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Simplest idea ever
One of the simplest ideas in investing is buy and hold strategy. This type of strategy is most frequent type of investing because most of the mutual funds are offering their products and services without any active management. Underlying assets are commonly stocks and bonds. In this article I would like to show you an alternative, how to use and adapt this strategy in currency market.
Safe o risky
Well, this is the dilemma. If we assume that all assets have different risk and all strategies have different risk profiles, there is always chance to make wrong decision. We cannot say that buy and hold is always risky strategy and we definitely cannot say that is safe as well. All these things depend on multiple factors as fair value of the asset, interest rate or yield, actual price, market condition and many others.
Why should I invest to the particular currencies?
I don’t know if there is any better and flexible market as a cash market. I don’t believe in never-ending bullish stock market. I believe in very serious and conservative way of investing. The way how to to create a fixed income. I don’t want to say that only forex is the best market. There is plenty of t…
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Kivetat avatar
Kivetat 30 Jan.

Airmike  very professional and very interesting job)))

bagema2015 avatar

and how much money should be in the account to invest?

bagema2015 avatar

and how there is a risk of losing everything and become bankrupt?

bagema2015 avatar

because with little money it can not be done? yes?

Airmike avatar
Airmike 2 Feb.

it depend on leverage. if you invest in no  leverage there is risk extremely low. because NZDCHF or NZDUSD is a rate with Interest rate differential. not an asset with yield.

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At the beginning of the year, everyone (myself included) expected to see rates push higher and higher. The US 10 year yield started at around 3%, and currently sits at 2.5%... 90% of the market participants were expecting to see 3.5%, not 2.5! And here lies the problem, consensus trades have been failing miserably this year, and frankly don't look goof for the rest of the year.
The consensus trades that nearly everyone believed in going in to 2014 were as follows, as they thought at the time:
1.) Sell bonds - With the Fed tapering, and the US growing well, interest are surely going to rise in the not too distant future. As such, we will have higher yields on Government bonds across the curve.

2.) Buy Equities - The so called "great rotation", sell bonds and buy equity. The US is growing, the world is recovering, buy stocks. Corporate default rates are historically low, and their profit margins have never been higher!

3.) Sell the EUR, buy the USD - With the ECB acting very dovishly, the EUR will fall... ignore the growing current account, or financial stability, the ECB will force the EUR lower. For the USD, the US could grow >3% this year, and interest rates could
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mimuspolyglottos avatar

Vix, Gold, Cad, we could put here much more whereat six figures guys were not precise. I am impregnated by the feeling that the whole situation is just slipping out of the US hands, no matter geopolitics or economy we are talking about. Baltic Dry Index stays below the cellar, capex is subdued, too much of ''Too Big To Fail'' in politics and in economy. Where the hell is my sell in May and go away, aaa? ZH and its armageddonian rap fails again? Fat cats overshadow tigers! CBs are offering only the blue pills, not the red pills. Thank You for the relevant one, Adrian. Best Regards.

Daytrader21 avatar

Great article as always. I couldn't agree more with what you have already said. US 10Y yields was the biggest surprise as Fed is moving away from his easing cycle I was expecting US rate to soar and breaking below 2.6 the previous days was quite a big surprise.I guess the market has to force weak hands out before moving in the right direction. Right now EUR/USD is the one to watch but until we see some raise in volatility I'm not expecting any powerful down trend to start anytime soon.

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____________________________________________________________________________________Introduction: We are going to look at a variety of asset classes encompassed within the fixed income and credit world, such as money markets and spreads. Interest rates and yields are historically low at the moment and many are calling for another credit bubble, with a chance of there being a bond bubble leading to a so called "great rotation" into stocks and other risk assets.However I will start by looking at the trends and likely outcome of STIRs and Money markets. ____________________________________________________________________________________STIRs and Money markets:Short Term interest rates (STIRs) and Money markets cover areas like LIBOR, EURIBOR and central bank base rates. First of here is a chart of the 3m USD LIBOR rate dating back to the 80's.3m USD LIBOR, Thomson ReutersAs is straight away evident, the inter bank rate is at a record low, and not only low, it has virtually not moved since the end of 2009. That being said, this is good for banks as it allows ease of access to liquidity to help sure up the banks if problems are to arise in the short term. Furthermore the LIBOR rate is v…
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scramble avatar
scramble 27 Mar.

@adrian: ah ok! so the box showing "MAR3 - JUN3" etc, means "MARCH 2013 - JUNE 2013"! Doh! Many thanks :)

Efegen avatar
Efegen 28 Mar.

Nice work+1

ducklobo avatar
ducklobo 29 Mar.

Great and interesting material to digest +1

Delossan avatar
Delossan 31 Mar.

well done. +

doctortyby avatar
doctortyby 31 Mar.

good webinar presentation and I am looking forward for more useful info from you

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Introduction:This article is all about bonds and in general the fixed income markets. To start with, a bond is effectively an IOU from one person to another. There is a legal obligation from the issuer to repay the investor. If this is not fulfilled the issuer default on his debts.Components:There are many components in bonds that you should be familiar with, even when it comes to trading Forex. Firstly;Principal : Also commonly known as the Par value is the value that the issuer will have to pay back to the lender upon maturity. This ranges from $1,000 to $100,000 depending on the type of bond. This is also commonly the same value that the investor lends to the country or corporation.Price : This aspect changes just as the price of a stock would, upon issuance price is normally  100. Throughout the life of the bond this price may vary due to demand for the bond. Any price above 100 is seen to be trading at a premium and anything below is at a discount. Normally it is quoted as the "clean" price, or the price without any interest that has accrued. If there is a $10,000 bond and the price falls from 100 to 90, it costs you $9,000 to buy an IOU for $10,000. This means that if you hol…
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AdrianWS avatar
AdrianWS 19 June

Spanish 10 year's caught a decent bid today forcing yields down 17 Bps at one point, bids seen from arbitrageurs trading compression movements with CDS'. -

Risk on across market but all rest on QE hopes. All things considering, do you personally value the SP500 at 1350 without QE, I think the answer is no, seems to be pricing in QE to me.

One key factor though is the diminishing returns of each successive intervention and that suggests QE3 will last for less than 1 month and give no more than 100 points. we will see.

scramble avatar
scramble 20 June

Another great article! Very well explained one of the most important (and very actual) aspects involved in trading financial markets! Well done!

AdrianWS avatar
AdrianWS 26 June

RBS say long core, short periphery into the weekend. as it stands 10yrs of European bonds are : 9.65% - Portugal // 6.72% -Spain // 6.06% - Italy // 1.52% - Germany // Netherlands - 2.06% // Finland - 1.9%.

Some pretty sizeable moves in these yields in the past few days, will be interesting to see where it goes from here.

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Why are we trading FX? Is it just because of the low transaction cost? Is it because the FX manager area used to be unregulated?Nope. Here's why we trade it. Here's why no investment manager can not afford not to invest in FX as a source of uncorrelated alpha.FX is the largest market in the world. It trades more than 4.000 billion USD per day. It's liquid, the amount of market participants is high, there is a natural trading demand (from corporates, individuals, businesses that need to buy other currencies), it's easy to price/value.FX has been a cash cow in investment banking for decades. Investment banks have had always FX prop and FX flow trading and it is a core element of investment banking. In Asset Management FX it's only something to hedge, to control exposure, to be aware of the risk – rarely traditional asset managers see FX as a core source for yield. Strangely only few managers have discovered FX investment products as a source for uncorrelated yields....yet. Today fixed income rarely lives up to the asset-liability-management (ALM) requirements (approx. 4% p.a.), equities are too volatile and the returns are too unstable, alternatives are often illiquid and hard to pri…
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ritesh avatar
ritesh 12 Oct.

Nicely written, quite detailed and informative article. Nice on bro, keep more coming. Best of luck and +1

Barney avatar
Barney 19 Oct.

nice job

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