I dont understand market reactions past few months
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Thread: I dont understand market reactions past few months

  1. #1
    It used to be (3 months ago), a big news event would come out bad and a nations currency goes down (and vice versa). Recently, 7 out of 10 occasions, the currency will go the other way.

    Now by way of instance, we had the UK cut rates into an unforeseen level (way below expectations). Usually, this would cause the GBPUSD to do down, however, we just got a brief spike , and a huge rally up.

    In hindsight I know some of you will say its because X, Y, or Z factors that the price acted this way, but, a few months back I can almost guarantee we'd have had a wonderful long move back on the GBPUSD.

    Yes, I still am/was a news trader but after I keep dropping money day after day hoping to trade what makes feel fundementally, I am considering quiting forex.

  2. #2
    Not sure I understand your purpose. You're unhappy with a 200 pip spike downward on a rate-announcement?

  3. #3
    I feel your pain. I used to attempt to exchange the news and realized that I was better off flipping a coin and leaving a tremendous SLs to weather the news tide. I found it was near impossible to predict which direction the announcement would send a specific pair. For me I was going to have to stop OR change my style of trading. I opted to change my style of trading. No doubt you know a thing or two about trading thus devote to some other manner of trading. It is really amazing just how much pressure goes away as soon as you stop trading the news.

    I found with bigger TFs the caliber of my life improved.

    Best of luck to you!

  4. #4
    Quote Originally Posted by ;
    Not sure I understand your purpose. You are unhappy with a 200 pip spike down on a rate-announcement?
    Assuming you were able to enter a trade at the top of the spike and then depart perfectly, sure, you might have captured 165 pips roughly. However, that is not feasible.

    What I am complaining about is the lack of follow through, not neccessarily the spike . With such a large rate cut, you would think there would be a follow through to the downside, nevertheless, we had a rally on the GU


    I concur with the above poster, I have noticed some specialized systems performing a lot better in the current market, perhaps its time for me to shift my focus from fundementals.

  5. #5
    Quote Originally Posted by ;
    Assuming you were able to enter a trade near the top of the spike and then depart perfectly, sure, you might have caught 165 pips roughly. However, that is not feasible.

    What I am complaining about is the lack of follow through, not neccessarily the spike itself. With such a massive rate cut, you'd think there could be some follow through to the downside, nevertheless, we had a rally on the GU


    I concur with the above poster, I've noticed some specialized systems performing a lot better at the current market, perhaps its time for me to change my focus from fundementals.
    Remember that you take care of probabilities. Also, if thing where so obvious that the nations currency would decrease in value immediately on every news-release wouldn't trading be way too easy?

    You stated 7/10 times the nations currency did the opposite. Sounds like a system with 70% success-rate to me

  6. #6
    Quote Originally Posted by ;
    You said 7/10 times the nations currency did the opposite. Appears to be a system with 70 percent success-rate to me
    reevaluate what I'm thinking too! The old buy the rumor sell the news trick!

  7. #7
    Quote Originally Posted by ;
    Yes, I still am/was a news trader but after I keep losing money day after day trying to exchange what makes feel fundementally, I am considering quiting forex.
    If you would like to give up, quit. Or... you can find out a better way to exchange. Up to you.

    The market doesn't always respond rationally. Sometimes the market has pre-priced stuff, or at times it's just major currency flow. It could be anything really, and I don't think it's possible to reliably predict what events will effect a spike (or even follow-thru). Atleast not over time. News trading is not really effective in the retail level .

    Quote Originally Posted by ;
    What I am complaining about is the lack of follow through, not neccessarily the spike itself. With such a massive rate cut, you would think there would be a follow through to the downside, yet, we had a rally on the GU
    Unless it was not enough. The dollar is overbought for today. We've seen a lot of money move to cash, seems that right now they are the ones running the market. DOW moves, ppl sell dollars and buy stocks, dollar goes down. DOW moves again, ppl buy dollars, market shares, dollar goes up. Just mechanics tho, could change.

    No system lasts forever. If you do not look to the inner workings of the market, you're always going to be blind.

  8. #8
    So I need to ask after doing so for a couple of decades, is there really a secure, long term way to make money trading Foreign Exchange?

    I've had great success along with great failures within the past couple of decades. No trading platform I've ever seen on a forum or purshased appears to survive in the long term, they've all failed. Some last longer then others.

    The biggest problem with Foreign Exchange is the large spreads, the shady brokers, and market manipulation by large players. The odds are stacked against you the typical retail trader likely has betters chances in playing poker or gambling in a casino. Heck, even large banks and comericial trading classes are getting killed in this market.

    So why do we do it?

    (sorry, just had to rant after a poor day)

  9. #9
    Quote Originally Posted by ;
    Therefore I have to ask after doing so for a couple of decades, is there a secure, long term approach to make money trading Currency Market?
    Sure, but I doubt anybody will just give you all the pieces to the mystery, even for a price. There are a lot of components spread around this forum, simply takes a lot of time.

    You sound just like a short-term trader. Explore market profilethe CBOT utilized to teach it... and also a lot of ppl still exchange it, therefore it is well worth a look.

  10. #10
    Emotions, (Fear/greed), transfer prices, and fear trumps all else if it is wide spread. News/fundamentals do not move markets, at best they add some alyst or fuel to tendencies which were already set up.

    Frank, try trading day charts with smaller leverage or lot sizes. There are some powerful tendencies to profit from, but one needs to endure the volatility.

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