Unless you were on holiday in Mars, or working with BBC3, you’ll know all about the failed US bailout on Monday. Equity markets did sell off immediately, but the widely predicted Armageddon scenario of at least a 1000-point fall just didn’t happen. And Tuesday saw a determined rally across equity markets. So where’s all the fear gone and what are traders hoping for?

Read more…

Ok, the carry trade. What’s that? To be short, it’s an FX trading system used by some of the biggest and meanest hedge fund managers in the world. Since the 1980’s, they have made billions from this remarkably profitable trade in stable FX markets.

But in the last couple of years, the FX market has become very volatile. Hedge funds aren’t making their easy buck on the carry trade anymore. Like me, I know that you won’t be losing any sleep over their recent troubles. But I’m interested in making money from the carry trade so, in this blog, I’m going to show you how minnows like us can get in on the act.

Read more…

This article is for information purposes only and does not represent investment advice. If a trader wished to make a short bet on the Irish banks, this is one way they could go about it.

As you may be aware, the Irish Financial Regulator banned the short selling of the big four Irish banks last Friday. This applies to AIB, Bank of Ireland, Anglo Irish Bank and Irish Life & Permanent. As a result all four have seen a huge jump in their share prices. As The Mole said in Friday’s Market Watch “Capitalism has been abolished.”

But there is apparently a way to gain short exposure to back falling prices.

Read more…

The last few days have been … I’m struggling to find an adjective. Remarkable? Amazing? Jaw-dropping?

Let’s just have a 30-second recap of what’s been happening:

• Lehman’s was allowed to go bust. The Fed gave a clear message it would not be the bailout boy in major bank failure.
• American Insurance Group (AIG) came under massive pressure – then got rescued. The Fed gave a clear message that … errr…. it would be ‘the bailout boy’ after all. Sometimes.
• The Lehman’s failure triggered what could be the start of a round of mergers amongst banks. Merrills agreed to sell itself to BoA and HBoS has been linked with Lloyds.
• Stock indices suffered massive falls
  Read more…

Evening folks,
Welcome to another addition of US Government Lotto Giveaway, with your host, Treasury Secretary, Hank Paulson. And tonight’s lucky couple are Fannie and Freddie.

Hank’s just promised Fannie and Freddie $200 billion of taxpayers’ money in exchange for their independence. And, just like our shows earlier in the year, you all love a good giveaway. Equity markets rallied between 2-3% (Ireland’s bank-dominated ISEQ put on a cracking 6%) and the good old Dollar nicked between 4-500 pips off the European currencies.

But is this really a turning point for the markets, or yet another nasty squeeze in a bear market? First I’ll talk about what’s going on and then I’ll talk about how it’s feeding into my trading plan.

Read more…

Ok, so you open a chart on paddypowertrader to check out a price history. You’re immediately confronted by hundreds of little green and red bars. No problem you think: “Green = Up, Red = Down. They’re candlesticks. I’ve seen them many a time before.” You’re correct, but did you know that millions of trade decisions are made by simply analysing these candlesticks? Why? The main reasons are their simplicity and, of course, their profitability. Here I’m going to explain some of the most basic candlestick signals which can be applied to any stock, currency or commodity!

Read more…

Hey! Hands up if you’ve noticed that after 2½ years of free-fall the US Dollar has perked up? The good old greenback has rallied by something in the region of 9% against a basket of currencies over the past month. Now it’s anybody’s guess whether this is more than just the dollar spurting up around the U-bend before it continues down the toilet. There are a lot of factors to consider, for example:

-There’s a growing perception that other economies aren’t doing any better than the US (or some would say the impact of a slowing US on other major economies has been underestimated until now).

-Lower oil prices might lessen inflation and put more money in consumers pockets; That money’s then available to spend on other goods.

However one less-discussed item caught my eye – a few months ago there was a lot of talk about Oil countries breaking their currencies’ dollar pegs. Doing so would have pushed the dollar down even further – but that now seems to be off the table. And there are also hints that China, although it has removed its peg, might not be as ready to let its currency weaken against the dollar just yet. So let’s see if we can get to the bottom of this pegging business.

Read more…

Hi folks,
Since returning from my holiday there seems to be one major talking point on the sites that I look at: Are markets slipping into reverse or merely pausing for breath before continuing on their merry way? Or, to put it another way, where are the next trading profits coming from?

The past few weeks have seen a rally in equities and the Dollar, whilst gold, oil, Sterling and the Euro have retreated faster than the Georgian army. Low volume volatile markets have presented some fantastic trading opportunities. But were these moves down to a shift in world affairs or was it just easier to move prices with so many of the heads of investment desks away?

Read more…

‘Mind the gap’ is the warning announced at all London Underground platforms as a tube train arrives or departs from a station. It refers to the gap between the platform and the train, and is broadcast loudly and incessantly at every station. Visitors to London who use the tube will have ‘Mind the gap’ still ringing in their ears long after they have arrived home. It is an essential part of the sound of that city.

Read more…

There was a general in the American Civil War – his name escapes me – and the last words he ever uttered were: -

‘Nonsense! They couldn’t hit an elephant at this dist..’

I guess that shows the danger of complacency in the field of battle. The above story comes to mind whenever I hear someone say: -

‘That share has fallen so much! It surely can’t fall any further..’

It sure can, is the answer. And these have often been the famous last words of stock market traders.

Read more…