What I Learned About Risk-Taking From Playing Blackjack
"I lived in Las Vegas for 5 years and played blackjack almost every day. I didn’t play for fun. It was strictly business. I never gambled by playing roulette or craps or slot machines. Every hand I played was based on the mathematics of it."
I learned to take risks based on assessing probability correctly. Here are my thoughts:
1. When the probabilities are favorable and you’re sure of it, get the big bets out. Be fearless about it.2. If you think you’re being cheated, get up and leave the table. Never play if you have any doubts about game integrity.
3. Long losing streaks are ordinary and do not mean you need to alter the process. Keep playing correctly.
4. During a losing streak — or draw down — adjust position-sizing relative to bankroll aka assets under management.
5. Seek out only the most favorable conditions. If you can’t find them, don’t play.
6. To take risks is to step outside of the comfortable and secure.
7. When taking risks, stay clean and sober. It only works if you’re sharp and present.
EURUSD Fundamentals (based on dailyfx article)
The European Central Bank,
after weeks of rampant speculation, delivered on its promise made on
May 8 for substantive policy action. Yet, the duration and depth of the impact on the Euro has proven thus very limited, raising the question: did the ECB do enough?
The Euro ended the week down only against three of the major
currencies, while posting meager gains against the other four.
Evidently, the market is taking the ECB’s actions as a sign that they’re
willing to do what is necessary to help spur lending and ultimately
growth in the region; but not necessarily weaken the Euro.
The breadth of ECB action was plentiful, insofar as
there were many changes to various aspects of the ECB’s current
accommodative monetary program. Everything that was speculated upon in
the weeks leading up to the June meeting ended up panning out. The
notable changes, to wit:
- Rate cuts: The
main refinancing rate was cut by -10-bps to 0.15%; the deposit facility
rate was cut by -10-bps to -0.10%; and the marginal lending rate was
cut by -35-bps to 0.40%. The rate cuts were in line with expectations,
as negative rates had been discussed over the last few weeks (and priced
in). The measures should help keep interbank lending rates (EONIA)
- Liquidity: No
more 1-month LTRO, but SMP holdings will no longer be sterilized after
the June 10 auction; TLTRO (Targeted LTRO, the ECB’s version of the Bank
of England’s Funding for Lending Scheme (FLS)) for up to four years.
The SMP unsterilization will boost excess liquidity in the Euro-Zone by
- Guidance: Reduced
GDP forecast for 2014 from +1.2% to +1.0%, but upgraded 2015 forecast
from +1.5% to +1.7%; 2016 GDP forecast unchanged at +1.8%; 2014
inflation forecast downgraded from +1.0% to +0.7%; 2015 inflation
forecast downgraded from +1.3% to +1.1%; 2016 inflation forecast
downgraded from +1.5% to +1.4%; Asset-Backed Securities (ABS) purchase
The efforts made by the ECB are established across all fronts, from traditional easing steps to non-standard measures. There
were two definitive steps taken, however, that can be pointed to as
perhaps viable reasons why the Euro didn’t endure a greater decline
around the ECB’s meeting on Thursday. First, the ECB’s updated its expected EURUSD
exchange rate over its forecast horizon to $1.3800 from $1.3600.
Second, President Mario Draghi said in his Q&A that the ECB’s rates
were essentially ‘at the lower bound’.
This week - 67% bearish on US dollar this week: CNBC poll
Patrick Bennett, FX Strategist at CIBC, discusses CNBC's latest forex
sentiment survey, where more than two-thirds of respondents were bearish
on the greenback.
Audio - Weekend Edition with Bert Dohmen & John O'Donnell
With over 40 years of trading experience under his belt, President of Dohmen Capital Research, Bert Dohmen joins Merlin and John
for a look at the current status of the markets. After creating a
distinction between the market and the economy, Mr. Dohmen addresses
several issues plaguing both and raising concern for another large
correction in the near future. The trio talk about jobs, “Prelude to a
Meltdown”, future market moves, FreedomFest and much more.
Video for tomorrow:
2014-06-10 01:30 GMT (or 03:30 MQ MT5 time) | [CNY - CPI]
Will China CPI boost AUD tomorrow?
With Chinese CPI released alongside Australian Home Sales, Job adverts
and Business Sentiment tomorrow we could see some much needed volatility
The history of [CNY - CPI] by price movement:
2014-04-11 01:30 GMT (or 03:30 MQ MT5 time) | [CNY - CPI]
actual data is 2.4%
according to the latest press release
AUDUSD M5 : 17 pips price movement by CNY - CPI news event :
2013-02-14 01:30 GMT (or 02:30 MQ MT5 time) | [CNY - CPI]
NZDUSD M5 : 13 pips price movement by CNY - CPI news event :
NZD/USD Fundamental Analysis June 10, 2014 Forecast
The NZD/USD gained
17 points to trade at 0.8517 moving towards the top of its trading
range climbing steadily after the roll out of ECB big guns, which should
benefit the commodity currencies. The addition of stimulus supports
small nations and emerging nations by increasing money flow and also
demands for exports to fuel growth. Over the weekend Chinese trade data
was released showing a surge in exports but a drop in imports. The main
focus this week will be the RBNZ where governor Graeme Wheeler is
expected to hike the official cash rate a quarter point to 3.25 percent
this Thursday and traders are mulling whether he will soften his
projection for future rate rises given recent weakness in milk prices,
and labour and inflation data. Still, many say the market has gone too
far in pulling back expectations for future hikes by 65 basis points
over three years, given the strength of the local economy which is
underpinned by strong migration and government spending.
Reserve Bank should surprise to the upside because markets have priced
in too much of a downgrade to the OCR track,” said Imre Speizer, senior
market strategist at Westpac Banking Corp. “We think that the Reserve
Bank will revise its track down a little but we are only talking in the
order of 10 basis points, not in the order of 65. The market is
basically saying they will take the equivalent of two full hikes out of
the multi-year tightening programme. We don’t agree with that. We think
that they will just take a little bit out and as a result the markets
will then be disappointed at the failure of the Reserve Bank to endorse
its pricing and interest rates then will need to bounce on the day and
that will push the kiwi/US higher.”
The US dollar remains strong
trading at 80.44 to start out the week after a smart release of US
nonfarm payroll data on Friday. The US economy might have contracted in
the first quarter but it has rebounded quickly, with non-farm payrolls
posting its strongest four-month period in two years.
payrolls rose by 217,000 in May, consistent with expectations, following
solid gains since February. Job creation in April was revised down to
282,000 (from 288,000).
This was the first time in 14 years that
non-farm payrolls rose by 200,000 in four consecutive months and it was
the strongest four-month gain since April 2012. To put this in
perspective there have been just three four-month periods with this
level of job creation in the past eight years.
Upcoming Economic Events that affect the AUD, NZD, JPY and USD:
Home Loans (MoM)
NAB Business Confidence
Chinese CPI (YoY)
Chinese PPI (YoY)
Chinese CPI (MoM)