How to trade in a brand new market

John C Burford looks to profit from the Aussie dollar against the yen, and explains what he looks for when he's trading any new market.

This morning I will veer off the exciting gold story I have been covering recently and show how I approach a brand new market and the analytical steps I take to judge whether there is a trade on or not. There is a multitude of currency crosses that we can explore. Although I like to concentrate on my favourites EUR/USD, GBP/USD and USD/JPY most of the time, I will look at others at various times.

Almost at random, I have chosen the AUD/JPY cross. This is a very popular market with the Aussie dollar very much a commodity-heavy currency, while the Japanese yen is a commodity-free currency.

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John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.