If one could ask a Forex trader what was the most noticeable move over the past few days their answer would probably be, Dollar gains against everything else. The source of this move into the Dollar, taking the Dollar higher in almost every FX pairing, is the fact that investors are becoming increasingly optimistic about the US. When investors becoming optimistic about a certain country that usually leads them to purchase the currency in expectation and anticipation of its rise. Of course, in Forex, everything is relative because currencies trade vs each other; take for example the EUR/USD, where the pair rises when investors are more optimistic of the EU relative to the US and where the pair falls when investors are more optimistic of the US. Which brings us to the latest developments; as we mentioned, investors have now become more optimistic of the US and its economy amid upbeat data and as a result pairs such as the EUR/USD and AUD/USD have moved drastically lower. And traders on their end? While some traders were caught by surprise, others used it to open shorts and have strong gains, and our article deals with those who used it in their favor.
Jagelski and the Short Euro
The first trader caught on our radar is a trader named Richard Jagelski from Estonia who benefited greatly from a falling EUR/USD. So how did Jagelski leverage a weaker Euro in his favor? The Euro has a very strong support at 1.35 which, according to estimates, once broken (i.e. the pair closes below 1.35) could lead to a quick slide. As the EUR/USD fell below 1.35 Jagelski opened a short selling in two major prices zones, the 1.348 area and the 1.360 area. Once the pair slid lower, the trader closed the two positions, first on the 1.3470 area and later in the 1.3450 area. And the result? Three positions with solid gains including one that gained 17% while the other two gained 7% or more. A rather successful move for Jagelsi that has been very lucrative, lifting his total returns.
Aussie Slides, Vilmore Gains
While Jagelski was gaining from the weakness of the Euro vs the Dollar, Vilmore , a trader from the Philippines, was focusing on what has happened in the Asia Pacific FX arena. That is the weakness of the Aussie Dollar vs the US Dollar. The Aussie Dollar draws its strength from demand for commodities. As commodities slid lower the Aussie was hit as well, and with the upbeat Dollar outlook the weakness on the Aussie vs the Dollar or the AUD/USD was even more intense. However, Vilmore, unlike Jagelski and the Euro, was rather cautious and instead of riding a long term short was quick to open a short at the 0.945 area but closed it approximately 10 pips later, one could say at a rather lightning speed. This lightning speed trade was incredibly profitable with Vilmore gaining in a single trade a staggering 20.37% and in another 18.64%, certainly a very strong return in a very short time span.
Further Reading
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