You want to be a forex trader?
Everyone does, but only a few select will ever join the sacred ranks of a true forex trader. Since you are here reading Rogue ForexTrader, there may be hope that you will manage to reap a few pips alongside this outpost I have created.
You may wonder what I have been researching the last five weeks and to be honest it is none of your concern so stop bothering finding an answer. I am not here to tell you about my life, I wrote today in order to counter the research and analysis conducted by Excalibur Funds Management Pty, a global macro alternative asset manager out of Sydney. I love Sydney, I love Australia and I love the women there.
When it comes to Excalibur Funds Management I have to slap them with a dislike in regards to their latest call on the AUDUSD currency pair. Excalibur Funds Management launched a new hedge fund on July 17th which is an Australian Dollar only strategy and basically means the fund only trades the Australian Dollar. According to Matthew Harper who is a principal as well as trader over at Excalibur Funds Management, institutional investors have placed in access of $200 Million with this specific hedge fund.
Excalibur Funds Management, which additionally runs a G-10 currency strategy, targets an annual growth rate between 10% and 13% per year with a maximum loss per month of 2.5%. This is by no means a solicitation or advertisement for the company. I just want to give you guys some very basic information so you know who released the below analysis.
Excalibur Funds Management calls the AUDUSD down to 0.7500.
They did not give a specific timeframe for this call, but they think the AUDUSD currency pair will tank severely from here citing a Chinese slowdown which they predict will reach 5% GDP. Australia did depend on Chinese growth as Australia is the world’s largest exporter of iron ore and heavily depends on the commodity sector. The Australian Bureau of Resources andEnergy Economics estimated that commodity exports would total A$177 Billion, down A$9 Billion from its previous estimate.
According to Excalibur Funds Management, which conducted their analysis with the assumption the Reserve Bank of Australia will cut interest rates down to 2.00%, further noted that should Australia enter a recession as they predict will happen in 2015 with a 30% chance that the AUDUSD currency pair could fall down to 0.6000 which would be the lows of 2008 as the US sponsored financial crisis unfolded.
Excalibur Funds Management further reasons their prediction with treasury yields between the Australian 10-Year Notes and the US 10-Year Notes. The margin between those two are just above 100 basis points and they predict it will shrink further until the margin will converge. The closest the Australian-US margin came to convergence was in 2005 and at that point the AUSUDC currency pair traded at 0.7500.
Matthew Harper, who was formerly employed by National Westminster Bank in Sydney, runs the fund together with James Wallace who was a former Citi Group trader. I have to admit, being a professional trader for over a decade and around financial markets for almost two decades that neither National Westminster Bank not Citi Group are great trading outlets. They are banks and should stick to banking and they are definitely not places where excellent forex traders are groomed.
When banks, or former bank employees, think they are smart enough to run hedge funds bad things usually happen. Banks belong in the dumb money camp together with mutual funds and hedge funds are a smart money trading vehicle which means they are not a natural fit. More and more dumb money trained and educated traders launched hedge funds which explains while the average performance dropped as more and more hedge funds are not pure anymore, but have been infested with dumb money untalented traders and managers.
Given that Excalibur Funds Management targets a growth rate of 10% and 13% per year, which means just below 1% per month; while they allow a 2.5% monthly maximum loss makes this a hedge fund which I consider a bad investment. That is my personal opinion and I am not here to tell you where to place your money, I am here to discredit an analysis conducted by a firm which Rogue Forex Trader disagrees with to the max.
Excalibur Funds Management calls the AUDUSD currency pair
Rogue Forex Trader calls the AUDUSD currency pair back up to parity.
Now you want to know my counter argument as of why Rogue Forex Trader calls the AUDUSD currency pair higher from current levels and eventually retest parity, especially after I mentioned the cornerstones of Excalibur Funds Management and their reasons why they call the AUDUSD currency pair lower?
You won’t get it, that’s part of being a rogue forex trader. You can do whatever you like with what you read here, I state my opinion and don’t need to give you reason as of why. You can ignore it and follow those who give you reason as I earn pips from my forex trades regardless if you believe what I write or not.
See, what you guys fail to realize is that true forex traders trade their own strategy because they know it works and have a track record plus lifestyle to back it up. They don’t trade so others understand and agree with it. Those forex traders and management firms who have to be out there and market their case are usually the ones you should stay away from.
PS: The hottie in the above pictures is Aletta Ocean.
