1.40 for
from the current EUR/USD.
6.00 region.
The UK has
As for 2011 been out of the
possibilities, it limelight lately
would not be and although
surprising to see the sense of
an initial perhaps impending doom
seasonal bout of seen just before
risk aversion which the general
may provide election seems
more power to the Swiss Franc and less-bullish approach to the nation, to have dissipated somewhat, recent
Japanese Yen although we think that perhaps aided by the change in reminders seen by the civil unrest
over time both the CHF and the JPY policy on certain confidentialities, perhaps reawaken the dormant threat
could weaken. In the Yen’s case, the the market may by accident or design that the Pound is also overvalued
view is bolstered by potential demand continue what the SNB had tried based on the UK’s mounting debt
for US Treasury’s and therefore US to start, which would be an ideal and perceived risk that the coalition
Dollars, the demographic impact of time for further intervention to Government could become shaky,
an aging Japanese population unable weaken the Franc to more practical which might lead the Pound to retest its
to replace itself to maintain the and desirable levels and we target lows in the 1.35 area from the present
required pace and therefore reducing EURCHF back to 1.40 from 1.30. 1.60 region, against the Dollar.
competitiveness, a depleted savings
rate and the threat of a lurking BoJ The Euro could easily take a We wish the readers of FX Trader
who have already had enough of the look at parity against the USD if magazine a prosperous 2011.
rising Yen. Switzerland could be events conspire, such as further
viewed as pricing itself out of the deterioration of EU finances Kevin Sollitt
Jody Samuels
Interviewed by Maud Gilson
“ Th i nki n g ba c k i t sh o ul d
h a v e b e e n m o r e d a u n t i ng
th a n i t a c t u a l ly wa s”, s ay s
Jo dy S a m u el s , th e “ Q u e e n
o f th e q u i d”, a b o u t h e r f i r s t
y e a r s ba c k i n th e 8 0 ’s a t
J P Mo r g a n i n N Y C . Jo dy
S a m u el s ,c o a c h a n d fo u n d e r
of F X Tra d e r sE D GE .c o m ,
d i s c o v e r e d Fo r e x i n 1 9 7 9
i n th e Arb i t ra g e ( Fo r e i g n
exchange) department of
a ba nk i n No r way a n d
i mm e d i a t ely g o t fa s c i n a t e d .
O v e r th e y e a r s , Jo dy l e a r n e d
h o w to limit her emotions
and this bal ance “on the vast
emotional spectrum of trading”
is something she is now teaching
to her students. She doesn’t
think there are gender specific
characteristics that make you a
better trader and “if a person
has goals to become a successful
trader, then the y need to do
whatever it takes to learn a
methodolog y, practice it over
and over again until it becomes
second nature.”
MG: When did you first get lot in common. We were prepared for JS: I didn’t compete with the other
interested in Forex trading? male dominated industries by virtue women in my work environment.
of the fact that we had just graduated The competition was with me, to
JS: During my studies at the from one of the top business schools see how many winning days I could
Wharton School of Business at the in the world where women and men have every single month. That was
University of Pennsylvania, I belonged were on the same playing field, taking one of the goals I strived for, to
to this organization called AIESEC, the same classes. So, when I joined have a complete month of winning
an international student business the bank to trade currencies, I really days.
association that organized internships didn’t think about my gender. I just
abroad. I was fortunate enough to did my job. MG: When moving on from the
get placed in Bergen, Norway, where trading desk at JPM to the role
I worked in the Arbitrage (Foreign MG: Can you describe your of retail trader/instructor, did
exchange) department of a bank as a experience on the GBP trading desk? you need to adopt any changes in
trainee. My function was to operate strateg y or perspective?
the telex machine and quote prices JS: As the GBP trader in NY, I was
from the traders in Norwegian among a group of about 20 traders/ JS: The biggest challenge I had
Kroners in the interbank market. I assistant traders on the desk trading when migrating from institutional
was so fascinated that I extended my various currencies. We had to work to retail trader was to accept that
internship to 3 ½ months, after which together as a team, answering phones I could be successful on my own
I moved to NY and applied without the support of
to work for JP Morgan. I had other institutional traders.
previously accepted a position
in a can manufacturing plant
When I joined the bank to While at the bank I had
so many resources around
doing cost accounting which trade currencies, I really me, including currency
I resigned from before I even strategists, options strategists
started working there. didn’t think about my and fellow traders that I
that independent retail traders face JS: Yes. I can say there isn’t one effective indicator?
today is not trading with enough capital. emotion or situation that a trader
Because of the high leverage allowed can describe to me that I haven’t JS: At the bank our technical
Forex traders, it is too easy to open experienced myself. analyst on the desk introduced
up an account with a small amount of Elliott Wave Analysis. He was
capital, leverage it up, and lose it after MG: Is this why you decided to very good at telling us what the
several trades. One advantage is that dedicate yourself to educating other bias should be for the day, given
information is highly transparent and traders? the Elliott Wave count and other
data is cheap. When I started trading techniques he looked at. When I
on my own in the mid 1990’s, I paid JS: Quite frankly, I have a lot to left the bank I studied and mastered
$2,500 a month for nice clean futures offer to other traders due to my long Elliott Wave analysis on my own and
data for charting. Today, the fixed experience. I am a mentor and a coach continued to use it in my trading. I
costs are practically zero, which means but I love to work with traders one on really can’t remember a time when
that anyone can set up an account and one which is why I developed the FX I didn’t use it – it has always been a
start trading. All the education and Trader’s EDGE coaching program to part of my analysis toolbox. Today
information is available to the retail teach traders entrepreneurial skills and I love teaching it to traders and
trader today, but the right often times they feel it is
education is key. Trading as the “missing piece” of the
a profession takes time to trading puzzle. Elliott Wave
master. It’s important to hire a The biggest disadvantage analysis can be used as an
mentor and a coach who have that independent retail overlay to whatever strategy
Forex trading experience and the trader is using to define
can communicate well. traders face today is not entry and exit points. It
provides a road map, making
MG: What feeling do you trading with enough capital. it easier to target moves, and
get when trading? see the bigger picture.
JS: In my earlier days I felt I was on habits. I find that by teaching them MG: You are very involved in
a roller coaster ride with my emotions the nuances of running a business networks, to the point that you
most days, as the markets were very or how to view a market through its encourage your students to use
volatile. I’ve been trading for so long cycles often makes a big difference them...
that I have experienced many different in a trader’s results. When one of my
feelings and emotions along the way. students succeeds, it brings me great JS: Yes. When people take my
Today, I work on limiting my extreme joy. When I run seminars to teach seminars, I encourage them to keep
emotions, positioning myself mentally trading skills, it always makes me think in touch and we actually set up a
on the fulcrum of a seesaw between the about how I am trading and reinforces Skype group. That way when like
emotions of fear and greed. I practice what I do myself. minded traders see setups, they can
being balanced on the vast emotional share them with the group. Everyone
spectrum of trading. MG: Elliott Waves is one of your benefits. The market is so big that
favorite technical indicators you it really doesn’t matter how many
MG: And that’s something you are teach to your students. Can you people are taking the same position
teaching to your students I imagine; remember when you first realized at the same time. This works really
how to control their emotions... Elliot Wave was a particularly well when students follow different
currencies and can share their analysis haul. I don’t know. I think being too immediately.
and setups with the group. conservative isn’t good either so a
happy medium needs to be found. JS: This describes a person’s instincts
MG: After teaching so many that drive a person’s natural way of
students, have you noticed differences I recently read the article “What if taking action. Since every personality
in how men and women trade and Women Ran Wall Street”, by Sheelah is different, one cannot say that the way
analyze the Forex Market? Kolhatkar, published in New York someone learns best is gender specific.
Magazine, March 21, 2010. The I’ve taught many male traders who are
JS: The analysis is the same but article implies that many men are well organized and meticulous about
sometimes I think women have an aggressive, stubborn and ego driven their studying. I’ve also met many
intuition about the market that it and therefore need to work on taming female traders who are also rigorous
will go up or down – almost like those qualities if trading large sums of in their approach to learn.
a gut feeling. I’m not sure that money. No comment on whether or
men experience that same level of not women traders are better for the MG: So you would not say these are
intuition. In terms of trading, I do economy – I would say that a good gender specific differences...
think that women are
more conservative and less JS: From my experience,
aggressive than men as a If women are in fact more these qualities are
whole but there are always definitely not gender
exceptions. That might risk averse, then they will take specific – if a person
translate into smaller fewer and smaller positions, has goals to become a
profits but tighter losses as successful trader, then
well. and take smaller profits. they need to do whatever
it takes to learn a
MG: The CEO of a retail methodology, practice it
forex trading training course says mix of both genders might create the over and over again until it becomes
women have 3 qualities which make right recipe of risk taking and risk second nature, and work with a coach
them better traders than men... First aversion. to keep growing as a trader.
he says women have a stronger sense
of risk aversion. Do you agree? MG: Second quality is increased
patience, which lets them follow
JS: I disagree – I don’t believe one through on trading plans better than PROFILE: Jody Samuels
can generalize that more women than men. • Current Job: Trader and Coach,
men have these three qualities. On the Founder of FX Trader’s EDGE
risk front, it is important to be a risk JS: Patience is important but again, coaching program, Elliott Wave
taker in any trading business, including I’m not sure if women are more patient expert
Forex. If women are in fact more risk than men. I know many male traders • Career: Over 25 years in the FX
averse, then that implies they will take who are very patient traders. Market, as bank trader at JP Morgan
fewer and smaller positions, have less and retail trader and coach
exposure, and take smaller profits. MG: Third, he points out women’s • Age: 52
Perhaps they will be better at running tendency to really learn thoroughly
the marathon of Forex trading and before trading, while men tend
being in the business for the long to learn something partially and
Karen Jones
Interviewed by Maud Gilson
In th i s “ Wo m e n i n Fo r e x”
exclusive interview series
f r o m F X s t r e e t .c o m , K a r e n
sh a r e s w i th u s th e m a i n s t e p s
o f h e r c a r e e r a s w el l a s h e r
v i s i o n a b o u t th e d i f fe r e n c e s
between men and women in
th e Fo r e x w o rl d . S h e a f f i r m s
th a t sh e c a n’ t p i np o i n t a ny
a n d n e v e r fel t a ny p r e s s u r e
from her colleagues : “I do
a t t e n d s o m e m e e t i ng s w h e r e
I a m th e o nly fe m a l e , a n d
th e o nly t e c h n i c a l a n a ly s t .
The discipline of Technical
[…] I am not paid to agree
w i th th e m , I a m p a i d t o g i v e
Analysis is ideally suited for
my v i e w s ba s e d o n t e c h n i c a l
analysis!”
the FX market
MG: How did Forex enter your I joined just before the October were always truly horrified that
life? crash in 1987 and remember they had done so and apologized
drawing spectacular lines on my profusely. Once you explained
KJ: I have actually only worked charts as the stock market slumped. where the line was - no-one ever
for 3 companies - the first was Although I covered commodities I crossed it!
a commodity brokers - Sucden was required to also monitor moves
(UK). I had just finished college in FX and it became clear quite MG: You left Credit Suisse at
in 1987 and was looking for a job early on that this was a volatile the end of 1998 and then arrive at
- I ended up with 3 job offers but market. But it wasn’t until I joined Commerzbank, right?
went to work for the commodity Credit Suisse that my interest in
brokers because it sounded the FX grew. KJ: Yes, in February 1999,
most interesting. I started work having been out of the market for a
as a junior technical analyst and MG: ‘Chart Tarts’? Where that couple of months. I was somewhat
by sheer luck ended up in a job nickname comes from? disappointed to have missed the
which has fascinated me ever since. start of trading for EUR/USD!
I joined just before the October KJ: A lot of people in the dealing
crash in 1987 and remember room had nicknames and this was MG: Tell us how you worked your
drawing spectacular lines way up to become head of
on my charts as the stock FICC Technical analysis
market slumped. Although Myself, a lady called Carol Research...
I covered commodities
I was required to also
Harmer and Fran were KJ: I started working for
monitor moves in FX and affe ctionately known the Treasury department
it became clear quite early initially covering primarily
on that this was a volatile a s ‘the Char t Tar ts’ FX and bullion, then after
market. But it wasn’t until a few years I was merged
I joined Credit Suisse that into the investment bank.
my interest in FX grew. just an affectionate moniker. The At that time I was the FX technical
team consisted of 3 ladies (which analyst and reported to the head
MG: Why? was unusual back then), Tart of FX strategy, but the whole team
rhymed with Chart, that’s it. I think worked with the FX division. While
KJ: I have actually only worked we were christened the nickname there, the demand for technical
for 3 companies - the first was by the FX spot desk. analysis grew and I was asked to
a commodity brokers - Sucden None of us were offended by increase coverage to include interest
(UK). I had just finished college it. we all liked it! There was a lot rate products and as consequence I
in 1987 and was looking for a job more banter back then, political gained another colleague to assist
- I ended up with 3 job offers but correctness has killed this, which in me. As I already covered bullion I
went to work for the commodity some ways is a shame. I remember was asked to cover commodities as
brokers because it sounded the it being more of a laugh. well, hence I became head of FICC
most interesting. I started work If ever anybody said anything that Technical Analysis Research.
as a junior technical analyst and I felt was out of line, I used to wait
by sheer luck ended up in a job pull them to one side and quietly MG: What is the FICC Technical
which has fascinated me ever since. explain they had upset me. They Analysis Research’s job?
KJ: The group is responsible not find that my female colleagues growing into positions of increasing
for forecasting and formulating treated me any differently to my responsibility at the bank?
technical trading strategy globally male colleagues.
and covers foreign exchange, fixed KJ: I think it is hard to work in
Income, emerging markets and MG: How do you think you any demanding job and to balance
commodities. analyze differently from men? your personal life. There are times I
have struggled, but as I have grown
MG: What about Forex in KJ: Having worked with both older the demands of both areas
particular do you find interesting, men and women in the field, I can’t have headed into a natural balance.
as opposed to commodities, FI say that there is any difference to
and other instruments under your the way men and women analyze. MG: Do you believe the
command? Not any that I can pinpoint anyway. opportunity for stay-at-home
However one observation I will trading will bring a flood of women
KJ: Of all the markets I traders into the retail
analyze - it is FX I enjoy Forex market?
the most. It is simply I am a technical analyst first and
much harder to do - there KJ: Stay at home trading
is more data to analyze
foremost and am confident in will appeal to women
for starters as it trades my convictions to stand by my as they try to juggle
24 hours a day, the way it childcare with working
trades in the various time analysis. It’s as simple as that. It is the flexibility they
zones can give you early need, however think this
clues of market direction. just generally increases
It is also much more volatile - after make (not sure if this a male/ the numbers who are trading from
all FX participants hold their female divide however). There home. I do not foresee a ‘flood’ and
positions for much shorter durations is a strong tendency to want to no I do not expect it to impact on
compared to say stocks or bonds. It ‘belong’ to a group, psychologically the market at all.
is a market which the discipline of I mean. In the course of my work
technical analysis is ideally suited. I do attend some meetings where
Technical analysts are able to use I am the only female, and the only
some fairly short term time frames - technical analyst. However, I feel PROFILE: Karen Jones
also most FX participants use charts no compulsion to ‘agree’ with the • Current Job: Head of FICC
extensively, so it is in this area where group. That said I am not paid to Technical Analysis at Commerzbank.
we have most interaction with sales agree with them, I am paid to give my Karen is also on the board of the STA
and trading. views based on technical analysis! Is (Society of Technical Analysts).
this a male/female divide? I suspect • Career: Over 20 years in the Forex
MG: With more women entering not. I am a technical analyst first business. Worked for a Commodities
the ultra-competitive world of big and foremost and am confident broker and two major investment
banking, how do you feel women in my convictions to stand by my banks.
treat each other? analysis. It’s as simple as that. • Age: 45
KJ: Having worked for 6 years in MG: How have you handled
a team containing 3 women, I did balancing a private life while
QUARTERLY REPORT
QUARTERLY REPORT
AUD PPP
Over/Under
Valued
GBP PPP
Over/Under
Valued
JPY PPP
Over/Under
Valued
EUR PPP
Over/Under
Valued
Technical outlook
EUR/USD
EUR/USD reached an all-time high of 1.6039 to eventually reach 1.1881 in June 2010, from
in July 2008, with losses from there having left where a two -legged recover y to 1.3333 & 1.4280
a double bottom at 1.2329 / 1.2459 in October occurred. The speed / extent of the latest retreat
2008 / March 2009, from where a prolonged from 1.4280, which was just under the 1.6039-
recovery phase was enjoyed. Although the break 1.5144 downtrend line, warns of the possibility
above 1.4721 in September 2009 appeared to of a resumption of the major underlying
complete a significant double bottom, a double downtrend. Already the mid-point of the
top was left at 1.5062 / 1.5144 in October / previous 1.3333-1.2590 dip is being tested and a
November 2009, just shy of the 76.4% Fibonacci lower top now below the 1.3786-1.3816 area may
retracement of the previous 1.6039-1.2329 trigger a move towards the 1.2329-1.2590 area
decline. The subsequent failure to leave a higher over coming weeks. That area may initially hold
low above former resistance-turned-support at firm for quite some time, but a clean breakdown
1.3739 / 1.3751 confirmed a reversal and a steady will raise fears of an eventual extension beyond
retreat ensued. A dead-cross of the (red & green) 1.1881 towards a minimum of 1.1434 (100% of
13 & 52 week moving averages was accompanied 1.6039-1.2329 decline measured from 1.5144)
by a breakdown through the (blue) ultra long- and possibly 1.1017 (100% of 1.5144-1.1881
term 260 week (5 year) moving average and decline measured from 1.4280). Between those
MACD moved back under the pivotal zero line targets, the 61.8% Fibonacci retracement of the
to confirm a trend change. Losses accelerated entire October 2000-July 2008 .8232-1.6039
through the previous floor at 1.2329 / 1.2459 rise comes in at 1.1214.
EUR/SEK
usd/ZAR
FX SPOT MONITOR
Country Flag USD Spot Last vs USD % Ch 3M % Ch 12M 12mth High 12mth Low
CENTRAL BANKS
Country Flag Central Bank Rate Name Actual Previous
ECONOMIC DATA
GDP CPI Industrial Production Unemployment
y-o-y y-o-y y-o-y level
USA 2.20 1.10 0.40 9.80
Eurozone 1.90 1.90 0.70 10.10
UK 2.80 3.30 -0.20 7.90
Japan 0.90 -0.60 -2.00 5.10
Switzerland 3.00 0.20 3.60
Australia 2.70 2.80 5.20
Canada 1.00 2.00 7.60
New Zealand (partecipation) 1.90 1.50 68.3 (partecipation)
Sweden 6.90 1.80 0.20 7.10
Norway -1.60 1.90 -0.30 2.70
South Africa 2.60 3.60 2.50 25.30
Czech Rep. 2.80 2.00 6.90 8.60
Poland 4.20 2.70 10.10 11.50
Hungary 1.70 4.20 8.30 0.00
Russia 3.90 0.80 6.70 6.70
China 9.60 5.10 13.30
India 7.40 10.80
Mexico 5.30 0.25 3.70 5.70
Brazil 6.70 0.83 2.10 5.70
Levels Date: 21-Dec-10 Source: Thomson Reuters
FX POLL
3 Month Days since Poll Poll Median Poll Min Poll Max Poll Mean Std Deviation Spot@Poll Date
EurUsd 19 1.345 1.17 1.5 1.34 0.061 1.3134
GbpUsd 19 1.58 1.42 1.69 1.575 0.057 1.5622
AudUsd 19 0.98 0.8 1.05 0.973 0.045 0.9682
UsdJpy 19 84 75 90.5 83.6 3.3 84.2
UsdChf 19 0.985 0.9 1.16 0.99 0.045 1.0024
UsdCad 19 1.005 0.95 1.14 1.013 0.035 1.0172
EurJpy 19 111.8 103.7 121.8 111.9 4.2 110.61
EurChf 19 1.32 1.235 1.516 1.327 0.051 1.3169
EurGbp 19 0.846 0.791 0.938 0.851 0.028 0.8405
GbpJpy 19 131.1 118.5 145.3 131.6 5.1 131.51
1 Year Days since Poll Poll Median Poll Min Poll Max Poll Mean Std Deviation Spot@Poll Date
EurUsd 19 1.305 1.1 3 1.343 1.243 1.3134
GbpUsd 19 1.589 1.335 1.9 1.588 0.112 1.5622
AudUsd 19 0.95 0.7 1.07 0.949 0.081 0.9682
UsdJpy 19 89.9 50 105 88.6 7.9 84.2
UsdChf 19 1.02 0.84 1.25 1.019 0.083 1.0024
UsdCad 19 1.024 0.9 1.2 1.023 0.057 1.0172
EurJpy 19 117.6 97.8 150 117.5 8.9 110.61
EurChf 19 1.34 1.197 2.82 1.37 0.228 1.3169
EurGbp 19 0.83 0.705 1.967 0.848 0.155 0.8405
GbpJpy 19 140.6 76.3 167.2 140.4 12.7 131.51
Levels Date: 21-Dec-10 Source: Thomson Reuters
MARKETS VIEW
Stock Indices Last % Ch 6M % Ch 12M Commodities Last % Ch 6M % Ch 12M
Gold 1384.3 11.27% 26.80%
MSCI World 1266.87 13.0 10.1 Silver 29.16 56.35% 71.63%
Dow Jones Ind. 11478.13 9.8 11.1 Brent DTD 93.32 23.41% 27.68%
S&P 500 1247.08 11.6 13.1 WTI 88.82 16.93% 22.16%
Nasdaq 100 2223.04 16.2 23.0
Eurostoxx 50 2872.08 3.7 -1.1 Bonds Last % Ch 6M % Ch 12M
UK FTSE 100 5945 12.2 13.4 5Y Euro 1.982 32.8 10.3
Dax 7076.96 12.9 20.4 10Y Euro 2.988 15.1 -6.5
Cac 40 3922.66 5.4 2.4 10Y US Treasury 3.34 6.3 -9.2
FT MIB 20657.55 -1.8 -9.3 30Y US Treasury 4.444 8.4 -2.6
Swiss SMI 6555.6 1.2 0.9 10Y UK Gilt 3.477 2.6 -10.1
Nikkei 225 10370.53 2.2 0.7 10Y CH Govt Bond 1.835 17.6 -5.5
Australia AORD 4862.469 5.6 3.4
HK Hang Seng 22993.86 11.6 6.9 Money Markets Last % Ch 6M % Ch 12M
Shanghai Comp. 2904.115 13.5 -8.4 US 6M Depo 0.4572 -39.2 6.2
Singapore StraitT. 3139.85 10.6 11.8 EUR 6M Depo 1.2530 22 25.9
India BSE30 20060.32 13.2 19.0 GBP 6M Depo 1.0469 2.9 25.5
Brazil Bovespa 67915.68 4.4 0.7 CHF 6M Depo 0.2383 14.4 -30.2
Russia RTSI 1750.46 23.4 23.4 JPY 6M Depo 0.3475 -21.9 -27.7
Levels Date: 21-Dec-10 Source: Thomson Reuters
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