Every trade is a currency trade(?)

Discussion in 'Trading' started by Avid_Consumer, Apr 28, 2011.

  1. ok let's face it... whatever you trade, movement in USD, DXY, etc is influencing the p&l of your trade as much or more than the "real" value of the thing you're trading. we trade in an environment where leverage and "money" outweigh the actual supply of the things we trade by several orders of magnitude.

    you can be as right as rain about the value or technicals of any asset, and the FX market will compensate against your position. for example, you're long silver, russell, S&P, oil, etc... it's breaking out, then DXY lunges upward at the moment of your breakout and your trade freezes and noses down.

    what's moving DXY?

    it seems like this effect basically removes fundamentals or technicals from any trade and hands it over to whoever/whatever forces govern the value of money.

    should every trade be hedged with DXY? ie when you trade any asset, trade DXY too to isolate the "real" value of your asset?

    it feels like currency is controlled, thereby all asset prices are controlled.

    it also feels like assets are by far the "tail" and USD/currencies are the "dog".
     
  2. You're on the right track. Keep digging.