I have been busy with my day job and struggling to have sometime in finalizing my trading system. That explains why posting has been lagging. Anyway, I hope I can get back on track soon.
In the August version of Currency Trader magazine, Ken Jakubzak was interviewed. There are a couple of points which I pretty much agree with him..
it was a major shift for the currencies.They dont trend like they did in the 1980s and early 1990s.Look at the overall trend of the Euro (Figure 2). It hit a bottom of roughly .8600 in 2001 and now it trades at 1.5600 (as of July 7). Thats a move of 60 handles (one handle = 100 points, or pips). But it took seven years to get there.
If you want to say thats a long-term trend, then good luck trading it. In December 2004, the Euro hit a high of 1.3660 and then dropped to 1.200 a year later. Thats a drop of 16 handles (1,600 points). Do you want to ride that down?
My point is that there are no long-term trends in the currencies anymore. They may go up 10 to 12 handles, but they will also drop almost as far. You can make some money using a trend-following approach in currencies, but youre not going to find big trades like you can in grains or crude. Also, 90 percent of all trades are losers. The other 10 percent should make your year and if they dont, then youre going to lose big. Its very difficult to trade that way.
Full article can be found here
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