Thursday, March 16, 2006

Peso to the US dollar

Although I am not an economist, I have been dipping my hand into currencies and forex for the past few months and years; however, this is no way in saying that I am an expert. Fact is, I barely know something about currencies than a guy in the street.

In trading currencies, I mostly rely on technical analysis in the short term, and the fundamentals, what ever that is, in the long term. When I buy or sell currencies, I consider technicals 80% of the time, and just 20% for fundamental reasons. Technicals mean, how the chart looks like, the immediate history of the currency, what my fib line is telling me, the moving averages etc.; in others words, my indicators.


Well…let me make my bold prediction on the Peso dollar exchange rate for the year 2006.

I say….provided GMA stay in power, and provided no events worse than Fort Bonifacio stand-off happens before December 31, 2006; and most importantly, provided the confidence to the economy remains stable during these period, then the Peso, could go up to 35 or 40 pesos to the US dollar by December 31, 2006.

Yes, you read me right… 35 to 40 pesos per US dollar by December 31, 2006.

Why? This is because of numerous reasons, primary of which is the humongous trade deficit of the USA economy, and because of two major events happening in the near future:

1. the Iranian decision of opening the first oil bourse priced in Euros on March 20th, 2006 in Teheran, which could cascade and start the downtrend of the US dollar to the pits.

2. the decision of the American Federal Reserve to stop publishing M3 figures (the most reliable indicator on the amount of dollars circulating in the world) from March 23, 2006 onward. This probably indicates that the US money printing presses will hum to produce large amounts of money this year.

These two primary events coupled with massive debts of the US economy to the tune of several trillion dollars, and the massive trade deficit with China, Japan and other Asian economies, will perhaps, create something, changing the landscape of the world economy, what ever, it will be.

However, there's a glitch here somewhere. Remember, a few months back, I blogged about a massive trade in weapons in 2006 for economic reasons? Well let me quote Congressman RON PAUL OF TEXAS of Texas:

Our whole economic system depends on continuing the current monetary arrangement, which means recycling the dollar is crucial. Currently, we borrow over $700 billion every year from our gracious benefactors, who work hard and take our paper for their goods. Then we borrow all the money we need to secure the empire (DOD budget $450 billion) plus more. The military might we enjoy becomes the “backing” of our currency. There are no other countries that can challenge our military superiority, and therefore they have little choice but to accept the dollars we declare are today’s “gold.” This is why countries that challenge the system-- like Iraq, Iran and Venezuela-- become targets of our plans for regime change.

To read his whole speech, check this site:

And to read more about the impending crisis of the US dollar, read this:


Well….as a forex trader, I got no choice but to short the dollar in the coming months, as if my few halala's of capital would matter! Hehehe.
My trades last Friday's NFP was great. First I went long US/Yen and catch most of the pips, then I moved buying EUR/US to catch the recovery after the spike – as I predicted. I realized that when there is a strong 50 - 75 pips move on a Friday – a good chance of it recovering is pretty good, an hour or two before the week closes. I rely on three primary methods in trading (1) reading the price trends using candle sticks, (2) my ema, sma, and macd, (3) my fib lines. These three tools are enough for me - to generate hundreds of pips a week.

I have decided to be a fulltime trader – wish me luck! To realize this plan, I have sent an email to my Boss yesterday, informing him of my plan to shorten my work contract here until May 15, 2006, instead of September 15, 2006. I also talked with our accountant to inform him to calculate whatever money that I will receive on May 15. Writing that letter made me feel – I got big balls - throwing a good paying job – and taking the risk of being jobless in Pinas! What am I thinking?

Drastic decisions?

Well no… I have been planning to do this for quite sometime now. And I am fairly confident that I would be able to earn a living out of trading currencies. Besides, I don’t want to get stuck here for another year…life is short, so I got to get moving. I got to enjoy life, while I am young. And I have to reach my dreams. I have to do this if I have to earn millions a year! Hehehehe! Dream on….dream on….well dream is cheap, might as well dream big.

Wish me luck guys.