International Markets

[Jesse Livermore]

Hi, Just wanted ask how many people trade on overseas markets and what are there experiences with it?

Also, I wanted to see what people think about foriegn exchange trading. I thought because there is less currencies than there is stocks it might be easier to make money?

 

[Smurf1976]

Forex.

If you are good at TA then you could trade short or medium term moves. Be aware that Forex trades 24 hours so you won't catch every move.

If you know something about economic fundamentals then you could trade the long term (years) moves as I do. But beware, forex moves at snail's pace from the "big picture" perspective despite the rapid short term fluctuation.

A word of warning though, playing with forex is a bit like playing with electricity. Done properly it is fine but is very dangerous if you don't know what you are doing. By all means give it a go, but be aware that a 100% loss is not only possible but quite likely.

I strongly suggest that you limit yourself to ONE currency pair and just trade that at least until you get some experience. Pick a currency you know something about the fundamentals of and can easily get info on if trading long term.

I'm happy to answer any questions, but remember these three words -careful, careful, careful with forex. Hope I haven't put you off, but you do need to get things right due to the leverage involved.

 

[DTM]

Forex.

If you are good at TA then you could trade short or medium term moves. Be aware that Forex trades 24 hours so you won't catch every move.

If you know something about economic fundamentals then you could trade the long term (years) moves as I do. But beware, forex moves at snail's pace from the "big picture" perspective despite the rapid short term fluctuation.

A word of warning though, playing with forex is a bit like playing with electricity. Done properly it is fine but is very dangerous if you don't know what you are doing. By all means give it a go, but be aware that a 100% loss is not only possible but quite likely.

I strongly suggest that you limit yourself to ONE currency pair and just trade that at least until you get some experience. Pick a currency you know something about the fundamentals of and can easily get info on if trading long term.

I'm happy to answer any questions, but remember these three words -careful, careful, careful with forex. Hope I haven't put you off, but you do need to get things right due to the leverage involved.

Smurf,

I'm also interested in trading forex. Could you tell me which currency pair is the easiest to learn/understand.

Thanks in advance.

 

[salz]

Hi, Just wanted ask how many people trade on overseas markets and what are there experiences with it?

Also, I wanted to see what people think about foriegn exchange trading. I thought because there is less currencies than there is stocks it might be easier to make money?

I'm from Singapore and I invest in primarily in Singapore. Occasionally invest in Malaysia, China-Hong Kong and US when I see good opportunity...

 

[Smurf1976]

Smurf,

I'm also interested in trading forex. Could you tell me which currency pair is the easiest to learn/understand.

Thanks in advance.

Sorry for the delay in responding... Must have lost track of this thread since I only came across it again today.

It depends on whether you want to day trade or take a longer term position. Personally I do longer term simply because my attempts at short term trading, both of shares and forex, have failed to outperform a longer term strategy. I don't mean buy and hope, but trades that last months to years rather than days or hours.

If you are interested in day trading and know T/A pretty well then the majors (British Pound (GBP), US (USD), Australian (AUD) and Canadian (CAD) Dollars, Japanese Yen (JPY), Euro (EUR)) are what you should consider. Swiss Francs (CHF) are a relatively stable base against which to trade something else although of course there is some movement.

I suggest you keep away from the less significant currencies such as, for example, the New Zealand Dollar. Nothing against NZ as a country, but the small trading volumes in the NZD facilitate more volatility than is useful.

EUR/USD (Euro/US Dollar) is the most commonly traded by far. Brokers generally give the best spread with this pair. But since it is heavily traded it's absolutely full of speculators all using T/A trying to make a profit.

If you wanted to trade US Dollars then you could trade against Swiss Francs (CHF) which are relatively stable such that the movement is substantially due to the USD.

Some pairs, such as AUD/NZD and EUR/CHF are relatively stable. There's a modest profit to be made if you have a timeframe of days/weeks for your trades. Big moves are unlikely though.

On the other hand, if you wanted to trade only the major moves (which means a single trade could last a couple of YEARS) then stick to those countries you know something about.

AUD (Australian Dollar) is an obvious one since (I assume) you live in Australia and thus have first hand exposure to factors such as the real state of the economy, political stability etc. You know just by listening to the ABC news or reading the Financial Review what the general sentiment is (remember to take a contrarian approach here). For that matter, half the people you know probably have an opinion which, if you are into contrarian thinking, can be very useful. You can't easily get that sort of info about the overeseas currencies unless you do an awful lot of reading to truly immerse yourself in it. And of course Australia is a major commodities exporter and is thus linked to the global economic situation - another thing about which there are plenty of opinions voiced.

So what to trade AUD against? Unless you have specific knowledge of some other country then USD stands out as the obvious choice. There's more commentary and opinions available about that than anything else. If you are into reading market sentiment, which I think does help if doing long term trades, then this would be the easy approach.

From a T/A perspective AUD/USD also makes some sense if your timeframe is long. It moves reasonably nicely except when at an extreme. Take a look at a 15 year chart and the high valuation of the AUD will be readily apparent.

I suggest you keep away from JPY (Japan) and as it is subect to official manipulation by central banks. Someone presumably makes a profit trading them but the manipulation is an ever present risk.

Whatever pair you pick, I very strongly suggest sticking to ONE pair and trading that. You don't have the "total collapse" risk that you do with shares (and even if it did happen you would only lose your margin) so diversification isn't really necessary IMO. Of course you set stops!!! (Check that your broker guarantees stops and go elsewhere if they don't.)

 

[Joules MM1]

New Zealand in lockdown(s) isolated, one of the lowest in vac rollout
and yet