Read the title carefully. Do you need good friends in FX market? Yes! Definitely yes! But sadly, only when you are big enough, you have the chance to approach the "FX good friends".Who are them? Ok, let me make a list here.
1. Uncle Ben 2. Mr. Mervyn King 3.Mr Jean-Claude Trichet. 4.Masaaki Shirakawa Son. If you look at Forex market, it is like a Mafia Games. Those who ignore the rules and gangs, will be eliminated. Media is the good friend of this group. They use it as a channel to attract the 'victims' and 'kill' them easily.
Still not believe? Ok, let me show you some information to prove my views. Before cable drop 4 cents yesterday, everything publish in the financial media is positive about UK economy recovery. Mr. King personally addressed these issues. The amateur players bought GBP/USD as much as possible. Big boys with good friends sell the GBP quietly via their black boxes. Once they finish selling, the pound dropped the most since April versus the dollar yesterday and traded at its lowest in more than five months against the euro after Bank of England Governor Mervyn King said the currency’s weakness was “very helpful” to the U.K. economy.
Do I trade based on news? I think most of the successful traders which do not have the good friends above will switch off Bloomberg or CNBC from Monday to Friday. I read financial news during the weekend while I am enjoying my Caffe Mocha at Starbucks. From Monday to Friday, if I switch on TV, I will watch History, Discovery Channel and National Geography.
