But it's only a couple of months since the Jap's were saying exactly the opposite that "the carry trade is not only a one way bet" or some-such....
I am not in my trades because of carry trade unwinding or winding. I am in my trades because the price trend is UP in the YEN and DOWN in the AUS for the short term that is. I was originally commenting that I feel like I am trading the stock indexes instead of currency lately. Strange times.
My point is all trends are based on past historical price action. You can not follow something that has already happened. You can interpret the past price action and make a prediction what will happen in the future. Mechanical trend followers say they just follow and react to the market and in reality they are no different then fundamental traders. They just leave the predicting to their mechanical model they are using to trade. Traders who truly do not believe that their trading does not involve predicting or having a "view" will leave profit on the table. For you it maybe over looking a more efficient trading model because of this perception.
makes sense to me that lowering of interest rates globally to "back up the U.S" would result in the carry trade ending.
Sperandeo, the greatest US based trend trader in my view and the one that influenced me the most, was very careful to say, particularly in his second book, that he always maintained a view. In fact, if I recall correctly, he said he even had a daily outlook. I always interpreted this to mean he watched newsflow carefully.
This was a good thread, that I was sorry to see end. I always have a view too, but unfortunately for me, it is wrong more than right. Now that it is a month after the last posting, there must be something to add. It sure was an interesting month! My plan was to buy and hold long the NZD/JPY just for the carry, when it was around 81. I did that, but exited early, due to the lack of good indicators. Another reason was the fundamentals were pointing in the other direction then. Now that it is around 87, that would have been a nice & easy 600++ pips, not to mention all of that interest gravy, if I had stayed with it. My view was right, but went wrong later. That was the 2nd time this month that the market did not do what the fundamentals and news suggested it would do. It looks like a technical approach might be better now in this market. I certainly need some better indicators. Preferably, some leading ones... Any suggestions? What about the Yuan? That's another thread by itself.