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AUD/USD

  • #46,681
  • Edited 3:28pm Jun 9, 2012 9:20am | Edited 3:28pm
Quoting whet412
Looks like there is gonna be a counter party to your trader man.
I tooks a trade earlier on audusd and it worked out pretty good.
Am still looking to hold it for another day or two, since I believe we have very strong support for it to the upside in short term. Here is the trade attached. Entered a little late, was too patient with the trade. I trade just looking at the charts themselves, and dont use indicators or anything like that. Have had good results so far based on just pure chart looking. Good trading everyone and hope we all have profitable...
I hope you are right and your chart looks very indicative.

Your chart solved one of my longtime puzzle as to why at the end of the bounce there was so much buying pressure. I guess you are a breakout trader. Your chart will help me identify the exit and reversal point better in the future. Now, I also realize the reason why false breakouts are formed.

I discussed the confirmation of dojis/stars with another member in previous posts. Basically, she was right about her point in most cases. But, I was talking about some special cases. Aussie H1 chart formed an evening star, which won't be able to be confirmed until Sunday night. (note: M5 chart had a big time shooting star and was confirmed.) To me, every candlestick has its own meaning with or without a confirmation.

Candlesticks are the footprints of the market. When you see big bear footprints all over at a high mountain, would you stay and wait for the confirmation there until the big bear gives you a bear hug? Not me, I would run to the hillside as fast as I can.

Again, thanks for your post and chart. They help me understand why the evening stars were formed at certain points.
daddybearforex. com
  • #46,682
  • Jun 9, 2012 9:20am Jun 9, 2012 9:20am
Bad Chinese data came out...we gonna see a bearish audusd on monday?
  • #46,683
  • Jun 9, 2012 9:26am Jun 9, 2012 9:26am
Quoting Nacho
Bad Chinese data came out...we gonna see a bearish audusd on monday?
The verdict is already out.
daddybearforex. com
  • #46,684
  • Jun 9, 2012 9:27am Jun 9, 2012 9:27am
Quoting Nacho
Bad Chinese data came out...we gonna see a bearish audusd on monday?
Why do you think that?
  • #46,685
  • Jun 9, 2012 12:48pm Jun 9, 2012 12:48pm
Quoting DaddyBear
I hope you are right and your chart looks very indicative.

Your chart solved one of my longtime puzzle as to why at the end of the bounce there was so much buying pressure. I guess you are a breakout trader. Your chart will help me identify the exit and reversal point better in the future. Now, I also realize the reason why fake breakouts are formed.
Well DB, I don't wanna mess with your view of things by getting too technical, but I'll give you a bit of insight as I understand it regarding false breakouts...

In many cases, the classic "false breakout" exists because large traders have to fight with really bad slippage on a regular basis. Basically, because if they drop an order to buy, say, $100 million aud/usd at 0.9900... by the time they get their entire order filled, they may have pushed price up to 0.9930...giving them an average fill of 0.9915. 15 pips of slippage sucks.

This "slippage" occurs for 2 reasons... 1: they placed a large order, and there are only so many "counter parties" to their orders at any price point...so as their order consumes all the sellers at 0.9900, it then moves up to 0.9901, and goes through those sellers, and then moves up to 0.9902...and goes through those sell orders...etc.

But, the bigger reason is that other traders are sophisticated. If an order hits the market and moves it a few pips... many hedge funds and computer trading firms and such will PULL their orders back. If you want to see this play out, open up a price ladder on the aud/usd futures, and watch as bids and offers disappear when price starts moving towards them.

So, even if the $100 million order would normally get filled within 15 pips (say by 0.9915)... because many of the pending orders to sell actually get removed from the market before they get hit...this accounts for an additional 15 pips of slippage...bringing our large screwed trader to fill the last of his order he was SUPPOSED to get at 0.9900... filling up at 0.9930.

But, as I said, traders are sophisticated.

He knows his 100 mil will cause him to get an absolute shit fill... so what does he do? he thinks "hmmm... now, if i knew of a price that there were LOTS of sell orders... i mean, a lot more than usual, I could probably get almost all my order filled, without that 30 pips of slippage"

And he knows where something like this would be for him... say, the low of the day, right around 0.9880.

Lots of people who went long today put their stop (which is a sell order, since they are long right now) under the low of the day.... (or a previous significant low...monthly low, whatever. a low)

So, he knows that if price gets 1 pip under the low of the day at 0.9880, there will be a lot of stops that get hit...and these are sell orders... sell to close out the guys who are currently long.

Therefore, when price gets right about to 0.9880, and starts to break out to the downside... he sees this as a GREAT opportunity to get filled up without any slippage.

he dumps his 100 million buy order on the market... and with all those sell order stops firing off, he basically uses them to fill his whole order, and nearly gets it all filled without any slippage...

then, the last $10 million of his order...there are not enough stops or breakout players selling to absorb it...so the last 10 mlllion buy he places moves the market up a bit... back up from the low it just broke.

This is a classic "bear trap false breakout"

It's also a big trader being able to get a big order filled without slippage.

Not sure if you knew this exactly, but i know of at least a couple doctoral thesis written on this concept and ones like it, and i've read of some very successful 100 mil + traders who use this concept on a regular basis to get in and out as they want, without losing a good fill.

Not saying other interpretations are wrong of course...not at all.. just, that this is the mechanics on a more "atomic level"... this is WHY it happens, really... what the biggest contributing factor is.

Anyway, take it for what it's worth... i'm sure someone around here will find it new and eye opening.

X
  • #46,686
  • Jun 9, 2012 1:06pm Jun 9, 2012 1:06pm
Quoting JeremyWS
Why do you think that?
traditionally the fate of the aussie dollar is likned to the health of china. Hence the assumption that bad data means less trade with australia and hence weaker aussie dollar. However in this mad world we live in associations do break and assumptions can fail as well...

Olu
If you think you can or cannot do it you are correct
  • #46,687
  • Jun 9, 2012 1:23pm Jun 9, 2012 1:23pm
Quoting forextraderx
Well DB, I don't wanna mess with your view of things by getting too technical, but I'll give you a bit of insight as I understand it regarding false breakouts...

In many cases, the classic "false breakout" exists because large traders have to fight with really bad slippage on a regular basis. Basically, because if they drop an order to buy, say, $100 million aud/usd at 0.9900... by the time they get their entire order filled, they may have pushed price up to 0.9930...giving them an average fill of 0.9915. 15 pips of slippage sucks.

This "slippage"...

FTX,

Thanks for your post, which is very informative.

My view was very simple. I knew it was the end of a bounce but a lot of late comers wanted to get into the game. Also, breakout traders saw the "resistance" was broken; therefore, they all piled in the game without knowing the party would be over in seconds. Now, it is very likely that Aussie drops to the point where we started the long trade Friday. This may happen in a gap down formation Sunday night. IMO.


BTW, I sent you a private email regarding some questions. Please reply to me at your earliest convenience. Thanks.

DB
daddybearforex. com
  • #46,688
  • Jun 9, 2012 4:56pm Jun 9, 2012 4:56pm
Quoting Olu
traditionally the fate of the aussie dollar is likned to the health of china. Hence the assumption that bad data means less trade with australia and hence weaker aussie dollar. However in this mad world we live in associations do break and assumptions can fail as well...

Olu
No no no, that wasnt my point, I know the tight correlation between china and Aussie, but my point was, does that guy KNOW why slight disinflation Is bad. I got the impression that he saw the red number on the calendar and just assumed AUD would fall without knowing why.

So my question still stands, why does he think that 0.2% greater disinflation is bad for Aussie?

My only reasoning is that people here blindly see a green or red number and go on that and have no idea what it means or how it affects the markets.
  • #46,689
  • Jun 9, 2012 5:32pm Jun 9, 2012 5:32pm
Quoting JeremyWS
No no no, that wasnt my point, I know the tight correlation between china and Aussie, but my point was, does that guy KNOW why slight disinflation Is bad. I got the impression that he saw the red number on the calendar and just assumed AUD would fall without knowing why.

So my question still stands, why does he think that 0.2% greater disinflation is bad for Aussie?

My only reasoning is that people here blindly see a green or red number and go on that and have no idea what it means or how it affects the markets.
I know that disinflation might not be necessarily bad, and that China has been trying to cool off inflation rates in these months, but I assumed that given the current global situation this was another sign of slowing of the Chinese economy, closer to the so much feared "hard landing" discussed lately. In turn this could affect the austrialian dollar for the tight correlation mentioned above.
  • #46,690
  • Jun 9, 2012 8:10pm Jun 9, 2012 8:10pm
Quoting JeremyWS
No no no, that wasnt my point, I know the tight correlation between china and Aussie...

My only reasoning is that people here blindly see a green or red number and go on that and have no idea what it means or how it affects the markets.
well...cough it up then...where is she going? :-)
  • #46,691
  • Jun 9, 2012 10:12pm Jun 9, 2012 10:12pm
Looking at my charts again, today. Going to exit my short position on audusd, and will go short for few days. AUDUSD is definitely going to go down from its current point. Attaching a picture of the chart and it should start going lower from this point. I have been trading it using just price charts and looking at the screen through news, releases and once again, I have had very good results so far. Good trading to everyone.
Attached Image (click to enlarge)
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  • #46,692
  • Jun 9, 2012 10:17pm Jun 9, 2012 10:17pm
Quoting Silencer
well...cough it up then...where is she going? :-)
I'm personally looking at a bullish bias for risk markets this coming week, particularly the currency markets (not so sure about equities on the whole)

I will say this.. I believe if we break above parity before retracing down to 9800... if this does happen, I think we'll see 200 pips above parity before we make a new low. And i'd bet money on that...

X
  • #46,693
  • Jun 9, 2012 10:34pm Jun 9, 2012 10:34pm
Quoting forextraderx

X
is that a kiss or that some kind of X-men trade mark? :-)

GL anyway..
  • #46,694
  • Jun 9, 2012 10:45pm Jun 9, 2012 10:45pm
Quoting Silencer
is that a kiss or that some kind of X-men trade mark? :-)

GL anyway..
no luck needed to have an opinion, lol. probably why trading can be a dangerous activity for many

and ya. it's a kiss. that's right. i'm here not because i'm interested to participate in market related activities, no. i'm actually here because i'm a bored and lonely somewhat plain and rail thin 40 something woman who in my socially awkward way use market knowledge and interest as a segway to a more romantic exchange. or at least thats my delusion.

and to those savvy enough to see though my cryptic flirting style, they too can experience the thrill of crushing on a plain, rail thin, pale faced lonely and socially awkward 40 something woman who doesn't do phone sex but might...if your REALLLLLLY lucky, send you a pic of her taken 20 years ago when she looked good enough to sleep with, MAYBE, if your wasted at the time. (you know, in her "hottest" days)

Silencer, you figured it out... the X means kiss. and now it's your lucky lucky day.

X
  • #46,695
  • Jun 9, 2012 11:49pm Jun 9, 2012 11:49pm
After china Trade Balance data....up we go.
  • #46,696
  • Jun 10, 2012 12:11am Jun 10, 2012 12:11am
Quoting whet412
Looking at my charts again, today. Going to exit my short position on audusd, and will go short for few days. AUDUSD is definitely going to go down from its current point. Attaching a picture of the chart and it should start going lower from this point. I have been trading it using just price charts and looking at the screen through news, releases and once again, I have had very good results so far. Good trading to everyone.
Quoting whet412
Looks like there is gonna be a counter party to your trader man.
I tooks a trade earlier on audusd and it worked out pretty good.
Am still looking to hold it for another day or two, since I believe we have very strong support for it to the upside in short term. Here is the trade attached. Entered a little late, was too patient with the trade. I trade just looking at the charts themselves, and dont use indicators or anything like that. Have had good results so far based on just pure chart looking. Good trading everyone and hope we all have profitable trades ahead.
Are you short or long? In your previous post, you indicated you were long. Now you are going to exit short position and will go short for a few days. What do you mean?
daddybearforex. com
  • #46,697
  • Jun 10, 2012 12:19am Jun 10, 2012 12:19am
Quoting forextraderx
I'm personally looking at a bullish bias for risk markets this coming week, particularly the currency markets (not so sure about equities on the whole)

I will say this.. I believe if we break above parity before retracing down to 9800... if this does happen, I think we'll see 200 pips above parity before we make a new low. And i'd bet money on that...

X
What is your rationale that you are personally looking at a bullish bias for risk markets this coming week? Thanks.
daddybearforex. com
  • #46,698
  • Jun 10, 2012 12:33am Jun 10, 2012 12:33am
Quoting DaddyBear
What is your rationale that you are personally looking at a bullish bias for risk markets this coming week? Thanks.
Well DB... i'm not overwhelmingly so...just slightly so... and i'll switch on a dime if i see reason... but, here's a link to a pretty longish post i made regarding where i see the euro/usd this coming week or so (and, i believe the AUD will mirror the euro for the most part)

http://currencytraderx.wordpress.com...h-on-the-euro/
  • #46,699
  • Jun 10, 2012 3:07am Jun 10, 2012 3:07am
.
Attached Image (click to enlarge)
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  • #46,700
  • Jun 10, 2012 3:33am Jun 10, 2012 3:33am
im thinking bullish sentiment. on aud. GOOD fundamentals, charts saying moving up of major resistance. aud been going up for years and years. i think at the very least another test of pairity
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