A Systematic Trader's Journal

Back in the 80s, when the US government had to deal with a crisis where the Resolution Trust Corporation, which is a holding company formed and housed within the Treasury, to deal with distressed real estate that was funded by loans and savings, the strategy was deemed a sucess where it was later reused by the HK and Indonesian government during the asian financial crisis. This indeed managed to give immediate liquidity and confidence to the markets during such turbulent times. In addition, this came as a win-win situation for the governments, because as these distressed assets were bought in a 'fire-sale' price, which was significantly cheaper than its face value, the governments made profits from such transactions, where in today's case, the similar situation applies. The target of this plan for the purpose of restoring order in the banking system, so banks will remain confident to lend, as well as to free up funds for further lending and use when the economy grows.  Afte...

The markets are still waiting for details on the US financial markets bailout program, as later today 13:30 GMT, Paulson, Bernanke and and Cox will address in a testimony on this issue, which the highlight may pose to be an event risk for the evening. By observation on the FX markets, the market seems to be anticipating a bearish trend underlying for the US Dollar, due to the loosening of monetary and fiscal policies of the US, which is usually seen as a problem for a currency. Currently, the USD is trading weaker against the majors. Be reminded that central banks have injected massive amounts of money over the weeks, if the bailout scheme does not turn out to be as welcoming as expected, then we may have to keep a close watch on the USD and US equities markets for a roller coaster ride. The hope is that this bailout program could work to improve liquidity and provide banks the opportunity to liquify their balance sheets, but hope may not always come true. On the maturing Oct crude oil...

Hi all, I'm finally done with the setup on my new Forexyard Demo account.  As on our previous posts, trading calls will officially commence from today, and we will review the result of trading on a week to week, month by month, and year by year basis (hope I'm that determined). Let us move in small strides to make this work on a long term. Summarizing some facts before we start on making market calls, here are some rules that I will be following: Stops are pre-determined before any entry of trades Size of trade is determined by the total size of the account, total risk should not be more 1% of the total value of the trading account at any time. My target return per week is to achieve 0.5% gains weekly. Compound it by 56 weeks, you should get our annual target. (Gains are tabulated on a weekly basis only) Term of trades may vary between minutes and even up to weeks. Weekly P&L on the Demo Account no. 77104 will be published at both http://systematic-trading.blogspot.com a...

Markets await details on the Fed's proposed bailout program, as the significance of this event is likely to pose bearish sentiments on the US dollar, as a combination of a loose monetary and fiscal policy, is usually seen as a problem for a country's domestic currency, similary over time, this countercyclical moves may be presumed to improve liquidity in the economic pipeline, and to provide firms the opportunity to realign their balance sheets. The bond markets may very well have to witness an increase in the outstanding U.S. government debt. Currently, US Dollar trades weaker against the EUR, CHF, JPY and GBP. Asian bourses closed higher with the Nikkei gaining. Shanghai and Shenzhen gained modestly making an approximate 20% over 2 days, following steps taken by the China government to boost stock prices. The U.S. equity markets will be opening lower later. 10-yr JGBs were also weaker. Commodity currencies are broadly mixed. Gold advanced only modestly. Oil is firm as it look...

Hi all, Hope you guys have enjoyed the 2 videos. Dropping by for some update and information on the markets. Below is a link to where you can find a list of US financial companies whose shares that cannot be shorted as imposed by the SEC on Friday. Find it here:  No Shorting Another small bank, Ameribank, just joined the bank closure list, I wonder if the list will continue to get longer, click here to access for details:   Failed Banks UK PM Gordon hinted that the FSA will be given more power if needed to regulate the financial system, and the UK is prepared to borrow more and use public expenditure. Paulson said foreign banks will be able to unload bad financial assets under a $700B proposal to restore order. Details are still being negotiated. So let's look forward to tomorrow.

Here is a short USD trading outlook and a short entertaining video for your enjoyment towards the close on Friday trading. Looking forward to see you guys here again this next Monday. Have a great weekend ahead! The financial markets have a lot to digest today as they attempt to assess the implications of the USD 500B bailout plan for the US financial system, where the assumption is that, this program could greatly improve liquidity and allow affected firms to salvage their problematic assets, and put an end to scares/panics made by the market on these big firms. Therefore, because of this, the U.S Treasury markets gain another USD500B of new debt. As I understand that many investors now may feel that the current strain is far from over, I still urge everyone to observe equities closely, if you remember yesterday closely, you would understand that the net change of the indices at the end of the day is more important than its change before the open. I would believe that the markets may ...

If the SEC temporarily bans short selling, it will actually INCREASE the cost to banks of raising new capital, and the market's floor might be removed. - "The Securities and Exchange Commission took its most aggressive assault against bearish stock bets by stating its intention to issue a temporary ban on short-selling," writes the WSJ. "SEC Chairman Christopher Cox briefed Congress late Thursday of the agency's intention to take the extraordinary step of interfering with the market's regular functioning." - This move will affect hedge funds that use short positions to hedge investment risk during a rights issue or placing. If they're not able to provide liquidity during a rights issue, the costs to banks of raising new capital will increase.  - Shorts provide a floor, buying (i.e. covering shorts) when there is no one left to buy. If you can't short, the only way to reduce your risk is to sell, which may exaggerate downside pressure in the event...