As gator often points out, most retail was short @ 1.39+
http://www.forexfactory.com/showthre...95#post8130195
http://www.forexfactory.com/showthre...95#post8130195
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Disliked{quote} hi kprsa, while I respect your opinion of being a contrarian to small traders, it can never ever be the dominating reason for taking/holding a position. Just staying/going long because 50% of small traders are not, seems a too simple tactic I certainly wouldn't take.Ignored
Disliked{quote}{quote} ...well to wrap up the last post... 2. From a trading point of view The only and KEY problem with those charts is that you are analysing the correlation in a linear and STATIC correlation. When TRADING (FUNDAMENTALS or MACRO MOVES) we TRADE EXPECTATIONS NOT FACTS. It can be STOCKS or FOREX or anything, We want to buy/sell the future forecast VALUE buying lower/selling higher. We buy/sell PRESENT value with the EXPECTATION of a Higher/lower FUTURE VALUE. By the time the ACTUAL FACTS, call it Earnings, valuations, merger, R&D, bankruptcies,...Ignored
Disliked{quote} the interpretation of such data is far more tricky. Retail traders have a very good nose for the extreme turning points oftentimes. The crux with most of them is, that they are quick to take the first gains and then position over a prelonged period of time against the new main trend. So the gains are getting quickly erased. Gator is right when he said, that the retail crowd was net-short when price turned at 399x. But when I remember correctly, most here in FF were long, and were still advocating prices far beyond of 1.4 after the initial...Ignored
Disliked{quote}they are quick to take the first gains and then position over a prelonged period of time against the new main trend..Ignored
Disliked{quote} What do you think after seeing this all? When I read FF, I still think that people think that it is a given, that price will simply follow the rate differentials. Some say it will at least follow after a while. So what do we make of this? How do we define this time? How much drawdown can people withstand? Are we able to formulateanuniversal trading advice? I think not. {image}Ignored
Disliked{quote}{quote} ...well to wrap up the last post... 2. From a trading point of view The only and KEY problem with those charts is that you are analysing the correlation in a linear and STATIC correlation. When TRADING (FUNDAMENTALS or MACRO MOVES) we TRADE EXPECTATIONS NOT FACTS. It can be STOCKS or FOREX or anything, We want to buy/sell the future forecast VALUE buying lower/selling higher. We buy/sell PRESENT value with the EXPECTATION of a Higher/lower FUTURE VALUE. By the time the ACTUAL FACTS, call it Earnings, valuations, merger, R&D, bankruptcies,...Ignored
DislikedThanks for this great post. I'm going to take your excellent advice about marking up a chart with fundies the way you do, even though I don't agree with some of your viewpoints. About the stock market, I would agree that it's a discounting mechanism, and that expectations are what is traded. (Where I disagree is that I think the stock market is trading expectations about future of the business cycle, and the Fed is REACTING to the business cycle, and further that they react differently when the business cycle is turning up than they do when it stumbling....Ignored
Disliked{quote} hello i agree with you mate but, shouldnt we consider the definition of short peroid for most traders so it might still be good as short for som and long for som with Fair SL ,i do totaly agree but just want to make my views more clearIgnored
Disliked{quote} This is precisely the small traders' irrationality that I was mentioning. Rational behaviour would be when the sentiment follows the price, if the price is increasing, more traders should go long and vice versa. Irrational behaviour is when the price is rising, more and more traders are going short. That is where one needs to be contrarian. kIgnored
Disliked{quote} I agree with you. Very well put and much better and more succinctly than I did (except for the an, if you'll excuse the grammar police.)Ignored
DislikedHm... just a thought on the dxy-interest-rate-chart. The world (with respect to interest) has changed dramatically. While in the past, the differentials might have been bigger/smaller, rates are now equally low with a few exceptions. That basically excludes any "non-reaction", any delay in responsiveness or any contradictory outcome.Ignored
DislikedI can honestly say... After reading as much as I could from Sisse, Misspips and brother Markus... I'm fucking glad I can read charts...all this other shit just makes me want to sleep. But...nice to know there is another side of the coin...Ignored
DislikedI can honestly say... After reading as much as I could from Sisse, Misspips and brother Markus... I'm fucking glad I can read charts...all this other shit just makes me want to sleep. But...nice to know there is another side of the coin...Ignored
DislikedI can honestly say... After reading as much as I could from Sisse, Misspips and brother Markus... I'm fucking glad I can read charts...all this other shit just makes me want to sleep. But...nice to know there is another side of the coin...Ignored
Disliked{quote} When your charts become to agitating and you can not sleep, try dreaming of your charts with Elliott-Numbered sheeps. That will help Sheep A - Sheep B -Sheep C - Sheep 1 - Sheep 2- Sheep 3 - Sheep 4 (holy shit, impulsive sheep - back to trading, wake up)Ignored