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Great fall of China sinks world stocks, dollar tumbles

  • Post #1
  • Quote
  • First Post: Aug 24, 2015 9:32am Aug 24, 2015 9:32am
http://finance.yahoo.com/news/asia-d...022053975.html
this explain the market madness
Bring on more madness I say
si hoc legere scis nimium eruditionis habes
Quoting PoundTrader
this explain the market madness
As you can see that the Global stock markets are collapsing and the main fact is that their is not much business to be done.

This is the start of the Great Depression as you will see in the coming times.

With the steep fall in the prices of the commodities and oil the US dollar will be the main stay
Trading in Forex since 8 years
time to buy everyone is saying sell

damien
Quoting wendigo
time to buy everyone is saying sell damien
wai till a uptrend develope, not a smart idea to guess this is the end of the fall
Quoting PipTraderz
{quote} As you can see that the Global stock markets are collapsing and the main fact is that their is not much business to be done. This is the start of the Great Depression as you will see in the coming times. With the steep fall in the prices of the commodities and oil the US dollar will be the main stay
Quoting numbnuts
Bring on more madness I say
Indeed........ the ability to anticipate the effect of the most probable economic outcomes.

One nation's meltdown lines another man's pockets. Ah, the wonderful world of trading.
Quoting hanover
........ the ability to anticipate the effect of the most probable economic outcomes....
Yeah. Shock events like this may be unpredictable, but their effects are never random. The first time I read Market Wizards, several years ago, one phrase had a deep and lasting impact on me - "A bull market will shrug off negative news and respond vigorously to positive news, a bear market will shrug off positive news and respond vigorously to negative news".

That's how a lot of long term shifts seem to unfold, by consistently reacting more strongly to little surprises in one direction than the other. My belief in that mechanism is one of the cornerstones of my trading.
si hoc legere scis nimium eruditionis habes
Quoting numbnuts
{quote} Yeah. Shock events like this may be unpredictable, but their effects are never random. The first time I read Market Wizards, several years ago, one phrase had a deep and lasting impact on me - "A bull market will shrug off negative news and respond vigorously to positive news, a bear market will shrug off positive news and respond vigorously to negative news". That's how a lot of long term shifts seem to unfold, by consistently reacting more strongly to little surprises in one direction than the other. My belief in that mechanism is one...
Yes. Something else I've noticed: sometimes a bull or bear market stagnates, but is actually looking for a reason to continue a move in its particular direction. Then it takes only a (favorable) low-to-medium impact ranked news announcement to act as a catalyst for that continuation, allowing a minimal risk trade for a possible 20-40 pip gain (before the next pullback).

Another good opportunity is when there are strong economic reasons (e.g. interest rates) driving a currency, but then a minor announcement (or other reason) causes a pullback in the opposite direction, allowing entry at a 'better' (lower risk; greater return) price.

Of course one big key is understanding that fundamental traders are on the lookout for opportunities, earlier than their peers, before a news outcome gets 'priced in'. Being part of that smart money, that sees opportunities -- and probable outcomes -- ahead of the herd, is an invaluable skill.

As always, getting the primary direction right is easy, timing entries optimally is a much more tricky proposition.
Quoting hanover
......... fundamental traders are on the lookout for opportunities, earlier than their peers, before a news outcome gets 'priced in'. Being part of that smart money, that sees opportunities -- and probable outcomes -- ahead of the herd ....... .

... it never ceases to amaze me how many traders look at a news event and say "oh, that result is already priced in" ..... yet I have never seen one of them stop and ask how it got priced in, why it got priced in, how the event was anticipated and how they can be in the group which anticipates the next event and get in before it gets priced in. It always seemed so obvious .... I didn't start looking into these things to make money though, I do it because it interests me .... so maybe it's a matter of natural curiosity v knowing only what can be taught .....
si hoc legere scis nimium eruditionis habes
Quoting numbnuts
{quote} ... it never ceases to amaze me how many traders look at a news event and say "oh, that result is already priced in" ..... yet I have never seen one of them stop and ask how it got priced in, why it got priced in, how the event was anticipated and how they can be in the group which anticipates the next event and get in before it gets priced in. It always seemed so obvious .... I didn't start looking into these things to make money though, I do it because it interests me .... so maybe it's a matter of natural curiosity v knowing only what...
Quoting numbnuts
{quote}"A bull market will shrug off negative news and respond vigorously to positive news, a bear market will shrug off positive news and respond vigorously to negative news".
Michael Marcus (the guy who said your quote) probably has the best section in that book.

3 things:
Fundamentals - is their an clear fundamental picture which should move price
Technicals - is price moving in the direction supported by the fundamentals
Tone - is the market shrugging off bullish/bearish news or reacting strong to bullish/bearish news
Quoting verv
{quote} Michael Marcus (the guy who said your quote) probably has the best section in that book. 3 things: Fundamentals - is their an clear fundamental picture which should move price Technicals - is price moving in the direction supported by the fundamentals Tone - is the market shrugging off bullish/bearish news or reacting strong to bullish/bearish news
Yes that is correct because many times we see that the markets are not reacting in the same way to the news they had done earlier.

And this is why we need to understand the Tone of the markets before doing our trades
Trading in Forex since 8 years
  • Post #15
  • Quote
  • Last Post: Aug 26, 2015 8:36am Aug 26, 2015 8:36am
Great fall of China sinks world stocks, dollar tumbles
The great fall of China caused a bloodbath in global markets. Thanks to constant economic slowdown and 2 times Yuan devaluation, World's second largest economy drove every equity market in the world to new lows. Being one of the leading importers of many commodities such as gold and oil, the economic slowdown and Yuan devaluation decreased the import quantity of US denominated commodities which led to fall in the prices of commodities. The fall was so steep that they went near 6 to 7 years low.
Secondly, US FED's plan to hike the interest rates seems to have taken a back seat due to complicated scenario. The Yuan's devaluation and economic slowdown has made FED's decision hanging.
The dollar is still going strong if compared to other currencies, thanks to strong US economic or macro data.
I am optimistic about overall markets. China will definitely take a strong step to counter its problems to stabilize its economy. It's a great buying opportunity as of now as US equities are bound to rise as FED won't take any step to tighten the conditions there as elections are due next year. China will not devalue its currency further which indicates that there are no more reasons for Asian markets to tumble big.
Go for some value buying. Go long!
Happy Trading
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