Trade Forex Fundamentally

[fxmonk]

Hi there. My name is Kris Matthews and I'm a researcher, entrepreneur, and forex trader from New York. I've learned most types of trading in forex, including technical, news, fundamental macro, and behavioral trading. I've been fortunate enough to have friends from the institutional trading world who have helped me become a better trader and would like to share my style of trading on this thread in the form of a journal with my weekly analysis on the market.

Each week I publish a video on my youtube channel explaining:
1. What brought price to where it is now
2. What are the positive and negative factors for a currency pair
3. What issues could come into focus

I'll post a few of the videos on here to see whether it's valuable to you all and if I get a good response I'll continue to post. I welcome any questions you may have as well!

All the best in your trading,

Kris Matthews

 

[fxmonk]

Euro, 3 Dec 09

[HTML]<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/G9GTwfGFR9M&hl=en_US&fs=1&rel=0&color1=0x2b405b&color2=0x6b8ab6"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/G9GTwfGFR9M&hl=en_US&fs=1&rel=0&color1=0x2b405b&color2=0x6b8ab6" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>[/HTML]

I tried to embed the video here but if it's not showing, the youtube video can also be viewed directly:

 

[Yamato]

Did you ever think of using some (or all) of the things into one fully automated system that makes money? Or do you think that cannot be done? I am not talking about high-frequency trading looking for inefficiencies, but about a system that tries to predict where the market will go and then places a bet accordingly.

 

[fxmonk]

Hi Travis,

I thought of that, but it seems like there are just too many variables in that case. I try to simplify things where possible. Are you referring to a mechanical system, or automated system? I'm a bit unclear. Thanks for your post!

Kris

Did you ever think of using some (or all) of the things into one fully automated system that makes money? Or do you think that cannot be done? I am not talking about high-frequency trading looking for inefficiencies, but about a system that tries to predict where the market will go and then places a bet accordingly.

 

[Yamato]

That's why I said "some", to mean that most likely by the fundamental analysis you do, you won't be able to use all your ideas in one system (and won't be able to implement some of those ideas in any system), but maybe some of those ideas can be automated, and I wondered if you ever tried or thought about it.

What I mean by "fully automated" is that you just turn the program on and let it run until you turn it off, and it does everything for you, and you never have to change its parameters.

Another question is how do you handle situations where you lose money? Do you have a "predetermined maximum loss"? I ask because I have only recently understood that concept.

 

[gamma]

Each week I publish a video on my youtube channel explaining:
1. What brought price to where it is now
2. What are the positive and negative factors for a currency pair
3. What issues could come into focus

Isen't that just hindsight.

 

[fxmonk]

Isen't that just hindsight.

Hi Gamma,

Sorry for the late reply, I've been away on travel. Yes the first is the past, the second is the present, and the third is the future. The reason why I consider the recent past is because it puts everything that is happening or is going to happen within context. Thanks for your comment.

Kris

 

[fxmonk]

Re: Euro, 3 Dec 09

I'll do today's "Outside the Box" Forex strategy video is on the British Pound. This currency has been taking a beating lately, despite the weak fundamentals of the US Dollar. We have a short bias on the GBP/USD pair for the time being, and are aware that any shift in perception to the Pound being a "discount buy" or signs that the UK government finally confronts the enormous deficit issue will lead to a shift back to GBP positive sentiment. I hope the youtube video shows up below:

 

[fxmonk]

Ok, no video this week. It's getting toward the end of the year and moves aren't reliable because of thinning liquidity. For right now it looks like the Fed is hinting at a strengthened bullish view of the economy but interest rates will still remain low. The Dollar increased on this and has been doing so lately on any US-supportive news: this is a change in price dynamics to watch out for. If currencies such as AUD continue to go down I would stay out of their way until a recovery emerges or things calm down. The market can't be trusted right now. See you after the new year!

Kris

 

[fxmonk]

Happy New Year! This is the first video entry since the beginning of the year because I was travelling through Thailand for a late vacation and wanted to take a break from the markets. Now I'm back in full swing and I'll be sharing my views and rationales for currency sentiment. Here is the entry for this week:

<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/xkOWnp4XEak&hl=en_US&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/xkOWnp4XEak&hl=en_US&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>

 

[zaprietas]

Hello and welcome back
I have few questions and if it's not hard for you maybe you can answer them.First is about Time Frames for how long do you hold a position?How do you Enter/Exit trades?How do you connect all economic indicators?

Thank you for the answers.

 

[fxmonk]

Hi Zaprietas,

Thanks for your welcome back. It helps to hear from people like you! As for time frames, I don't like sitting in front of a computer all day to trade, so I hold longer time frame trades. Some last a day and some last 3 weeks but on average I'd say about a week for my standard trades, but if a really big move happens after an imbalance had been developing I might hold for 2-4 weeks. I enter when price starts moving in my direction on a daily chart after I've confirmed that sentiment is changing. You can look at more details on my strategy on my blog (the pdf reports), but if not, just keep asking questions here so everyone can learn at the same time.

Thanks for asking, talk to you soon!

Kris

Hello and welcome back
I have few questions and if it's not hard for you maybe you can answer them.First is about Time Frames for how long do you hold a position?How do you Enter/Exit trades?How do you connect all economic indicators?

Thank you for the answers.

 

[fxmonk]

This week's video is on the Yen. I don't think there's a trade quite yet, because the factors for positive and negative sentiment are almost equally weighted, BUT, a big imbalance is developing between Yen and Yen futures positioning (as can be seen with COT data). If we're patient we might be able to catch some nice pips. See the video:

Kris

 

[fxmonk]

OK USD/JPY is starting to stabilize. I've put on some small long positions that are starting to pay off and I'll start adding more soon. Sorry that I didn't put out a video this week- I was busy providing analysis on my blog. I'll post one on Monday so you'll be ready for the following week. A lot of people are confused in the markets- this is great, because it means there's opportunities!

Talk soon

Kris Matthews

 

[fxmonk]

Usd/jpy

Aah, I missed monday again- Mea Culpa!

Long USD/JPY positions are starting to develop nicely and sentiment is still positive. We'll see how this plays out. See my reasons for getting in in the video.

Kris Matthews

 

[fxmonk]

Ok here's this week's release. I'm still bullish the USD/JPY. I've been making good money except for one loss that happened in the last few days. Be careful about following the daily upswings and downswings. Hopefully this video will give you a better perspective by allowing you to "zoom out."

-Kris Matthews

 

[fxmonk]

Something to look at as we're waiting for the long USD/JPY trade to develop is a long AUD/USD trade. Currently the only thing that has been weighing down currencies against the dollar has been the politics in the UK for the pound and the Greece sovereign debt problem for the Euro. These are both risk events which should normally shoot down currencies such as the Aussie, but it has remained strong. Further reasons (ask if you don't understand or see this): 1. AUD COT data shows that traders are still net long and increasing, 2. AUD is strengthening individually against most other currencies while the dollar is falling individually against most other currencies. Opinions? I put on a small position to test this out. Short Yen position has been profitable despite the fall. Keeping it simple for now...

Kris

 

[fxmonk]

No "Outside the Box" trading video this week. I'm long Aussie and long USD/JPY. Looking at Gold also because sentiment seems to be returning back to "recovery mode" which is bullish for currencies and negative for the Dollar. If you notice, the only reason for the latest dollar and yen rallies have been risk aversion due to such issues as the Greek sovereign debt problem. The market's reaction to new negative develoments is getting less and less each time, showing that sentiment is becoming positive for the pairs I mentioned above.

Let me know if you have Qs.

Kris Matthews