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 Forex Version 20, Foreign Exchange Market Discussion

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paogeh
post Oct 30 2019, 02:02 PM

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another questions pop up :


we always see ppl invest in stock , eg: Warren Buffet .
Ppl use this strategy to hold as long as possible to generate wealth .
Basically , buy blue chip and collect dividen forever .
when die , passed the blue chip to next kin .
wealth being built this way .

However , we dun hear such thing in FX , or options , etc .
how come ?

In theory , FX should amplify the wealth effect like the stock do .
in reality , i cant find any.

i can think off , carry trade in FX to collect swap daily . But this strategy is dead after 2008.


is it possible to build wealth in FX similar like KLSE/stock/blue chip/divien stock?

paogeh
post Oct 30 2019, 02:04 PM

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i think i read somewhere Hansel , did carry trade or similar where he buy AUD ?


Hansel ,
u still doing that ?



paogeh
post Oct 30 2019, 02:45 PM

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QUOTE(Emily Ratajkowski @ Oct 30 2019, 02:17 PM)
Different instruments have different functions in the market. If you like to hold and collect interest I suggest you go to stocks, bonds or trade options.

Carry trades do not happen all the time. If market allows you to do a carry trade that also pays you swaps, then good for you. Else you simply have to make do with capital gains.

If you die die don't like to cut loss, or die die you must be right in the market, then forex and futures are not for you.
*
stocks -- collect dividen , this one straight forward .
Bonds - collect bond interest till maturity , got risk of default . Worse, hold till maturity and collect back principal.
options -- Can explain more how to collect interest/swap ? The swap is juicy ?

*above 3 market , need huge capital , right ?

paogeh
post Oct 30 2019, 03:40 PM

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QUOTE(Emily Ratajkowski @ Oct 30 2019, 02:51 PM)
Stock and bonds require large capitals. They are not leveraged products.
Options doesn't require as much capital. But they are still higher than forex and futures.

There's too much to talk about options. I suggest you go pick up a book or something. But to answer your question, you can sell an option to collect interest. There's a lot of other consideration so you really need to know the details.

Life is fair...
You want safe and easy, it is expensive. (stocks, bonds)
You want cheap, you require a lot of skill and it is hard (forex, futures)
You want safe and not so expensive, you require extensive knowledge (options)
*
wow !
of the 3 ....

what;s the best mix ?
seems options ......

but got scary story below too ::


QUOTE(dwRK @ Oct 30 2019, 03:34 PM)
friend lost half a million trading options when trump crashed crude from about $75 to $45. He said most of the time very easy collect premiums only... lol
*
USD500k ??!????!?!?!
RM2M ....can buy a luxurious bungalow ....

paogeh
post Oct 30 2019, 04:31 PM

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QUOTE(dwRK @ Oct 30 2019, 04:08 PM)
oil and gas expat, earns quite a bit, knows the oil business, so trades crude related instruments lor...

options are fairly easy but need a bit of ground work. can best combine with shares so you can sell covered calls & buy puts...

I'm old & lazy, difficult to learn easy to forget...lol...  but here got good material if interested... https://optionalpha.com/
*
i thouhg u trade FX ?

u trade options + oil ?


as Emily suggested ,
most easy = stock ....
buy and hold .
collect dividen till death .


paogeh
post Nov 1 2019, 10:55 PM

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QUOTE(AllnGap @ Nov 1 2019, 06:11 PM)
on warren buffet, what you said is on the surface only.

1. Warren buffet has an insurance company for 52years, and he use those premium paid by customer to buy and collect dividends. (insurance company has $115 billion, may read here : https://www.fool.com/investing/2019/02/22/w...-a-52-yea.aspx)
basically he's using OPM (other ppl money) to grow

2. his dad is one of the politicians. of course this gives him an edge in "insider info"
why would i make this conclusion ??
many of his decisions in buy those companies are winners (some of which are winners in government policy change) must have some sort of magical crystal balls

3. his dad owns a small stocks brokerage firm.
this also gives edge because the know the orders (ahem can do a lot of scalping back at those days) whistling.gif
or when the owner of the stocks dump before earning season comes you already know bad report is coming......
or knowing some back-end merger between companies also can huat d
so it isnt as simple as buy stocks and become FXXKING RICH
*
basically, most ppl get rich through stock ,
like malaysia COLD EYE , buy dividen chip/blue chip/grow chip , collect dividen year in year out .
and after 20--30 years, become RICH .


As Emily mentioned , most ppl are poor,
stock are expensive and slow .


that;s why , we dun hear FX , ppl becoming RICH. Most become broke ...






paogeh
post Nov 3 2019, 11:47 AM

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QUOTE(dwRK @ Nov 2 2019, 10:02 AM)
I'm sure a lot of people get rich in fx but stay quiet only...Malaysia stock market a lot of insiders and syndicates trading. Normal people can still get rich but takes long time...a lot fail stay quiet only you don't hear about. Also last time can only trade stocks...

My understanding is the buy n hold forever trend is changing. Now commercial trading people long time hold is 3-6 months. Retail people still holding on to old thinking hold forever get high dividend lah...

You see cmk96 & hft their ea can double account in 3-6 months, holding good old stocks is very difficult to achieve this...target small 0.7% per day, in 100 days double your risk amount liao

Most people in FX broke because high leverage, small account, trade cfd against MM...

Not to discouraged you from stocks, it's good to diversify a bit, best to combine with a hedging strategy so to preserve capital and reap benefits from dividend.
*
Thanks drwk.

For stocj, its almost very diffucult lose as long as u buy the divden.blue chip.

The only time . Stock can lose, margin acc .
Even Koon yew ying use margin also lose big .


I always hear warrant in malaysia.

And so far i have not hear those margin.warrant.index in malaysia long term profit.

Seems like making $$ is not easy .





paogeh
post Nov 3 2019, 03:10 PM

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QUOTE(Hansel @ Nov 3 2019, 11:52 AM)
I think in investing, we need to see the timespan too. One who made money within a short timespan may not be the best measurement to define Best Investment.

I was a forex player, in the form of Carry Trade. I had to cut lost after holding for a few years, but in the early years when I first 'invested', I kept making money from premiums earned due to knock-outs.

I invested into strong Term Deposits which yielded me 11%, 12% int rates in Aussie Banks but such returns have disappeared today.

I invested into Canadian ctrs which PAY MONTHLY DIVIDENDS, but those ctrs' dividend amts dropped after a few years. I recently divested ont restaurant ctr in the TSX which dropped to $10+ only, last I heard...

I can call out more experiences,... BUT,.. I would like to say that I continue to invest into SG REITs today. But well,.... First REIT is also risky today,... okay... holding forever is not possible anymore ! The word forever is not logical anymore.
*
Thank you hansel for sharing.

Investment.trading really not easy.

Currently do u still carry trade? Or fx ?

Any good investment to recomend ?



Side notes, almost all my friends.collegue invest.trade klse stock.
Again, got earn.lose.
Some claim can get insider news etc. But not always.
Making $ seems hard.


paogeh
post Nov 4 2019, 12:02 AM

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QUOTE(Hansel @ Nov 3 2019, 10:39 PM)
Yeah bro,... looks like we need to monitor continuously,... I have the same thinking too.

On my part,... I held one REIT in the SGX since 2006,... it was doing really well till the sponsor started to give it problems. This REIT survived in my portfolio for 11 years before I started divesting it.

But I must too that there are REITs in the SGX that has survived and been doing well till today since it first listed.
*
Hansel,

u live in Singapore ? As u invest in SGX + REITS.


I used to invest in STAREIT , get good dividen , didnt make much from capital , only dividen from holding a few years .
*already changed name to YTLREIT


paogeh
post Nov 6 2019, 02:10 PM

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Best Juicy carry trade

USD/TRY or EUR/TRY.

but then, it;s roller coaster ride ....

paogeh
post Nov 9 2019, 11:49 PM

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EU down down down .

approaching 1.1000
have pending BUY at 1.1015 , 6LOT , TP 1.1020
*during weekend , MT4 dun allow to open/close/modify order.

**acc, recovered from USD4k to USD10K (withrawed USD1K)
*** ICM , VISA DIRECT used to take ~12 hours back to Bigpay , this weekl , withdraw on 5Nov , today Sat only get it ....





paogeh
post Nov 9 2019, 11:55 PM

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Just asking ,

For ICM ,

what;s the difference between SAFE CHARGE and VISA DIRECT ?
*although both also credit card , same pin/card.

The only difference , i see-ing
1. SAFE CHARGE - take average 3 working day to withdraw
2. VISA DIRECT - take ~12 hours to 1 day to withdraw.




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paogeh
post Nov 10 2019, 12:06 AM

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From 1Nov till 10Nov,

Can someone help to better understand those parameter ?
How to interpret them ?



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paogeh
post Nov 10 2019, 12:08 AM

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This is LAST 3 months,

where i blew the acc ....


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paogeh
post Nov 10 2019, 12:27 AM

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QUOTE(Archemedia @ Nov 10 2019, 12:15 AM)
u still trade with no indicator?
*
the only indicator at MT4 == Volume + MA200 ,
just for reference .

Others = FF , dailyfx , myfxbook/outlook, FX expired option ===> Just for reference


https://www.myfxbook.com/en/community/outlook
https://www.forexlive.com/orders


paogeh
post Nov 11 2019, 10:51 PM

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QUOTE(Emily Ratajkowski @ Nov 11 2019, 07:39 PM)
There is no way to analyze this info. It does not tell us if you're trading the right way or not.
All I know is that in the first report, you're a superstar.
In the 2nd report you're a very bad trader.
Unfortunately, martingale or grid type of trading is often going to produce such results.

But I can tell you a few things. Just for you to ponder on. I tell you this based on my 9 years of experience. Accept it or not, is up to you.
1)There is no shortcut. You must make more money when you're right, and you must lose less money when you're wrong.
2)You must have an edge. And your edge must do at the minimum 2 things:
2a)It must give you a price forecast. Meaning, it must tell you whether to go long or short or do nothing.
2b)As an extension of 2a, it must also tell you when you are wrong.
3)The more accurate you are in forecasting price, the stronger your edge.

4)Money management strategies by itself cannot provide an edge. They only determine how fast or slow your account grows/shrink.
4a)If you use martingale and grid strategies without an edge(price forecast), you will ruin your account eventually.
4b)The problem with martingale and grid is that traders use it because they don't want to forecast price. But without price forecasting, you do not know when you are wrong. And because you do not know when to stop applying martingale/grid, one day the market will do something funky and you will wipe your account.
4c)You can get lucky in the market for a long time using martingale and grids. Which is why, most traders tend to do very well for very long periods of time and then suddenly go bust in 1 week. One day the markets decides to do something unexpected, and these traders have no way of knowing whether the market will eventually cooperate. So they keep trading their grid until they eventually ruin themselves.

5)Can you turn grid trading into a good strategy?
a)The answer is yes. But not by itself. It must be combined with a proper edge.
b)Grid strategies are at best ‘average entry point’ strategies. They are good at giving a good entry point, but they can’t provide an edge.
c)But... if for example, you have a system that can identify when price is ranging.
d)Once you have determined that the market is ranging, you can start to apply the grid.
e)When your system tells you that the range has ended, you close all your grid positions regardless of loss or profit - because your market edge tells you that the range has ended. Therefore if you continue to grid, you will probably be applying grids in a trend market.
f)How well your strategy performs ultimately depends on how well you can determine when market is ranging. THIS is your edge. Ultimately, your edge is what will give you consistent profits. The grid is only used as a money management tool to help you get better returns.
*
Thank you so much for the details explaination .
This would really help everyone on the FX journey.




paogeh
post Nov 14 2019, 12:38 AM

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QUOTE(Emily Ratajkowski @ Nov 13 2019, 11:20 PM)
If you go, share story here plz. I'm super interested to know how these people operate.
*
emily ,

do u familar with FEB REPO news? Thanks

https://www.zerohedge.com/markets/fed-losin...other-direction

paogeh
post Nov 14 2019, 09:55 AM

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QUOTE(Emily Ratajkowski @ Nov 14 2019, 07:33 AM)
What do you want to know? Your question so broad...
The article did summarize what's happening quite well in the last few paragraphs.

Basically fed pump too much money into the market. So now the effective interest rate getting too close to the lower bound of what is permissible.
*
basically REPO ,
how does it affect FX ?


Eg , now FED pump too much USD.

Does this mean USD would be weaker ?


paogeh
post Nov 14 2019, 11:08 AM

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QUOTE(Emily Ratajkowski @ Nov 14 2019, 10:40 AM)
First thing you need to know is 'what is repo'. Basically,
1)Forex is settled daily. That means in their account books, if a bank is short a certain currency, they need to borrow it from somewhere to square off.
2)They do this by borrowing from other financial institutions. Usually these are other banks.
3)The rate at which they charge interest is the repo rate. This rate is usually similar to the interest set by that country's central bank.
3a)For example, if you need to borrow dollars, you will go to an american bank and borrow some dollars for 1 night. You repay the money back tomorrow with the interest rate set by the US central bank. At this point of writing, that interest rate should be 1.5%-1.75%. Same case, if somebody wants to borrow ringgit, they will find a Malaysian bank and borrow ringgit from us. Then the next day they will repay with 3% interest as set by bank negara opr rate.
3b)Bonus info: This is where your +ve or -ve swaps come from when you trade forex. When you sell eurusd, you're selling euros and buying dollars. At the back office, your broker will receive the swaps at the end of the day and pass it to you. The opposite is true.

4)Repo market is the main tool used by central banks to inject or take away liquidity in the market. Those quantitative easing things you hear on the market is basically done through the repo market.
4a)Fed purchases Treasury securities to increase the supply of money and sells them to reduce the supply of money.
4b)For example now the fed is buying up treasuries. If you are a bank that needs some USD, you can "lend" the fed your bonds overnight and get some USD + interest. So when your swap unwinds, you now have your bonds back + a little bit of extra USD. By doing this, the fed effectively print money and inject liquidity into the financial system.

5)Last month, there was a liquidity crisis. There was not enough dollars in the market. So people started charging a higher price to lend out their dollars. In other words, the repo rate shot up too high, beyond the set interest rate by the fed. In the past, bear sterns went bankrupt because they couldn't square their books due to liquidity crisis. And that subsequently started the 2008 financial crisis. So now the fed wants to make sure that it can always maintain the repo rate close to their set interest rate. Because markets get scared when there's a liquidity crisis.
5a)The fed has been doing "quantitative easing" everyday since then.
6)Because they have been injecting the market with so much cash, the repo rate will naturally drift lower. But as the article wrote, this is strictly better than "not enough dollars". They want a low interest rate to spur the economy into spending. Because part of their mandate is to achieve a 2% inflation rate.
7)At the moment, there is no cause for concern. This is likely a non issue. Even if it drifts lower, the fed can simply stop the bond swaps and the market will be back to normal.

8)If repo rates are the only thing that affect USD, then yes, the USD should be lower. But right now, the market is focused on trump's trade deal. If the trade deal is successful, then dollar will rally. If the deal is not successful, then dollar will fall.
*
Thank you so much Emily.
This really help me to understand the Repo.

*If this is similar to Forexfactory , i would definately "liked" your post + subscribe to u as 1% High Impact Member


paogeh
post Nov 14 2019, 11:27 AM

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Currently Trade war ,

good news == EUR/USD fall
Bad news == EUR/USD rise

EUR start to behave like "safe haven" status.



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