Now I am getting a wee bit confused.... its day 5 of me on Forex Trade but in actual fact it has only been 3 trading days... so from now I will rename it to Day 3.
Today has been a bag of mixed fortunes. At day's end I still register a gain in profits of close to 27% returns, but a caution today, I cannot trade as much as I like...
Reason: I took up GBP positions today and at first sight, it wasn't a bad decision, just a bad day. For most part of the day GBP was trading between the range of 1.6490 - 1.6540, a healthy volatile range. It has been edgy as I waited for it to go down to close my earlier positions but it hovered stubbornly above the 1.6520 level. After some time when it does go down and after I have cleared my positions, I thought, well, no news is good news... well, never thought the news of Bernanke making a QE3 announcement this Friday would cause any trauma to the market. QE3 is a term the Yanks use for Quantitative Easing, whereby the government buys up bonds and bills.... in simple layman terms, print more money to pump prime the economy, and it seems to be in fashion right now, the 3 merely indicates that this is the 3rd ROUND! Now, how can printing money cause the USD to appreciate? Beats me. Anyway, I was buying positions at 1.6486 all the way down, thinking that it would appreciate back to the 1.65 level... unfortunately, that was not to be. It plunged down till 1.6320 level and I was staring at holding losses of USD190 which almost wiped out my entire profits for the last 3 days of trading with a free margin of USD100+. Safely, I thought, lets incur some swap cost and hold till the next day.
End of trading day 3:
Balance: USD335.72, Profit for the day: USD70.65, Percentage gain: 26.65%
Hanging over my head is my total of 2 standard lots of GBP bought at an average of 1.645 or so. Well, there is still room, but, I will start praying.
The good news is its starting to recover the morning of day 4 but still early to tell or sell as the lowest I bought was about 1.6381... just imagine the look on my face when it dropped till 1.6320. I wanted to buy further but looking at the margin, I thought, lets keep it safe, I wait.
Day 4 will be crucial as I do not intend to incur anymore swap cost but on the other hand, I would still want to target some gains to be consistently making everyday. Praying for the best and preparing for the worst... still wondering what is the worst or how it looks like.... well, I hope I will never find out.
Key news that probably spook the market:
1. Bernanke's Jackson Hole's Friday statement on QE3 rollout.
2. Steve Jobs quit Apple but stay on as Chairman
3. Stock market continue to recover, CME implemented higher margin restriction on trading of Gold. Gold dropped from its records level to 1740/oz from a high of more than 1880/oz.
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