Price displacement in the fx market is an artifact of market mechanics that have nothing to do with determining fundamental value. The inefficiency of over-shooting is disruptive, increases risk, and drives uncertainty.

Olsen’s investment methodology counters this uncertainty by anticipating imbalances between buyers and sellers and providing liquidity that can restore prices to more reasonable levels.

Finding a foothold in the shifting sand

The potential profitability of currency trading is a given. The trader who takes advantage of just a 0.2% price change once a day can make an annual profit of 40 %; succeed at trading a change as small as .05% 10 times a day and your annual profit is 100%. Betting on price moves is one thing, but where, exactly, is value?

Price is always specific: it enables or disables a transaction; it sets a new bench-mark for the pricing of all other positions in the market; and sudden, inexplicable price changes accelerate cascading trends that destroy or dilute value.

So, what really drives currency pricing? And how do we reduce the uncertainty of that process and retrieve value?

The valuation of currencies is a mysterious business. But for the traders who come to the market with distinctly different expectations and time horizons, valuation is beside the point.

In the fastest-moving, most active market in the world, the name of the game is price. Something different, somehow.

With only a tentative connection to fundamental value, currency prices move quickly and for the most opaque reasons. Yet, we rely on the market to exercise some degree of “efficiency”—to perpetuate trading, of course, but ultimately to provide a rational basis for the global investment and allocation of capital. This in the face of the fx market’s well-earned notoriety as the least predictable, most change-direction-at-the-drop-of-a-hat market on the face of the earth.

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Editors’ Picks

EUR/USD retains gains and hovers near 1.0600

EUR/USD retains gains and hovers near 1.0600

EUR/USD peaked at 1.0607, now trading in the 1.0580 price zone. The rally was all about the broad greenback’s weakness despite demand for safety continues. Soft US data added to the bullish case.

EUR/USD News

GBP/USD renews two-week highs, trades above 1.2500

GBP/USD renews two-week highs, trades above 1.2500

GBP/USD has gained traction and climbed to its strongest level in two weeks above 1.2500. The weaker-than-expected macroeconomic data releases and falling US yields cause the dollar to stay under constant selling pressure, helping the pair push higher.

GBP/USD News

USD/JPY faces barricades around 128.50, DXY steadies, Japan’s Inflation in focus

USD/JPY faces barricades around 128.50, DXY steadies, Japan’s Inflation in focus

A combination of factors dragged USD/JPY lower for the second successive day on Thursday. Recession fears continued weighing on investors’ sentiment and boosted the safe-haven JPY. Retreating US bond yields prompted some USD selling and further contributed to the decline. The Fed-BoJ policy divergence warrants some caution before placing aggressive bearish bets.

USD/JPY News

Editors’ Picks

AUD/USD hovering around 0.7050 amid the greenback’s sell-off

AUD/USD hovering around 0.7050 amid the greenback’s sell-off

The Australian dollar shrugged off negative local data and reached a fresh weekly high against its American rival at 0.7072. The pair preserves its strength, despite the poor performance of global indexes indicating prevalent fear.

AUD/USD News

EUR/USD retains gains and hovers near 1.0600

EUR/USD retains gains and hovers near 1.0600

EUR/USD peaked at 1.0607, now trading in the 1.0580 price zone. The rally was all about the broad greenback’s weakness despite demand for safety continues. Soft US data added to the bullish case.

EUR/USD News

Dollar’s sell-off underpins gold

Dollar’s sell-off underpins gold

Gold is up to on Thursday, trading above $1,840 after hitting an intraday high of $1,849.18. The dollar changed course after soaring on Wednesday and is in franc decline across the FX board. However, action in stock markets is choppy. 

Gold News

Cardano is still on pace to retest $0.40, but bears shouldn't get too excited

Cardano is still on pace to retest $0.40, but bears shouldn't get too excited

Cardano is on professional traders' urgent watchlist as the digital asset could enter a mid-term bottom in the $0.45 zone before rallying upwards towards $0.60. ADA, like several cryptos, has been in a steep bear rally, which demands the need for balance and proportion.  

Read more

Warning signs in China's economic outlook as COVID-19 spreads

Warning signs in China's economic outlook as COVID-19 spreads

New variables both within and outside of China in 2022 have placed the country's economy under new pressure. In the first quarter, its economic growth rate was only 4.8%, which was 0.7 percentage points lower than the annual economic growth target of 5.5%.

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