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