Took a small long home ...

... on Friday from 1.3940 and just sold in Far East at 1.4032. Completely square. Account value = $285

Profit taken ...

... on Euro short from 1.4000 at 1.3890. Flat looking for a Friday melt up in stocks and currencies. May try a small Euro long at some point.

An Open Letter to Ben Bernanke

Dear Ben,

You seem to have forgotten what you were appointed to do, and instead, view yourself as the right arm of fiscal policy. If you wish to be a politician, run for office. If you wish to remain a central banker, act like one.

Your mandate is to protect the value of the currency and to ensure inflation remains manageable. It is not to create jobs by attempting to manipulate long term interest rates by printing money. It won’t work. When interest rates are high and inflation and growth are falling, you have some bullets. When interest rates are low and growth and inflation are rising, you have some bullets. Your gun is empty, hombre.

Clearly, you have spent too much time studying a depression that has little relevance to the modern world. High tariffs, closed borders for capital, and insular economies characterized the 30’s. Today, we have a global economy where cross border flows are instantaneous and there are very few barriers to the trade of goods. Today’s slow growth and high unemployment rate has nothing to do with interest rates. When Walmart can borrow for three years at 75 basis points, it should be evident that lower rates aren’t going to have an effect. Companies are not creating jobs despite the abundance of capital that you keep printing. Banks aren’t lending. Why? Because you are giving them risk free profits by lending them money for free and borrowing it back for a couple hundred basis points. Easy game … for them. Raise the Fed Funds rate and see how quickly banks will start lending again.

Please do not cite any further comparisons to Japan’s deflation. The US has very little in common with Japan either economically or culturally. They save, rather than consume, export rather than import, and continually run a considerable current account surplus that acts to strengthen the yen. If you want to learn how to manage our monetary policy, you would do better to compare us to the UK, the poster child for a declining economic superpower displaced by far larger countries in area and population with a hunger and manpower for manufacturing growth. What have they struggled with since America passed them? A continually weakening currency over the long term, and perennially stubborn high interest rates and inflation.

So your bright idea is to quantitatively ease … again. It will have no effect on job growth or wage inflation. That will remain stagnant until the current structural problems sort themselves out, which they will over time. What it will do is drive down the value of the dollar and seriously inflate commodity prices. You should be incredibly alarmed by the current prices of food, energy, and metals. I don’t know about you buy my biggest bills each month are for energy and food. And since wages aren’t going up, I am having a hard time keeping up with those bills. You are crushing the American worker like a python and you had better stop before we can no longer breathe.

Mike Castagna

Dumped the long euros for small ...

... profit. This could get interesting should stocks not hold their gains. Just sold EURUSD at 1.4000

Oddly enough, a good result!

The Euro was at !.3910 and the GBP at 1.5800 when I retired last night and I moved my stops down to 1.3952 and 1.5845 which, upon awakening yielded a small profit in Euro and a full big figure in sterling which I closed out at 1.5747. I don't understand it but I'll take it. My suspicion here is that currencies will continue up for the day and a break of the overnight high in Euro likely leads to a retest of the 1.4155 high. I am long small Euros at 1.3990.

You heard it here first ...

I believe this is an extraordinary opportunity to be long USD (except vs. yen) and am long vs EUR and GBP. Frankly, if price does not drop off from here, there will likely be stop run in moron-land. My stop is above 1.4020. Come and get me donkeys.

Dollar selling is crazed ...

... and no one seems to care what price they sell it as currencies are continually bid through offers. I still think that we are topping and high volatility is a sign of that, as are rapidly changing market opinions. I was stopped out of the Sterling position but have reshorted at 1.5850 and also shorted EURUSD at 1.3965. Truth be told, it feels yucky right now, but tops in these markets are usually profiled with sharp runs higher. I don't have a lot of tolerance for prices higher than these and it could be that the buck is just doomed.

Order to short Sterling ...

... @ 1.5763 with stop at 1.5823

Going flat to watch ....

OK. Scratched the long Euro at 1.3772 but had bought 2K AUS at 96.72 and sold that out as well at 97.49 ..... not really sure what to do but I think that one should be long currencies .... I think I will sleep on it. Account value = $236.94

Profit hit ...

That was an exercise in patience! But did get filled at profit level of 1.3785 and also got filled on entry order at 1.3774. I am now long EURUSD in the amount of 4K looking for a rangy trade into the election and a possible head and shoulders top to form in the euro for a much larger downswing. I will probably dump this position on any sharp moves lower from here. We'll see if equities can come back today which should start the grind up once again.

Have to call this one a close below 1.3960 so ...

I am staying short Euros. Such a shame to have been short from the level I am ... as I really wanted to sell in front of 1.4000. I have a take profit in at 1.3785 and believe that it is likely that EURUSD is carving out a major top. Initially I think it takes the form of a head and shoulders with a neckline at 1.3770 and will probably last until the elections with the right shoulder forming in the lead up as the Euro loves symmetric formations. I will be going long at 1.3770 if we see it.

Still short and not loving it ...

.... but moving averages on the 4 hourly chart have all rolled over and the 50 has flattened out at 1.3955 which coincides with the 1.3960 level which is important. If the euro closes below this level, I will stay short. Else, go flat.

Stopped ...

... for a small loss. In keeping with the program sold bounce in Euro at 1.3895 looking for move down to 1.3775 with a take profit at 1.3785 and will put in a buy order at 1.3778.

Going long Euro

I was hoping to see a stop run beneath Friday's lows for an opportunity to get long EuroUSD as I don't think anything has really changed. I am now long 4K Euro at 1.3924 with a stop at 1.3885. If we continue to sell off, we could easily see 1.3770 which would present a very good level to be long. Let's see how it goes ...

What a surprise!

I did some nice trades Thursday evening in the Far East going home short Euros, taking profit and then getting long overnight and exiting that in London for a tidy profit. I fully expected the rest of the day to be a circle jerk with no real direction with equity option expiration and did not plan on trading but instead helping my favorite girl get her house ready to be sold. Unfortunately, I missed the Euro upmove to my sell zone and, of course, the big reversal! Damn. Not so bad though, as I patiently waited for a bounce, got short Euros at 1.4030 and added below (Total position size = 7K Euros) and exited at 1.3962. I thought it was critical to close below 1.3960 which would have been the first daily close below the previous day's low in almost 30 days. As it did not, nothing has changed. The Euro may have topped, but I wouldn't be too confident of that. I am flat and will see what next week brings. I have a feeling that there will be some interesting yen action but I rarely get too involved with yen. Day's profit = $70ish for a total account value of $194.78 ... that's like 100 lawyers at the bottom of the ocean ... A good start!

Nice Euro upmove ....

I exited the Euro long at 1.4107 and tried to get short higher but was not filled as the high only made it to 1.4123. Account value = $128.06

First Day

Not too bad. Just a little scalping to get the account wet and a profit of $12.60 for an account total of $62.60. My feelings here are that the $ is at an extremely oversold level but I can't say I am necessarily bullish. I'd like to see it trade at 1.4140ish vs the Euro and take a shot there. Having said that, I am long Euros tonight at 1.3945.

Chronicle of $50 to $5K

Hi and thanks for reading! I am an ex trader that has recently gotten back into FX trading on my own from my computer. I've had some limited success and thought to attempt a challenge to turn $50 in an account into $5K. The beginning will be critical as I will certainly be trading in excess of what would be considered good risk management guidelines for position size. That should stabilize with success as the account hopefully grows. Losing fifty bucks off that bat is no big deal but if the account gets larger, it could be. So I will be taking some chances early which will hopefully be mitigated by some long learned skills at scalping with fairly limited risk. Let's see how it goes and wish me luck!