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Currency Stability
Jan 03, 2010 at 06:42
Miembro desde Sep 09, 2009
posts 71
hi peeps,
would like to find out from you guys on how stable is currency prices?
I've heard people saying that currency prices are stable because it moves in 4th decimal places which is very minimal.
I've also heard that currency prices are stable because each currency pair would prevent or wouldn't allow the other currency to surge too high or low due to economic fundamentals/ import and export
On the other hand, i've heard that in comparison with stocks, the decimal movement is very little compared to stocks which explains currency prices stability
What are your views whether currency prices are considered stable?
would like to find out from you guys on how stable is currency prices?
I've heard people saying that currency prices are stable because it moves in 4th decimal places which is very minimal.
I've also heard that currency prices are stable because each currency pair would prevent or wouldn't allow the other currency to surge too high or low due to economic fundamentals/ import and export
On the other hand, i've heard that in comparison with stocks, the decimal movement is very little compared to stocks which explains currency prices stability
What are your views whether currency prices are considered stable?
Slow and Steady Wins the Race :)
![Elkart Elkart](/userimages.gif?uid=7&id=4517&w=100&h=100)
forex_trader_7
Miembro desde Aug 01, 2009
posts 941
Jan 03, 2010 at 07:48
(editado Jan 03, 2010 at 08:00)
Miembro desde Aug 01, 2009
posts 941
More stable than a stock, a currency doesn't often lose 50% or 80% of its value, unless you have the misfortune to live in Zimbabwe. One of my stocks IMP which is one of the biggest platinum mines in the world did exactly that last year.
Also, you're not going to get a CEO who gets pissed in the company bar and say the wrong thing and the next day the stock is on the floor. I lost money like that.
In fx a 10% move is big. But a block is so expensive and credit so easy to get through margin accounts that people tend to over leverage the trade.
So I think it's more stable than stock, but quite likely you'll over leverage it and get a more volatile equity curve than stocks, where margin accounts are a lot less common.
There is one very big difference though. Stock is 100% predictable where fx 100% unpredictable. A stock will always go up. If it's not going up now, then it will go up later. Unless the company goes bankrupt, the stock will go up eventually. Same is not true for Fx, which is bi-directional. Makes it very difficult to trade...
Also, you're not going to get a CEO who gets pissed in the company bar and say the wrong thing and the next day the stock is on the floor. I lost money like that.
In fx a 10% move is big. But a block is so expensive and credit so easy to get through margin accounts that people tend to over leverage the trade.
So I think it's more stable than stock, but quite likely you'll over leverage it and get a more volatile equity curve than stocks, where margin accounts are a lot less common.
There is one very big difference though. Stock is 100% predictable where fx 100% unpredictable. A stock will always go up. If it's not going up now, then it will go up later. Unless the company goes bankrupt, the stock will go up eventually. Same is not true for Fx, which is bi-directional. Makes it very difficult to trade...
Miembro desde Jan 05, 2010
posts 92
Jan 05, 2010 at 15:09
Miembro desde Jan 05, 2010
posts 92
Elkart, I agree with most of what you've said, but how exactly can you say: 'Stock is 100% predictable'?
I think you have the same probability of winning the stock markets as the forex markets, which both are next to impossible in the long term 😀.
I think you have the same probability of winning the stock markets as the forex markets, which both are next to impossible in the long term 😀.
Patience is a virtue.
Miembro desde Jan 05, 2010
posts 92
![pingman pingman](/userimages.jpg?uid=5353&id=5817&w=100&h=100)
forex_trader_5353
Miembro desde Jan 07, 2010
posts 7
Jan 08, 2010 at 03:26
(editado Jan 08, 2010 at 03:27)
Miembro desde Jan 07, 2010
posts 7
Elkart posted:
Fx is easier to automate. And stocks is a lot of waiting. Fx is daily profit.
That is why I came to forex. A small part of my portfolio which includes stocks and real estate. Forex is daily and keeps the brain in play. I can't play golf all the time.
I am also interested in automation and atrategy creation
![Elkart Elkart](/userimages.gif?uid=7&id=4517&w=100&h=100)
forex_trader_7
Miembro desde Aug 01, 2009
posts 941
Jan 08, 2010 at 03:44
(editado Jan 08, 2010 at 04:09)
Miembro desde Aug 01, 2009
posts 941
Fx views are fundamental to stocks.
The last resources rally we had was actually all about dollar weakness. So if I want to buy say Implats shares (platinum) I have to be relatively sure that both the dollar will weaken and demand will pick up, otherwise it be dead money.
All part of the puzzle.
I see it as a pyramid in terms of gains, property the slowest, then equities, then derivatives on equities and then FX. From there I cascade my investments down, as they are also affected by changes in market conditions in that order, property being the last to be affected, fx first.
To me we all trade fx anyway, no matter what we trade.
The last resources rally we had was actually all about dollar weakness. So if I want to buy say Implats shares (platinum) I have to be relatively sure that both the dollar will weaken and demand will pick up, otherwise it be dead money.
All part of the puzzle.
I see it as a pyramid in terms of gains, property the slowest, then equities, then derivatives on equities and then FX. From there I cascade my investments down, as they are also affected by changes in market conditions in that order, property being the last to be affected, fx first.
To me we all trade fx anyway, no matter what we trade.
Jul 19, 2017 at 14:16
Miembro desde Apr 18, 2017
posts 45
Well, I measure the stability of any currency pair based of the market context, I mean trendy market or not! Yes, I am interested on only trendy market! For determining market trend I mainly use high time frames like Weekly and Monthly.
Jan 21, 2018 at 07:51
Miembro desde Apr 18, 2017
posts 920
bizWiz posted:
i agree, all markets are correlated, it just a depends on the risk tolerance of the investor.
Yes, there have correlations between the currency pairs! But, you can’t use this strategy as directly because all of trading pairs move individually according to their own principle!
Miembro desde Dec 11, 2015
posts 1487
Jan 21, 2018 at 15:15
(editado Jan 21, 2018 at 15:15)
Miembro desde Dec 11, 2015
posts 1487
Most major currencies are relatively stable. Of course, there are exceptions sometimes: the GBP and CHF immediately come to mind due to BREXIT and the Swiss Bank shenanigans back in 2015.
Miembro desde Aug 27, 2017
posts 994
Dec 28, 2018 at 07:35
Miembro desde Aug 27, 2017
posts 994
mlawson71 posted:
Most major currencies are relatively stable. Of course, there are exceptions sometimes: the GBP and CHF immediately come to mind due to BREXIT and the Swiss Bank shenanigans back in 2015.
Till now I can remember the issue of CHF. Luckily, I was out of the market in that time.
Miembro desde Jul 12, 2018
posts 24
Apr 01, 2019 at 08:03
Miembro desde Jul 12, 2018
posts 24
FernandoUgho posted:
It is necessary to watch the news and track down possible changes in the economy. If the trend of the economy of this country is predictable enough, the currency will be more stable. For example, in the United States there is some instability and uncertainty in monetary policy, and in Europe the situation is slightly better. Because of this, we see quite an obvious trend with options for reversal due to the instability of the dollar.
True, you need perfect timing to be investing in the U.S. dollar.
Apr 01, 2019 at 11:02
Miembro desde Apr 18, 2017
posts 920
FMovingAverage posted:FernandoUgho posted:
It is necessary to watch the news and track down possible changes in the economy. If the trend of the economy of this country is predictable enough, the currency will be more stable. For example, in the United States there is some instability and uncertainty in monetary policy, and in Europe the situation is slightly better. Because of this, we see quite an obvious trend with options for reversal due to the instability of the dollar.
True, you need perfect timing to be investing in the U.S. dollar.
This rule is applicable to all trading pairs; a good entry point is very crucial. In this case, my mainly use support/resistant tools.
Miembro desde Aug 27, 2017
posts 994
Miembro desde Jan 05, 2016
posts 1189
Nov 28, 2019 at 02:20
Miembro desde Jan 05, 2016
posts 1189
mlawson71 posted:
Most major currencies are relatively stable. Of course, there are exceptions sometimes: the GBP and CHF immediately come to mind due to BREXIT and the Swiss Bank shenanigans back in 2015.
Those times of extreme instability also give rise to a number of viable trading opportunities.
Fundamental analysis plays a large role in proper Risk Management, especially in instances where an interest rate suddenly drops to 0% or a currency suddenly becomes devalued because of a Political Coup, or similar catastrophic event with extreme economic results.
Causality is the primary focus of interest in those instances.
If it looks too good to be true, it's probably a scam! Let the buyer beware.
Dec 02, 2019 at 18:01
Miembro desde Apr 18, 2019
posts 25
Currencies are more stable because they are based on the country's economy. Currencies are regulated by bureaucrats and news is usually not unexpected. Unlike company stocks, which depend on a much larger number of factors. But in currencies there is no such profit as in stocks, so it’s worth choosing)
Miembro desde Jan 11, 2020
posts 23
Miembro desde Jul 19, 2020
posts 318
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