Discussion in 'Trading' started by tradingjournals, Jul 25, 2011.
Are we there yet? How far is it?
EUR/USD at 1.4475. I am rooting for Uncle Sam.
How should we interpret the lack of interest in this dollar thread, when the thread was initiated at the dollar's worse pricing area?
There was a sharp move today, but the "experts" on bloomberg have been saying the dollar was going down further. What should we make of it? Do they know more than I (and possibly you) do not know?
Just for the record: the trend of the dollar has been down. I am mentioning it so that if the future trend were to become up, they cannot state the "follow the trend" thing. If the dollar continues down, they cannot claim it either, because they did not state anything so far, particularly since under continuation scenario, today's move would be bounce.
My personnel view is that trend following is an illusion, and true only in hindsight.
It is quite easy to predict what direction the dollar will move assuming various scenarios in U.S. policy. It is impossible, however to predict with much certainty either policy changes or the rate of change. The best one can do is expect the current direction to continue until a crises requires a substantive change, and at the same time assume the policies in other important economies will also continue as they are.
A worse outcome for the U.S. would be for a sudden policy change to create a crises, rather than the other way round. I would not expect this, a sudden policy change that is.
Better outcomes are possible, but they seem somewhat unlikely if one listens to the media. The media however, just as common wisdom is, is quite often wrong.
Soros said about 18 months ago that he knew "exactly" what the dollar would do. I assumed, at the time, that that meant he expected no substantive change in either U.S. policy or that of other leading nations (especially the EU, Japan and Asia), since that is the only way he could know "exactly" what the dollar would do, unless of course he had inside information about a policy change that the rest of us were not privy to. By policy. I mean fiscal, monetary, and trade policy. But of course there are other area of policy that can have an indirect influence, such as social, agricultural, judicial, and military.
What bothers me is that we hear very little about CDS's insuring PIGS debt that may have been sold by U.S. entities.
My weekly and monthly indicators indicators continue to warn of significant USD upside and opposite for EURUSD.
Bring on the overdue dollar rally . . .
The bottom of the dollar against what?
gold? EUR? GBP? CHF? JPY? AUD? CAD? $DXY?
The answer to your question will vary greatly depending on what you measure it against.
against the other currencies mentioned above, and also gold in some time frame, but not infinite time frame as all currencies lose value against hard assets.
There are currencies that would do better than the dollar, but there are not in your list.
I believe that Soros did not know anything about what he said he knew about. I watched the video where he said it sometime ago. I do not believe Soros to be a good trader either. He strikes me as a low caliber as far as thinking and farseeing goes, but he was rendered famous because of cash, and media.
How did he make it then?
Here is how I would have done it if I were him.
I would hire say 50 people. I would divide them in two groups. The 2 group have to hold opposite views. In each group, each trader would have a vision, and an implementation of the vision (both developed by the trader so he can stick to the plan).
I would split the cash among them, and then add to the winner guy(s), and cut the losers (reducing money and firing them).
That is called a straddle-- not the tradditional straddle but still a straddle.
Connections would bring money at the start, and with the fame of at least one of the traders (which is guaranteed because of legs of the straddle) more money would come.
But the guys hearing/watching "me" might confuse the above with being a good trader with grand vision.
If one has the seed money (it is significant money), could you tell me why the above theory/plan would not work to make one a "famous trader"
The dollar was originally made as a certificate which guaranteed it could be exchanged for its written value in gold. A few hundred years later, the growing US government began printing paper money for the sake of printing paper money, and, even though it still indicates that it has value, the fact is there is not enough substance of true value (i.e. gold) to account for the total of all the printed USD's.
So where's the bottom? Eventually the dollar will reach the value of kindling. Maybe not in our lifetime, but eventually.
Have you lost your fucking mind?
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