Real Estate Investor Magazine South Africa June 2018 | Page 58
CURRENCY
PART
2
THE RAND:
Respect the Tide,
Ride the Wave,
Watch the Ripples
I
JAMES PAYNTER
Director and Head Analyst at
Dynamic Outcomes Inc.
56
n Part 1 of this series, we looked at
the analogy of how foreign currency
markets like the Dollar/Rand can be
related to the ocean, and how there are
cycles and moods in each, and different
degrees of forces or trends that drive
their apparent ever-changing motion.
Let’s quickly recap last
month’s piece:
A forex market has a primary trend (like
the tides of the ocean), and you need to
know what this trend is, and how far
that trend is likely to continue, so you
can use this to your advantage. Fighting
the tide is a recipe for disaster! The in-
teresting thing about long term trends
and tides of the ocean that we didn’t
JUNE/JULY 2018 SA Real Estate Investor Magazine
cover, is that these also have different
moods and intensities.
Sometimes you have strong market
trends (like during spring tide), and
at other times, lacklustre trends (like
during neap tide). Knowing when each
of these is in play and the characteristics
of each is important to understanding
and surviving the ocean – and the mar-
kets.
But that is not the whole
picture.
While knowing the Rand’s long term
trend is essential, it is not sufficient in
order to be successful in managing your
forex exposures or trading. The fact is –
you can know the long term trend, and