1000 + 21.88 - Silver(XAG/USD) brings in the money.
My first day of trading has been quite an adventure for me. I won't say I'm happy over my 2% profit but I'm not disappointed either. I'm just not feeling satisfied as I should have made at least a 10% profit for the day... AND I DID! Well, ALMOST. If I were wise enough to take profit at the right time. *sigh*
Fundamental Analysis
We've a couple of news release worth paying attention today which is German IFO and US Existing Home Sales or a.k.a. Owned Home Sales. German IFO Business Confidence index, derived from a monthly survey of 7,000 executives dropped from a 5-year high to 107.5 from a consensus of 109.0, mainly led my pessimistic retailers. This is mainly due to the fore-coming interest rate hike by the European Central Bank (ECB) and the VAT that was introduced 1st Jan 2007.
US Existing Home sales in December dropped for the first time in 3 months capping the largest annual drop since 1989. Many economists and analyst felt this slide is a sign of bottoming in the housing industry. I would say it's gonna hurt more than this. Even throughout for the past few months I didn't follow the releases of such data, I still feel that US economy will not recover as easily from the damage it's been suffering for years. Even a drop in interest rates has been ruled out at this present moment, but I'm expecting in months to come, US Federal Reserve will at least reduce 25 bps from it's interest rates system. Reasons are simple, if there's no way to outrun the tiger, take the next best way out. Minimizing the damage that couldn't be possibly avoided and hope for a chance of survival. I'd personally won't think so much for the US economy afterall, it's been in deficit for years. It's gonna blow up some day... the thing is when?
The thing that I'm worrying the most is the China over-heating economy. With the latest China's economy grew 10.4 percent in the fourth quarter and inflation accelerated, prompting speculation the central bank will raise interest rates for the first time since August. It could lead to a meltdown and it's gonna be another repeat for another economic crisis. As long as I remembered, world economic crisis happened on 1987, and 1997, will 2007 suffer the same fate? I certainly hope not.
Consumer prices climbed 2.8 percent in December, the most in nearly two years. The world's fourth-largest economy expanded by 10.7 percent in 2006, the fastest in 11 years.
Accelerating inflation may force China to raise rates or take other measures to slow lending growth that is fueled by a record trade surplus. Surging exports swelled the country's foreign reserves to more than $1 trillion and prompted the U.S. and Europe to call for China's currency to strengthen.
Even with the central bank raised rates twice last year and on Jan. 5, inflation in the China economy is growing hotter than ever supported mainly by industries processing raw materials into goods for export.
However, this is where the interesting part comes in. According to Cheng Siwei, vice chairman of the National People's Congress, said today at the annual meeting of the World Economic Forum in Davos, Switzerland, China will import more from overseas,'mainly consumer goods and commodities. This is to control and adjust the super strong yuan from exploding and creating a narrower trade surplus and curb growth in its ballooning foreign exchange reserves.
Story Telling Session
The Asian Market today is pretty peaceful today, Gold traded in somehow like in a zig-zag manner between prices of USD 646 till 648 on average. I would say not much of movements but it would be great scalping the market, which I did not do so because I'm not a good scalper. Silver traded even in a tighter range of 500 pips. It's totally IMPOSSIBLE to scalp the silver market due to the buy-sell pip difference (400 pips during Asian Session). So, it was practically only viewing and no trading. The actions starts pouring in when it's 03:00 EST or 08:00 GMT where London session is starting and the game begins.
As I've mentioned yesterday that I've positioned a trade in Silver or XAG/USD at 13.3000, after analyzing the market in Asia of the price movements and news, I've decided to make an early entry. I modified my trade from 13.3000 to 13.2300. The trade was triggered a couple of hours before London open and was well supported within that price level. 30 minutes before the London opening, the first rally of the day start and I was in it! I ride the first wave up to 13.3380. I moved my stop loss from 13.2000 to 12.2800, securing my 500 pips of profit. Then making the next move of riding a wave is placing another trade at 13.43000. It never made it and went back down triggering my stop loss. This is where the 21.88 profit comes from.
After the trade is closed, I was observing the market closely looking for another opportunity entry. I was looking for a dip buying but the strength in silver was so amazing that I didn't managed to get a price at 13.3000, and before I knew it, it's back on 13.3450. Judging of the momentum and the swift recovery, I place a trade at 1.35000, and it was triggered the next minute. It went up without showing any sign of exhaustion even there's a consolidation period just right before New York market opens at price estimate 13.4000. I held my 13.3500 trade until 13.5500 where it triggered another trade and it went straight down. I moved my stop loss to break even at 13.4500. Which in the end, I end up nothing... This is where I've learnt another lesson in my trading experience. Anyway, I'm looking forward to bring in more profit and targeting a 20% profit by the end of this month. This is my near term goal and I'm looking forward to it. Sounds tough since I only have a couple of days left before it's February.
So guys and girls, HAPPY TRADING and may you gain something from the experience I had today.
Apology note*
I personally thinks that my post today is not really as professional as it should be. I feel that I could possibly do better as I'm getting back to blogging my trades. And currently I've no next trade I'm planning to enter. So I can't update my next trade moves tonight. Sorry to everyone. =(
Fundamental Analysis
We've a couple of news release worth paying attention today which is German IFO and US Existing Home Sales or a.k.a. Owned Home Sales. German IFO Business Confidence index, derived from a monthly survey of 7,000 executives dropped from a 5-year high to 107.5 from a consensus of 109.0, mainly led my pessimistic retailers. This is mainly due to the fore-coming interest rate hike by the European Central Bank (ECB) and the VAT that was introduced 1st Jan 2007.
"The fundamental weakness in the economy emanates from the consumer" said Julian Callow, chief European economist at Barclays Capital in London. The retail sector is stagnating in Germany. The impending ECB rate increase is looking premature without evidence of an improvement in private demand. - BloombergI personally do not expect ECB to raise interest rates in February as the current economy in the Euro-zone is not as in much desired state.
US Existing Home sales in December dropped for the first time in 3 months capping the largest annual drop since 1989. Many economists and analyst felt this slide is a sign of bottoming in the housing industry. I would say it's gonna hurt more than this. Even throughout for the past few months I didn't follow the releases of such data, I still feel that US economy will not recover as easily from the damage it's been suffering for years. Even a drop in interest rates has been ruled out at this present moment, but I'm expecting in months to come, US Federal Reserve will at least reduce 25 bps from it's interest rates system. Reasons are simple, if there's no way to outrun the tiger, take the next best way out. Minimizing the damage that couldn't be possibly avoided and hope for a chance of survival. I'd personally won't think so much for the US economy afterall, it's been in deficit for years. It's gonna blow up some day... the thing is when?
The thing that I'm worrying the most is the China over-heating economy. With the latest China's economy grew 10.4 percent in the fourth quarter and inflation accelerated, prompting speculation the central bank will raise interest rates for the first time since August. It could lead to a meltdown and it's gonna be another repeat for another economic crisis. As long as I remembered, world economic crisis happened on 1987, and 1997, will 2007 suffer the same fate? I certainly hope not.
Consumer prices climbed 2.8 percent in December, the most in nearly two years. The world's fourth-largest economy expanded by 10.7 percent in 2006, the fastest in 11 years.
Accelerating inflation may force China to raise rates or take other measures to slow lending growth that is fueled by a record trade surplus. Surging exports swelled the country's foreign reserves to more than $1 trillion and prompted the U.S. and Europe to call for China's currency to strengthen.
Even with the central bank raised rates twice last year and on Jan. 5, inflation in the China economy is growing hotter than ever supported mainly by industries processing raw materials into goods for export.
However, this is where the interesting part comes in. According to Cheng Siwei, vice chairman of the National People's Congress, said today at the annual meeting of the World Economic Forum in Davos, Switzerland, China will import more from overseas,'mainly consumer goods and commodities. This is to control and adjust the super strong yuan from exploding and creating a narrower trade surplus and curb growth in its ballooning foreign exchange reserves.
In pure economic theory, the yuan should be stronger, but we don't live in a purely theoretical world,'' William McDonough, vice chairman of Merrill Lynch & Co. and former president of the Federal Reserve Bank of New York. A freely traded yuan ``would be a brutal hit to a financial system that isn't ready for it.'"So, this again proves that commodity market will be on the bull run for a very LOOONG time. I'm putting a bet in the commodity market. Are you?
Story Telling Session
The Asian Market today is pretty peaceful today, Gold traded in somehow like in a zig-zag manner between prices of USD 646 till 648 on average. I would say not much of movements but it would be great scalping the market, which I did not do so because I'm not a good scalper. Silver traded even in a tighter range of 500 pips. It's totally IMPOSSIBLE to scalp the silver market due to the buy-sell pip difference (400 pips during Asian Session). So, it was practically only viewing and no trading. The actions starts pouring in when it's 03:00 EST or 08:00 GMT where London session is starting and the game begins.
As I've mentioned yesterday that I've positioned a trade in Silver or XAG/USD at 13.3000, after analyzing the market in Asia of the price movements and news, I've decided to make an early entry. I modified my trade from 13.3000 to 13.2300. The trade was triggered a couple of hours before London open and was well supported within that price level. 30 minutes before the London opening, the first rally of the day start and I was in it! I ride the first wave up to 13.3380. I moved my stop loss from 13.2000 to 12.2800, securing my 500 pips of profit. Then making the next move of riding a wave is placing another trade at 13.43000. It never made it and went back down triggering my stop loss. This is where the 21.88 profit comes from.
After the trade is closed, I was observing the market closely looking for another opportunity entry. I was looking for a dip buying but the strength in silver was so amazing that I didn't managed to get a price at 13.3000, and before I knew it, it's back on 13.3450. Judging of the momentum and the swift recovery, I place a trade at 1.35000, and it was triggered the next minute. It went up without showing any sign of exhaustion even there's a consolidation period just right before New York market opens at price estimate 13.4000. I held my 13.3500 trade until 13.5500 where it triggered another trade and it went straight down. I moved my stop loss to break even at 13.4500. Which in the end, I end up nothing... This is where I've learnt another lesson in my trading experience. Anyway, I'm looking forward to bring in more profit and targeting a 20% profit by the end of this month. This is my near term goal and I'm looking forward to it. Sounds tough since I only have a couple of days left before it's February.
So guys and girls, HAPPY TRADING and may you gain something from the experience I had today.
Apology note*
I personally thinks that my post today is not really as professional as it should be. I feel that I could possibly do better as I'm getting back to blogging my trades. And currently I've no next trade I'm planning to enter. So I can't update my next trade moves tonight. Sorry to everyone. =(
Labels: commodity, currency discussion, economic discussion, forex, forex discussion, gold, silver, strategy, US economy, usd fundamentals, XAG/USD, XAU/USD
posted by 4xTrader at
12:00 PM
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