I've been scouring this forum for a while now and one of the most important things to ponder is the statement below posted by FTI in the "technical analysis fallacy" thread. One thing I've found that could be consistent with this theory is how a pair will follow its little song and dance, ride its elliot waves, stumble at resistance numbers etc. but then suddenly, about every 30 mins to 1hour it will make a 10-15 pip move in a matter of seconds, these movements seem like "rifts in the fabric" of the regular market movements and I believe these are the movements of this "monster". Thankfully they are usually in the direction I'm usually trading.
This is the statement from FTI I'm talking about.
I have recently read an opinion, that the market is not a living beast, in which we face each other, but a field, in which we face one monster - the union of the biggest banks. The author bases his reasoning on the fact that the internet made it possible for the banks to use a single platform where they know what each is doing and never go against each other. He says that only this union has enough power to move the currencies and change their directions, this is why sometimes we have fundamental news announcements (microeconomic), some important numbers, but the market goes the way it goes, against any logic, and the next day we all hear from analysts that the market had already played the move before, or the expectations were not that strong/weak, and so on. The truth is, he says, that this monster has its goals, and follows its own agenda. It'll buy the currencies which are sold heavily at its own expense only to raise the price on them later, and take our money, it goes into big minuses sometimes because it knows it'll end up positive. It always knows where the price will be at the end of the day, week, month. It does have one weakness though - the macroeconomic numbers, such as GDP, interest rates, inflation, unemployment, etc. Although it doesn't have to follow them right away, it will eventually follow, and it can be seen on weekly/monthly charts, but on smaller charts, it only tries to fool us (by us he means retail traders, investment banks, global corporations, exporters, importers, and so on).
Before the internet era, we had spreads of 30-40 pips on most popular pairs, but these pairs kept moving 400pips per day minimum, and it was much easier to guess the direction, just because there was no monster, and the game was more honest, whereas now, we have much smaller moves because it's well regulated by one big thing.
Also he says, this monster will not just meet its target in one move because it will hurt all the economies and its participants at once, but will do what it does slowly, allowing us to see the turn, some indication of it. So, knowing its weaknesses, and playing by its rules is the only way to make money, and the indicators do help.
This is not my own opinion, but I found it very interesting.
This is the statement from FTI I'm talking about.
I have recently read an opinion, that the market is not a living beast, in which we face each other, but a field, in which we face one monster - the union of the biggest banks. The author bases his reasoning on the fact that the internet made it possible for the banks to use a single platform where they know what each is doing and never go against each other. He says that only this union has enough power to move the currencies and change their directions, this is why sometimes we have fundamental news announcements (microeconomic), some important numbers, but the market goes the way it goes, against any logic, and the next day we all hear from analysts that the market had already played the move before, or the expectations were not that strong/weak, and so on. The truth is, he says, that this monster has its goals, and follows its own agenda. It'll buy the currencies which are sold heavily at its own expense only to raise the price on them later, and take our money, it goes into big minuses sometimes because it knows it'll end up positive. It always knows where the price will be at the end of the day, week, month. It does have one weakness though - the macroeconomic numbers, such as GDP, interest rates, inflation, unemployment, etc. Although it doesn't have to follow them right away, it will eventually follow, and it can be seen on weekly/monthly charts, but on smaller charts, it only tries to fool us (by us he means retail traders, investment banks, global corporations, exporters, importers, and so on).
Before the internet era, we had spreads of 30-40 pips on most popular pairs, but these pairs kept moving 400pips per day minimum, and it was much easier to guess the direction, just because there was no monster, and the game was more honest, whereas now, we have much smaller moves because it's well regulated by one big thing.
Also he says, this monster will not just meet its target in one move because it will hurt all the economies and its participants at once, but will do what it does slowly, allowing us to see the turn, some indication of it. So, knowing its weaknesses, and playing by its rules is the only way to make money, and the indicators do help.
This is not my own opinion, but I found it very interesting.