A lesson for us all, not to say I told you so
Wednesday, June 17, 2009
I’m beginning to believe that I have some psychic ability. In yesterdays post I spoke about the “spin” that the Americans and the press took on the Russian Finance Minister’s comments backing the dollar.
And, as if he read the posting himself, Russian President Dmitry Medvedev agreed with me and sent shockwaves through the Forex world.
Actually, what Mr. Medvedev said was that there was a strong need for another currency reserve that the world can turn to. Now, many saw this as a contradiction to what his Finance Minister said, but make no mistake, what Alexi Kudrin had said was that the Dollar will be the Reserve currency for some time to come. He did not say, “I believe in the Dollar”, he did not say “I love the Dollar”, he did not say that he wants the Dollar. What he said was practical as “right now there is no option other than the Dollar for countries looking to park their funds someplace”...
The arrogance of some who believe that they can manipulate the system, and manipulate exchange rates by twisting words to their advantage is becoming ridiculous. The Forex Online traders look for quick snippets of information before trading, and are usually hasty in assuming – and what happened on Monday was the Dollar shot up, without traders listening to what was said but rather reading a quick sentence “Russian FM backs Dollar as Primary Reserve” – this is the problem when you do before you think. Because the very next day, all those Forex Online traders got burnt after Medvedev clarified the Russian position.
The key to trading the Forex, and I have said this over and again, is to be informed. You cannot rush to judgment and jump to conclusions, you need to watch out and be thorough.
Warren Buffet, Rupert Murdoch and George Soros did not become rich from buying on rumors, they made (and still make) their fortunes based on knowledge, research – and well thought out strategies.
It is time for the Forex online community to do the same or, we risk turning our very liquid market into the volatile entity that the Stock market is – where everything hinges on nothing and things happen for no reason.
And, as if he read the posting himself, Russian President Dmitry Medvedev agreed with me and sent shockwaves through the Forex world.
Actually, what Mr. Medvedev said was that there was a strong need for another currency reserve that the world can turn to. Now, many saw this as a contradiction to what his Finance Minister said, but make no mistake, what Alexi Kudrin had said was that the Dollar will be the Reserve currency for some time to come. He did not say, “I believe in the Dollar”, he did not say “I love the Dollar”, he did not say that he wants the Dollar. What he said was practical as “right now there is no option other than the Dollar for countries looking to park their funds someplace”...
The arrogance of some who believe that they can manipulate the system, and manipulate exchange rates by twisting words to their advantage is becoming ridiculous. The Forex Online traders look for quick snippets of information before trading, and are usually hasty in assuming – and what happened on Monday was the Dollar shot up, without traders listening to what was said but rather reading a quick sentence “Russian FM backs Dollar as Primary Reserve” – this is the problem when you do before you think. Because the very next day, all those Forex Online traders got burnt after Medvedev clarified the Russian position.
The key to trading the Forex, and I have said this over and again, is to be informed. You cannot rush to judgment and jump to conclusions, you need to watch out and be thorough.
Warren Buffet, Rupert Murdoch and George Soros did not become rich from buying on rumors, they made (and still make) their fortunes based on knowledge, research – and well thought out strategies.
It is time for the Forex online community to do the same or, we risk turning our very liquid market into the volatile entity that the Stock market is – where everything hinges on nothing and things happen for no reason.
0 comments:
Post a Comment