EURO, CAD, AUD & NZD Stay Low (Bloomberg March 6th 2012)

March 6th 2012, Monami Yui, Masaki Kondo, Chris Fournier & Mariko Ishikawa, Bloomberg.com

Hey friends,

Hope you guys had a great weekend. 

Just some news that we received today from Bloomberg:

1) After a 4-day decline, the EURO still remains low against the Yen (Yui & Kondo, 2012). 

    “Buying the euro makes no sense,” said Marito Ueda, senior managing director in Tokyo at FX Prime Corp. (8711), a currency margin company. “The European Central Bank is tied up with tackling the region’s sovereign-debt problem and has no room left to bolster the economy through monetary policy.”

- Yui & Kondo, 2012

2) Although gained last week,the CAD was at its lowest in almost a week against the USD and dropped for the first time in five days after the Yen (Fournier, 2012). 

3) The Australian and NZ Dollars remained low after raw materials prices fell (Ishikawa, 2012). Hans Kunnen, chief economist at St. George Bank Ltd. in Sydney, implies that the AUD & NZD are tied with Europe and should it decline further, it may bring the RBA (Reserve Bank of Australia) down with it (Ishikawa, 2012).

To read the full articles, go here:

Euro Remains Lower Against Yen Before Europe GDP Report, U.S. Jobs Data

Canadian Dollar Declines for Second Day as China Derails Investor Optimism

Australian, New Zealand Dollars Remain Lower After Commodity Prices Drop

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Aussie Touches Nine-Month High (Bloomberg March 2nd 2012)

March 2nd 2012, Kristine Aquino, Bloomberg.com

Australia’s dollar reached a nine- month high versus the yen as an improving global growth outlook spurred prospects the Reserve Bank will keep its key interest rate unchanged next week (Aquino, 2012). 


The Aussie Dollar strengthened against 13 of its major 16 counterparts this week.


“I do think we’ll see a holding pattern” from the RBA, said Kara Ordway, a foreign-exchange strategist at City Index Asia Pacific in Sydney. “The Aussie is certainly looking good" (Aquino, 2012). 


To view the full article, click here: http://www.bloomberg.com/news/2012-03-02/aussie-touches-nine-month-high-versus-yen-as-rba-seen-to-hold-rates-steady.html

Stop Loss, Risks & Standard Lots

Hey Everyone,

Just some update on some matters that caught our attention the past week (thank you for those you gave feedback).

Here are the questions that we have received:

1) How do I determine my Stop Loss?

2) Risks and Standard Lots. How do they play a role?

I'll start with part 2.

The Golden Rule for traders is that you must NEVER trade more than 3% of your capital per trade. Do not trade more than that. 

To minimize your loss, I also mentioned about your Lot Sizes remember that? :) 

Lot Sizes are the number of units we trade. 

1 Standard Lot = US$10 

To determine an appropriate Lot Size I recommend for you to follow this formula:

Lot Size =           Risk x Capital             

                (Stop Loss Pips x Pip Value)

Example: 

Risk is 3%

Capital is US$5000

Stop Loss Pips (number of pips from your Entry Point to Stop Loss) is 30 pips

Pip Value (as usual) is US$10 per pip

Therefore: 

Lot Size =    0.03 x 5000   

                     (30 x 10)

             = 0.33 standard lots

Now how to determine the Stop Loss?

Always remember that YOU MUST NEVER GO MORE THAN 3% risk. 

So if Risk is 3%

Again if Capital is US$5000

  3    x 5000

100

= US$150 

and if it is 1 pip = US$10
and number of pips = x

   x =  US$150

            US$10

   x = 15 

For this example you should put your Stop Loss 15 pips below your Entry Point. 


I hope this helps some of you. Always remember the 3% risk and do not predict, always react (Mario Singh). 


Subscribe to our blog to get immediate updates. 


Regards,
Joe 

Euro Set for Weekly Drop (Bloomberg March 2nd 2012)

March 2nd 2012, Masaki Kondo, Monami Yui & Arif Sharif, Bloomberg.com

According to Bloomberg today, the Euro is set to a weekly drop among its major peers as the 17-nation currency has the weakest growth prospects globally (Weber, cited in Sharif, 2012). 

The Euro maintained a 2-day decline versus the Dollar after reports on manufacturing and unemployment reports yesterday contributed to the fact the European debt crisis is hurting the overall economy (Kondo & Yui, 2012). 

“The European economy is already in a recession, and the only question is how bad the recession gets,” said Robert Rennie, chief currency strategist in Sydney at Westpac Banking Corp. (WBC), Australia’s second-largest lender. “We do not have a growth plan in Europe. That certainly weighs on the euro" (Kondo & Yui, 2012). 

Also, the Yen and Dollar are set to weaken. 

According to John Taylor, founder of currency hedge fund FX Concepts, told Bloomberg that the yen is “the ugliest of the ugly.” He said Japan is in a situation which is “really not very pretty" (Kondo & Yui, 2012). 

To read the full articles, click here:

Euro Set for Weekly Decline Amid Signs of Economic Slowdown; Yen Near Low

Euro to Depreciate on Low Growth

Yen Dollar Weaken Against Euro as Gains in Asian Stocks Sap Haven Demand

Dollar, Yen Fall on Signs of Manufacturing Growth (Bloomberg March 1 2012)

March 1st 2012, Monami Yui & Masaki Kondo, Bloomberg.com

Due to the U.S. manufacturing index rising, the dollar and yen weakened today (Yui & Kondo, 2012).

After the drop, Japanese companies' capital spending jumped by the most in almost five years causing higher-yielding currencies such as the Australian and New Zealand Dollar to rise.

Australia’s dollar gained 0.3 percent to 87.34 yen and climbed 0.2 percent to $1.0758. New Zealand’s currency added 0.3 percent to 67.88 yen. It bought 83.63 U.S. cents, 0.3 percent higher than its close yesterday (Bloomberg.com 2012). 


To read the full article, click here: http://www.bloomberg.com/news/2012-02-29/euro-remains-lower-before-european-union-leaders-meet-on-crisis-ism-data.html