Timing & Patients…err Patience

Don’t ignore what’s RIGHT in front of you

The other day I was chatting on Skype with a friend of mine as the news came over the wire that UK GDP had seen a larger than expected drop.

“I’ll let you go. I’m sure you want to get involved”

“No mate you’re OK nothing happening initially so I reckon the market is going to ignore it”

Since that moment, Sterling has lost 212 points!

As my fellow PIG’s are well aware I am a born fundamentalist (in a good way). I am assuming that “nothing happening” actually meant that technically the market (or he) needed a signal to trade.

The major point made by “get rich quick” schemes available to current and would be traders is that charts and technical trading are the Holy Grail and provided you follow the rules making money is like falling off a log.

...did I mention I have a bridge for sale?

I saw an advert recently for the opening of a “trading academy”. A good friend of mine is going to be “technical director” and Head Tutor.

I asked to see a copy of the curriculum and it was all technically driven with virtually nothing more than a nod of the head to the real drivers of the market.

Will Fundis EVER get there due in retail FX?

As I have said before, you cannot get up in the morning look at a chart for ten minutes and find that the Conservative Party are going to call a general election or the Brexit vote will be for leave!

So, I have offered my services to teach about the fundamental analysis side of trading and the effect of various economic releases on the market.

How different data affects different currencies in diverse ways.

For example, the employment report this Friday in the U.S. is the single most important monthly release for the dollar. Why? Hard to say since it is a (very) domestic piece of data although it feeds through into a number of other factors. People with jobs spend more so consumer confidence and retail sales improve. This drives the economy higher. As the job market tightens, wages go up fuelling inflation which alerts the Central Bank who raise rates. The entire process then starts to reverse and this is the economic cycle.

Perversely, the major release in the U.K. is house prices. Since the U.K. was turned into a nation of property owners by Margaret Thatcher, the populations home loans have the major household expense. Equity in property, that used to be handed on by the lucky few to their offspring to get them started on the property ladder, is now used to fund social care as the population gets older.

It is no surprise that inflation is the major concern of the Eurozone. The ECB mirrors the Bundesbank in Germany in its concerns over rising prices. By now we all know that one size does not fit all when it comes to monetary policy.

Germany still has collective nightmares over the inflation that brought the country to its knees between the wars. Now it has signed up to an experiment that means it is controlled by the lowest common denominator when it comes to growth and rate hikes. Successive Chancellors have obviously decided that this is a small price to pay for the financial domination of the whole region.

In summary, whilst it is acceptable to lose money (we all do) when trading, to ignore a major piece of data simply because the previous 1,10,20,60 or 120 minutes price action doesn’t align is almost criminally negligent.

Oh, and by the way, my offer was accepted I start tutoring next month...