Monday, March 27, 2006

NZD/USD (One more time!)

The market is boring me to tears, and until we get the silly Fed business out of the way, I just don't want to talk about it. So how about a blast from the past?

Many months ago (like nine....) I suggested a FOREX short on the New Zealand dollar (NZD/USD). You can see the post here. .

This is the only FOREX trade I've ever recommended, but it's done fantastically well. I haven't looked, but I wouldn't be surprised if this was the best FOREX trade over that entire period:

What I want to point out to all the nay-sayers that visit this blog is the following: I was early on this recommendation. If you had checked the recommendation at various points after it was made, you could have said I was dead wrong. And the trade was a loser.

But the broad trend was there. And in the end, the broad trend crushed the little ups and downs, and my analysis was right on the money. It was a little early, yes. But it was ungodly profitable.

Something to keep in mind on those days when the Dow squeaks out a gain and people have Dow 19,000 on the brain.


Kapil Khanna said...

To be fair, why dont you post a trade that went completely against your reccomendation along with an post mortem analysis.

Tim Knight said...

Oh, there are plenty of those. They get stopped out. But the fact is that if I state a stop in advance, and it hits the stop, there's not a heck of a lot to discuss. I'm wrong PLENTY of the time. The key is to have a stop which represents a reasonable loss in case one is indeed wrong.

Kapil Khanna said...

Agreed. The interesting thing is the biggest losers could have also been the biggest winners, if only the trade was done on the opposite side. I like to analyze them and see why did i miss. More often than not, it turns out i saw what i wanted to see :).

Mr.President said...

Hi Tim,
What is your opinion on airline sector?
Company like Delta Air Lines and others. DALRQ is up again 13% today. Thank you!

John Wheatcroft said...

You do know that most of the reason for the large collapse in the NZD/USD is the fact that the BOJ decided to change their interest rate policy because they believe that their deflation problem is licked? This is causing a need to unwind a lot of carry-trade action in the Pacific rim. The same thing is happening to the AUD/USD pair.

Not to say your analysis wasn't correct - I don't know what that was. But what is going on now since the beginning of the year is what we could call "panic in the pits."

PB said...

Just exactly what is the market waiting for Bernanke to say? That he will act according to incoming data? OOOOhhhh, that is earth shattering stuff! Bernanke will not say ANYTHING to spook the markets. This current bull-run will only stop once the Fed gets out of the way.