Diversifing coz USD Sucks!

Filed Under (Journal) by Casey on 09-11-2010

I have to admit… I am not a total technical EA trader… Maybe I am 95% of the time. I do keep in touch with the global fundamental of economics. While I am not a great expert like most forex sites that talks about the reason a currency might go higher or lower. Or even about whether the impact of policies might screw up one’s currency.

I do believe that we need to have some fundamental knowledge of the global economy. When it comes to business, we need to know our surrounding issues and the effect that it might have in the long run.

The reason for me is very simple, the reason why I trade is trying to grow my equity via trading, and of course protect my capital. While technical, or forex EA might help me to grow my equity… to protect my capital is another story.

Risk management is not only about money management or how many lots one should take an an amount of equity, but it is also ensuring that my purchasing power is still in tact. For me that is…

Everybody knows USD is a sinking ship… everybody thinks Obama is causing that… But I believe it was Bush who started all this and Obama just inherited the problem…

Ok… I am not much into American politics so I am not going to talk about this but whatever it is… USD is not exactly doing too well…

The point is that I am aware or rather I need to be aware of what is happening to US… Why? Because I am holding USD currency in my account. So I gawd dang have to know what the $hit is happening in the US.

Whatever the policy that is in place in the US… It is causing the USD to drop…

I live in Malaysia, and of course most of my spending is in MYR. So I have to worry about USD vs MYR and not EUR vs USD or any other currency vs USD. I need to be worried about ALL other currency vs MYR. Which means my actual base currency should be MYR and not USD because I plan to withdraw OR convert all foreign currency to MYR before I can actually enjoy my money.

A lot of local fund manager agreed that USD is not going to strength anytime soon…. Even Antony Robbins does not believe it will improve anytime soon.

And at this point in time… USD is weakening against my home currency. I am getting less ringgit for a buck. That’s not good. Because of that… I need to take some corrective action to protect my capital.

I ain’t going to quit forex just because USD is not doing too well… (You got to love forex for this) What I did was I started to diversify my account currency.

Last two weeks, I have been doing just that. I moved or rather changed my Alpari USD to Alpari EUR. Maintained my FXOpen account in USDĀ  while my GoMarket USD to GoMarket AUD.

Of course I am getting less figure on my Alpari EUR… meaning less margin which should not matter to me anyway because on my Alpari account I mostly scalping EA.

For FXOpen I had no choice. My EA on FXOpen are all Martingale EA… It needs to be a micro and most broker that offers micro account only offers USD. However, on the highsight… FXOpen allows withdrawal to Liberty Reserve… which in turn has a very good exchange rate to MYR. So… I do not need to worry.

On the side note, IBFX has finally open their branch office in Australia… huh! It is only now that they realize that brokers outside the US is making more money than in US… IBFX does offer nano lots which is interesting for me since IBFX is quite reputable, and of course with a nano lot I can trade martingale. But……………………………. the problem with IBFX is that, there are no forex rebate scheme. And I doubt that I will be able to enjoy it even if they do start that scheme. (Long story short… they might not offer this scheme to those who already have an account with IBFX)

Anyway… AUD is ever strengthening and will continue to do so because they are a mining country and these sort of commodity is what people will be going for when and if USD does continue to weaken. For GoMarket I got a one to one exchange… On the day I change my account… it was trading at 0.9799. Close to 1… and GoMarket was kind enough to give me a 1 to 1 exchange. Probably they pitied me… (I’ll tell that story in my next post)

So… now I have three broker… three account… three currency… That is what I call diversification…

Or it could mean I got nothing else better to do than to mess about with my account…

Here something to share with you… I am not sure when was this taken… but it seems like the worst for US is not over yet… From what I could gather at youtube… It was posted 2 months ago… So it’s relatively recent.

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