Currency Trading Dec 11th-15th

[xx_joray_xx]

trade balance

good morning all....i have a question about yesterdays trade balance....when the headlines are printed they print negitive numbers i.e. -56 and -67......what number is a bigger number and does the bigger number help or hurt the dollar

 

[jacinto]

good morning all....i have a question about yesterdays trade balance....when the headlines are printed they print negitive numbers i.e. -56 and -67......what number is a bigger number and does the bigger number help or hurt the dollar

a minus means that the us buys more from abroad than it sells abroad. in economic theory, that would mean that the dollar should weaken. you have to see the balance of payments then. if the us receives more inflows than outflows (excluding trade), and that difference surpasses the above trade deficit, then the dollar strengthens. that is the economics.

however, trading is not about economics believe me, im an economist

 

[City Bound]

-56 is bigger, unless you are talking about the size of the deficit, and is Dollar positive (EDIT: assuming you are talking about moving from one to the other, which I assume you are considering those are the latest numbers) as there are less Dollars going abroad (i.e. a contraction in supply = increase in price). It also means that GDP increases due to the X-M part of the aggregate demand equation, which implies higher rates due to higher growth. However in developed nations the decreasing deficit is more often attributed to slowing consumption than a growing economy, which actually means that rates are likely to go down as the economy slows due to a drop in demand.

Hence the answer is that it means both, the market will do what it wants and that economists (like myself) will explain it away afterwards using hindsight whilst critisizing everyone who "got it wrong" (which lately has all too often included me).

 

[tradewinds]

good morning all....i have a question about yesterdays trade balance....when the headlines are printed they print negitive numbers i.e. -56 and -67......what number is a bigger number and does the bigger number help or hurt the dollar

The -67 hurst the dollar more than the -56. This is in billions, ie, 56 billion. So -67 billion dollars means that the trade balance is getting wider. This neagtive number denotes a trade deficit, whereas if it was positive that would be a trade surplus.

The bottom line is that negative balance means more dollars are leaving the US than are coming in,ie deficit. It means that the US hav spent more and traded those dollars for other goods and services in other currencies than other people spent on dollar denominated services.

So obviously more dollars leaving than coming in is going to weaken the dollar.

Hope this helps.

 

[ChowClown]

hi CB, i agree, seems to be building again for another go (5min). Expecting a turn at 20 to head down to 00-05 and then a trip north again, from what i see atm, this could change in a candle of course

..i'll be happier with the next vebo long entry if this pans out, but the entry is not far off the WW exit

 

[Offshore Trader]

Yet another VEBO trade goes down.... this system has fallen apart in the last month as most of the movement in Cable now seems to be outside 8.00 -4.00 GMT. Still sticking with it though, hopefully its time will come again

 

[ChowClown]

I think it will. Damage limitation until it does.

 

[JonnyT]

Systems come, systems go but do any currency systems work consistently well?





































NO

JonnyT

 

[xx_joray_xx]

The -67 hurst the dollar more than the -56. This is in billions, ie, 56 billion. So -67 billion dollars means that the trade balance is getting wider. This neagtive number denotes a trade deficit, whereas if it was positive that would be a trade surplus.

The bottom line is that negative balance means more dollars are leaving the US than are coming in,ie deficit. It means that the US hav spent more and traded those dollars for other goods and services in other currencies than other people spent on dollar denominated services.

So obviously more dollars leaving than coming in is going to weaken the dollar.

Hope this helps.

so the bigger the negitive number the more it hurts the dollar?

 

[ChowClown]

Short 9681.4....now b/e.

 

[tradewinds]

so the bigger the negitive number the more it hurts the dollar?

thats right. However I would nt try to understand it this way. I woiuld try to understand the reasons why. positive and negative numbers can mean a whole host of things as regards fundamentals.

Personally i dont use the fundamentals. They are interpretated too many different ways. And basically the econmists dont seem to know alot of the time. Just a while back they were saying UK interest rates had stopped rising and what happened?

Again the fundamentalist were saying the euro would hit 1.40 before xmas. SO unless it takes a charge in 2 weeks, it wont happen...

just my opinion...

 

[ChowClown]

Short 9681.4....now b/e.

5min.

 

[ChowClown]

...30 locked in now.

 

[jacinto]

nice one chow. well done.

 

[ChowClown]

...thanks J, i'd forgotten what it was like to have a winner.

 

[ChowClown]

Last pic. Apologies for smothering the thread this arvo - mentioned to OT the other day i wouldn't post so much....inconsistency is my main weakness

 

[jacinto]

...thanks J, i'd forgotten what it was like to have a winner.

it cant be as bad as feeding a moody 4 year old, see a pattern and not take it, then see it plummet.

well, guess i have to blame the little one if i dont buy her a lolly

 

[ChowClown]

+40. +30 from vebo today.

 

[Offshore Trader]

How's everyone been doing lately?

The good thing about the recent failure of Big Ben/morning breakout methods, is that it has given me the impetus to look at other things and improve my trading style. Fortunately my discipline has been very good lately and whilst my equity is where it was a month ago, I'm pleased with that result given that the morning breakout is the backbone of my P&L.

I've learnt two things. Discipline is essential in the good and bad times. Secondly it is not good to rely too heavily on one thing.

Things are looking up here and if the morning breakout returns I'll be coining it in. Good luck everyone

 

[a_gnome]

How's everyone been doing lately?

The good thing about the recent failure of Big Ben/morning breakout methods, is that it has given me the impetus to look at other things and improve my trading style. Fortunately my discipline has been very good lately and whilst my equity is where it was a month ago, I'm pleased with that result given that the morning breakout is the backbone of my P&L.

I've learnt two things. Discipline is essential in the good and bad times. Secondly it is not good to rely too heavily on one thing.

Things are looking up here and if the morning breakout returns I'll be coining it in. Good luck everyone

Hi OT,

As a fellow trader of morning break-out methods I too have been suffering in the last couple of weeks though this is on the back of the best performing period for my system in the last three years so I can't really complain. However my historic back testing shows that these drawdowns are quite normal for the system that I am trading and I am happily soldiering on. I do agree that having more strings to one's bow is a good thing and I am also developing complimentary approaches. I shall not be abandoning my core method just yet though.