Trade Forex and Forget Savings in the Bank
In this video:
00:25 What you can potentially make from the Forex market
03:00 Why news trading is probably not a great thing to do
05:10 My e-book is available on Kindle
In today's video and podcast I want to talk about why you probably should not have a savings account with your bank, in comparison with trading Forex. So let me share more details and explain exactly what I mean right now.
Hi, traders, this is Andrew Mitchem here, today is Friday, the 30th of May and I want to talk about bank savings rates as a comparison with what you can potentially make from the Forex market.
A 6.5% gain for the week
Look, I've had another really good week, I'm up 6.5 % on my accounts so far for this week with still one more day to go for the rest of the week and some trades open behind me here looking really good. I shared all of those trades with my clients last night on our live 2.5 hour trading room webinar, and during that session I highlighted the fact of why for a lot of people, you probably shouldn't have savings at a bank because the interest rates around the world are just so pathetically low right now, in terms of for savers.
I highlighted a British website that I found, and I found that the highest one-year rate on savings accounts was 1.71% for the whole year. I also highlighted a US website that I found – the very highest that I could find just searching yesterday was 0.95% return paid in one year in the US, so it's absolutely awful.
Of course it's great if you're borrowing money, that's absolutely fine, but as traders we're looking at investing and returns of what we can make on our investments. So you look at those figures and my 6.5% for one week with a very, very low risk amount on each trade. It just shows you the benefits of Forex trading once you understand it and once you've mastered it and consistently trade well.
Now, of course 6.5% is not what I do every week, but it shows what can be achieved when you have a good week. And as I mentioned, I discussed that with my clients last week, last night on the webinar.
So for the week I've had on my account that I trade, the daily charts, the weekly charts, the one hour charts, and I also took a 15-minute chart on the webinar live in front of clients. I am up 3.7% on that account, on another account that I trade only four hour charts, I'm up 2.8% for the week, and as I've mentioned I've still got trades open here behind me.
So it's 6.5% return in the first four days of the week, which is not a bad return, especially when you compare it to those awful interest rates that you can get with your savings in one year.
Why I don't Trade the News
The other thing I want to talk about and again I discussed it with my clients on our webinar yesterday, was, in my opinion, why news trading is probably not a great thing to do. And it's why I suggest that people trade what they see on their charts and not what they think.
I'll give you two examples of what happened yesterday in the news, and how they affected the charts. Now yesterday out of Australia, there was a high-impact news announcement – you can see it on Forex Factory or whatever calendar you use – and it was called “Private Capital Expenditure.” And it came out at a -4.2% and the expected was -1.6%. So it came out two and half times worse than the expected figure.
And all that happened yesterday is the AUD went up and up and up. It went really strong. And even today, into Friday, I'm looking for buy positions on the AUD. So the news was two and a half times worse than expected and it was the only high-impact scheduled news announcement out of Australia yesterday so it's two and half times worse than expected, yet the AUD got stronger and stronger all day. You know, it's hard to figure.
Also yesterday, just before that announcement, out of Japan there was the retail sales – the year on the retail sales. They came out at -4.4% out of Japan as opposed to last year's positive 11%. So last year it was +11, this year it's -4.4. A huge difference yet all that happened for most of yesterday was the JPY strengthened. And I called for the Yen to strengthen yesterday on my daily analysis and that's what it did for much of the day.
So it just goes to show that you can't really have too much of a fundamental news opinion and trade currencies at the same time. That's my opinion, now I know that there's a lot of people that do trade news announcements and fundamental trading, that's absolutely fine and I've got no issue with it as such if that works for you, but in my opinion it's far better to trade off the charts and the technicals and to trade what actually happens, not what you think should happen. There's a big difference there.
Forex Book on Kindle at Amazon
The last thing I want to mention is that my e-book is available on Kindle, and as a physical book on Amazon, and if you haven't yet attended one of my free webinars, not my clients' webinars, they’re only for clients, but the free webinars that I hold each week, if you've not attended one of those yet, make sure you jump on because there's a lot of free and very good trading information given out on those webinars. So that's it for now, have yourself a fantastic weekend. I look forward to talking to you this time next week. This is Andrew Mitchem from the Forex Trading Coach.
Bye for now.