Slow Trader

Tag: Foreign Exchange currency pairs

  • How big is the FX market?

    Most of my trading time is currently in the Foreign Exchange (FX) market, so here’s a potted version of what it’s all about:

    The FX market is a decentralised global market for the trading of currencies. It is by far the largest market in the world with an average turnover of some USD$4 trillion per day.

    The main participants are the larger international banks.

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    And, the largest Financial Centres for these institutions are London and New York.

    The FX market also comprises smaller banks, hedge funds, high frequency trading firms and the smaller trading firms/individual traders. Market share of all the smaller traders together is not more than 5% – but growing.

    Trading is around the clock. Thank goodness the market is closed at weekends.

    Most FX trading is speculative, that is the person or institution that bought the currency has no plan to take actual delivery of the currency; rather they were just speculating on the movement of that particular currency.

    The large majority of currency turnover (roughly three-quarters) involves the United States Dollar (USD), next (but a third of the size) is the Euro (EUR), then the Japanese Yen, Pound Sterling, and further down is the Australian Dollar, the Swiss Dollar and the Canadian Dollar. The remaining currencies have a very small representation when compared to the USD.

    As I currently trade the 5-minute charts, I prefer to trade just one currency pairing: and for me its the EUR USD.

  • How goes it? week 24

    This week most of our shares came up nicely. But it is early days in this swing and we have some way to go (possibly this coming week) to reach our sell targets.

    Our only share to stop out was DaVita Healthcare Partners for a loss of £216. This is still an excellent possibility if I get another buy signal. On this occasion it dropped below my previous buy signal and I took our loss early.

    We are currently in the money in all our other shares:

    ….of note: In the weekly reports I show the points up and down, rather than how much we are up or down monetarily. I find this helps me stay separate from the money emotion of it all. I will trade an amount on each share depending on an acceptable risk level. This is governed by several things but mainly the value of the share. For example BT Group may have £30 per point risked whereas Under Armour has 0.9 pence per point risked…..

    Arm Holding up 7.8 points. This share has provided a lower high and I will move my stop up close or will come out soon for a small profit.

    BT Group up 11.7 points. This share has climbed nicely over the last few days bouncing off a 50% retracement line. We are holding.

    Halliburton up 63 points. In the oil equipment sector. This share came down 70 points on Friday. However, we bought at a good price and the possible up side is well worth risking our present 63 points. I will move our stop however so that at worst we will break even.

    ITV PLC up 6.4 points. We bought this at a good price and the last 3 days have seen a reasonable jump. A hold.

    Moneysupermarket.com up 5.4 points. This took a large drop a week or so ago. It provided a good buy signal for us, and the share moved up nicely during the end of last week. A hold for us.

    Monster Beverage up 35 points. This came down close to our stop. We were lucky not to have a loss on Monster. Price moved up on Friday but we are not out of the woods yet. A nervous hold.

    Under Armour Inc. up 275 points. This has been level for a few weeks. It jumped up nicely a week ago then stayed level again. Stop moved to break even. We will hold.

    Foreign Exchange currency pairs  – I’m still struggling to master the FX market and I’m down on those trades. However, we have made a clear adjustment to our strategy and potential benefits are well worth the perseverance.

    I will include FX in coming weekly reports so you will see the (larger than shares) ups and downs of the market.

    B