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Busch: MIM Currency Trades Update

Wednesday, 15 Jun 2011 | 10:21 AM ET
AP

On Friday’s Money In Motion, I had two trades that I liked for this week.

Here's what to do with them now.

The first trade I recommended on Friday was a re-entry of a Euro short from the original Euro short I had.

Here are the details:

ANDY’S OLD EURO/DOLLAR

  • Sell Euro/Buy USD
  • Entry 1.4650
  • S/L 1.4750
  • T/P 1.4450

ANDY’S NEW TRADE

  • Sell Euro/Buy USD
  • Entry: 1.4450 (old T/P)
  • S/L 1.4550
  • T/P 1.4150

For those of you who put the trade on, move your stop to 1.4450 and cover half the position at the original profit area of 1.4150. If Greece defaults or restructures, this will give you the opportunity to stay in half the trade for a larger move lower.

The second trade I recommended was buying USD against the Turkish lira after the Turkish election. Here’s the segment providing the background on the election and why I wanted to do the trade. The idea was to buy USD against TRY after the election, leave a 100 pt S/L, and have a 300 point target move. Here was the structure:

ANDY'S TRADE

  • BUY = 1.5775
  • TARGET = 1.6075
  • STOP LOSS = 1.5675

Now, you wouldn’t have been able to buy USD against TRY at 1.5775 because it opened at 1.5725 and traded down to 1.5640. If you didn’t adjust the 100 pt S/L to reflect where you got the trade on at, then you got stopped out. If you adjusted are and are still in the position with the stop at 1.5625, then now move your stop up to where you got in at (1.5725?) and put your take-profit in at 1.6025 (entry+300 pts).

Andrew B. BuschDirector, Global Currency and Public Policy Strategist at BMO Capital Markets, a recognized expert on the world financial markets and how these markets are impacted by political events, and a contributor to CNBC's Money in Motion Currency Trading.You can comment on his piece and reach him hereand you can follow him on Twitter at http://twitter.com/abusch .

Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm. "Money in Motion Currency Trading" will repeat on Saturdays at 7pm.

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