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Using WM/Reuters Benchmark Rates in trading

  • #21
  • Feb 11, 2015 1:11pm Feb 11, 2015 1:11pm
Quoting Pharm0r
{quote} I understand that- and I have nothing against that at all. But- to claim that the professionals use this, without definitive proof, is no different than claiming professionals use the star's alignment or GANN dates to trade. What makes you so sure this is the way? and again- have you traded it?
I most definitely trade it! :-)

I don't think you should take my word on anything I say or write, this is just an invitation for traders to investigate for themselves how WM/Reuter Benchmarks are used in trading with Fibonacci Levels. If you choose to investigate the charts you can decide for yourself if this is useful or not for your trading strategy.

Again, it's just an invitation! :-)
  • #22
  • Feb 11, 2015 1:29pm Feb 11, 2015 1:29pm
Yes, I'm very interested as well.
  • #23
  • Feb 11, 2015 1:41pm Feb 11, 2015 1:41pm
Quoting GreatNorth
{quote} No. For example, for EURUSD You Start at 1.115 and then go to 1.348. Those are your levels. Then you can draw fibs within those fibs from the levels from the first fib. See examples above.
Cheers, a fib within a fib. Getcha
  • #24
  • Feb 11, 2015 1:45pm Feb 11, 2015 1:45pm
Quoting GreatNorth
{quote} Yes, I agree you only know what the price does after it happened. BUT you know before the price gets there what the level is and you can see how the price behaves at 14.6/85.4 It usually reverses. And these Fibonacci leves are NOT the ones that you have used before. I guarantee it. Just draw them on your charting software and see for yourself how it behaves.
By saying usually do you mean with a greater than 50% chance, and if so is there any proof of that? Like cristian said, it's easy to see these levels after the fact, but whether price will break through the fibo line, bounce off it, or go sideways that's a different story.
  • #25
  • Feb 11, 2015 1:47pm Feb 11, 2015 1:47pm
Quoting GreatNorth
It's quite simple and I will give you the information you need trade how professional traders trade. 1. Professional Traders use Fibonacci without 50% (You can read up on fibonacci retracements and the math behind it to confirm for yourselves http://en.wikipedia.org/wiki/Fibonac...bonacci_ratios) 2. Fibonacci levels are 0, 14.6, 23.6, 38.2, 61.8, 76.4, 85.4 and 100 (There is NO 50%) 3. Reversals occur mostly at 14.6/85.4 and 61.8/38.2 4. Traders use WM/Reuters Benchmark Rates as in trading. Not what you have on your chart....
Do you have the numbers for other currency pairs as well ? Like Gbp/jpy ?
  • #26
  • Feb 11, 2015 1:50pm Feb 11, 2015 1:50pm
Quoting Trenderer
{quote} By saying usually do you mean with a greater than 50% chance, and if so is there any proof of that? Like cristian said, it's easy to see these levels after the fact, but whether price will break through the fibo line, bounce off it, or go sideways that's a different story.
I suggest you practice good MM and go back and look at how price behaves historically at these levels. As I have said before, price usually retraces at 85.4/14.6 and 61.8.

STudy and the charts if you choose and see what you come up with. :-)
  • #27
  • Feb 11, 2015 2:28pm Feb 11, 2015 2:28pm
Quoting xpie
{quote} Do you have the numbers for other currency pairs as well ? Like Gbp/jpy ?

I don't have that particular pair, but i do have EUR/JPY. They are 132.455 --> 89.341

Below is a 4Hour Chart. See how it is repeatedly bouncing of 132.455.

132.455 Comes from the FIRST EUR/JPY Benchmark Rate recorded on December 31, 1998. So it is the Zero level on the fib.
Attached Image (click to enlarge)
Click to Enlarge Name: eurjpy.png Size: 51 KB
  • #28
  • Feb 11, 2015 3:00pm Feb 11, 2015 3:00pm
Load of rubbish. Fibs is a very minor tool. Datastream - who gives a shit. They have other TA indicators also - but so what. Reuters doesn't have a clue - they are just a data vendor that comes up with data and calcs. Look at Metastock - they have heaps of systems - none of them work!
  • #29
  • Feb 11, 2015 3:04pm Feb 11, 2015 3:04pm
Quoting GreatNorth
{quote} I don't have that particular pair, but i do have EUR/JPY. They are 132.455 --> 89.341 Below is a 4Hour Chart. See how it is repeatedly bouncing of 132.455. 132.455 Comes from the FIRST EUR/JPY Benchmark Rate recorded on December 31, 1998. So it is the Zero level on the fib. {image}
I come to slightly different levels using data from kinetick End of day. What data source do you use to pick the price levels ?
  • #30
  • Feb 11, 2015 3:11pm Feb 11, 2015 3:11pm
Quoting adamcox
Load of rubbish. Fibs is a very minor tool. Datastream - who gives a shit. They have other TA indicators also - but so what. Reuters doesn't have a clue - they are just a data vendor that comes up with data and calcs. Look at Metastock - they have heaps of systems - none of them work!
Wow. You seem very angry.

However, I'd like to thank you for taking the time out of your day to sign in, read my thread and post your message.

Have a great day! :-)
  • #31
  • Feb 11, 2015 3:14pm Feb 11, 2015 3:14pm
Quoting xpie
{quote} I come to slightly different levels using data from kinetick End of day. What data source do you use to pick the price levels ?
They are WM/Reuters Benchmark Rates. Please read the first few posts--all the information is in there.
  • #32
  • Feb 11, 2015 3:25pm Feb 11, 2015 3:25pm
You are profesional trader?
  • #33
  • Feb 11, 2015 3:26pm Feb 11, 2015 3:26pm
this is neat, although it appears that one could determine similar levels by drawing traditional support/resistance lines

perhaps this relationship exists since the first "benchmark" rate can be considered the first swing low/high and traders have traded the fib levels, including extensions (e.g. 161.8%, etc) from that point, therefore expanding the range of price but still maintaining a fib relationship
  • #34
  • Feb 11, 2015 3:27pm Feb 11, 2015 3:27pm
Quoting GreatNorth
{quote} They are WM/Reuters Benchmark Rates. Please read the first few posts--all the information is in there.
I thought the Benchmark rate is the closing price at the day of the benchmark date. At least for eur/usd it fits. Benchmark start date is the 12/31/1993, the closing price at that date is 1.1157, your benchmark number is 1.115, pretty close.
  • #35
  • Feb 11, 2015 3:29pm Feb 11, 2015 3:29pm
Quoting Tim_isoara
You are profesional trader?

Yes. No. Either way, you are free to see whether this trading strategy suits your trading style or not. Although I think that you haven't looked into the charts much.
  • #36
  • Feb 11, 2015 3:37pm Feb 11, 2015 3:37pm
Quoting xpie
{quote} I thought the Benchmark rate is the closing price at the day of the benchmark date. At least for eur/usd it fits. Benchmark start date is the 12/31/1993, the closing price at that date is 1.1157, your benchmark number is 1.115, pretty close.
From WM/Reuters:

The WM/Reuters Closing Spot Rate Service was launched in 1994 to provide a better standard for the valuation of global portfolios. This need was a direct consequence of the globalisation of trade and investments which took place in the early 1990’s. Our rates were quickly adopted by major stock market indices, the Financial Times and investment clients.

From Investopeida:
The importance of these rates lies in the fact that they are used to value trillions of dollars in investments held by money managers and pension funds.

There is only ONE WM/Reuter Benchmark. I do not know where you get your number from. The official WM/Reuter Benchmark for EURUSD on December 31, 1993 is 1.115. It is calculated by a methodology, at 1600GMT.
  • #37
  • Feb 11, 2015 3:39pm Feb 11, 2015 3:39pm
Quoting GreatNorth
Now that we have the monthly charts I will provide examples of how to continue drawing fibonacci levels within these levels to see how the price behaves and will use EURGBP as an example. See how the price behaves around the fibonacci levels? You can go as far as 1minute to see how it behaves if you want more proof of how professional traders trade. {image} {image} {image}

Can I see the whole chart from the beginning cause I get different levels? Can you just show the first original fib level on EURGBP from where you draw inner fibs?
  • #38
  • Feb 11, 2015 3:45pm Feb 11, 2015 3:45pm
Quoting GreatNorth
{quote} I don't have that particular pair, but i do have EUR/JPY. They are 132.455 --> 89.341 Below is a 4Hour Chart. See how it is repeatedly bouncing of 132.455. 132.455 Comes from the FIRST EUR/JPY Benchmark Rate recorded on December 31, 1998. So it is the Zero level on the fib. {image}

HI GN Not being an ass here but if I use the benchmark rate as you have and select different swing points for the 100% level, I could circle lots of other swing points which coincide with the fib levels on the left of the chart. In order to give some merit to your prior posts perhaps it would be prudent to suggest where the next swing point is likely to be on the right hand side of the chart. Why did you select 138.750 as your 100% level ? Do you anticipate next swing point to be 137.831 ? No offence intended but I can move fibs all around and get them to line up on the left.
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: EJ Fib 2.png Size: 41 KB
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Once You See, You Can't Unsee But You Will Get The Odd Poke In The Eye
  • #39
  • Feb 11, 2015 3:45pm Feb 11, 2015 3:45pm
Quoting neuron
this is neat, although it appears that one could determine similar levels by drawing traditional support/resistance lines perhaps this relationship exists since the first "benchmark" rate can be considered the first swing low/high and traders have traded the fib levels, including extensions (e.g. 161.8%, etc) from that point, therefore expanding the range of price but still maintaining a fib relationship
Very true, but I believe that the Fibs came first, then Support and Resistance lines developed out of that or it is possible that traders were not aware of fib levels at those levels.

For example, here is the EURUSD daily chart from the end of 2007 and the beginning of 2008. You can see how the fibonacci level at 161.8% @ 1.49199 offered considerable resistance and then how then how the price spent about 2 months hovering around the 200% mark at 1.5810 from which it retreated making that level an all time high level (1.6038)

Since this was the first time price came to this level there was no support and resistance. Only Fib Extensions which projected a retracement very accurately in my opinion.
Attached Image (click to enlarge)
Click to Enlarge Name: daily.png Size: 47 KB
  • #40
  • Feb 11, 2015 3:55pm Feb 11, 2015 3:55pm
This does coincide with the 4.o.clock fix every day which is used as the benchmark price by Reuters, so I can vow some truth in the approach GreatNorth has stated here. Interesting thread, I like Fibs, I don't use them in the way stated in this methodology but it does make sense.

Thank you for sharing your idea, please keep posting for improvement of knowledge!
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