Major corporations asked Dakar, the FX trader, about the spot middle-rate disclosure trade!
FX攻略.com Editorial Team spoke with Dakar, who has a career of over a decade in the foreign exchange team of a major export company. We take a close look at the教材 “One-Point Focus! How to Trade by Securing a Clear Advantage at the Time of the FX Benchmark Fix” currently sold on GogoJungle. If you want to know about the benchmark fix trade, please read on.
What the benchmark fix expert asked! “First of all, what is the benchmark fix?”
Ebizu (FX攻略.com Editorial Team) This time, I would like to ask Dakar about the “One-Point Focus! How to Trade by Securing a Clear Advantage at the Time of the FX Benchmark Fix” (hereafter the Benchmark Fix FX Strategy) listed on GogoJungle. Before that, I think there are people who want to know the basics, such as “What is the benchmark fix?” so please start with an overview.
One-Point Focus! How to Trade by Securing a Clear Advantage at the Time of the FX Benchmark Fix
https://www.gogojungle.co.jp/tools/ebooks/13739
DakarWhat is called the TTM (Telegraphic Transfer Middle Rate) is the benchmark rate banks use when conducting currency trades with customers on that day. This rate is decided at 9:55 AM and announced around 10:00. Because of this, the USD/JPY tends to rise toward the 10:00 benchmark fix. Trading USD/JPY by buying ahead of the 10:00 fix is the benchmark fix trade.
So why does USD/JPY tend to rise toward the fix time? The main point is volume (trading volume). Put simply, banks purchase huge amounts of dollars to prepare dollars, and that moves the chart. This tendency to rise can be viewed as an edge from a trader’s perspective, and if you trade according to simple rules, profits accumulate. That’s why I advocate this benchmark fix trade.
Ebizu: I understand the basics of the benchmark fix. Now, more specifically, around what time should we buy USD/JPY?
DakarThat depends on the market, so there is no single pattern. It’s important to think according to the market. So sometimes it’s good to hold from 7:00, and other times from 9:30.
Ebizu: Generally, when people talk about the benchmark fix trade, the image is to trade from around 9:30 to 10:00, but that seems different.
DakarTrading only from around 9:30 to 10:00 narrows the strategic scope a bit. At least I look from 7:00 to 12:00.
Ebizu: What, from 7:00 to 12:00?
DakarI think it’s better to consider the window from about 7:00 to 12:00 as the target for the benchmark fix trade.
Ebizu: I see!
DakarAs said earlier, there is a notion that you should aim for USD/JPY rise from around 9:00 to 10:00 for the benchmark fix trade. But that only covers half of the trading. Exporters buy yen after 10:00. The yen-buying by them causes USD/JPY to fall, which forms another part of the chart around the fix. In other words, you can catch the rising trend toward 10:00 and then also catch the falling trend after 10:00. Your earnings can double.
Ebizu: I see, rising and falling twice is profitable. This is not well known, is it?
DakarThis kind of detail is summarized in the Benchmark Fix FX Strategy.
Even within a year, there are times with more and less opportunities
Ebizu: Next, based on the explanations on the product page for the Benchmark Fix FX Strategy, I’d like to ask about the keyword “calendar factors.” Please explain.
DakarIf we assume about 250 business days in a year, not every day is under the same conditions. A year has 12 months, and each month is divided into the beginning, middle, and end; weeks are Monday through Friday; and the gomoe dates with 5 and 10 also exist, and March, September, and December are corporate fiscal months. Under these various conditions, for example, if March 1, the fiscal month end, falls on a Monday, I would raise the lot size for the benchmark fix trade. In short, on days when you want to trade or want to complete trades by a certain date, or when holidays pile up trades, I raise the lot size.
Ebizu: So, even within a year, there are fluctuations in opportunities.
DakarThis is my subjective view, but I believe such a strategy is viable. By looking at the calendar, you can determine in advance whether a day is favorable or not.
Ebizu: So plans can be made in advance.
DakarThat’s right. The Benchmark Fix FX Strategy does not have me create the future calendar for you; it’s about you doing that work yourself. In rough terms, there is a list of items marked with a circle (O), and when enough of them are present, you trade.
Ebizu: So you add positive factors and trade when you reach some number of points.
DakarThat’s the idea. For example, one of the circles could be the gomoe date, and we include such check items.
Ebizu: Interesting. So if you buy the Benchmark Fix FX Strategy, you can plan forever!
DakarExactly. And the Strategy has a high win rate, so you can just follow it and win.
Ebizu: By the way, how is the calendar factor created?
DakarI have worked for over ten years in the business, watching foreign exchange rates, and I was also one of the main people who inflated the benchmark, so I have a sense of its characteristics. I organized that understanding into a form.
Ebizu: So it’s a calendar with decades of experience. Next, what does the keyword “one-day schedule of institutional investors” mean?
DakarFrom the perspective of institutional investors, large-volume trades are conducted with a lot of tension; therefore, they want to complete as early as possible after going to the office. So, in general, it’s often done in the morning. For example, I personally have a morning meeting, then I perform trades around 9:30 or 10:00. Banks’ trading desks also hold morning meetings and then trade around 9:30 or 10:00. Therefore, 9:00, 10:00, and 11:00 are times to watch. In Japan, many times trading happens exactly at 10:00 or 10:30, so pay attention to those times.
Ebizu: “The main players who generate Tokyo time USD/JPY moves”?
DakarOne of the major players is an insurance company. For example, if USD/JPY rose sharply before GW (Golden Week), it’s due to many insurance company trades. The reason is that people buying travel insurance before GW in March and April get settled just before GW. Or, in December and January, gas companies drive USD/JPY higher because both corporations and individuals start using heating and must buy LPG in USD. So that’s another factor behind the moves.
You can’t do it without knowing, but anyone can join if you know
Ebizu: Any cautions for the benchmark fix trade?
DakarYou should check whether there are trades that appear to have higher volume than actual interbank trading or physical needs. For example, if Pa Powell of the Fed gave a statement late at night Japan time, or there was some stimulating material, I would not trade during Tokyo time in such flows.
Ebizu: When the usual pattern is clearly different, you need to be careful.
DakarEmployment data also requires caution. For example, if on a Friday the employment data is released and the following Monday is a gomote day, you should not blindly buy USD/JPY. If the Friday report shows unemployment rising, USD/JPY would move downward, and you cannot blindly follow a buying strategy when that trend is in play.
Ebizu: There are many gomote days. By the way, this Benchmark Fix FX Strategy is said to have a high win rate; approximately how high?
DakarNumerically, around 70%.
Ebizu: Is that number unique to Dakar, or can purchasers aim for the same figure?
DakarI haven’t received win-rate reports, so I can’t say definitively, but I have received multiple reports that it worked well. On the other hand, there aren’t reports of it failing.
Ebizu: It’s such a good教材. Are there points not written on the product page that should be highlighted?
DakarAn under-recognized point is that the benchmark fix has features that influence the yen as a price move. People often say “USD/JPY goes up,” but I feel it’s better described as “the yen has movements based on a certain rule.” In other words, the Benchmark Fix FX Strategy can be used not only for USD/JPY but for all cross-yen pairs. For example, EUR/JPY moves relate to how European companies handle trading with yen since many of them are active in Europe.
Ebizu: Now that you mention it, yes. I had pictured benchmark fix as just USD/JPY opportunities.
DakarMany people think that way. As timely examples, Japanese companies are closing their European factories and moving operations to Europe. As a result, pound trading may decline. This has been discussed since last year, and since the start of the year, EUR/JPY has not moved much. So recently it’s better not to focus on GBP/JPY, while EUR/JPY has potential.
Ebizu: If you only watch USD/JPY, you’re missing other opportunities.
DakarThat’s right.
Ebizu: I’m curious about a line in the text that says, “Teach your wife and have her trade in your place as one option.” If I teach my wife who doesn’t know much about forex and have her trade, is that possible?
DakarI think it’s possible. The Benchmark Fix FX Strategy is something you can do if you know it; it’s not something you can do unless you know it. The key is that you or your wife should mark a calendar and only trade when the conditions are met. It’s not unrealistic to have your wife trade when the conditions are met. Still, there are points that require judgment on the day itself, and that judgment could be something you could handle, or I could handle as Ebizu.
Ebizu: Then it doesn’t seem unrealistic. A bright future for our household is becoming visible (laughs). Now, please share a message for those who are interested again in the Benchmark Fix FX Strategy.
DakarThe 10:00 benchmark fix time is fixed, so you can trade in a predictable routine and plan. So I would recommend it to those who want to trade mechanically at a single time, following a textbook-like approach. With this strategy, you can increase your money while relying on a high win rate. You also learn about actual interbank trading, and it will sharpen your interest in USD/JPY moves during Tokyo time, and you can expand your own strategy on top of that. This content is condensed into 64 pages, and you can expect a lot from it!
Ebizu: With decades of professional experience in watching benchmark fixes, the knowledge is well summarized. I will discuss introducing it at home with my wife. Thank you for today.
