"Everything Becomes FX" Weekly Trade You Won't Tell Anyone Vol.003
This "Investment Navigator Plus" is a report delivered every Sunday by those who focus on money management and believe "everything becomes FX."
I want to share money matters beyond FX market, including the weekly positions I actually hold, with a limited audience.
――――――――――――――――――――――――――――
▼Table of Contents
―1. Current Situation
―2. World Finance
―3. Weekly Trades That I Can’t Tell Anyone About
―4. Next Week’s Positions
――――――――――――――――――――――――――――
【PR】Turn FX Losses into Gains using Money Management
A trading method that emphasizes money management, which is often neglected in FX.
It enables trading that isn’t swayed by win rates or strategies.
▼1. Current Situation
――――――――――――――――――――――――――――
The author-in-chief, "Everything Becomes FX," travels between domestic and international locations about half of each month. I’d like to share where I am now, what I’m seeing, and who I’m meeting and working with domestically.
――――――――――――――――――――――――――――
This week I’m in Bangkok. Bangkok, a Southeast Asian city alongside Kuala Lumpur and Jakarta, is still under construction of many high-rise buildings everywhere.
When people think of Thailand, it is famous for being a central player in the 1997 “Asian Currency Crisis.”
As the country’s annual economic growth rate, which had been about 9%, showed signs of cooling, it faced a speculative sell-off by hedge funds, causing the Thai baht to crash from 25 baht per dollar to 50 baht per dollar in six months.
If you imagine the rate going from 100 yen per dollar to 200 yen in six months, you can understand how terrifying that is…
As a result, economic growth fell to -7.6%, and across Asia (excluding China) to -4.9%. I wasn’t trading forex at that time, so imagining it gives me chills.
The Asian currency crisis and the “Lehman Shock” affected Japanese companies in Thailand, freezing the wallets of expatriates, and many shops disappeared from entertainment districts like Sukhumvit and Nana.
By the way, many women who work at karaoke venues that cater to Japanese clientele come from rural areas to Bangkok for various reasons, and they say they only get to see their own children three times a year (on their birthdays, New Year, and Songkran*).
*Songkran = Thailand’s traditional New Year. In Japan, it is also called the “Water Splash Festival.”
Hearing this may give a negative impression, but Thailand’s annual economic growth rate remains about 3% (Japan’s is about 1%). It’s certain that it will continue to be one of Southeast Asia’s major cities.
Although prices are said to have risen sharply in the last decade, they feel about one-tenth of Japan’s levels. Even buying a lot at a convenience store won’t reach 300 baht (about 1,000 yen).
The condo I’m staying in now costs about 3,000 yen per night on Airbnb, but locals pay around 8,000 baht per month (about 24,000 yen). I find myself considering permanent residency…
Having 29 floors above ground with all the latest facilities and 3,000 yen per night for an example room on Airbnb is astonishing price disruption, and it’s understandable that group hotels and others apply pressure (vested interests).
▼2. World Finance
――――――――――――――――――――――――――――
Many people trading FX spend time researching fundamentals and technical analysis.
Yet, ironically, about 90% of FX participants end up losing, and many exit the market.
In this column, I want to think about world finance while keeping a distance from those trends.
――――――――――――――――――――――――――――
This week the UK policy rate had a major impact on the markets.
The BOE policy rate, announced on September 14, held at 0.25%. However, there were indications of rate hikes as markets expected further unwinding of monetary easing to bring inflation back to target in the coming months (quoted from Bloomberg), which caused the pound to rally.
Incidentally, in the “Weekly Trades That I Can’t Tell Anyone About” section, I held positions that were short the pound, resulting in two stop-outs.
To profit from markets, staying “unfeeling” is important. If you look at the price with a money symbol, you will likely get burned, so trade with a size that you don’t feel anything about.
Now, another major news item is China stopping Bitcoin trading.
On September 15, China intensified its crackdown on cryptocurrencies, and the three major exchanges stopped Bitcoin trading. This caused Bitcoin’s rate to fall from about 500,000 yen to 400,000 yen.
In dollar terms, what was approaching $5,000 could drop below $4,000, and the current line under consideration is whether it will dip below $3,000.
China blocks out Google, Facebook, Twitter with the Great Firewall, and fences its own citizens with tools like Baidu, WeChat, and Weibo.
Because of the nature of blockchain, it’s easy for money-laundering to occur with cryptocurrencies like Bitcoin; where this regulation will go next is something to watch.
Moreover, 99% of China’s ICOs (initial coin offerings) are scams, and only about 1% of funds actually go into projects—quite remarkable….
▼3. Weekly Trades That I Can’t Tell Anyone About
――――――――――――――――――――――――――――
A strategy that uses trend-following and counter-trend portfolios with full money management in the “Weekly Trades That I Can’t Tell Anyone About.”
Since starting in 2012, it has never posted a loss for a year and has achieved total gains of over +30,000 pips.
What is the secret to profits with a win rate of 48%? Here, I’ll present this week’s trade results.
――――――――――――――――――――――――――――
・This week’s result: -1,716 pips
・Cumulative result: +30,056 pips
【Weekly Trade Results】
・Win rate: 48.6%
・Average winning: +839.6 pips
・Average losing: -580.1 pips
・Largest win: +13,491 pips
・Largest loss: -2,932 pips
・PF: 1.37
・PR: 1.45
“Weekly Trades That I Can’t Tell Anyone About” takes positions with an edge from the 1-hour, daily, and weekly trends, but its essence lies more in money management than in trading itself.
This method’s win rate is 48%. Since it feels around 40% by “felt probability,” it cannot be recommended to those who require a win rate of 80% or more. It is only recommended for those who can think in the long term.
＞＞Overview of “Weekly Trades That I Can’t Tell Anyone About”
