Daily Archives: July 16, 2010

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Earlier today our VP of Marketing Michelle Heath wrote a nice post about the Old Spice guy. As promised we have created our own rebuttal to his Orli video. Enjoy!

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

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In a world where the continuous stream of economic and fundamental statistics swamps even the most hardened trader, it’s important to maintain some sort of structure around how you can manage your positions through these numbers and not be caught out by short term spikes of volatility. It also allows you to have a game plan about how you can position yourself so that you’re not paralyzed into inactivity.

Thursday was a classic example of this and created trends that were reversed or continued as each statistic hit. The only real constant was foreign exchange where the dollar weakened or held station as each new story broke. This lack of volatility in relationship to bonds and equities was a good indication of the dollar’s continued inherent weakness that I have touched on in last week's post as well as the post the week prior.

The day started at 3am with the Chinese economic numbers, which caused a spike in the E-mini and a fall in the dollar. The numbers were not as bad as feared. By the morning all eyes were on the Spanish bond auction, which was well received. Stocks rallied, bonds fell slightly, and the dollar had already weakened further before the number.

Next were JP Morgan’s results, which at first glance were startling good. However, a look below the surface saw that some 36 cents of gain was due to lowering their reserves against bad debts. I perceived this to be a somewhat dubious one-off adjustment that, if I’m right on housing as I have been, could well be reversed in the quarters ahead. stocks spiked again, but reality on the JP Morgan stats caused a drift back, and bonds collapsed far more than had been there reaction to Spain. A second bond negative story was what got the trend moving.

However, by 1.30 there was claims data and the NY Fed and PPI. The market focused on the most up-to-date figure on the Fed as equities went lower and the dollar fell again. The bond bounce was muted.  Industrial production for June was slightly better and caused a brief equity rally. The importance of analyzing and understanding stats was significant in the same way for JP Morgan, in that the rise was due to utilities increasing, which was due to the heat wave. That is an artificial expansion.

Finally, the Philly Fed arrived, which was weak as well, and now equities could slide aggressively until (in classic technical fashion) they filled the gap from Monday. This caused the bond market to erase all its losses and the U.S. bond market to rally to new highs. The dollar had already exhausted its ability to trend having been under pressure all day. Also, rumors of the Goldman’s settlement saw all the equity losses erased, but it was too late in the day to influence currencies or bonds in any meaningful fashion. In fact bonds just held there station.

So how do you ride the waves of stories? This depends on what time zone you are trading in. European traders are at an advantage because they have the benefit of riding through all the major statistics, which allows for two major trends per day. American FX traders normally just have one, but equity traders can still get two (as occurred on Thursday). They could end up being all one big trend or a major reversal of the morning move.

Obviously the first thing is to have a firm grip on all the likely market moving events. In order to prevent paralysis, signals must be taken as normal and stops entered. If the statistic moves your way trailing stops can then be applied and the time frame this is applied to is critical. My statistical analysis shows that trends typically last between 15 to 20 bars before some sort of corrective phase. This means that if you want to ride the morning and afternoon trends, a 15 minute chart is the correct one. If there is (as on Thursday) a sequence of tighter times between statistics, this must lower down to 5 minutes.

There are two basic ways to ride the trend (But first, just to use a simple 3 period moving average moved one bar forward so its value is fixed on the current bar. When it changes direction or price closes back in the opposite direction of the average you exit. This is the tightest form of trail you can use.):

  1. For those who wish to track price action, the use of simple fractals or swing points can be used. In a downtrend as soon a price closes above a bar that was the highest point as the middle bar within a 5 bar patterns, you exit.
  2. For those that are the most risk averse, you can use a 3 bar pattern, but this method is unlikely to ride the entire trend. In an uptrend it is simply the opposite, so you monitor the lowest middle bar within a five bar pattern. With this method, when a market such as the dollar simply trends throughout day this will normally capture the entire move.

Finally, remember that when a trend day occurs the most common occurrence is that the close will be very near to the absolute high or low of the day.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

A big thank you goes out to Casey Stubbs from Winners Edge Trading. Our webinar on Wednesday evening was one of our most successful yet. Casey walked us through the ins and outs of Simple Moving Averages. Watch the full webinar below.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

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If you haven't heard about the Old Spice video campaigns you must be either living under a rock or rendered speechless by Isaiah Mustafa's six-pack, towel wearing bod. Some say he's a god. I say the campaign is brilliant (and happen to concur with the god-like references). Weiden + Kennedy, P&G's ad agency, pulled together one of the most integrated and truly buzz worthy social media campaigns of 2010. Their timeliness, randomness, and honest-to-goodness humor has put Old Spice on the map in terms of social media. Instead of us gushing about it, feel free to read the great articles by Mashable and Fast Company. But of course our $0.02 anyway.

As I thought about what worked so well in this campaign, I kept thinking about the 4Ps of marketing and how, in this new social media world, we need a new P. Sure, every successful marketing mix has something to do with product, price, placement and promotion. But what they don't teach you is what we learned this week about a healthy dash of social media and a heaping helping of a hot guy in a towel.

As marketers, we spend most of our time cooking up clever ways to share our brand with the people we think are most interested - a.k.a. our target audience. Whether it's chocolates, cars, ShamWows or Forex - there's a buyer for what we're selling. They just don't know it yet.

Brands have to work harder than ever to earn our attention. We've all heard the urban legend of the viral video that refused to produce the golden YouTube views and its silent death at the hands of its maker. Tragic. We've all seen the Facebook pages that vie for us to like them only to disappoint us and the Twitter streams that offer nothing of value in 140 characters or less. Sigh.

The great thing about the Old Spice campaign is that it took something that's been around for decades (my grandpa wore it for years) and made it new by starting with fans and followers. It is what every good campaign should do - start with the people and let them build it. It's something they don't teach you in school but something I admire in practice. IMHO, People should be the 5th P. Think about it. Social media is all about People. It's about engaging People in conversations, creating new ideas, forming and sharing opinions and connecting. These are People who may or may not like your brand. But, they know other People. And when they see and hear cool stuff in action, they tell them.

Hats off to W+K for focusing on the People and to Old Spice taking a risk and putting a hot guy in a towel (seriously, thank you.) As a social network, we here at Currensee are empowered by great examples like this one and, because we are a little goofy and love social media, we decided to ask (and by ask I mean, make) one of our interns, appropriately named Orli, respond to one of the commercials. Watch the original commercial here. Our response will be posted momentarily. Happy trading, social media lovers.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.