Morning update: 4th December 2015

Good morning. Well its not really that good a morning as I see that the green trade i left yesterday is now in the red, but I had no intention of closing it yesterday as I felt there was more profit to be had (we will come to this point later.)

Anyway, as many of you no doubt know, against our expectations, the EURO rallied yesterday like a rocket after Mario Draghi and co left the QE amount unchanged. This caught the market by surprise given Mario’s speeches recently and his use of very direct language “we will do everything we must”. The market reaction clearly shows that many of us got the complete wrong idea from him. Those of you who claim you knew this would happen, 99.9% of you did not and got lucky with those month old positions, let us be honest here. You did not outwit all these respected economists with you talent, it was purely by mistake.

Anyway Mario’s actions bring up two questions:

1.) Did he fail to communicate effectively with the public?
2.) Did he mean what he said but then fail to win over the rest of the members?

Whichever of the two it is, one thing is clear. This is the first time Mario has failed to deliver on his words and in future I suspect the markets may not take his speeches for granted as they have in the past. In short, his words on monetary policy will not be seen as absolute anymore. Bear this in mind when listening to his future speeches.

Anyway onward to today and why we left the NZDUSD sell open. Quite frankly, I remain bullish on the US employment data (NFP’s) and intended to leave this trade open till this evening to capitalize on this. In addition while the trade is moderately red, it poses no danger to our account and is not in danger itself at this time.

Why I am i bullish on NFP’s, well there are a number of reasons.These include Comments by Yellen that 100K jobs would suffice the labour market at the moment. Bear in mind that today’s data is expected to show in the region of 200K and with productivity meeting expectations, it is not likely to be far off.

On the back of this I have opened a EURGBP sell. This is because I feel EURUSD pair will fall more given strong US data than the GBPUSD and I intend to benefit on the EURGBP cross falling as a result. In addition I have an order in to buy the USDJPY should it reach adequate levels before the NFP’s.

Presently, the account’s equity is up 2.8% this week, which is not bad considering our current red trades and the fact that everything this week went against our expectations. It is actually quite good that we are still in profit for the week at this point and I am proud that I can attribute that to sticking to my strategy and not giving in to a dozen or so odd people who copied yesterday and then left moaning after I refused to open more trades for the sake of opening trades. Its always amazing that certain people come late to party and then expect 1200 others to change their beat to suit them. I guess these guys must feel important in their own way 🙂

As always good luck to everyone today,



  1. Thanks Mo for your thought!
    Beside you I have copied one guy and he has opened CHFJPY sell now losing about 380 pips. And I blindly followed him to cover my loss on VOW3 last week. Each day this pair go up for about 120 pips, and today, given NFP and US matters, what is your advice for me: stop the sell position on CHFJPY now or wait a bit longer (if today it with hit another 100 pips to reach my SL)?

    1. Hi, I know the question is not directed at me but I have similar positions (is it me the guy you copied??).
      Now to the point. Different currencies have different volatile. The Yen is volatile. The Swiss Franc is highly tied to Euro rates. Hence the sharp raise yesterday.
      In my case, I keep these positions for the following reasons :
      – Swiss Central Bank have negative interest rates
      – The unexpected sudden rise of the euro is now above it’s normal appreciation level in the given circumtances
      – Japan, amid its trouble, amid a solid economy that output decent numbers and the Central Bank still have positive interest rates
      – In case of international trouble, the Yen is still seen as the de facto safe currency
      – If you look at 10 year chart about chf/jpy you see we are at very high levels for this pair, and that it started falling for month now in the very same conditions we still see.

      But then, nothing is for sure.. just my plan.

    2. For completeness, I wanted add it is rarely a good idea to copy trades without understanding what’s the reasons behind it.
      You cannot know what the situation of the trader is. Is he opening just to have fun with a bet? Do he have copiers he want to lock for some time? Did he do his homework?

      At the very least I would recommend asking. You see by the answer if the position was taken on some reasonable assumptions and if you agree with that. Beware of the people giving the talk tough. If they drow you in technical terms, obscure calculations, they are just trying to look “pro”. When someone have a reasonable understanding of what he is doing, he can explain it simply.

  2. Thanks for the update Mo. On a side note, there was a post from you yesterday that I cant find any more- you wanted it, here it is. Was it deleted?

    Thanks Mo.

    1. Not deleted, temporarily put in drafts till the community figures how we want to handle it. Its great news but also comes with a severe limitation. You can find out more on the forums.

  3. Hi Mo,

    what can we see with Euro and our positions? That you are one of the very few trader who came through this year in green every month. Forget the Dollar bulls, the Euro bulls, what matter is green =D

    On the ECB side, do you think it is possible that the situation in Europe simply doesn’t need an extended QE? That would explain the “Whatever it takes” and then “Ho well in the end we are good for now”.
    As a side note I’ve read something about the Germans wanting to stick to orthodox financing method i.e. no easing, winning the hard way
    (For those interested, the modern orthodox economy have been devised by Milton Friedmann. A lot of material can be found online, pro and cons)

    1. In all honesty, many think that this is not enough to raise inflation. Many are speculating that Draghi lost control of the group who wanted to wait and see what the US would do first. The Euro bulls were lucky in this case, they got the 5% outcome which nobody saw coming. If we are honest, most of them had no game plan and were sitting there panicking. Many still got SL’d in the last two weeks and some came within a hairs grasp of it yesterday. I am sure those who survived will all say they had a plan or they had it under control because it takes a big person to admit mistakes. Fact of the matter is, luck saved the euro bulls from the very silly positions they put themselves in. Anyone who says being drawndown in red for 6 months was part of a plan should not be taken seriously. But yesterday shows a fact of life that sometimes luck is all you need.
      As for the Eurozone, its problems are far from over. This isn’t the first time the Euro has pulled back and it wont be the last. Hopefully this time many people will have learned their lessons and not put all their eggs in one basket.

  4. Hello Mo, first of all I hope your healthy again . Iam sorry I had to pull back my copy money (etoro) I needed that to safe a open euro/USD position of my self (lost iT all) !! Be back asap! Have a Nice Weekend

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