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Overnight Points of Interest
22 January 2013
Good morning and a belated happy new year.
Before I review the events of last night I'd to touch on one thing that we believe impacts on trading results more than any other input, and that's position sizing. Here at Edge Capital we have done an enormous amount of work over the last 9 months on this matter. We've come to believe that, more than any other factor, position sizing has the biggest influence on trading success. Most would expect 'directional view' to be the biggest contributor to trading success but we disagree. Take the example of Gold. Most of you have been very bullish Gold the last 5-10 years as its made its way from US$255 to $1,900+ but who of you have bought the new boat and bach on that move? That's right, the initial risks taken have been too great to hold the position to any worthwhile conclusion.
As such I urge you consult with me this year and come to understand how best to capture decent trends in an successful manner.
Overnight
# It was a relatively uneventful day offshore as U.S. markets were closed for the Martin Luther King Day (and the Obama 2nd term presidential inauguration). Global sentiment remained healthy with the EuroStoxx600 rising a mild 0.26%, to sit near 2 year highs.
# The JPY strengthened slightly after an extraordinary run of recent weakness with market participants happy to book some profits ahead of today's bank of Japan policy meeting. With such big things expected of the central bank, under new PM Abe's guidance, there is a wariness that they may not be able to deliver against the much hyped expectations. USD/JPY has drifted back from 90.25 to 89.70 (was as low as 89.33) whilst the NZD/JPY has drifted from 75.80 to 74.95.
# GBP weakness continued apace as GBP/USD fell to 5 months lows and NZD/GBP rose to 11 month highs. A number of factors have conspired recently to undermine Sterling, the chance of a triple dip recession, fears of the AAA rating being lost and the possibility of a British exit from the Eurozone. The latest worry is that heavy snow currently falling in the UK will hurt economic performance in the near term.
# Germany's ruling coalition lost a key seat in the Lower Saxony election, Mrs Merkel called the defeat "painful". The loss makes things difficult for her ahead of national polls in September.
This week (events of a 'high impact' potential shown)
Regards and good trading
G.
BBY (NZ) Limited, a specialist advisor in Futures - FX - CFD - Options - Shares - Gold - Silver - Commodities
