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Making sense of a rise in price (AUDUSD)

mavericks
Jan 14 2015 at 09:28
110 posts
CrazyTrader posted:
Look like you have ignore the most interested part..

'Only the time will now make the difference between us... I know the end. : )'


dear Crazyperson

:) Of course you do. Cause youre the one that cant even make one pip live and yet predicts future.

Also you are famous for inventing M a W patterns, trading against the crowd while being epitome of it, having retarded amateurish webpages from year 1998, blowing demo accounts while having chance of your loser life on 10 k (while trading randomly)

Get investors and get paid 15 percent of theyr profits. More on my website.
johnfxpips (johnfxpips)
Jan 14 2015 at 09:30
1 posts
Euro Falls to Nine-Year Low on Easing Fears.

spunta
Jan 14 2015 at 09:38
28 posts
Hi

I have been following this thread for a while and while I am no expert (about a year in Forex, most of which was disastrous), I feel that in the last four months I have started to understand it a bit better. I don't want to get in to a discussion about who trades better than whom or whatever, to me if anyone makes consistent money out of forex no matter how they do it, then good luck to them. I am currently trading one real account and one demo, the real is small, just trying to get as much practice as possible before trying anything large - I am not selling any system, EA or anything.

It's an interesting point about price reaction to news as I have seen the same thing happen in many pairs (GBPUSD just yesterday for example did the same) and would like to offer my thoughts (all or some of which may be wrong) for people to comment on - just for all our own learning, not ego.

1. Trading around news is very risky as any reaction might be short and violent in both directions and with some brokers the spread gets worse and/or maybe trade context gets busy and you can't open/close.
2. Large money players need the volatility and liquidity to get their orders filled and if they can push the price one way or another then money will come into the market, so that they can get better prices for what they want to do. i.e Buyers need Sellers etc.
3. Unless the news fundamentally changes the expectation for interest rates (return) for the currency, then it will likely return to the broader trend. E.G The AUDUSD pushed up (after that news) to .825 ish and then fell down and is currently .811. GBPUSD after yesterday went up to 1.518 or something....you would expect it to resume going down unless something fundamentally changes. For the USD remember the expectation is that interest rates there will go up in April whereas AUD for example unlikely to go up this year apparently. Of course, it's not always as simple as that as for example the fall in Oil seems to affect AUD, CAD, NZD etc. differently and JPY often gets talked about as a risk averse currency or the place where money goes when USD etc is considered vulnerable.
4. So if you are still bearish/bullish on the currency, treat it as a chance to go short/long at a better price and vice-versa.
5. Consider where the price is in relation to support / resistance levels....the AUD was about .803 and while the news wasn't good - that support held.

Anyway just my thoughts...be interested to see what people think....

mavericks
Jan 14 2015 at 09:49
110 posts
johnfxpips posted:
Euro Falls to Nine-Year Low on Easing Fears.


Cool. What about it ?

Get investors and get paid 15 percent of theyr profits. More on my website.
mavericks
Jan 14 2015 at 12:26
110 posts
spunta posted:
Hi

I have been following this thread for a while and while I am no expert (about a year in Forex, most of which was disastrous), I feel that in the last four months I have started to understand it a bit better. I don't want to get in to a discussion about who trades better than whom or whatever, to me if anyone makes consistent money out of forex no matter how they do it, then good luck to them. I am currently trading one real account and one demo, the real is small, just trying to get as much practice as possible before trying anything large - I am not selling any system, EA or anything.

It's an interesting point about price reaction to news as I have seen the same thing happen in many pairs (GBPUSD just yesterday for example did the same) and would like to offer my thoughts (all or some of which may be wrong) for people to comment on - just for all our own learning, not ego.

1. Trading around news is very risky as any reaction might be short and violent in both directions and with some brokers the spread gets worse and/or maybe trade context gets busy and you can't open/close.
2. Large money players need the volatility and liquidity to get their orders filled and if they can push the price one way or another then money will come into the market, so that they can get better prices for what they want to do. i.e Buyers need Sellers etc.
3. Unless the news fundamentally changes the expectation for interest rates (return) for the currency, then it will likely return to the broader trend. E.G The AUDUSD pushed up (after that news) to .825 ish and then fell down and is currently .811. GBPUSD after yesterday went up to 1.518 or something....you would expect it to resume going down unless something fundamentally changes. For the USD remember the expectation is that interest rates there will go up in April whereas AUD for example unlikely to go up this year apparently. Of course, it's not always as simple as that as for example the fall in Oil seems to affect AUD, CAD, NZD etc. differently and JPY often gets talked about as a risk averse currency or the place where money goes when USD etc is considered vulnerable.
4. So if you are still bearish/bullish on the currency, treat it as a chance to go short/long at a better price and vice-versa.
5. Consider where the price is in relation to support / resistance levels....the AUD was about .803 and while the news wasn't good - that support held.

Anyway just my thoughts...be interested to see what people think....


Hi Spunta

1.Spread at good ECN brokers can widen up to 50x. If youre holding 60 lot position that is 12 000 USD extra you need for that time. Brokers not widening spreads often times work like casinos and at the point of deposit they can consider your money theyrs.
2. Market makers are seeing both side of the market as they have acces to most of the orders. They will use all money making maneuvers in the book to hunt for stop losses and margin calls. Mechanic of this moves is brutal. It is catching traders in both direction and showing them how much money is ready to jump in any direction. They cant always do that. Only when market allows it. They do not fight the crowd, just take advantage of it.
3. In my opinion it depends on the time frame you are looking on. Big news may stop and reverse all trends on smaller timeframes but overall trend will merely experience a correction.Therefore, as you say it might produce a opportunity to go in direction of long term trend. But you still need to be carefull.
4. S/R levels are important at news, however if you want to open a trade on the news spread will propably kill it.

Best regards

M

Get investors and get paid 15 percent of theyr profits. More on my website.
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