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Market mechanics

  • #21
  • Jan 10, 2019 7:55am Jan 10, 2019 7:55am
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  • #22
  • Jan 10, 2019 8:01am Jan 10, 2019 8:01am
Basket traders know the so called formula or at least they have some understanding of the inter relationships between the currency pairs and how they move in relation to the other major minors. To understand this relationship one must spend a lot of time for this understanding. It does exist and it is achievable. There is a way to see this in action in a very simple way...... regards
Live today like theres no tomorrow-- Prioritize like you will die today
  • #23
  • Jan 10, 2019 8:09am Jan 10, 2019 8:09am
Quoting iamsovereign
Basket traders know the so called formula or at least they have some understanding of the inter relationships between the currency pairs and how they move in relation to the other major minors. To understand this relationship one must spend a lot of time for this understanding. It does exist and it is achievable. There is a way to see this in action in a very simple way...... regards

I am Sovereign,

"There is a way to see this in action in a very simple way"

Could you please elaborate more on this...

Thanks
  • #24
  • Edited 10:28am Jan 10, 2019 8:36am | Edited 10:28am
Quoting aaven
{quote} I am Sovereign, "There is a way to see this in action in a very simple way" Could you please elaborate more on this... Thanks

And I thought you would never ask............This is a very interesting exercise..... find a good broker and open a demo account... on that account using mt4 ... place one buy order for the five major currency pairs . (you can add other pairs as your understanding grows.BUT- use all 28 pair to see the real magic.... ). the lot amount does not matter for this exercise. I use ten cents for all the pairs I am looking at...... The amount does not matter but use the same amount on all the currency pairs you are using for the exercise.... you could use sell orders ... it does not matter for the exercise. to see the whole picture place a buy or sell orders on all currency pairs that you are observing. just make sure that what ever the amount use the same on all the pairs that you are using. you must let this run for at least a few hours and you will start to see the pairs switch positions and start to have some structure.

now open the trade window on mt4 and enlarge the screen so that you can see all the open orders in the trade window. now look at the profit cell on the far right of the trade window...... do a single mouse click on the profit cell..... this will toggle the profit cell to show the currency pairs that are the highest to the lowest in profit or loss. this is the set up and now just watch and observe how the currencies change and swap positions as the price moves thru out the trading day. sessions....... you should start to see some correlations with this set up .... you may just get a AHaaaaa moment depending on how you are wired... this is a great exercise and I know someone that uses this to make trading decisions . have fun .... regards.
Live today like theres no tomorrow-- Prioritize like you will die today
  • #25
  • Jan 10, 2019 8:38am Jan 10, 2019 8:38am
  •  WSoar
  • | Joined Jun 2018 | Status: It's a businessNot "Get rich quick" | 56 Posts
Thank you guys for your response.
@breakdastops sorry but you wiil need to find another thread to build up your replies statistics.
==
  • #26
  • Jan 10, 2019 8:39am Jan 10, 2019 8:39am
Quoting alphaomega
{quote} Yes. We only see the history and we try make a good logical guess about the near future. Accurate long term predictions are impossible. The market does not follow any fundamentals. 99% of the price movement is mechanical as a direct consequence of current supply and demand in the top 8 currencies. Someone buys one currency - all other currencies go down proportionally. And the same in reverse. The whole system is made for stability!
Exactly,
Cause and effect.
Regardless of the triggers ,there are boundaries ,everything reajusts and not always simultaneously
The parameters are the boundaries within the whole.
Great topic
  • #27
  • Jan 10, 2019 8:51am Jan 10, 2019 8:51am
  •  WSoar
  • | Joined Jun 2018 | Status: It's a businessNot "Get rich quick" | 56 Posts
Quoting alphaomega
{quote} Yes. We only see the history and we try make a good logical guess about the near future. Accurate long term predictions are impossible. The market does not follow any fundamentals. 99% of the price movement is mechanical as a direct consequence of current supply and demand in the top 8 currencies. Someone buys one currency - all other currencies go down proportionally. And the same in reverse. The whole system is made for stability!
But what about times when other currencies don't follow? Or is it a "nugget" given by market to gauge whenever move is real out of previous chaotic PA?
==
  • #28
  • Edited 10:29am Jan 10, 2019 10:09am | Edited 10:29am
Quoting diceman555
{quote} Exactly, Cause and effect. Regardless of the triggers ,there are boundaries ,everything reajusts and not always simultaneously The parameters are the boundaries within the whole. Great topic
And the best trades happen exactly at these invisible boundaries! Most of the time the market will change direction immediately when some boundary is reached.
But from time to time the price will go beyond the "normal" boundary. Usually this happens due to lack of liquidity. The most recent such event was the YEN a few days ago. These things happen rarely but the impact is proportional and often devastating because even if you apply strict risk controls, nothing helps when there is no liquidity to get out.
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  • #29
  • Jan 10, 2019 10:17am Jan 10, 2019 10:17am
Quoting alphaomega
{quote} Yes. We only see the history and we try make a good logical guess about the near future. Accurate long term predictions are impossible. The market does not follow any fundamentals. 99% of the price movement is mechanical as a direct consequence of current supply and demand in the top 8 currencies. Someone buys one currency - all other currencies go down proportionally. And the same in reverse. The whole system is made for stability!

#v2vCoTdata
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  • #30
  • Jan 10, 2019 10:23am Jan 10, 2019 10:23am
Quoting WSoar
{quote} But what about times when other currencies don't follow? Or is it a "nugget" given by market to gauge whenever move is real out of previous chaotic PA?
No suck thing. The pairs are synchronized 100% of the time and if one currency moves all other currencies will move proportionally in the opposite direction.
Risk free arbitrage does not exits in the Forex market!

You have to track the movement of all 28 pairs to see where is the strength and the weakness.

For example, today the strongest currency is AUD and the weakest is CHF.
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  • #31
  • Jan 10, 2019 10:55am Jan 10, 2019 10:55am
source: https://fxtools.github.io/change/cumulative.html
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Since Frank Sinatra sings in his own way, my chart sing... I did it, my way
  • #32
  • Jan 10, 2019 12:43pm Jan 10, 2019 12:43pm
Quoting iamsovereign
{quote} And I thought you would never ask............This is a very interesting exercise..... find a good broker and open a demo account... on that account using mt4 ... place one buy order for the five major currency pairs . (you can add other pairs as your understanding grows.BUT- use all 28 pair to see the real magic.... ). the lot amount does not matter for this exercise. I use ten cents for all the pairs I am looking at...... The amount does not matter but use the same amount on all the currency pairs you are using for the exercise.... you...
Thanks for the guidance I am Sovereign...

Prior to initiating the orders for the exercise, do we need to wait for a specific timing, ex:Session Opening. or can one still start the exercise at any random time?

Thanks
  • #33
  • Jan 10, 2019 1:16pm Jan 10, 2019 1:16pm
Quoting aaven
{quote} Thanks for the guidance I am Sovereign... Prior to initiating the orders for the exercise, do we need to wait for a specific timing, ex:Session Opening. or can one still start the exercise at any random time? Thanks

You can start the exercise anytime, does not matter.( just start all pairs at the same time ).... After you start all the pairs with a buy or sell. ( one or the other for all pairs )... it will take anywhere from a few hours to a day for the pairs to show a correlation on the pairs that are in profit verses the ones that are in loss.... watch this for a few days, hours and you will see the ebs and flows from loss to profit as the pairs show gains from losses and vise versa. be sure to toggle the profit cell to see that the pairs align up to show the pairs from top to bottom .. ie pair in most profit to pair with most loss.....
Live today like theres no tomorrow-- Prioritize like you will die today
  • #34
  • Jan 10, 2019 1:31pm Jan 10, 2019 1:31pm
Quoting alphaomega
{quote} Only a few people in the world know that formula. {image}
I can say only a few know some of that formula .. and that's really can be called an edge!
  • #35
  • Jan 10, 2019 1:58pm Jan 10, 2019 1:58pm
Quoting iamsovereign
{quote} You can start the exercise anytime, does not matter.( just start all pairs at the same time ).... After you start all the pairs with a buy or sell. ( one or the other for all pairs )... it will take anywhere from a few hours to a day for the pairs to show a correlation on the pairs that are in profit verses the ones that are in loss.... watch this for a few days, hours and you will see the ebs and flows from loss to profit as the pairs show gains from losses and vise versa. be sure to toggle the profit cell to see that the pairs align up...
Thanks I am Sovereign for the quick response. Much appreciated for the guidance...
  • #36
  • Jan 10, 2019 3:36pm Jan 10, 2019 3:36pm
Based on what I've read, more forces are at work, Lets consider the firms which make up 70% of the total market trading with robots, lets consider hedge funds etc Lets also consider the fact that market movers are institutions with huge volume. With this in mind you mentioned that when GBP/USD is going down, it means the institutions are buying the dollar and selling the GBP, it could be automatically or manually, but 70% forex trading is on autopilot. So In my opinion the direction of the market depends on computer algorithms, we don't need to know why, the best we can do is ride the trend as retail traders so that we can take our piece of the pie.
  • #37
  • Jan 11, 2019 3:47am Jan 11, 2019 3:47am
  •  WSoar
  • | Joined Jun 2018 | Status: It's a businessNot "Get rich quick" | 56 Posts
Quoting alphaomega
{quote} No suck thing. The pairs are synchronized 100% of the time and if one currency moves all other currencies will move proportionally in the opposite direction. Risk free arbitrage does not exits in the Forex market! You have to track the movement of all 28 pairs to see where is the strength and the weakness. For example, today the strongest currency is AUD and the weakest is CHF. {image}
Gbp/Usd was down and Usd/Jpy was down before London open
???
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  • #38
  • Jan 11, 2019 7:03am Jan 11, 2019 7:03am
Quoting WSoar
{quote} Gbp/Usd was down and Usd/Jpy was down before London open ???
So what?

In your example the traders are selling GBP and buying JPY. In other words - the movement is not in USD.

As I said, you have to track the movement of all 28 pairs at the same time to understand what is happening.
  • #39
  • Jan 11, 2019 7:13am Jan 11, 2019 7:13am
Quoting WSoar
{quote} Gbp/Usd was down and Usd/Jpy was down before London open ???

So, did you check what Gbp/JPY was doing ?
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  • #40
  • Jan 11, 2019 7:18am Jan 11, 2019 7:18am
Quoting iamsovereign
{quote} You can start the exercise anytime, does not matter.( just start all pairs at the same time ).... After you start all the pairs with a buy or sell. ( one or the other for all pairs )... it will take anywhere from a few hours to a day for the pairs to show a correlation on the pairs that are in profit verses the ones that are in loss.... watch this for a few days, hours and you will see the ebs and flows from loss to profit as the pairs show gains from losses and vise versa. be sure to toggle the profit cell to see that the pairs align up...
I AM Sovereign,

Kindly advise:

You mentioned 5 Major Pairs. I have shortlisted: EURUSD, GBPUSD,USDJPY,USDCHF,USDCAD and keeping aside AUDUSD,NZDUSD. Is the shortlisted pairs correct? What pairs do you watch.

Assuming the list is correct, I entered the following trades:

BUY EURUSD, Lot Size 0.1
BUY GBPUSD, Lot Size 0.1
BUY USDJPY, Lot Size 0.1
BUY USDCHF, Lot Size 0.1
BUY USDCAD, Lot Size 0.1

My doubt is: You mentioned to pick either Buy or Sell and use it on all pairs. If we are buying, In pairs where USD is the quote Currency, do we still Enter Buy EURUSD 0.1 Lot (or) use Sell EURUSD 0.1 Lot which would translate to buying USD/Selling EUR?

Thanks for your time
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