Giving it a shot at 1.4688. Got 3 lots, on the way to 10 lots total.

Fed Funds pricing in 100% chance of a .25 cut in December and 50% chance of another .25 after that.

China making their fishy remarks pushing the dollar lower. Supermodel Gisele making comments. When supermodels get quoted in the news, the market has to be at an extreme and due for a reversal.

The dollar is oversold.

I just don't think the fed is going to be able to deliver on the interest rate cuts that the market has already priced in. When the market doesn't get the cuts, the dollar should rally hard. Looks like the dollar already made a nice turn against the Canadian Dollar. Maybe other currencies follow.

Once inflation gets out of hand, the Fed just won't be able to cut.

Of course I could be wrong. Any thoughts?

id rather make a direct bet against a fed cut in the fed funds futures/options market.

also long GBP eurodollar futures short USD eurodollar futures is a good bet if the market has priced in a 100% rate cut. reason is it is likely also priced into the eurodollar futures markets.

Barron

barron, for someone who only has access to tading stocks, currencies and options, how could one make a bet against a rate cut? Is there some super levered etf where I can bet on it?

I'm sure that's in a lot of people's market models ;p

Also, why did you choose to go long versus the Euro rather than another currency?

No real fundamental reason, just most familiar with how that pair moves. I wish I was more familiar with the Canadian dollar. That pair made really nice bottom.

Not sure that I'm going to be successful here though. I've got 30% of what I want, but lets see how it acts around 1.47 and how it breaks out of this base thats forming. This is a little scary. Looks a little like a cup and handle forming.

Ok, I found these CBOT binary options, and that looks perfect. Yet if I dont have an account at the cbot can I somehow get these options?

You have to get an account with a firm that trades at the CBOT. Sometimes places like ETrade and Charles Schwab have referral programs so you can use one of your accounts there to do it. I'm not exactly sure how it works. If you have an account with InterActive Brokers you should probably be able to do it.

yea CF said it. i'm always saying everybody should use IB since they have such a wide array of possibilities and very low costs.

Barron

InterActive Brokers probably has the largest line of products on the net to trade,as well as being quite cost effective

SF

Judgements like these are usually *not* what good trades are made of. You are predicting, in effect telling Market what to do, instead of listening to what Market is saying via price and volume.

Examples:

" When supermodels get quoted in the news, the market has to be at an extreme and due for a reversal."

"The dollar is oversold."

"interest rate cuts that the market has already priced in. "

"When the market doesn't get the cuts, the dollar should rally hard."

Most of the time, I notice that Market does not ever have to get in sync with my trading. No, Mr. Now always has to get in sync with what Market is saying, now.

What you seem to be doing here is kind of telling Market what to do. Plus, now that you have a) taken a position and b) gone public with it (even under a pseudonym) you probably find yourself defending your analysis, "filtering in" what agrees, and "filtering out" what does not.

Be careful.

You might want to sell all your positions and take a fresh look at what Market might actually be saying now.

With no position to defend, no ax to grind, you might get a less filtered view of what Market actually says.

You can always put those positions back on after you complete the cognitive exercise.

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Price and volume often foreshadow "the news". Trend followers, sensitive to Market messaging in price and volume, often:

1. Establish small positions early based on these messages;
2. Establish these positions without knowing "why" price and volume are sending the message;
3. Add to these positions when Market delivers confirming messages;
4. Stop buying, and hold, for the strongest segment of the move;
5. Listen and notice when the trend is weakening, and start scaling out.

Adept Trend followers often receive pleasant "surprises" from "news".

Trend followers with excellent listening skills might be able to notice lots of trends, like the dollar-down trend, relatively early in the move.

Clearly hearing Market speak is mostly an exercise in Empathy

I think your trading philosophy sucks. You make no mention of your timeframe, which is the most crucial aspect of whether you can pull off a profit in a counter trend trade.

You said you already have around 30% of your position (long UDS in some form, I assume), but the set-ups you've refered to haven't yet been confirmed by price action. I'm wondering what strategy or methology you're using, and in which timeframe you're trading within.

It sounds like you're fishing for a bottom. If you've seen some price action indicative of a bottom or a cup and handle forming on the charts, then why not wait for a confirmation of a reversal? - I believe that would be a far less risk trade.

I'm not familiar with this market's charts as I don't directly trade currencies, but I'm just curious about your methodology and timeframe.

After thinking about the currencies and how to trade the euro, and reading a post that Mr. Now made, I think it is best just to see the trend and go with it, rather than against it. Until you can be told otherwise, I'd stay with the trend.

I've sent up a demo account with FXCM taking some very small positions and although it's fake and probably doesn't mean anything, I'm up a little over $2k on $50k of playmoney. Ignore that because I know it doesn't mean anything. What I am trying to say is that it's best to just go with the trend.

Excellent post. I'll drink to that.

After listening to this podcast by Peabody, I was thinking of doing the opposite. About 37 minutes in he states that he believes the present USD/JPY exchange rate is still way out of whack & should be closer to 80.

What I woud like to do is take $10,000 of my poker money & literally gamble it on the $ being below 105 in, say, a 3/6 month time frame. I'm presuming this involves buying something like a USD 110 put/JPY 110 call that knocks in at 105?

Would this be the best way to go about this? Can anyone recommend a broker where this trade would be feasible?

I do think the Euro is ready for a break and the dollar is looking for some good news to give it a temporary rally, but I'm just unsure when. I think we need to start looking for this move, but not exactly try to catch the top of the EURUSD. We need to let the EURUSD make its move and then get in at a favorable LONG on the EURUSD until the trend changes. If you look at the Daily/Weekly/Monthly charts of the EURUSD, it is quite extended to the upside. It's almost inevitable that this strong rally in the EURO needs to come to a halt for the time being.

Anyone agree/disagree?

I think if the USDJPY can cross below 100, and take out the stops, we could be headed to the 80ish level.

For the record, Mr. Now engages in trading trends-- not "counter" trends.

Genuine trading in genuine trends is not supported by strongly held beliefs about the validity of predictions.

The prediction idea leads to other rigid beliefs about specific future price movement, such as "the dollar has to bottom soon", "gold is overbought and must fall", etc.

The dollar might bottom.

The dollar might rise, fall, or move sideways.

ArturiusX might think Mr. Now's trading philosophy sucks, or doesn't suck, etc.

None of this matters since the dollar and ArturiusX behave as they intend to behave now, regardless of any predictions about them.

I think Arturius was talking to OP.

I wasn't talking to you, but what you're saying makes zero sense.

Mr. Now is stating that he doesn't look at what should happen, but rather at what is happening. It makes sense to me.

No [censored], get confirmation of some kind that gives you a good probability of putting in a successful trade.

It's basic high probability trading. On uptrends, you wait for pullbacks and set a stop below the pullback. It's more art than science.

I think Mr.Now is articulating one of the most fundamental psychological aspects of trading. It doesn't matter why a market is doing what it is doing. It only matters that it is doing it and for you to be on the correct side of the trade (remembering there are 3 positions to take in a trade).

Using language such as 'the market should do this...or the price has to do that' just reaffirms your biases about the market direction based on your beliefs.

You can't force the market because it will do whatever it wants regardless of your position, the percieved fundamentals, or whether or not the next losing trade will force you to throw yourself under a subway train.

This is the primary reason why I try my best to avoid watching and reading financial press. Thing is, I find it entertaining, but acting on information I get from Barrons, CNBC, WSJ, Fishead or Shoe is -EV for me.

What you mean my shorts during 1999 was stupid?