February 16th, 7:55 pm by Barbara Zigah
(eToro Blog) This week we draw your attention once again to OpenBook guru Babczyk. Since we first highlighted this trader back in October last year, his popularity among the OpenBook has increased to nearly 1500 followers, and from 184 copiers then to almost 1300 as of this writing. Given that this trader primarily communicates via his trading wall in German, his incredibly strong following speaks to his skills as a trader rather than as a communicator. Followers and copiers should know that while English is not his mother tongue he does respond to questions and comments so they should not let the language barrier be an impediment to communicating with him.
This trader who employs a low to medium risk strategy, continues to allocate a huge portion of his portfolio, in this case 94.8%, to the EUR/USD pair over the past six months, with an aggregate return of 4.1%. In reviewing this trader’s P&L, you can see clearly the upward trendline which shows a 54.25% gain. Guru Babczyk’s other currency holdings are in EUR/JPY, GBP/USD and AUD/USD which have provided him with gains of 3.8%, 3.6% and 2.6%, respectively. With a P&L of 94.3% in the last six months, he has executed over 300 trades and has a generally bearish outlook with 80% of all trades sold short. Currently, this guru has only a handful of open positions, but one EUR/USD short is on the verge of break-even. We believe that, given this trader’s low profile risk, which is ideal for long-term trends, and the stability of his drawdowns which signals a consistency in his trading strategy, that the upside potential for achieving the magical 100% gains is high.
We also took a look at a relatively new OpenBook trader, Teslaru20 from Romania who already has 77 followers and 12 copiers to his credit. The last month has been a good one, with a recorded profit of 186% and a quarterly return of 25.6%, generated from trading the EUR/USD and the EUR/JPY. Over the past three months, nearly two-thirds of this trader’s portfolio was allocated to those currency pairs and the USD/JPY. The trader had been relatively unsuccessful in trading the USD/JPY, with a recorded loss of 64.3% on a 1.1% allocation, but appears well aware of his limitations and has since dropped that pair from his trading portfolio. More than 17% of the portfolio is allocated to the EUR/JPY, which has returned 11.25% while the EUR/USD pair dominates the portfolio with a 45.8% allocation and a return of 5.7%. A previous allocation of nearly a third of the portfolio to oil and gold has since been dropped, a sign perhaps that this trader recognizes that commodities are not his forte despite some good returns in gold. A review of his recent trading history shows that this trader has been exclusively bullish for the Euro-Dollar over the past month, and also closely monitors events as they transpire as a majority of the positions were manually closed. All things considered, this trader is one to consider for your watch-list if you are looking for a cautious mid-risk trader.
In the Eurozone, the Greek saga continues to play out, ratcheting up uncertainty. Austerity demands appeared to have been met, but not to the satisfaction of some Troika members who are reluctant to accept Greece’s agreement at face value, given comments made by a P.M. candidate who said that he would seek to renegotiate it. The Euro unexpectedly nosedived yesterday, hitting a 3-week low, much to the chagrin of Euro bulls. Guru Gavinwright got caught on the wrong side of several trades, but as with any good trader, he knows when to cut his losses. The majority of his followers remain supportive, nonetheless, and this trader is now focusing on recovery and positive trades.
In the U.S., Wall Street’s rally hit a speed bump when the Fed released the minutes of January’s FOMC meeting. Markets wanted to know where the Fed stood with regard to additional stimulus measures, in light of general improvement in recent data; the minutes confirmed that the members are still widely disparate on the need. Richard Fisher, president of the Dallas Fed, said QE wasn’t necessary and that the thought of QE3 is essentially a Wall Street fantasy. On that “good” news, Wall Street closed markedly lower and OpenBook trader ROLaterveer got the rout he needed from the SPX500 drop to close out a short with a 42.50% gain, and scored another closed short with a 21% return earlier.
In the U.K., the Bank of England revised its inflation forecast yet again, saying that the outlook continues to present challenges to the U.K.’s recovery. For investors, that shut down any hope of more stimulus. The bank recently pledged an additional £50 billion in QE and it will likely want to first see the inflationary effect. That news renewed support for the Pound Sterling, which had been under some pressure recently on worries of an impending double-dip. Guru PPvijayakumar held onto the long position in the EUR/GBP and closed it out after the announcement for a 48.70% return.
On Tuesday, the Bank of Japan finally put paid to growing speculation of an intervention and did just that, knocking the Japanese Yen broadly lower. The tipping point may have been the unexpected 2.3% contraction in the 4th quarter. According to the statement, the Bank intends to “pursue powerful monetary easing” by setting various short and longer-term inflation goals, holding interest rates near zero, and increasing its asset purchases by 10 trillion Japanese Yen. Guru Piethein was able to hold on and eventually close two profitable long positions in the USD/JPY following the intervention, with an average 18% return.
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