Rob Booker's Blog
June 19, 2011
Is the Iraqi Dinar a Safe Investment?
Risk Disclaimer: Trading currency involves substantial risk of loss and is not suitable for everyone. Trading with leverage can work for you as well as against you. This is not a solicitation or an offer to buy or sell any investment.
I receive at least 10 emails per week (and more lately) about the Iraqi dinar.
Is it a safe investment? Some people claim that it's just about to become the next great amazing miracle. And if you got in early, you're going to make a fortune.
I'll share with you what I think. You're free to draw your own conclusions.
1. No U.S. bank - major or minor - NONE - will buy Iraqi dinars in ANY quantity from anyone. At all. If these banks were able to trade in the dinar, you would see it reported by CNBC and analysts would be talking about it and discussing the upcoming revaluation. It is a fact that no U.S. bank will process a transaction for anyone - not me, not you, not a hedge fund - to get out of that trade. If you want to buy them, that's great. But no one will buy them back from you.
This means that once you buy the dinars, there is only one way to get value out of the investment: To travel to Iraq and buy some dates, figs, or buckets of oil from a street vendor. Enjoy that. But please be careful outside the green zone.
Skeptical? Call any U.S. bank and say that you have dinars, and ask them to quote you a price on getting out of the trade. If no bank wants to talk to you, then you know that you will be holding something that you cannot sell. Who cares if the value of your dinars goes up by 1,000% on paper, if there isn't anyone to sell them to?
2. The Better Business Burueau has warned consumers about dinar investment schemes:
http://www.bbb.org/us/article/bbb-warns-that-iraqi-dinar-investment-is-creating-concerns-and-complaints-690
3. If you are thinking that a growing Iraq economy (once sanctions are lifted) will lead to an appreciating dinar, then you do not have history or facts on your side. There is talk that sanctions on Iraq will be lifted soon and that will lead to an explosion of economic activity. That's possible. However, you can point to many examples where an emerging market economy, growing very fast - was accompanied by a falling currency. Venezuela is one very real example, because it is an oil-rich economy with an autocratic regime, which then enjoyed greater access to world markets (and thus a growing economy). What did they get in return? A depreciating currency.
4. If your "dealer in dinars" has registered as a Money Service Business, then they have to register and disclose the following information:
It would not hurt you to ask them where they are registered, who owns the company, and where they do their banking (and ask for bank references), and what the dollar value of transactions they completed in the last year is.
5. If you buy dinars because you have faith in the Iraqi ecomonic miracle, then you are really, really, really hard up for investment ideas. You are better off investing in a real business, a startup idea, or something close to home that you can visit, touch, see, use, and understand.
6. If you don't fully understand the risks of an investment, it's probably better to walk away. You should understand the following before making an investment decision (not just about dinars):
a) How you are going to get out of the investment? Do you hire a realtor? Is there an IPO? Do you put it on ebay? Have many other people done this already? Is it an established exit method?
b) Have you ever done this type of transaction before?
c) Do you understand your legal rights?
d) Are you locked into this investment? Is there an immediate secondary market for the investment if you made a mistake?
e) Does the seller encourage you "not to worry?"
f) Does the investment REQUIRE YOU TO LEARN ABOUT A GODFORSAKEN WAR-TORN AREA OF THE WORLD WHERE NO ONE GIVES A SHIT ABOUT YOU AND HATES YOUR COUNTRY FOR INVADING REPEATEDLY, KILLING WOMEN AND CHILDREN, AND THEN LEAVING THE COUNTRY WITHOUT RUNNING WATER?
6. Would Google have been a safe investment if they'd been headquarted in Baghdad? Or listed on the Syrian stock market? What other great businesses or investments have emerged from Iraq in the last 10 years? If not, then what makes you think this is okay? Most economic bubbles will have a long enough cycle that you can wait until the sanctions are lifted and see how much money other dinar investors have made.
If I'm wrong about this, and I just caused you to miss out on the investment of a lifetime, I'm sorry.
April 14, 2011
Boris Schlossberg and the Art of Flow Trading
Risk Disclaimer. Trading involves substantial risk of loss and is not suitable for everyone. Past performance is not necessarily indicative of future results.
RECORDED PHONE CALL:
I interrupted Boris Schlossberg at work today by calling his private line. Out of nowhere I asked the King of All Flow Trading what makes him tick. His approach is direct. His results speak for themselves. And he's open about how he trades the news. He packs a ton of information into a 6 minute phone call, so get ready to listen to it twice.
Here's the interview:
BorisSchlossberg.mp3
Listen on Posterous
And you can download the free FAQ of Flow – his special report about flow trading – right here:
http://www.bkforexadvisors.com/session-breakout-strategy/
April 7, 2011
$EURUSD Trade Closes +$2,805
Risk Disclaimer. Past performance is not necessarily indicative of future results. Trading involves substantial risk of loss and is not suitable for everyone. Not all of my trades are winners. I post them all - the winners and the losers. Often times there will be more to learn from my losing trades than my winning trades. Don't make the same mistakes I do! Learn from them. No one is open about their losing trades in this business so take advantage of the fact that you can see when I screw up. In the case below, I didn't screw up. But you can still learn.
UPDATE: I shorted the EUR/USD based on Wallaby divergence last night. I closed the trade just in the middle of the night. If you feel like you need to learn how to take these trades, then you need to go right here and sign up now before I take down the signup page.
Here are the before and after charts:
Before:
View on screencast.com »
After:
View on screencast.com »
April 5, 2011
$EURUSD Trade Closes +$201
Risk Disclaimer. Past performance is not necessarily indicative of future results. Trading involves substantial risk of loss and is not suitable for everyone.
I posted information about this setup (as I do with most trades) on the Wallaby Twitter Stream - and teach the essential elements of every method that I use in my trading (including extending out the profit targets on these trades) in the Pivot Course.
UPDATE: I bought the EUR/USD based on Wallaby divergence this morning. I came in late to the game so my trade size was much smaller than possible. When the pair jumped up to the 800 Simple Moving Average, I went ahead and took the profit.
Completed Trade:
View on screencast.com »
Original Trade Setup:
April 4, 2011
$EURUSD Trade Closes +$819
Risk Disclaimer. Past performance is not necessarily indicative of future results. Trading involves substantial risk of loss and is not suitable for everyone. UPDATE: I shorted the EUR/USD based on Wallaby divergence last night. I closed the trade just a few moments ago when it hit the 800 Simple Moving Average, which lined up nicely with the previous low on the chart below. I was hoping for about15 pips more in profit but it was time to take the money and run. Chart:
View on screencast.com »
March 31, 2011
$NZDUSD Trade Closes for a Profit of $1,336
Risk Disclosure: Trading involves substantial risk of loss. Not all trades are winners and you'll see plenty of losing trades posted on this blog as well. Past performance is not necessarily indicative of future results.
Unless I get creative and invent a way to fit more people into a webinar series, there are only two seats left for the upcoming Pivot Power Trading Course and even though the course hasn't even started I've already started sending out lessons. I'm nuts because I'm still offering a hugely discounted price on the course and you can get one of the last two seats here.
The NZD/USD went bearish divergent and I lost the first time but the second time things worked out just fine. Here is the chart:
View on screencast.com »
March 29, 2011
What I Learned from Walter, Who Watched Porn All Day at Work
The guy was obsessed with women's underpants. And every morning on the Dulles Toll Road he blew past the unmanned toll booths – never paid the 50 cents. He said they'd never once given him a ticket, even though flashes went off and sirens blew. Walter sat on the other side of my cubicle wall, and this is no joke: He looked at soiled panties on the Internet all day long. I did not make that up. He had a favorite web site, and that web site showed him pictures of used women's panties, and he visited the web site while at work. He cackled like a crazed animal. And that wasn't even the worst part of the job.
This job was a stepping stone on my way to trading for a living, so it has a place in my life and I don't regret it. I regret just two things in my life but we can talk about that another time.
I worked at a major internet service provider after law school, and after J.M. taught me more about sales in 4 months than I ever learned anywhere else, before or since. Easily the best boss I ever had. He fired me for revealing that women were paid less than men. Why wasn't I practicing law during this time? Because I hated it. I hated the legal world. I've never met a happy attorney. Have you?
Walter used to call Chief Technology Officers at work and just say, "I want to sell you a T-3 line. It makes me a $3,000 commission. Let's talk." One day a woman IT director said, "Now is not a good time," and hung up on him. He called her back immediately and said, "Hey Susan, is now a good time?" He ended up talking to her for 15 minutes. I don't know if he sold her a T-3 but I do know he probably wanted to see her panties.
Three months before law school graduation my aunt sent me a clipping from the Wall Street Journal. It was a study that showed lawyers committed suicide far more frequently than any other professionals. At the time I was clerking for a law firm on the 44th floor above Montgomery Street in San Francisco. I read the article and looked out the window. I realized that sooner or later I'd jump.
So I changed tracks. I applied to graduate school. I moved to Washington, D.C. And when I got there, and bought my books, and registered for my classes, talked to the dean. He told me four times that my acceptance letter would arrive tomorrow. They only accepted 20 people into the PhD program. He was happy to have me. I was the only one with a law degree.
Three days later I received a rejection letter from the school. I'd moved across the country for this. I had no job, I owed rent, and it was August 25, 1998. My 27th birthday. I hadn't published any books, I had been tricked into moving across the country, and I had no job prospects whatsoever. Damn it. Dead end.
At that moment I needed to find something stable to hold me up. Something to stand firmly on. Everywhere I went felt like the ground was moving under my feet. As if at any moment the rest of my life would collapse from under me and I'd be drifting in space. What the hell was I going to do?
So I visited a public library in Arlington famous for having collections of ship manifests from the late 19th century. I looked up names from 1890-1895. Ships that arrived in New York from Italy. Looked for my great-grandmother's name: Emilia Ferrara. And some other names too. I found her.
[Ellis Island]
She had come alone.
There weren't any other names on the manifest along with her. No other Ferrara family members. She was 9 years old at the time. How does a 9 year old get on a ship from Napoli and get to America safely? What did she think along the way? Who paid her fare? Who would she meet when she arrived? Did she understand English?
So maybe my great grandmother had known what it was like to start from scratch. And be afraid. And so I walked out of the library and called an old friend from Bear, Stearns in San Francisco.
"Whatever you do, don't get involved in currency trading," he told me.
You can guess what I did next.
Monthly pivot is battling against this week's pivot on the $NZDUSD:
Risk Disclaimer: Trading involves substantial risk of loss. Past performance is not necessarily indicative of future results. This is not a trade recommendation.
Right now the NZD/USD looks confusing, and that's because there is a battle going on between the monthly pivot and the weekly pivot. My guess is that the monthly pivot will win – the pair will finish the month strong at that level (or even above it – wow!) and then fall to this week's pivot and the new week's pivot next week.
View on screencast.com »
March 21, 2011
March 18, 2011
Rob Booker's Blog
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