Fed Cuts Another 50 Bps

The Fed has released the FOMC statement for this month and voted to reduce the overnight lending rate 50 basis points to 3%.

This reflects the lowest rates have been since June of 2005. The move was made easier after GDP numbers came out this morning lower than expected, mostly on negative housing growth.

The Fed felt it had to lower rates because inflation is not a concern, the economy is spiralling into recession (out of fear, possibly), the market had already priced it in, and today's GDP numbers proved that the economy needs a shot in the arm to pull out of a recession quickly.

You can argue that a little recession would be good, but you can't convince Wall Street of that, and obvious signs of fear and lack of confidence there made the Fed's decision fairly easy.

Proton Saga Red Concept Design

Here are some photos of the Proton Saga "RED" Concept by Proton Design, which will let some of you soon to be new Proton Saga owners know what modifications could be possible with the car's aesthetics. Having a special kitted up version of each new model launch has been a tradition now, and I hope this continues.
The Proton Saga "RED" Concept features a nice metallic red paintwork, a black roof, nice light grey grill surrounds, and large wheels, complete with a minimal tyre to fender gap. The interior gets a two-tone black and grey design, with red door trim, red seats and a grey-red trimmed steering wheel.

Trade Out

At the time of writing I am somewhere in Putrajaya. Its sound proof and no mobile phone can get a signal in here.

Trade gone bad. EU has actually hit my 1st target but I didnt close it. Now every trade has hit SL. No more trade for now.

Im going back to Kota Kinabalu this afternoon. My flight is at 3pm. See you later

US Fed Cuts

US Fed has cut benckmark Fed Fund rates by 75 basis points to 3.50% and it has cut the Discount rates by 75 basis points as well.

This cut has managed to bring immediate immediate relief to carry-trades and the stock indices.

The statement with the rate cut is given below...

The Federal Open Market Committee has decided to lower its target for the federal funds rate 75 basis points to 3-1/2 percent.

The Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth. While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households. Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets.

The Committee expects inflation to moderate in coming quarters, but it will be necessary to continue to monitor inflation developments carefully.

Appreciable downside risks to growth remain. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Charles L. Evans; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Eric S. Rosengren; and Kevin M. Warsh. Voting against was William Poole, who did not believe that current conditions justified policy action before the regularly scheduled meeting next week. Absent and not voting was Frederic S. Mishkin.

In a related action, the Board of Governors approved a 75-basis-point decrease in the discount rate to 4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Chicago and Minneapolis.

Effect:
I was up 3k on the demo account but now its -1.6k. This is something unexpected and market is trying to find a new balance point. At the moment that point is still unknown. EurUsd was dropping like WWII plane shot down now its going up again. In another angle what we see here is a correction. An act done by US Fed to slow down the drop by EurUsd.

Beauty about forex market is it will not turn on you in an instant. At the moment trend is still intact eventhough UsdChf has turn but with out support from other pairs it may not go very far.

System Testing

Ive open a demo account to test my final system. Final coz I dont see anyway I can improve it somemore. It has been the same in the last 3 months with no more room to improve.

Its a medium term trade system. Trade between 2-4 times a month only with target of doubling capital each month.

For those of you who like to monitor the trade can login to investors account as below:

Metatrader 4 Terminal
Login : 112328
Investor : qjxx1rm (read only password)
Server : 74.86.131.115:443 or 88.85.79.65:443

You are welcome to monitor. Any idea on improvement is much appreciated.

Trend is broken

At last the trend is broken. EU is changing direction but unfortunately that last dip was too much. A correction is coming before we can consider a short entry.

Same story with Uchf. Long entry on next low

Masa itu Emas

Disebabkan signal lom kluar dan aku hari ni makan lunch laju, jadi ada masa sikit nak berceloteh kat sini. Citer apa saja yang terlintas difikiran aku

Mula-mula sekali aku cemburu dengan ramai orang. Ramai orang mempunyai masa yang berlebihan sehingga boleh membuang masa. Dalam 1 hari cuma ada 24jam saja. Takleh tambah atau kurang. Nak dibeli dengan seberapa banyak duit pun takleh. Jadi bila aku tengok orang duk melepak dan takde buat apa, aku rasa cemburu. Orang tu ada banyak masa dan boleh dibuang sesuka hati.

Kepada aku lak, aku rasa macam masa tu tak cukup. Aku ada kerja tetap, time office hours aku sibuk ngan keje office aku. Disamping tu aku buat network marketing edymium. Dimasa yang sama aku study forex dan trade forex. Kenapa aku kata study dan trade?? Bak kata orang keje sambil belajar sebab forex ni terlalu banyak bidang yang perlu dipelajari sebelum kita betul betul mahir.

Dimasa yang sama kemahiran aku yang lain seperti membaiki kereta, motor, alat elektrik, komputer, wiring, networking, sound system dan beberapa lagi masih aku teruskan pembelajarannya. Ini kerana kemahiran tu perlukan latihan yang berterusan disamping ilmu yang amat luas utk dipelajari.

Jadi bila bila masa korang terjumpa satu mamat yang takde keje, takde duit dan duduk melepak membuang masa, korang perlu cemburu pada mamat tu pasal dia mewah dengan masa. Masa itu tidak boleh dibeli dengan duit. Mamat tu adalah orang kaya sebenarnya.

Medium Term And Long Term Trade Only

After much thinking, I have decided to take only medium and long term trade only. This is to avoid those noise in the market which will lead to losses.

Medium term are trades that run from 1 week and can last for 4 weeks. Its more of riding the trend.

Long term trades are trades that can lasts for years. Last long term trade for EU lasted for 2 years.

Due to this strategy I may be trading between 2-4 times the most a month. Its boring but its safer compared to short term trading. Furthermore I will have much more time for other things in life.

Hopefully I can post a full medium term trade signal by this week or the next.

How To Steal Money Off Forex Market

I was watching the charts today. My trade gone bad, suddenly it came to me. How to steal money off forex market. It came to me. The answer is as clear as broad daylight. Why I havent seen it earlier. The answer is right there infront of my eyes for so long.

Since I have found the answer now its time to take it into play. Time is running short. I need to confirm my findings by end of April. Good luck everyone

Trade Setup Week 2 January 2008

For this week I would only trade on 3 pairs. They are Eur/Usd, Usd/Chf and Usd/Jpy.

Eur/Usd
At the moment is having difficulty to rise forcing for a correction soon. The trade would be to short Eur/Usd @ 1.4700 or better.

Usd/Chf
No confirmation at the moment but trade setup is close to perfect. Long Usd/Chf @ 1.1150 or better

Usd/Jpy
Currently the only Jpy pair that I would trade. No confirmation yet but if all goes well I would Long Usd/Jpy @ 109.00 or better.

As usual forex is a risky business. Protect yourself at all time. Use stop loss appropriately

Dollar Declines in Forex Reserves

What analysts have been warning of for years has finally come to pass: the USD officially occupies a smaller portion of global foreign exchange reserves. According to a recent IMF reports, the fraction of reserves denominated in Dollars has fallen from 66.5% to 63.8% over the last year, with much of the difference offset by a proportional rise in the preponderance of the Euro. Analysts first began sounding alarm bells as early as 2003, when the Dollar fell nearly 15% against the Euro. However, it wasn't until 2006, when China began to accumulate reserves at an ever-increasing rate as its trade surplus exploded while at the same time the USD was tanking, that commentators began paying attention. 2007 brought several anecdotal reports that foreign Central Banks were both passively and actively diversifying their reserves. Now, it looks as though these were not isolated incidents, but instead part of a broader trend. AFP reports:

In recent months, several emerging-market countries, whose foreign currency reserves have ballooned as a result of such factors as high commodity prices and strong exports, have signaled their intention to further diversify their foreign exchange reserves to offset the US currency's depreciation.

Read More: IMF says dollar losing ground in global forex reserves

Happy New Year 2008

This year my new year celebration is a bit different from before. At the stroke of midnight I was on a plane cruising some 20,000 feet above sea level on my way home.

There is no celebration just the steward wishing a happy new year to all the passanger.

This year I plan to run my system full throttle for 4 months and lets see how good it is. By the end of april if I manage to gain massive profit, I would be going back to KL and have a meeting with my friends. Some of which are very amazed on how I could make huge profit from forex and are asking me to trade for them.

Until then I will not post my live trading result. Only my demo account on Marketiva. Hopefully I can be Marketiva Masters for 4 months and only then the result would be good enough for me.

Fed to Cut Rates Next Month?

In recent speeches, two high-ranking officials from America’s Federal Reserve Bank gave conflicting indications regarding the likelihood of rate cuts next month. Both officials were deliberately ambiguous in their speeches, though one went so far as to rule out a rate cut while the other hinted at its inevitability. Nonetheless, analysts used the speeches to buttress their conclusion that a rate cut is probable. In fact, the futures market has priced in a 94% chance that rates will be cut by 25 basis points at the next meeting, on December 11. Likewise, it seems a rate cut has already been priced into the USD, which was virtually unaffected by this story. MSNBC reports:

On the currency markets, the heightened expectations of a US rate cut cut did little to hurt the dollar, as investors took the view that the currency's recent weakness had gone far enough.

Read More: Fed stance sends equities soaring

Malaysia experiences economic slowdown

Malaysia announced that it expects its economy to grow at only 5-6% this year, down from 7%. Economists attribute the slowdown to a decline in exports. As an emerging economy, Malaysia is heavily depend on exports (especially technology related exports) to fuel economic growth. However, a global decline in IT and technology spending has hit Malaysian exporters especially hard. Even with the artificially favorable exchange rate, maintained at value which experts estimate to be 20% below fair value, exports are declining.

Malaysia will be forced to rely on the other factors of GDP if its economy is to grow. The first factor is government spending, which on outlays such as education, agriculture, and health care, looks to remain constant this year. Consumption, on the other hand should drive Malaysia's economy. Consumption and growth effect each other in a circular manner. As the economy grows, consumers are left with more disposable income which they typically use to purchase more goods and services. This increases aggregate demand which increases GDP growth, which then increases consumption, until the process diffuses. Finally, investment in Malaysia continues to strengthen. as speculators pour money into Malaysian capital markets. Such speculators anticipate a revaluation in the exchange rate, which Malaysia insists will not happen. Reuters reports:

Bank Negara indicated speculation and short-term capital flows would not spark a change in currency policy. "The basis for any change would therefore be made on long-term structural considerations and not short-term movements in capital flows or transient shifts in exchange rate expectations," it said, adding that it could continue to absorb foreign inflows through money market operations.

Read More: Malaysia GDP growth seen slowing to 5-6 pct in '05

New currency ETF debuts on AMEX

An exchange-traded-fund (ETF) is similar to an index fund in that both types of securities are designed to track the performance of the index to which they are assigned. The crucial difference, however, lies in the fact that there is no centralized market for mutual funds, whereas ETFs trade on exchanges, and hence, charge lower fees to investors. At first, investment companies were reluctant to create currency ETFs, because they weren’t sure if demand was large enough to justify such products. Since currency trading surged in popularity, a spate of new currency ETFs have been introduced, the newest of which is designed to track the performance of a composite of ten of the world’s most important currencies. Previously, this type of product was only available to wealthy investors. Now, anyone with a brokerage account can index in such a way, and would be smart to do just that, in order to hedge against the decline in any single currency. The Daily News reports:

The fund is managed by DB Commodity Services LLC. “DBV will offer investors easy access to the returns of the currency markets by following a highly developed index previously available only to very sophisticated investors.”

Read More: New Means of Access to Currency Markets

ECB nervous over Euro appreciation

Jean Claude Trichet, president of the European Central Bank, is know for his terse, deliberately vague commentary. This week, he veered slightly away from that modus operandi by speaking out against Euro “volatility” in forex markets. In other words, he has not been delighted by the Euro’s rapid appreciation against the USD. While Trichet indicated that such an appreciation is bad for EU growth, he did not encourage EU governments to attempt to stabilize the currency. Thus, it is not clear how the markets will react to such comments, although if it appears likely that the ECB will alter its monetary policy as a result of the Euro volatility, the markets will certainly take notice. The International Herald Tribune reports:

ECB President Jean Claude Trichet said that while globalization had led to lower import costs for manufactured goods, it had boosted demand and increased oil prices.

Read More: ECB president says volatility in currency markets not good for long-term growth

Interest Rate Story Hurts Pound

The British Pound has been reeling since the Bank of England cut rates at the beginning of this month, from 5.75% to 5.50%. Last week, the minutes for the meeting were released. They revealed that that members of the Bank were growing increasingly nervous about the state of the British economy and are worrying particularly about how fallout from the credit crunch will impact growth. British interest rates are still among the highest in the industrialized world, behind only Australia and New Zealand. Thus, it seems investors are punishing the Pound indirectly for the rate cuts, because of fears concerning the near-term prognosis for the British economy. At the same time, the minutes indicated that members of the Bank were adamant about not lowering rates further, so some of the concerns may be overblown.

Read More: Pound weakens after BoE minutes show concerns for growth