© Daytrader21
|
It is hard to say whether there are some currency pairs more predictable than the others, but I believe that some pairs are more difficult to forecast mainly because of reduced liquidity and/or its "personality". Each currency pair has its own "personality" and a tendency to exhibit particular patterns characteristic to its behavior. However, due to recent years' changes in monetary policy of world major central banks, I see the Fed and BOJ diverging from each other, thus making USD/JPY uptrend to continue in the years to come. Most likely the U.S. central bank will stop easing and will continue with a gradual tapering of $10 billion every FOMC meeting, while the BOJ will be engaged in more QE. I also see a huge potential for a big GBP/USD upside movement in the following years. Fundamentally speaking, the U.K. is set to grow faster than any other Western economy. This year the economic data have been very strong and supportive for the Pound thus far. The U.K.'s GDP has shown the fastest growth in three years and rose by 0.8% according to the latest figures.
What performance do you expect from the Japanese Yen versus its major counterparts in the short and longer term?
As I have already said previously, I am expecting the current weakness in the Japanese Yen to continue in the years ahead because of the divergence between the Fed and BOJ. However, in the short term, since it has gone too fast in a very short time period, we can see it staying in a wide range and taking a pause, but pressing to the upside. Only last year alone the Japanese Yen weakened 17%. I believe that taking a pause is healthy for the market in order to regain strength for the next big leg up in USD/JPY.
What advice would you give to those, who have just started FX trading?
My first advice for a novice trader is to invest real cash, track your trades and study your mistakes. That is the only way you can get real education in this business. My number-one rule is that you should develop a strategy with a risk to reward ratio greater than 1:2, this way you make sure your winners are far bigger than your losses. Another mistake I have seen beginners make is not cutting losses short. You have to be able to cut your losses short and let your winners run for long term survival in this business.