Long term euro

Discussion in 'Forex' started by andris, Mar 12, 2010.

  1. andris


    I have just recieved some school loan money, and i want to take 1,000 USD of it and trade for euro. Is it wise to do so? do you think the euro in the long run will continue to rise against the dollar?

    just looking for some tips.

  2. yes my friend u right

  3. Cambist


    I'm not sure it's the best idea if you've never traded currency before. It also depends on how you plan to trade.

    If you're looking to open a brokerage account and buy with 100:1 leverage (pretty common) then you wouldn't be able to put on much size with $1,000 account (probably a max of 20k). The reason being, the pair could definitely move down a couple hundred pips and with 20k position, that's a draw down of $400 on your $1,000. And this is just one scenario.

    Sure there is speculation that the EUR/USD will head back up, but it's not certain. If you simply want to speculate then go for it, but understand that holding a pair for the "long-term" can be a gamble when you aren't constantly managing the position. The FX market is extremely volatile and leverage is aggressive. Coupled, these are some tough conditions.
  4. Gcapman


    TP: 1.3500
  5. the euro is way overvalued versus the dollar, just compare what you get on amazon.com in the US and what you get on Amazon.fr in France and you will see that everything cost 35% to 50% more in Europe.

    This is not sustainable over the long term.

    Add to this that Europe is absolutely not tackling the problems it is facing, acting like an ostrich digging its head in the sand, and you have a recipe for disaster.

    Long term the euro will revert to the price it traded when it was launched, i.e. below 1.

    No amount of political willingness will change this.
  6. clacy


    This sounds like a rock solid plan. I would place the entire loan amount on that position though. It sounds like you may not even need to go to college at all. Just keep adding borrowed money to your winner and you'll be retired in no time.
  7. Gcapman


    bearish 100 SMA crossing below 200 SMA on the daily charts.....

    looks like the Euro might start the beginning of a nosedive at 2:15 EST

  8. Put the loan money in a secure safe (dug in concrete) at home, then forget about it.

    Instead of trading, learn how to become a good pussy licker - its healthier. :)


    goodluck to you, Sir :)
  9. All jokes aside, I looked at the S&P 500 for the period from March, 2009 to January, 2010. I made all kinds of calculations of the kinds of profits I could have captured with various methods with 5 to 6 trades, 12 to 15 trades, many, many trades and one single trade. Believe it or not, the one that would have profited more would have been to buy an out of the money option on SPY and just hold it for that entire time.

    I wouldn't encourage blind investment, but in Mastering the Trade by John Carter, he said some people will put $20,000 in two currency accounts, one long, one short on the same currency and just wait six months. One account will have a blowout with the other account growing to $400,000.

    I just read on Bloomberg that Greece is not out of the woods yet, but given the kind of pessimism that's out there currently, maybe the euro DOES have some potential to move up (even if it crashes in six months, we don't know yet).
  10. Cambist


    In my opinion it would be much more likely to blow both accounts. No joke.
    #10     Mar 16, 2010