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Anyone here into FOREX?

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Music_Producer said:
Nathan, I'm not trading anything today. The eur reports I have no clue if they move the markets.. but generally they don't. As for US PPI, I would have traded it but there are a couple of other reports coming out at the same time (housing starts) and I am afraid that if there is a huge conflict, you will see nothing but whipsaws.

If you are trading, trade with a small lot.. of course I could be wrong and you could see a move of a lot of pips, but I'd rather be safe than sorry.
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Yeah, I didn't trade either for the exact reasons you listed Music_Producer. I made my pips for the week so I'm happy. ;)

As for my technical analysis methods, my MACD values need some fine tuning, so I'll be working on that this weekend. Based on some backtesting though there does seem to be a bit of consistency and potentiall, but not enough yet for my liking. I'll let you guys know when I have something ready for you to review and offer input on. :cool:
 
didnt trade PPI..came out as expected.

ok...Ive got another question. Supposedly, the BOJ rate decision is next week(Its not on the FF calendar, but thats what Ive heard).

Ive learned that normally, if a central bank raises rates, the currency gets stronger...and if they cut rates, it gets weaker.

But it seems a lot of people carry trade against the yen, so if they were to raise rates...would it go up or down?

Im thinking it would go like any other rate decision...for the initial spike.

But then the yen would get weaker because the yen gained quite a bit this week(GBP/JPY dropped 600 pips:eek: ) which could be from everyone liquidating their carry trades for the rate decision...then, whether they raise rates or not, everyone piles back in to their carry trades in the days after the announcement.

Im not going to trade based on anything I just said, Im just trying to see if I understand whats going on.

Any thoughts?

Also, most of the JPY pairs have been in an uptrend for quite awhile, which is another reason for it to pick back up and also because all the central banks seem to want the yen weak for the global economy.

Again, Im not trading on that, I just dont want to get screwed next week if they do raise rates and I sell GBP/JPY or AUD/JPY and then everyone piles back in to their carry trades.
 
nhallmark, it's really too tough to say. Yes, in theory, if a country raises its interest rates it makes the currency more attractive and it should rise. But, if it's really expected, then perhaps the upside has already been factored in and built into the price prior to the announcement, resulting in not much of a move. Or, perhaps other economic factors will inhibit an upward move. As I said, tough to say.

In the case of the Yen specifically, there are a couple of factors which are possibly going to keep the JPY soft even should the BoJ hike rates next week (the announcement is the 21st btw). Relative yield spreads will remain significantly against the Yen while the BoJ is holding yields down by continuing its GBP buying, despite ending quantitative easing. We'll just have to wait and see... :cool:
 
I've also developed a couple interesting theories when trying to investigate and prove out some of the technical trading techniques I'm currently looking at.

Basically, the news traders and the technical traders have just as much "power" as each other. There are people who trade specifically on technicals and charts whom (rightly or wrongly) impact the market just as much (if not more than!) the news traders who are trading on fact. It's somewhat ironic in a way, but it appears to be true. For instance, a NFP report could come out with a huge negative surprise, however once all the news traders jump on board trying to short on the news, a (possibly even larger) group of technical traders will move the markets themselves by executing BUY orders once a certain resistance level it met, RSI becomes stupidly oversold, a MA is crossed, etc. - and then the pair will skyrocket upwards, even though, solely based on the facts and "logic" it shouldn't due to the bad news.

I guess what I'm getting at is that some people who only trade the news sometimes perhaps look down at technical traders, calling them "noise traders" and saying that their methods aren't valid, as they are not taking into account actual events and fundamentals. But in the end (again rightly or wrongly) it doesn't matter, and you have to keep in mind what the technical traders are doing as well, or else you might find yourself executing, what is in your mind, the proper trade on a news item, only to find the pair swing the other way and hand you a loss. Shorting a pair on a bad report? Well, when it drops and hits a key support trend line and automatically generates a ton of BUY orders, look out! ;)

I guess a good parallel might be the carry trade, i.e. a pair held artificially high at times due to what it represents, as opposed to what pure economic factors and news may or may not report.

Just some thoughts. I'd appreciate any feedback. :cool:
 
I would tend to agree with about 50% of what you mention Shard. First of all, I don't think any news trader looks down upon technical traders.. in fact, technical trading is less stressful than news trading. Not to mention - all the risk factors associated with news trading such as re-quotes, delayed executions, whipsaws, etc.

With any currency, there are resistance levels because of the stops placed by the various banks who are in active trades. To prevent the currency level from hitting that stop.. the related banks would buy/sell .. whatever necessary to avoid losses.

I look at any currency movement after the news this way -

When the news comes out +ve, the currency jumps up.. and after a few seconds.. it comes down again (if the report has not deviated by that much) I think that can be attributed to simple profit taking. You have all the traders buying when the news comes out.. and they all take their profits in 3-4 seconds.. so you will obviously see the level drop.

On the other hand, yes.. when stops are involved.. for e.g. if gbp/usd is 1.9630.. and GBP+ve news comes out.. and GBP/USD jumps to 1.9690.. you can be sure that if it hits 1.9700 it will be met by a lot of resistance.. simply due to the massive stops probably placed at that level.. it's a psychological factor really. When it hits 1.9700 I would short it, expecting it to dip down to 1.9680-1.9660 or so. This happens because:

1. All the news traders start taking their profits *and*
2. The banks who have placed stops at 1.9700 get in and start shorting GBP/USD to prevent that stop from being hit.

Now obviously it's a battle between these two groups.. once 1.9700 gets broken (if the news is super positive for e.g. an unexpected rate hike) then 1.9750 would be the next level (or whatever resistance levels that can be calculated)

I've seen tons of technical traders look down upon news traders because.. news traders cause all the spikes! If you see plowcow mention in an earlier post regarding the USD/JPY .. he mentioned that when it hits 120.. it should go back up. Why? Because its a massive resistance level.. common sense. However, if any news that is terrible for the USD comes out.. then no resistance is a match for it. As a result USD/JPY touched 119.00 (not at once, but pretty fast)

Let's say I wasn't fast enough to get in on the news spikes. How would I trade then? Probably by placing orders at the resistance levels, like you mentioned Shard. If gbp/usd is 1.9640.. I would place a short at 1.9700 (pre-news) and a buy at 1.9600. Whatever hits, I can be sure to make a few pips profit (hopefully)

But sometimes, mind you.. a news report can come out that can make a currency plunge by 800 pips in 24 hours. You'll keep buying at all resistance levels.. and you'll keep getting screwed. So all the technical stuff goes out the window in face of such strong news.

Hence in my opinion, I would suggest - why not trade both ways? A smart trader should trade news *and* technicals. Place orders at the resistance levels, and trade the news as well. Eventually it depends which one suits you the best.. for me, news trading suits me as I have absolutely no patience to watch a currency move to a certain level. I need to get in, and get out. I'm not the types to hold on to a trade.. I can't even see a 1-5 pip loss.. I get heartburn :p

Nathan:-

I don't know about these JPY interest rate trades.. because they never come out any fixed time. So if you are looking to trade the actual news report.. I suggest you don't. I've watched it before and never liked it.

The carry trades should continue strong - japan is expected to hold its interest rates steady. If they do surprise everyone by raising them.. you should see all the JPY pairs drop by quite a bit.. who knows.. 300-600 pips maybe. But its in japan's best interests to keep their currency levels low. Additionally, their inflation data never showed any risk of inflation in the first place.. so they have no need really to hike rates. In fact, the inflation is dipping.. so they might actually *reduce* the rates back.. (not so soon obviously.. it depends on future inflation reports)
 
Thanks for the thoughts Music_Prodcuer, I agree with what you've said. I've always thought you need to be aware of both sides of he "trading fence" (technical and fundamental) but in the end, as you state, you have to do what's right for you, and more importantly, what you're good at! As you say, with trading the news, you can get in, get out, take your pips and leave. There is no need to open a long term position and worry how it might move, if news will adversely affect it, or if it dips and you end up having to carry it for days with not only a significant paper loss but also financing to deal with.

Trading the news wrt forex is obviously how I started (thanks to this thread and you!) :)) and is probably how I will continue for the most part, however if I can have some success in trading the technicals as well, hey, why not! ;) To that end, I'm going to continue playing around and seeing if I can find some consistency in some of my strategies. Once I have something worth sharing (i.e. that won't be a waste of time for you guys to review :eek:) I'll definitely post it.

Once again, thanks for the feedback, I think you're pretty much on the money (pardon the pun) with your thoughts. :cool:
 
I just bought a brand new Mac and a brand new PC and guess what I bought it for?

That's right..... Forex trading, I went for a 2 monitor display set-up, anyway imagine my surprise when I sign up to a Mac forum and I find a conversation about Forex.

I think I am going to like this forum. Anyway I am a full time trader and have been for 4 years. So if anybody has any questions feel free to ask. I also got a few good systems I am trying out if anybody is interested I can share those.

Now onto other business I spelt my nickname wrong it should be PiP Dictator not Dicatator is there any way to change it?

:eek:

P.S. I am from Australia and NO COUNTRY IN THE WORLD MAKES A BETTER BEER THAN........ Germany (Though I was going to say Australia didn't you?)
 
Welcome to our thread PIP Dictator! Please read through things when you have a spare hour or two ;) and let us know your thoughts. And obviously any insight, tips, strategies etc. you can share with us would be most welcome. :)

PiP Dicatator said:
Now onto other business I spelt my nickname wrong it should be PiP Dictator not Dicatator is there any way to change it?
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PM a Mod and indicate that you made a simple spelling mistake. Since you just signed up they shouldn't have a problem changing it for you. Drop my name if necessary. :cool: Oh, and it's a good idea to participate in a lot of the main threads as well - the Mods don't like it sometimes when someone signs on just to participate in one "off-topic" thread such as this one. As long as you contribute to the other actual Mac-related threads as well, it'll all be good. ;) :)

Apemanblues said:
Damn.

Maybe I should really read through threads.......

Naaaaaaaaah. Never in a million years.
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Yeah, that would require far too much effort, right? :p ;)
 
I haven't had time to look through the forum so i do know know if you guys are active traders but if you re you will have noticed that GBP/USD and GBP in general has dropped like a stone.

Here is why!

The move was caused due to the MPC report released by the BoE

Here is the culprit himself

http://www.publications.parliament.uk/pa/cm200607/cmselect/cmtreasy/299/299weii.pdf

The actual comments that caused the bearish move are "GBP depreciation will probably be necessary"

Inflation fo the U.K is still high at the moment but it is at the lowest is has been for a long time. We could see possible rate cuts in the next 6 months.

We got the UK GDP coming out this week and the BoE minutes meeting which will be worth taking a look at.
 
Oh yeah, these statements come out from time to time. Before the G7 summit.. there was talk about an agenda to discuss the weak yen.. and take possible action. So all the JPY pairs dropped. I bought AUD/JPY and GBP/JPY when they were low.. because it's a known fact that everyone always 'talks' about how a currency should be tweaked.. etc. When the actual G7 summit came.. there was no talk about the Yen.. as I expected.

It was just a chance for people to make some good profits on the carry trade.
 
Well i pegegd that retrace got into GBP/USD for the up trend after that report it was apparent it would move up. Entered GBP/JPY also for a combined total of 400 pips today I can relax for the next 6 months lol...

By the way guys I am a pro trader don't throw money in if you do not know what you are doing. If you have any questions ask I am happy to share questions and trading systems.
 
Im not planning on trading the actual BOJ announcement, Im just trying to figure out the market psychology of it because sometimes its backwards.

For example, when inflation is higher, thats supposed to be bad, but the currency gets stronger because it means there is more chance of a rate hike, right?

So, like Shard said, I guess we will just have to wait and see.


PiP Dicatator said:
Well i pegegd that retrace got into GBP/USD for the up trend after that report it was apparent it would move up. Entered GBP/JPY also for a combined total of 400 pips today I can relax for the next 6 months lol...

By the way guys I am a pro trader don't throw money in if you do not know what you are doing. If you have any questions ask I am happy to share questions and trading systems.
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Yeah, I got 72 pips on GBP/JPY on that ride up. I traded it with a very small lot though because I am just now learning about technicals and I wasnt really sure what I was doing.

If you want to share your system(s), Im all ears. Im just trying to learn anything and everything I can about it right now.:)
 
nhallmark said:
For example, when inflation is higher, thats supposed to be bad, but the currency gets stronger because it means there is more chance of a rate hike, right?
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You have it half right. When inflation is high, this is bad for the economy in general as it means the banks need to raise interest rates to combat the inflation. However, if a country's intererst rates are higher, more people will be attraced to purchase its currency due to the higher interest rates. Look at the AUDJPY pair for instance - that's the whole principle behind the carry trade - the AUD is an attractive currency because you can invest and make 6.25% on it while only having to pay 0.25% to borrow yen against it. Good return there.

Too bad you couldn't buy Iceland's currency - I wouldn't mind sticking $100K in an Icelandic bank earning 11%/year or whatever their rate currently is! :eek: :) :D

nhallmark said:
If you want to share your system(s), Im all ears. Im just trying to learn anything and everything I can about it right now.:)
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I agree - the more information that is shared and the more learning that goes is, the better for all of us. Please do take the time to share some of your insights and methods PIP Dictator, we're more than eager to learn. :cool:
 
Bank of Japan just raised interest rates to 0.50% Big surprise.. I've exited all carry trades for now. Will look to get back in when jpy pairs still head downwards. Then again it depends what the BOJ chief says.. if he says this is it for the entire year then all jpy pairs will shoot back up.
 
I didn't trade the press reports because I thought the official report would matter more, but even with the 8-1 vote, it still shot up so I caught 40 pips on that.

So, for this week, Im up 110 pips. 100 pips was my goal for this month so Im happy:D
 
Great going guys! Check out all the JPY pairs now.. they are back to the pre-report levels! This has to do with the speech that usually follows an interest rate decision. Apparently the BOJ has decided to keep rates low.. so all the carry traders jumped back in.

Personally I think the jpy pairs should fall quite a bit, then again maybe I could be wrong. I would like to see AUD/JPY fall to say 87-88.. GBP/JPY to 225.. and then I'll get back in.. just to be on the safe side.
 
I just wanted to pipe in and say that after reading the first ~10 pages of this thread and the last couple (to get up to date) I'm going to open a game account and give this a shot. Even though I don't like waking up early here on the west coast ;). I look forward to learning more from all of you, and would like to say thanks to CurrenSea and Music Producer for the great explanations about this trading.

Cheers!
 
First of all I should share broker information do not sign up with forex.com or fxcm.com they will screw you over with stop hunting and locking you out during news.

My pick is http://www.fastbrokersfx.com/ they have an ok charting platform, fast execution, great entries on news and they don't seem like they stop hunt.

I will give some strategies later out soon.
 
FXCM.. hmm .. they didn't even fill me in during non-news reports :rolleyes: I don't know how they're still in business.. they should have been shut down a long time ago.

Bagged 24 pips on the UK BOE minutes, next up US CPI. I'm still watching the JPY pairs and still can't believe they shot up that fast.. lol, it's too funny. All those carry traders just couldn't wait!
 
21 pips on the US CPI report (deviation was only 0.1%) Huge lot though, so I'm very satisfied right now :D

Hey gaucho.. where you been?! I see you hopping in and out from time to time :p If you can't fit the trading patterns in your schedule.. I recommend you trade news reports like Aussie/Kiwi ones. They usually come out at 4.30 pm PST - 7 pm PST. They're very limited unlike the UK and US reports but they do move really well. I know that I could do well if I just traded one AUD/USD report once a month.. (obviously with a massive lot) So look into that as well.
 
I slept through the BoE minutes and I got a requote on US CPI:mad: ...Im still happy about last night though.

PiP Dicatator said:
First of all I should share broker information do not sign up with forex.com or fxcm.com they will screw you over with stop hunting and locking you out during news.

My pick is http://www.fastbrokersfx.com/ they have an ok charting platform, fast execution, great entries on news and they don't seem like they stop hunt.

I will give some strategies later out soon.
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Yeah, I looked at their site and they use MT4 which is great for techs but, from my experience(on a demo), it sucks for news.

There base spreads are also high...EUR/USD-5, GBP/USD-6, GBP/JPY-10. And that was their "best" under "normal maket conditions".

What's so great about them?
 
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