SINGAPORE, SINGAPORE -- (Marketwire) -- 03/31/13 -- Going into April 2013, nobody expects that US Federal Reserve Chairman Bernanke will release any new script in the near term, and the Cypriot turmoil and the European saga go on. But the Aussie has continued a resilient rebound since its recent domestic environment and China reflect a better outlook.
During March, Mario Sant Singh, Director of Trading & Education at FXPRIMUS whose views are widely sought after in the Forex industry, looked at safe haven assets Gold and Silver, the downward directions of the GBP and JPY, and the need to follow a trading plan amongst other topics, in his AskMarioSingh.com blog, "Your toughest Forex Questions answered daily".
The precious metals Gold and Silver, have recently been viewed as safe haven assets for investors who wish to balance their portfolio against risk assets.
"With the global economy struggling to move beyond first gear (if not reverse)," said Mario, "Precious metals should be trading at prices way above their current price.
"But not only have prices for precious metals been consolidating for the most part of 2012, they are lately under intense selling pressure as well," said Mario. "I do not have a definitive answer to explain the price drop, but talk about the precious metals market being manipulated by certain big banks, and even by the Commodity Futures Trading Commission (CFTC) itself, is rife in the blogosphere," he said.
On the JPY, Mario said that Japanese Prime Minister Shinzo Abe will press his easing monetary policies with his sights set on a 2% inflation target. Moreover, Abe nominated the president of Asian Development Bank Haruhiko Kuroda to lead the Bank of Japan, and Kuroda, just like Abe, is a widely known advocate of aggressive monetary easing. "In the longer-term perspective, I believe this will further weaken the JPY," said Mario.
On the GBP, Mario said that Moody's downgrade of the UK's rating to AA1 is the tip of the iceberg of the UK's economic woes. The UK conducts its own version of quantitative easing in a bid to improve her economy, but is seeing disappointing results. "The GBP is under intense pressure since the credit downgrade and I expect the slide on the Pound to continue, increasing the inflation rate as a result," said Mario.
"On a side note," said Mario, "The JPY is considered a safe haven currency. Thus, in times of great uncertainty in the market, it can strengthen substantially. The GBP is considered a risk currency, so in times of great uncertainty, it can fall dramatically. In the current depressing financial and economic markets, the Pound may have more fall compared to the Yen in terms of "bearishness"," he added.
When asked whether following a trading plan can work if the strategy might have a negative expectancy. Mario said that the importance of having a trading plan cannot be over-emphasized. "Poor strategy execution can cause losses, more often than not, because traders either don't have a plan or didn't follow it," said Mario. "Of course, a trader needs to use a profitable trading strategy, but until they can attain enough discipline to follow their plan - to avoid emotional trading, they will lose even if they use a profitable strategy."
"The profitability of a trading strategy can be tested," added Mario. "A trader can either use back-testing with (historical price data or forward-testing with current price data, over a specific period of time. And I strongly recommend testing the strategy on a practice account before trading it live," said Mario.
During March, the top ten Forex trading questions (click the links for the answers) were:
1. Question from Subra: Since there is frequent news from the U.S. and UK, is it better to trade fundamentals rather than only candlesticks?
2. Question from Salwa: What does "buy the rumor, sell the fact" mean?
3. Question from Selcuk Benter: What are the reasons for Silver's price drop and what other factors affect its price?
4. Question from Aaron Loh: Which currency has the potential to drop faster, the GBP or JPY?
5. Question from Andrew: How much longer do you think the GBPUSD will remain bearish?
6. Question from Yurryse: How can I set a proper state of mind and defeat emotion before I start trading?
7. Question from George: Is it possible that some "trainers" overemphasize the need to follow a trading plan?
8. Question from Tapan Gill: What is the best way to employ swing trading strategies?
9. Question from Sree: How much monthly return can I expect from a USD250 investment?
10. Question from John Woo: What should I do when my trading strategy stops profiting?
Mario's popular blog, his weekly market webinar, his daily and weekly market reports and his new ASEAN market review provide some of the best-informed directly-accessible educational resources that new and experienced traders can utilise to improve their knowledge of Forex and related investment markets.
Have a new question for Mario? Then ask him online at AskMarioSingh.com and sign up to receive Mario's Forex Answer of the Day, by email.
ABOUT MARIO SANT SINGH
Mario Singh is the Director of Training & Education at global retail Forex brokerage FXPRIMUS. He has appeared as a guest expert on CNBC more than 35 times to talk about foreign exchange markets, and is a regular contributor to top investment publications and online portals. Known as a brilliant and intense communicator with a unique ability to 'keep Forex simple' and a mission to help every man-in-the-street to trade profitably and responsibly in the Forex market, more than 20,000 people have attended his Forex trading programs. He is the only Forex trader in Asia invited to train Julius Baer Private Bankers - the third largest Swiss Bank, and ICBC, China's largest commercial bank. Mario is also author of the best-selling book, 17 Proven Currency Trading Strategies: How to Profit in the Forex Market. (Wiley Publishing).
FXPRIMUS offers retail traders a level of trade execution, service quality and fund safety that are normally reserved only for the largest investors. Serving traders in 205 countries across 6 continents FXPRIMUS combines an unmatched level of fund safety with regular independent audits of company financials and Straight Through Processing, top notch execution with tight spreads, prompt and responsive customer support, ISO 27001 certification in Information Security and an industry-leading trader toolset that includes free access to powerful trader tools and personal coaching via FXPRIMUS Coach FXPRIMUS truly is The Safest Place To Trade.
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