Actual Forex Trade – Post Interest Rate & Federal Budget

Submitted by Marco on 8 June, 2006 - 19:33

In this eBook we will have a look at two of my trades taken a week after the Australian Interest rate hike and during the week

The Australian dollar has been particularly active against the US dollar as of late. So what are the main forces behind the volatility in the Aussie dollar? The main reason for the jump in the Aussie dollar a month back was because of the Interest rate hike of 25 basis points. Have a look at the hypothetical trading journal for more information. But the recent sharp downtrending channel which has seen the Aussie hit US $0.7398 in the past few days is the prospects of the US raising their official interest rates. Other contributing factors to the volatility are the metals prices, particularly the gold price and the usual economic data releases that either support or negate reasons for the US Fed raising their interest rates this month.

This eBook is about two trades that I took about a month ago just after the Australian interest rate was raised and during the week of the Federal Budget. I used the most basic of all forex trading systems. And that’s the EMA 50+200 crossover with a 30 pip or so stop loss. I will be investigating other forex trading systems in future.

For my newer readers, you may be wondering why I trade forex when the URL and the title of this website is specifically "My Share Trading". Well I can answer that one. The reason is this. I believe that the forex market is simply the stock market on steroids. I’m just basically trying foreign exchange trading just to gain a more varied "trading experience".

I have a feeling that I will shortly be rejecting forex trading (FX). Even though I'm young and I am a risk taker, I feel that the leverage for forex is just too much. Also the fact that FX is a 24 hour market just doesn't fit my trading style. I know that there are profits to be made in forex - but I would much rather focus my funds on the Australian stockmarket. And maybe in future when I have a little more money to play with, I would perhaps take longer term (less riskier) cash trades on the forex market based on longer term trends.

You can download the eBook here. (Just click on the link – right-clicking and "save as" doesn’t work)

Come back soon for more forex trading journal entries. I will also be reflecting on my previous trades from last year when I was trading shares and warrants.