Rogue Forex Trader Counter AUDUSD Call

Fellow forex traders, accept my apologies for my month long absence. Being a rogue forex trader sometimes means you will fade into the shadows and do some heavy research especially if you plan a longer-term move so I have been busy doing just that. You know, now that I think about it; don’t accept my apologies as there are none!

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 17^th 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

down to 0.7500.

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.

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Northern Colorado Secession Plans

I know it has been a while, but the last two weeks I was extremely busy with some rogue forex trading which I needed to focus on in order to keep everything intact. The life of a rogue forex trader can be extremely rewarding; having said that there may be times when you guys will miss me and my rogue forex trades here as more pressing matters require my full attention such as my trade set-ups for the next few weeks.

While I was analyzing charts in order to find the next rogue forex trade which I will share with you guys on Monday, I did have some time to stumble across a very interesting article which I could not keep to myself. It has to do with Colorado or rather Northern Colorado which wants to become the first state to secede since West Virginia seceded from Virginia back in 1863 during the Civil War. This was 14 years before Colorado even joined the union.

Since then there has been no secession in the US, but it was only a matter of time. Northern Colorado is serious about it and a total of eight counties are in secession plans together. I am rather excited about this, but do not get too excited forex traders. I doubt they will have their own currency and merely adopt the US Dollar as their currency which means now new currency crosses to trade.

Which eight counties want to form the 51^st state?

• Kit Carson County
• Logan County
• Morgan County
• Phillips County
• Sedgwick County
• Washington County
• Weld County
• Yuma County

There may be two Nebraska counties who would like to join the new state as well as two Kansas counties which means that there could be up to 12 counties from three different states who would like to secede and form their own state which they can govern free of socialistic left-wing propaganda.

Secession talks are usually heavy in Texas which continues to see an increase in secession wishes from the US while Austin would like to secede from Texas. I think this shows the extreme dissatisfaction of the growing general public with the current system and those who understand the US constitution want to break away from Washington and be allowed to operate their state for their constituents and away from left-wing idiots.

The counties who wish to form their own state represents the rural areas and want to fight in order to preserve their way of life, which given the abuse of freedom as well as the US constitution over the last five years makes perfect sense. I applaud the people who have created the idea, fight for it and stand up for it as well as those who support it.

Weld county commissioners Sean Conway, Mike Freeman and Douglas Rademacher are leading the secession coalition and want to put secession on a ballot so voters can decide if they are on board with secession and in order for the process to move forward. US Representative Cory Gardner, a Colorado Republican, also support the coalition. After voters agree on secession from Colorado, the Colorado General Assembly needs to agree on it and give the counties the green light. The final hurdle lies within the US Congress and their final approval.

The process is lengthy and most think impossible to achieve, but the coalition is already mapping the borders of the new state and are 100% serious about this matter. I can only hope for the citizens of the counties who want to do the right thing for them and their lifestyles that they actually secede from Colorado.

I will continue to follow the developments out of Colorado, more out of personal interest than business interest as it will not have any impact on forex markets. I think over the next decade we will see more and more secession talks and the eventual break-up of the US as we know it now. At that point forex markets will take note as we may see a complete split of the US over the next three decades into multiple independent countries.

PS: The hottie in the above picture is Gina Lynn.

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Abenomics, JGB’s and the Japanese Yen

Sometimes it is hard not to laugh and the stupidity of voters and how they tend to make every effort to fulfill the basic principles of insanity. On September 26^th 2006 Shinzo Abe became the 90^th Prime Minister of Japan by a special session of the Japanese upper and lower house referred to as the National Diet. He was the youngest Prime Minister elected since World War II and resigned less than one year later on September 12^th 2007.

During his eleven and a half months as Prime Minister he introduced what is now known as Abenomics to the Japanese economy which backfired and was nothing more than a counter-productive move which gave Japan more of the same and rightfully so. Japan decided to bailout its massive financial system as the Japanese were clouded by pride and stated that no Japanese financial institution will fail. The Japanese government bailed out its failing banks and welcomed an area of recession, depression and deflation from which it has yet to recover 14 years later.

After his resignation a string of other Japanese Prime Ministers left their stamp of failure and resigned within less than one year after winning elections. As the Japanese economy endured recession after recession and the Bank of Japan slashed interest rates down to zero in an idiotic attempt to force Japanese savers to take their money out of banks and invest as well as consume, the Japanese Yen grew stronger as it was regarded as a safe haven and used as a carry trade.

Japanese exporters grew disgusted with the strength of their currency and the Bank of Japan vowed to come to the aid of the only function sector of the Japanese economy; its export sector. In order to make Japanese products more competitive from a pricing perspective they adopted a weak Japanese Yen policy.

Abenomics failed terribly, but Japanese voters worked hard to display their utter lack of memory and on September 26^th 2012 Abe was elected Prime Minister again. Yes, you guessed it right; with his electoral victory he brought back Abenomics. This time he made a pledge to turn things around and kick-start the Japanese economy with Abenomics. Same approach as six years ago based on hope for a different outcome equals insanity.

The Bank of Japan, you know the ‘independent’ one, announced a massive QE program on April 4^th worth $1.4 Trillion over the next two years. The amount of complete lack of economic understanding and fiscal as well as monetary stupidity only rivals the Ben, the Septic Tank, Bernanke out of the US Fed. The Japanese Yen started to tumble and the USDJPY currency pair moved from below 78 to above 103 in less than six months.

Japanese exporters were extremely pleased, but things have changed rather fast. The Japanese Yen experienced a sharp reversal trade and collapsed back down to 94 just as dumb money analysts called this currency pair to 110 by the end of 2013 and 120 by the end of 2014. Rogue Forex Trader calls this pair to end 2013 between 88 and 92. All other major Japanese Yen crosses experienced the same fat in the forex market.

The fall and rise, yes it was just like that and not the other way around; of the Japanese Yen is not even the biggest problem for Abe, the Bank of Japan and their moronic economic policy. The forex market already mocked the Bank of Japan and their ultra-short term approach to a decade old problem and shoved their quantitative easing campaign down their anus.

Even worse for Japan and as a direct result of Abenomics is the performance of Japanese Government Bonds or JGB’s. Abe and the Bank of Japan hoped to lower interest rates and force consumers to spend their money in order to generate economic activity and invite inflation. The 10- Year JGB traded below 0.32% and remains historically very low especially if compared to other sovereign debt.

After QE was announced it jumped at some point above 1.00% before settling in the 0.80 range. This is just another example why you do not operate based on hope. The Bank of Japan vowed to purchase 70% of new issued debt every month and hoped long-term interest rates would drop even lower. It works different in the real world and long-term interest rates rose which starts to give Japanese consumers even less incentive to spend. Abe and the Bank of Japan achieved the exact opposite of what they desired.

In order to top things off, Japanese Banks already unable to earn a decent return started to dump their holdings and shed 10.8% in April alone and applied further upward pressure to yields on the JGB. Additionally they have hiked prime interest rates in order to cover the shortfall in earnings from JGB’s which now offers cautious Japanese consumers another reason to not spend money.

The rise in interest rates will now impact Japanese debt and further hammer the Japanese economy and could initiate a death spiral of bond selling which will allow yields to skyrocket and interest rates to rise even further and ensure deflationary pressures will haunt the Japanese economy. Japan is the most indebted nation in the industrialized world and is proud to have a record 230% debt-to GDP ratio. The Bank of Japan took what idiotic steps they could in order to try and control the JGB market which backfired severely and is about to do so even more drastically.

This is a perfect example why governments as well as central banks should not interfere with financial markets and the economy. All the Japanese problems can be dated back to the massive financial bailout of their financial system back in 1999. This utter socialistic move destroyed Japan and continues to haunt them. The US made the exact same mistake in 2008 and will face the same outcome. Those who disagree simply fulfill the definition of insanity just like Japanese voters did in September 2012, US voters in November 2012 and so many others.

The Nikkei 225 entered a bear market last week and dropped over 20% in less than four weeks and implied volatility on JGB’s maintained a level above 5% for several trading weeks while the Japanese Yen began to strengthen. After it is all said and done, Abenomics was the same failure as before and Prime Minister Abe as well as the Bank of Japan have accomplished the exact opposite of what they intended.

This is what happens when you vote unqualified individuals into decision making positions and allow their lack of real world comprehension and amusing moronic approach infested with socialism interfere in what should be a free market. The more you decide to mess with a capitalistic idea the worse the impacts will be. Sometimes the economy will revert into a recession and the best policy is to allow the financial system to work as it does because it works perfect as the Abenomics – Japanese Yen – JGB example displays.

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About Rogue Forex Trader

As the name suggests, I am a forex trader. I have been trading forex for several years and decided to start this blog to take you through a fictional journey through the world of forex trading. Yes, you read that right; a fictional journey. Nothing you will read here is based on a true story or developing story, or is it?

So, why should you read Rogue Forex Trader since it will be a fictional journey through forex markets?

The answer is very simple. All forex trades I will mention are real-market trading recommendations which you may or may not follow at your own risk. All news events I will mention are real-world news events and not fictional so you may get the truth behind the news rather than just some lousy news report compiled by biased journalists who only view a bull market as good and call bear markets terrible.

Maybe you are sick and tired of belonging to the 98%ers.

What are the 98%ers?

The 98%ers are all currency traders who failed at forex trading. The failure rate in today’s forex market is roughly 98% which means out of every 100 traders only two will make it. This is not meant to discourage anyone, just some cold hard facts. Out of the 2% who will make it, only about 10% trade professionally while the other 90% manage to trade part-time and boost their disposable income.

Let’s keep the math coming. Out of 1,000 traders only 20 will succeed in the forex market and out of those 20 only two will trade professionally. 980 forex traders will blow their accounts and keep following the advice they receive by the 98%ers and wonder why their accounts get burned time and time again.

Everything you will read here, from busted forex myths to rogue forex tips will give you a fighting chance to crossover from the 98%ers to the 2%ers. Be warned, what you will read is not what you will get to read in too many places and only the minority will share the same or a similar point of view, but when it comes to successful trading it is good to be in the minority.

The less people share a certain thought the better; this holds especially true in financial markets. As mentioned above the failure rate in forex markets is roughly 98% so I let you guys figure out why you want to be and need to be in the minority if you want to succeed as a forex trader or any other trader in today’s global financial markets.

Honestly, you need to decide why you want to read the Rogue Forex Trader. In case you have no clue I suggest you go back to the 98% and be happy getting what you deserve which is nothing more than scares from your unsuccessful attempts to become a forex trader. Following the advice of the 98%ers is like one blind man giving directions to another blind man.

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