Cable update: First target at 1.35 then 1.38-1.40
I'm expecting volatility to increase significantly in coming weeks as the US election date nears. All of the no-deal Brexit headlines will have encouraged plenty of fresh cable shorts and these will start to get worried if recent highs near 1.35 come into focus again. I will stay core long cable in the hope that these shorts get squeezed and we see a break above 1.35.
In the meantime, I'm encouraging those following the strategy to stay in dip-buying mode and take advantage of strong rallies to book some profits. Rinse and repeat as usual.
Support should now be firming near 1.2900 and its important to keep an eye on some of the crosses like GBP/AUD which have broken important resistance levels.
Same old views: Long Cable, Silver, Gold & EUR/AUD
Core long all these instruments and looking for opportunities to add when conditions are right.
Cable is still my favourite play and I believe we are base-forming above 1.2750 for a move towards 1.40+ in coming weeks. As always, beware the noise as in cable it's usually at least 200 pips!
I believe that we will see fresh highs in Gold & Silver as the US election nears and as I'm not really an expert in the day-to-day movements here, I prefer to sit on long positions and set some silly profit targets which will get taken out on spikes.
EUR/AUD is more of an opportunist play; looking for dip-buying opportunities on a daily basis as we head back towards 1.75. Book 100-150 pip profits and revisit.
It's a plan. I didn't say it was a good plan, but at least it is one :)
AUD & NZD: Prefer to be short on the crosses
I've been watching pairs like EUR/AUD and GBP/NZD pretty closely over the last few weeks and both pairs are suggesting to me that they are trying to form a base for a healthy rebound. I have some fairly aggressive targets in 1.75 and 2.10 respectively (from current levels near 1.64 and 1.9650).
The economic stand-off between Australia and China is not showing any signs of improving and this is eventually going to have an impact on the AUD. Australian government stimuli packages are starting to ease off and an economy which relies heavily on overseas tourists and students is in for some very tough times ahead.
I am not a fan of the USD either in the current climate and would be cautious about being overly short AUD/USD. I expect some range trading here in a .69/.73 ish range over coming weeks.
Institutional Team report: Month 2
This started off as a bit of a test case but it's starting to gather some momentum. Two of the more promising young traders, 1 medium term trend trader and 1 intraday trader, have been trading my strategies exclusively for the last 2 months on dedicated accounts.
The day trader can often trade up to 60 times per session, which is a lot for a discretionary trader. His brief is to be square overnight and to look for trading opportunities in line with my overall view during his trading session. After some early hiccups when he strayed a bit from the strategy, his performance is very strong at around +15% per month unleveraged. His feedback is that it's enlightening for him not to have to figure out what to do on a session basis. He simply 'turns up for work', gets told what the strategy is for the day/week, and then looks for opportunities. He doesn't have to waste energy trying to figure out directions.
I've always been a big fan of the medium term trend trader, who has that magic talent of being able to maximise profits when he gets on a move. With him it's taken a bit more convincing to get him to buy into the strategies but success breeds confidence and he has picked up 2 very nice moves already, delivering around 10% per month unleveraged.
As we know, it's easier to make money when you are picking the market right and we have been picking the moves pretty exactly for the last few months. Nevertheless, the art of trading is to maximise profit when you are right and minimise losses when you are wrong. Hopefully we continue to get this bit right.
Ideally we would have between 6-10 traders as part of the team as statistically, that shows the best chances of success.
Cable: Loading up on long position
Got a bit lucky in picking the bottom near 1.2750 and now that we are playing with bank money, we can afford to take on somewhat bigger risk.
I expect GBP to outperform the other majors in coming weeks with the other 'sterling' instrument, Silver, also likely to outperform significantly.
On the crosses I still like GBP/NZD a lot but I am concentrating my efforts on cable, and I feel that we could even see levels close to 1.40 over the next 6-8 weeks.
I expect intraday dips to be well supported around 1.2950 and if it starts to rally, I will try and stay patient until my targets are reached.
FXWW Select: Members end-of-month homework
Some really fantastic performances this month and let's hope the investment community sees fit to greatly increase those allocations :)
- Particularly for the newer members, please ensure that your strategy description and personal bio are up-to-date on the FXWW Select portal.
- There will be monthly webcasts going forward, focusing on developments in the alternative investment space. All members are automatically invited. There will be guest speakers primarily from the allocation side.
- Non members, both investors and managers, must register to attend these webcasts. This can be done either directly through me or via support@fxww.com.
- As always, feel free to reach out directly to me with any questions or requests.
Cable: Time to be long again
I've been dipping my toes back in the long-GBP market for the last few days and I feel that the upside pressure is about to intensify. Some of the crosses, particularly GBP/AUD and GBP/NZD, showed me that they are trying to base and I am expecting a strong move higher into the mid 1.30's in coming weeks for cable.
Care is always needed with cable, as it's 'noise' can be 200+ pips so we will need to be attentive. But as long as it 'looks bid', I'm going to be long. I have started accumulating near 1.2750 and as always, lets see what happens.
Have a great week.
Cable: Looking to re-enter longs
Lots of Brexit headlines this week have knocked the pound off its perch but I am going to stick to my guns and look for attractive levels to re-enter my long cable play. It's Friday, and there will no doubt be plenty more Brexit headlines in the UK weekend papers, so I prefer to wait until early next week and hopefully pick some up at cheaper levels. I'm not even going to try and speculate where those levels might be, I will wait and see what the market does, but the closer we get to the 1.25 handle, the more attractive it starts to look.
My USD/JPY long play has been a waste of time, energy and resources. It just won't move. I'm close to giving up on that strategy.
The EUR and AUD remain very resilient. I had expected a more aggressive dip but the cross plays seem to be favouring both of these currencies for now.
Targets reached in Cable, AUD/USD and Silver; now long USD/JPY
The 2 big drivers in the FX market over the last few weeks have been the semi-official Japanese buyers of AUD bonds driving AUD/JPY higher, and the reserve managers buying of EUR/USD after the EU bail out announcements.
My targets have been reached in Cable @1.32 and AUD/USD @ .72 and I now feel that there is significant potential for a sharp up-move in USD/JPY. Pretty much all of the JPY crosses look to be putting in interim bases and once the August lull is over, I would not be at all surprised to see USD/JPY trading back above 110.
I'm still of the opinion that cable and Aussie will see higher levels but I prefer to wait for dips and reinstate longs near 1.26 and .68 respectively. But lets wait and see what the market does before committing to definite levels.
For now, I'm core long USD/JPY whilst above 104 and will continue to trade with a bullish intraday bias, buying dips and looking for 50-80 pip session profits.
Still long cable; Silver leads the charge out of USD
Back in the good old days, if silver made 10% gains then the GBP would follow suit but the times they have a changed! The pound has been lagging the other majors (bar the JPY which is on strike!), and it's close to major support levels against the EUR and the AUD.
I'm in the money on my medium-term cable trade and I'm happy to stay long for now. If the market can break back above 1.28 then I feel confident that my interim target at 1.32 will be reached. I will only exit the strategy if we break back below 1.2500 again. I am also looking to buy intraday dips hoping for 100 pip rallies to improve the overall position average.
Elsewhere, the AUD/USD has come a long way since the panic selling at 56c and I feel that momentum may start to wane soon. The surges in iron ore and the precious metals have given the Aussie another leg up but I'm wary of more big risk off events. I prefer to look for a comfortable wide range and play the edges of that eg .68-.74 on the outside.
The big EU stimulus deal could have significant ramifications for the EUR/USD exchange rate and I wouldn't be shorting this pair anytime soon until we get a strong handle on when and where the big money will flow.
Cable: Adding to long position
The signs from the crosses such as GBP/AUD and EUR/GBP are bullish for the pound and I am starting to ramp up my cable position.
This is always the most dangerous time when it comes to position building, as if I get the timing wrong then it's easy to get stopped out.
I have started to add at present levels near 1.2545 and will continue to do so if we start making fresh highs. I don't buy on breaks by the way, I usually wait for the first pullback after the new highs are made.
I'm hoping that yesterdays low at 1.2460 becomes the first marker and stronger support should emerge again at 1.2350-1.2400.
My target for this leg is 1.3200 which I think is achievable.
Cable trade idea updated
This trade has been dragging on for a while and I very much hope that it will be worthwhile. I managed to stay safe last week after a strong bounce off 1.2250 and the fact that EUR/GBP is threatening to to post a top near .9080/.9100 is also promising.
On a less optimistic note for GBP longs, comments from the BoE seem to be paving the way for a move into negative interest rates and although this is not unexpected, it could lead to a rocky start for the pound in early Monday trade. Let's wait and see what happens.
If the market ignores the comments then we should see a test of recent highs near 1.2550. Lets hope that volatility increases.
FXWW Select: More FAQs
I will try to respond individually to all those who have contacted us. In the meantime, here are some answers to more FAQs.
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Q7. What size of personal account is considered 'relevant'? Like everything else, it depends. I would suggest that $5-10k minimum account sizes with usual leverage usage of 5:1-10:1 and occasional managed increases to 30:1-50:1 is acceptable if the risk is managed. Investors want traders who can take controlled market bets but can dial it back when required.
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Q8. How much will I be paid when I get my first allocation? Early-stage traders will not receive a management fee and can expect terms like 0&25, so 0% management fee and 25% of fresh profits, on either a monthly or quarterly basis. Established traders can charge a hedge fund like fee structure, with 2&20 being the usual model.
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Q9. How does FXWW get paid? We act as an agent or a 3rd party marketer if you like. We earn a standard 20% of all fees we generate.
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Q10. Do I need a license? Anything which will add to your credibility is a distinct advantage. Licensing or further relevant education always helps. If you are unlicensed, as most start-up traders are, we will organise suitable regulatory cover.
FXWW Select FAQs
Thank you very much indeed to all who've contacted us after yesterday's registration email.
I thought it might save a bit of time if I answered some of the more frequently asked questions here, but by all means feel free to contact us directly with any individual questions you may have.
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Q1. "What are my chances of being added to the FXWW Select platform?". If you can show a consistently profitable performance record, using a consistent strategy, and you have no skeletons hidden in your trading closet, then I would say the chances are pretty good.
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Q2. "What does a 'good' performance record look like?". For a riskier type of prop trader, the ability to make annual profits of 30-60% using moderate leverage. For a more conservative money manager type, the ability to manage their drawdown profile and deliver solid returns (5-15%) on low leverage .
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Q3. "Who are the typical investors and how much will they invest?". The allocations start from $100k and to be perfectly serious, the upside is only limited by the trader's strategy and their nerve! The investor profiles range from hedge funds through to high net worth investors, from fund-of-funds through financial adviser groups.
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Q4. "Why do I have to pay an annual registration fee of $100?" To try and eliminate as many time wasters as we can!
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Q5. "Is a demo track record acceptable?" NO
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Q6. "How long can it take to be added to the FXWW Select platform?". If you are an ex-institutional trader with a verifiable track record and strong references, you will be added immediately. If you are a self-funded trader with an impressive performance record, in the region of 3 months. If you are a self-funded trader with a limited performance history, you can presume that it will take at least 6-12 months (but don't be discouraged, everyone needs to start somewhere and sometime).
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Good luck to all.
Sterling still looking shaky on the crosses
I'm long cable and 100 pips out of the money. Not an unusual occurrence by any means as in my experience this is one pair which tends to overshoot expected levels by significant amounts.
But, my confidence levels are receding as I've watched and seen the pound continue to slip against the EUR, JPY and AUD and it's time to put a hard stop in place. The overnight low was around 1.2250 and if we break back below there then I will cut and run.
Elsewhere it looks like the noisy markets are set to continue with big orders either side of USD/JPY keeping it rangebound and overly short positioning in EUR and AUD now mainly unwound.
Any big moves are now likely to be driven by fresh US-China headlines.
Time to start building cable longs
For once in my life I've been patient and cable has pulled back to what I consider to be 'good value' levels. The pound has also some decent support levels nearby on the crosses with EUR/GBP resistance at .9050 and GBP/AUD support at 1.8050.
I'm hoping that 1.2350/1.2400 should start to build a base and I've started with a small long position. I don't like running bigger positions over weekends, especially in sterling and especially with another Brexit deadline day looming on June 30th. If it breaks back below 1.22 I will forced out of the trade but a 200 pip risk on a small position compared to 800 pip potential on a bigger position; seems like a good proposal to me.
I am holding off on AUD/USD longs for now as AUD/JPY still looks like it could test levels closer to 70 before steadying.
AUD/JPY: Still prefer to sell rallies for test of 70
My overall big-picture view remains the same. The USD will weaken and I'm looking for good medium-term entry levels back into long AUD/USD and long cable positions. My shorter-term view is a bit different and I expect some noisy sideways markets just like we have seen in the last week or so.
We've just seen AUD/JPY shorts get squeezed and technical stops above 74.60 were triggered. The big levels seem pretty clear here, with big figures at 70-77 providing support and resistance. I prefer to look for exhaustive spikes to re-launch shorts for a final test lower.
I'm a bit annoyed that I missed the buying opportunity in cable near 1.2450 but I expect to get more chances. I'm hoping to build an aggressive long position for a move into the high 1.30s.
AUD/USD should be s/t toppy near .71c and support should be powerful on dips to .67c. Range trading advised until the noise is over.
Ergo, trade of the moment, sell USD/JPY rallies for a move towards 102 in coming weeks.
Here comes the dip!
AUD/JPY has fallen off faster than I had anticipated which has given me my hoped-for dip in AUD/USD and cable.
It's Friday and Wall Street had another shocker overnight, which means that the risk off plays will be front and centre. I'm not exactly sure how far we can go but I hope to start picking up some AUD/USD on the approach to .6735 and my ideal entry levels for medium-term longs in cable look to be around 1.2410.
USD/JPY looks like it could fall off a cliff and I'm staying small short there and will add on the day if bearish momentum starts to build again.
Should be an interesting day :)