Variance. It's all sample size. I've seen your charts, and you seem to be doing everything right, so I wouldnt stress too much about changing the way you do things

Technicals are fundamentals are technicals. As you suggest, USD pairs do move on good/bad news, but that is less to do with US strength than it might seem - remember that USD is where funds are held... and so, on bad news in the US, you will tend to see the US dollar strengthen (which seems counterintuitive at first) as money floods out of other currencies.

That's why the news earlier has AUDJPY down (oh noes, apocalypse! kill the carry trades!), USDJPY up (I dont want this crazy moon money, gimme US dollars) and USDX is through the roof, even though it was bad US news.

Anyhoo, the point is that technicals are driven by fundamentals, so as long as there is sufficient volume, no currency is more technical than another

I cant think of a single situation in my life where I wish I was *less* informed

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When you have to shoot, shoot. Dont talk.

That isnt really how things work. More buyers coming in will be hitting the ask, and the ask is going to be higher than the bid... driving prices up if they cant be filled at that level.

If this triggers a short entry from a big player, then it is their selling which drives price down, which is a completely seperate issue.

Buying never pushes price down.

(this isnt directed at you, trig - you just reminded me of something that has bugged me for a while, and its friday so a good time to be angry about something!)

Choosing to ignore something that other market participants, the ones who actually move markets, are using makes you less informed, and IMHO that never makes you a better trader.

It doesnt necessarily make you a worse one, of course. If the information has no value to you because it doesnt fit with your style, you misinterpret or misapply it, you get overloaded and cant make good decisions or you cant filter it, that's fine - but that isnt a problem with the information.

It just annoys me that certain authors like to push this line as if it were some kind of great, hidden axiom. In reality, its just a vague statement that appeals to their target audience (non-professional traders) who love to be told that 'you dont need no fancy booklearnin! all that econonmonics and fundamental stuff is rubbish anyways!'). Looking straight at you, Covel.

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When you have to shoot, shoot. Dont talk.

lol, you arent alone. where the hell did that spike come from?

The thing is, you have so many people buying francs at the moment, especially over the last few months - no european wants to be in euros atm, they want something safe that wont implode if spain and greece collapse.

And so after last nights bad news, that's just going to be magnified. Bad news leads to fear leads to panic leads to buying francs in Europe, yen in Asia and USD everywhere else. The SNB would be kinda crazy to try and run a deval program in the middle of a rush of bidding.

I wouldnt rule it out in the near future though. The Swiss economy is still pretty fragile, and deflation is a real threat. Will we get a huge pin? Maybe, maybe not. All those people buying francs gives a good opportunity for bigger players to try and establish a short franc position to take advantage of any intervention in the future at that historically significant level. Or perhaps a bit of stop hunting to clear out speculators before a big move up. Maybe.

But even if it doesnt pin, I think we are definitely going to see some more sharp moves upwards in EURCHF in the near future (and to a lesser extent, USDCHF and GBPCHF).

Then again, if the Germans keep getting angry (and history shows that, as a nation, they can get pretty cranky), they might just split the whole EU up. And then all kinds of craziness could ensue.

That's my baseless stargazing predictions and posthoc analysis for the day

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When you have to shoot, shoot. Dont talk.

Soon - just gotta work out a financing deal with Jim where he covers the FCC fines for swearing (and possibly televised nudity on friday nights). I dont have the account size to cover it

Nah, they just pass on market prices with a markup. The spread in the market was huge - lots of sellers, no buyers... then lots of buyers, no sellers.

Glad I went to lunch for a couple of beers. Too much craziness. Anyone who traded this is either reckless, amazingly skilled*, or both

*edit* ie, rac

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When you have to shoot, shoot. Dont talk.

You assume that they *actually* intervened

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When you have to shoot, shoot. Dont talk.

It's all idle speculation, but personally, my thoughts (in order) would be

a) It was someone big playing some games and raking in some cash. You know there are a stack of orders pooled there, you know they are going to have tight stops in case the slide continues, so short a bunch of eufchf, push it through the stops, let the cascade of selling push price down, buy back in at the basement as it exhausts itself, then float rumours of SNB intervention, let the speculators jump in and then sell it back to them at the top.

b) If you wanted to devalue the currency, but not spend any/much money, floating a rumour off hours would be a good way to do it. It's at a key level too, where your rumour is pretty believable, and you might just get enough people piling in to sustain a sharp move. Not sure here, the move is pretty large for something without much substance, but it did retrace quickly.

c) They might intervene off market hours before London opens with more trouble. Yesterday was bad news bears, and it it looks to get worse before London, then NFP, then the weekend... maybe you want to push in first while the market is pretty illiquid to get the most value for your dime. If you wait, you might have to sell into a bit of a buying frenzy tomorrow, and that's just not going to help.

d) a combination thereof - hedge fund tomfoolery, rumour milling and actual intervention.

In the end, who knows - I sure as hell dont Reuters has some speculation it *might* have been intervention, Bloomberg doesnt know, the SNB wont tell us for a couple of days (if ever). As I said before, I'd expect more of it - but it's an open question as to exactly *where* and *when*. Central banks cant control a floating rate indefinitely, they can only draw a line, defend it as long as possible, then fallback to the next position and defend that. Slow the advance, not stop or reverse it

Personally, I'd ask Rac. He is probably somewhere in Zurich, hiding under a ghillie suit with a parabolic mic and a laptop

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When you have to shoot, shoot. Dont talk.

add a couple hundred pips and cut the retrace by half and I'd definitely agree. As is, it just seems a bit girlish - the move was only 250 pips, and then it got slammed back down. Net benefit of 80 pips, in a quiet session? My little sister can do more damage with her purse

(it could have been, of course - it just seems a bit weak, and didnt have the solid close that you would expect if they were throwing real money into it. then there is the 'shot over the bows' option, warning speculators that they can and will push through your stops if you try messing around)

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When you have to shoot, shoot. Dont talk.

lol, love the rumour mill. Unnamed sources from unnamed banks making competing claims, every one of them with vested interests. You can see why retail newstraders get wiped out within like six minutes of opening an account.

time to thank jim for steering me in the right course, i think

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When you have to shoot, shoot. Dont talk.

I dont even see this as an A grade trade, to be honest. The main problem I have is that nose of the bar is barely protruding the noise around it. You really want price to stretch out and bash into something and be rejected (Mike uses the example of a cherry hanging from a tree) - for me, I want it to be sticking out and to be so obvious that it smacks you in the face. This one is almost hiding in the bushes.

On top of that, it is a small bar in relation to the recent move down, it backs right into a PPZ, a world of traffic and a fib (not that I really care about fibs, but I wouldnt be using it to justify this one).

Plus a few other non-chart reasons.

Not a good enough setup for me, but I can see why others might like it.

If you do trade it, I think your plan of waiting for a break of the PPZ (rather than the bar) is a wise one - much safer that way, even if you give up a tiny amount of profit.

I'm a longtime happy IB customer. I generally only trade futures and equities through them - keep in mind that for forex, they have a minimum order size of 25k USD (and other random minimums for other currencies, like 35k AUD or 3m JPY) and leverage of 40:1. I assume that wont be a problem, but worth knowing I guess. You can put through orders smaller than that, but they get routed through their currency conversion platform rather than the trading one.

The spreads are the best you will get anywhere, given they have about a dozen big interbank feeds plus client-client fills, and execution is in the milliseconds.

also, as you said, their charting package is kind of rubbish. Well, it isnt *terrible*, it just has its own quirks which I could live without. Like the way it seems to randomly crash for me It's not that bad, you could get by with it.

I use Ninjatrader pretty much exclusively with them, and the combination has been pretty close to perfect for me (for the price). Plenty of people use Tradestation or Multicharts, and I have played around with Sierra Chart too.

(edit: I should add that for your purposes, their software will be fine. It's really only when you are talking about drilling down to the orderbook level that you could potentially run into issues. If you are trading off a chart, you will be fine. If not, Multi or Sierra will work fine)

Feel free to shoot me a PM if you have any other questions, although being an Australian, to me an IRA is a pissed off irishman with a balaclava

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When you have to shoot, shoot. Dont talk.

I swear, its a neck-and-neck race between Rac and Bemac for the coveted Most Cryptic But Clearly Knows His Stuff award.

I'm gonna assume Dow hitting 1000.

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When you have to shoot, shoot. Dont talk.

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When you have to shoot, shoot. Dont talk.

Not the biggest pin or the best location, but as long as you know where it is heading, you should be able to grab a few bucks with very little risk... I'd wait for a break of that ppz first though, and be aware of possible support around the 7850ish area.

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When you have to shoot, shoot. Dont talk.

I dont see anything 'reverse' about that bar (apart from it being the reverse of what you want to see ). I see a regular pinbar, pointing to a bullish move.

A rubbish one that I wouldnt trade, but anyhoo. I wouldnt exactly call it a confluent sign, more a divergent one.

*edit*
Trig's chart at the bottom of this page shows a good example of an IPB (aka 'reverse pin')

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When you have to shoot, shoot. Dont talk.

This thread has gone from solid, evidence based reasoning with disciplined entries and management to 'there's a ppz so I'll buy if we get near it' justified as touch trading* to straight out 'lol it mite go up!' guessing.

That's some bearish PA on the quality front. Time for a short?


*which, while i generally dont think is a great idea unless there is a deeper understanding behind it (and I can only think of definitely one, maybe two, people who meets that criterion.. the rest are just justifying sloppy entries), it is still based on something concrete

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When you have to shoot, shoot. Dont talk.

Exactly.

And when a thread which is promoted to new traders as 'this is how to stop losing money and start learning to trade' moves away from those basic, high quality 'dirt simple folks' trades.... well, when you are teaching your kid to swim, you dont throw him off a boat in the middle of the Atlantic.

Then again, kids annoy me. So maybe I would

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When you have to shoot, shoot. Dont talk.

hm. Seems I inadvertantly managed to kick a hornet's nest.

The 'touch trades' line wasn't meant as a 'this doesn't belong in this thread!' - conversely, if you think there is nothing to learn from someone trading pure PPZ reactions and confluence, then you probably aren't thinking enough. obviously, you need to consider the source, but that's standard. I was more using it as an example of a midpoint in the spectrum of approaches.

Personally, I love looking at the different directions that people have taken the basic material, and the diversity of approaches (and subsequent discussion and analysis of them) is a great way to learn.

My *actual* concerns were more around charts which have been cropping up recently posted with no solid basis, which aren't based on anything related to the thread, and usually come with fairly spurious reasoning or outright curve fitting. Are they going to lead someone like Jaroo down the wrong path and send him broke? Unlikely. But to a newbie, they are going to confuse and mislead...at best.

Apologies if I was unclear.

one of the guys I used to work with now trades for an AR fund and he has (literally) spent more on dinner after a big day than my entire trading account, which isn't huge but is still enough for something new, German and fast. He was a chemical engineer before trading. I think you'll be fine

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When you have to shoot, shoot. Dont talk.

Contests like that reward high risk behaviour because only the top 25ish people get paid, and the time horizon is only a month. If you are in 26th spot with enough time for one more trade, expected value demands that you risk 100% of your account on that next trade.

Then again, if you are a 'broker' that takes all the action from the clients onto your own books (and therefore win when they lose, and vice versa), maybe that's a trading style you want to encourage.

As always, great stuff.

---------

Thinking about it, these two things are probably related. Just as it is easy to shove your entire account into a single trade when the only risk you have is contest money that has no real world value, its pretty easy to just post all kinds of crazy trades that you took on demo (as long as they are winners).

I suspect we would see a much higher concentration of A+ setups if people were trading actual money.


(and by actual, I mean both legal tender and meaningful amounts)

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When you have to shoot, shoot. Dont talk.

I'd suggest the fed discount rate movement has alot more to do with that than us

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When you have to shoot, shoot. Dont talk.

I'm not going to listen to people with more experience and skill than me, even if they are profitable and I'm not.

I'm not going to follow sound risk management processes like every professional trader, despite there being a firm, quantitative basis for the said processes.

I'm not going to stop trading the m30 chart with a bunch of indicators that I dont even understand.

I'm not going to accept that it is all my own fault when I bust my micro account taking bad trades with a third of my 'capital'.

...

Honestly, if you are going to have that approach, you would be better off taking your 166 euros and buying a nice steak and a bottle of red. You are only going to donate it back to the market.

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When you have to shoot, shoot. Dont talk.

I swear, everyone starting out should be forced to read over Ben's progress from square 1. Its like a 'How To' manual.

Good to see you back.

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When you have to shoot, shoot. Dont talk.