My views on future trades, past trades, the market and lessons learnt

Sunday, August 13, 2006

Take advantage of terrorists

Ok having reflected on the terrorist crap I realised I need to capitalise on this next time. Any terror thing always effects one country first and may or may not effect others. In this case it was UK and possibly US and Europe. The pound should have weakened and the USD to because the attack was aimed at US. But it didn't because it was viewed as a safe haven, but how was I to know. So to take advantage of this:

1. Identify key countries effect and involved

2. Do NOT take long positions in these currencys

3. Find a suitable cross against a country that IS NOT effected at all and trade versus that.

4. In this case it was the JPY. Japan was not effected.

5. If the terrorist has nothing to do with Europe then take it against the CHF.

6. The reaction may not be instant, once an event is anounced keep an eye out for it all day. Other issues may trigger the currency collapse (airlines cancelling flights)

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