I placed my first Forex trade today. Short Euro.USD After the federal reserves meeting confirmed the end of QE I decided to finally place a trade that I have been wanting to put on for some time. I am speculating that because the fed is no longer increasing the money supply through its quantitative easing program, the USD will experience deflation and increase in value. Europe is still doing its bastardized form of QE and from what I hear is incredibly weak/on the brink or in horrendous recessions. America is the best house on the block currently.
Anyways I was looking at the chart of the EUR.USD and around the time I started getting bearish on the stock market around June was the same time the Euro began drastically weakening and USD started gaining strength. This has revealed to me that the smart money has been positioning for the end of QE all along, not through selling equities, but by selling the Euro.
This has taught me that watching currencies is a good way to glean insight into the macro picture, how investors are feeling about the economic environment of the different parts of the world. They say that the Bond market is the smart money to it's half retarded schizophrenic cousin the Equities market. If thats the case, the Forex market is the wise old man behind the curtain running the show.