The Real Mccoy (May 14)

It has been a revelation week for me since I spent most of it next to professional traders. I might say that I am doing this for some time but those traders are the “Real Mccoy”. Red eyes, cigarettes, coffee and staring at naked charts all day (and night) long. No need for indicators, no need for fancy trading tools, no need to write in blogs, follow the news. As I was told they respect the news. They avoid taking positions before and after the news but they ignore the outcome. Good news for the USD, GPB etc can push the pairs up or down. It is a manipulation game and they know it well.

They know the support and resistance levels by heart. No need to draw trendlines. A simple line chart is enough. They know the correlations between the SP, Dax, oil, gold, commodities, forex and they trade everything that moves. They take small profits and their major concern is money management. If you will check my myfxbook link you will see what I am talking about since I am following their trading for about two weeks. It is important to make constant small profits that will keep your balance growing and protect you from the inevitable Black Swan, a book written by Nicholas Taleb that every trader should have in his library (and read it – lol).

Back to earth now. The market remained in a range, the JPY was the loser of the week with -100 pips and the winner was the CAD with 86 pips. From the individual pairs the movers were the Gbp/Jpy and Gbp/Aud that both closed with a profit of 162 pips but practically remained in a range.

Monday is a European holiday and on Tuesday news from Australia and US are expected. Wednesday will start with the Claimant count from the UK and is the FOMC meeting after the close of the London market that could affect the pairs. Thursday some more news from Australia, UK and US and on Friday a 2 day G7 (ex G8) meeting is starting in Sendai, Japan. Those meetings are closed to the press but finance ministers and their assistants leak information to the public.

I remain bearish for the Eur/Usd and Gbp/Usd. I expect (and would like) to see the AUD getting stronger (ie higher Aud/Usd and lower Eur/Aud and Gbp/Aud). I remain cautious with the JPY pairs but expect the Eur/Jpy and Gbp/Jpy to move lower and test support and the Usd/Jpy to move higher and test resistance. Finally for the Usd/Cad I monitor closely oil price and expect the pair to move lower.