Weekly Review and OpenBook Roundup
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(eToro Blog) Equity markets got a big let down yesterday after the U.S. Federal Reserve Bank announced stimulus plans that fell far short of what traders had been hoping for, i.e. an actual announcement of QE3. Instead, Ben Bernanke offered markets a token in the form of Operation Twist’s extension, which improved traders’ sentiment for a few brief minutes before the realization that they’d “been had” dawned on them. Markets are still pricing in QE3 and analysts are also certain that it will come to fruition sooner or later, as the U.S. economic recovery is still too frail and the labor situation too precarious to come to any other conclusion. Bernanke said that the Fed would watch closely for any deterioration especially in the labor market, which would warrant further action. The Fed’s most recently published economic outlook isn’t calling for any significant improvement, however, with the unemployment rate likely not falling below 8% any time soon.
Earlier in the week, the Group of 20 concluded its days-long session held in the Mexican resort town of Los Cabos. While there was a great deal of discourse, primarily about the importance and need to resolve the growing crisis in the Eurozone, there was nothing said or promised that could even begin to assuage market jitters. Markets are more hopeful that the E.U. summit which will be held next week in Belgium will provide a little more substance and hope.
In the U.K., to the relief of market players and certainly the majority of Britons, the government has at long last shifted from their steadfast austere position. In tandem with the Bank of England the government announced plans to stimulate the U.K. economy to ward off what is in the words of Bank of England Governor Mervyn King, a “darkening cloud” coming from the Eurozone. Minutes of the last meeting of the BoE revealed that the bank governor would support additional stimulus in the form of £50 billion more in gilt purchases. With the hawks winning the latest easing decision by only a single vote, there’s hope that the momentum will swing in favor of the doves at the next MPC meeting.
For this week, we look at two OpenBook traders who are each included on the 6-month ranking board. First, from Sri Lanka is trader eshantha, who is ranked #26 on that board with an 87.9% win ratio, 50% profitable days ratio and 295.3% profits. The trader’s P&L over the entire recording period is written in green; at 1-week it shows a profit of 3.4%, at 1-month it is 5.1% and jumps to 96% for the quarter then to 295.3% at 6-months; finally, for the full year the trader’s profit was 103.2%. The trader has 43 copiers and 725 followers, and over the last 6-months held a portfolio comprised 86.3% in currencies and 13.6% in commodities which he has since reallocated to be comprised primarily of currencies. The trader has had some good success in trading the USD/CAD, which has consistently been among his top three gainers over the entire period; over the last month, a 7.3% allocation has provided a gain of 5.2%. While the trader has had somewhat less success in trading the EUR/USD pair, he is well positioned with open longs and shorts to capture a profit under nearly any scenario. Likewise, several long gold positions should benefit from the round of central banks’ stimulus that analysts are expecting.
OpenBook trader nazmulfx5, who is from Bangladesh, has 277 followers and 11 copiers as of this writing. The trader is in position #44 on the 6-month ranking board, with a win ratio of 89.5%, a profitable days ratio of 49% and a gain of 118.5%; in the shorter term, the trader has a small loss at the quarter of -9.3%, a profit of 127.9% for the last month and 40.1% profit for the last week. At the 6-month point and again at 3-months, the trader had his greatest success with an in the NZD/USD pair which provided a gain of 18.9% at 6-months and 26.6% at 30months. At 6-months the trader’s largest allocation was in the EUR/USD with 27% and a correspondent gain of 12.1%; at 3-months the allocation was raised to 46.5% but the gains were significantly reduced to 1.4%. Since then, however, at 1-month and currently, the trader has reallocated the portfolio which is now 100% given over to the EUR/USD pair. It has proved a good move for the trader, as 94.1% of the 17 executed long trades over the period resulted in a profit. In the last week, all of the trader’s long positions were profitably closed with a 9.7% gain. While the majority of the EUR/USD positions were CopyTrades from OpenBook guru juergen13, the trader does initiate some himself and has one open long in the EUR/USD that is currently showing a 9.75% profit.
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