14 October 2009 / Flash Alert

Dear Exotic FX Alert Subscriber:

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Our Mexican peso trade hit our stop loss yesterday. So we took a small loss of 61% (100:1 leverage). The good news is that our risk management cut the loss in half. If we had left the original stop loss, losses would have been over 120%. And that’s the secret of success in FX trading: cut losses short and let profits run.

But we have even better news. Out trade in the Turkish lira is doing really well. So it’s time to adjust our stop loss to lock in some profits. This afternoon, the Federal Open Market Committee will release a statement regarding the decision of the latest Central Bank meeting. Traders will be assessing how quickly the central bank will unwind its stimulus measures and hike interest rates.

Any comments about the improving economic outlook and possibility of rate hikes earlier than expected may help lift the dollar. So please adjust your stop loss to lock in gains of 130%. If the lira continues to appreciate we will readjust the stop loss to lock in more profits later on.

Change your stop loss to 1.4468.

Regards,

Evaldo Albuquerque, Ashish Advani and the Exotic FX team