The Justinian

Reuters has posted a fairly exhaustive sampling of key currency analysts’ viewpoints on how global warming will affect the FX markets.  They single out the CAD as a major beneficiary given the fact that Canada may in future provide fresh water for many major western countries and be as important in that market as Saudi […]

This issue is one of the more divisive in the trading world. Few traders have a middle-of-the-road view on it, and perhaps with good reason. Some of the most notorious hedge fund collapses in history, including Amaranth and Long Term Capital Management, have been partly blamed on strategies that involved “throwing good money […]

For newbie forex traders, a mere mention of the term Non-Farm Payrolls (NFPs) brings delusions of grandeur. Fifty points or pips made in 50 seconds, that kind of thing. For stock traders, NFPs stand for fear perhaps more than anything else, as huge market swings can occur before the market open. This leaves most equities […]

Traders are often overly sensitive to words springing from the mouths of politicians and government economists. This is no different for those tracking the New Zealand (or “kiwi”) Dollar, where last month Finance Minister Cullen talked down the country’s currency and caused a 150-pip drop. Those buying up kiwi-denominated assets for their attractive yields were […]

Central bankers, especially in the US and Eurozone, try to be as methodical as possible. The market, however, tends to overreact to near-term news and get out of line with real central bank expectations. Weeks ago, the markets had priced in that the Fed would not hike again, and might even pause prior to the […]

In a world where a charting package is considered inadequate if it doesn’t have 200+ indicators, I find that basic charting and observation of price action simplifies the process. The most basic ideas allow information on the market participants’ sentiment to shine through. Reading market sentiment is the essential premise behind technical analysis, and basic […]