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Nordling's Legacy - Live Fundamental Trading

  • #281
  • Feb 2, 2022 10:28pm Feb 2, 2022 10:28pm
Quoting Nordling
{quote} As expected, GBPAUD long term trend is up from here: {image} And this is how my positions look so far, 4 pairs but no reds, all green {image} https://www.myfxbook.com/members/Nor...legacy/9364022
WOW, well done on the big gains mate. Extremely impressive
Trying my best.
  • #282
  • Feb 3, 2022 6:13am Feb 3, 2022 6:13am
BOE hiked rates again. Any pullbacks on GBPJPY, GBPAUD, will be a good buy. I am not trading GBPUSD as they are both strong and looking to hike. Trade safe.
  • #283
  • Feb 3, 2022 7:26am Feb 3, 2022 7:26am
Quoting moondoggie
{quote} Great analysis, thanks for sharing mate Will you please elaborate on what happened in 4 Nov. 2021 if you have time?
Markets expected a 0.25 hike from BoE that day, but BoE didn't and markets were disappointed then Pound is dumped. So it's crucial for a central bank to fullfill the expectations.
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  • #284
  • Feb 3, 2022 3:16pm Feb 3, 2022 3:16pm
Opened EUR/JPY short:

Attached Image (click to enlarge)
Click to Enlarge Name: EJ.png Size: 65 KB
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  • #285
  • Feb 4, 2022 3:09pm Feb 4, 2022 3:09pm
Inserted Video


Inserted Video
  • #286
  • Feb 4, 2022 3:47pm Feb 4, 2022 3:47pm
Quoting Techanalyst
https://www.youtube.com/watch?v=kAk8iZowAOQ https://www.youtube.com/watch?v=wPwNyDZBPLE
"Go straight to the source"

The wisest advice ever. Simple but enlightening.

When i took that advice and decided to learn the fundamentals, that was when my game has changed.
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  • #287
  • Feb 4, 2022 4:29pm Feb 4, 2022 4:29pm
Quoting Nordling
{quote} "Go straight to the source" The wisest advice ever. Simple but enlightening. When i took that advice and decided to learn the fundamentals, that was when my game has changed.

My game is changing as we speak
Trying my best.
  • #288
  • Feb 4, 2022 7:25pm Feb 4, 2022 7:25pm
Quoting moondoggie
{quote} My game is changing as we speak
Thank you for saying that buddy! Well my game is still changing too, trying to improve it everyday. Your questions are also helping me improve myself
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  • #289
  • Feb 4, 2022 7:27pm Feb 4, 2022 7:27pm
The massive move in Euro pairs after hawkish ECB sent me back to studying again. I am wondering what i underestimated and what could i do to save my EURGBP short positions. I am still keeping them open but it's a serious pullback in the downtrend and i should have avoided it in the first place.

What we already know is it wasn't the monetary policy decisions that caused the Euro to appreciate. When we compare December and February reports there is no change on the monetary decision. It was the press conference that made the difference.

What happened in 3rd of February is actually very similar to what happened after the FOMC meeting back in 16th of June, 2021.
Let's remember what what happened in the FOMC meeting on 16th of June, 2021:


FOMC JUNE 2021 HIGHLIGHTS:

  1. The Federal Open Market Committee (FOMC) ended its June 15-16, 2021 meeting by announcing no change in policy.
  2. While recognizing that inflation has risen, they attribute this mainly to "transitory factors" that will abate.
  3. However, the consensus of members is that the federal funds rate will be increased in 2023.


Green marked sentences are indicating already expected decisions, while the red underlined sentence is what surprised the markets and caused USD to appreciate for 3 consecutive days. It was the first time that the FED increased it's interest rate expectations since the start of the pandemic.

Now let's look at the highlights of the ECB February 2022 Meeting:

- Tapering PEPP in the first quarter of 2022.
- Ending asset purchases under the PEPP at the end of March 2022.

- Press Conference (Considerations for Monetary Policy): "President Lagarde's press conference seemed to suggest that the ECB has acknowledged that inflationary pressures are becoming more widespread. The bank now expects inflation to stay high for longer than previously expected and also sees risks to the outlook tilted to the upside. This is a significant shift. Risks to the economic outlook are still seen as broadly balanced but the tone of Lagarde's statement sounded a little more bullish on growth than in December."

Two different banks, similar hawkish change on the interest rate talks. Of course, FED was way more hawkish, they directly signalled rate hikes in 2023 back in the June meeting. Which is why the move lasted for 3 days.

ECB did not directly signal rate hikes in a specific time, but still they kept the door open for rate hikes which is a remarkable change from the ECB compared to it's previous stance on the rate hikes.

So my worst case scenario for Euro did happen unfortunately:

Quoting Nordling
As you guys know, we have BoE and ECB monetary policy meetings on 03/02/2022 Let's start with BoE. I expect BoE to hike the rates, like most of the analysts. I don't think a rate hike would be enough to cause a big bullish move on pound, since market already expects that rate hike so it's already priced in. Not hiking the rates though, would impact the Pound very bad, that would probably cause a sell-off like it happened back in 4 November, 2021. I am heavily long on the Pound, currently have GBPUSD and GBPAUD longs which is why i decided to balance...
Quote
Coming to the ECB, both inflation and core inflation data that came out yesterday was higher than expected. Which may trigger a more hawkish ECB than we expect. So it's better to be careful.
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  • #290
  • Feb 5, 2022 9:41am Feb 5, 2022 9:41am
Attached Image (click to enlarge)
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  • #291
  • Feb 6, 2022 4:28pm Feb 6, 2022 4:28pm
Quoting Nordling
The massive move in Euro pairs after hawkish ECB sent me back to studying again. I am wondering what i underestimated and what could i do to save my EURGBP short positions. I am still keeping them open but it's a serious pullback in the downtrend and i should have avoided it in the first place. What we already know is it wasn't the monetary policy decisions that caused the Euro to appreciate. When we compare December and February reports there is no change on the monetary decision. It was the press conference that made the difference. What happened...

I'm grateful for you typing out your thoughts like this, mate. I see now why consensus vs actual is incredibly important for big meeting weeks. I learned a whole lot, filled up my notebook a little bit more too last week. It was a first-hand look at some intense PA, never seen crazy movements like that before What a fun time to learn how to trade.
Trying my best.
  • #292
  • Feb 6, 2022 4:29pm Feb 6, 2022 4:29pm
Quoting Techanalyst
{image}

I just downloaded the whole PDF! Incredibly informative, mate
Trying my best.
  • #293
  • Feb 6, 2022 5:16pm Feb 6, 2022 5:16pm
Question, if you gentlemen have the time Is it safe to say at this point that FED, ECB, and BOE are all hawkish at the moment? And that what I should be paying attention to right now is how soon these central banks actually raise their rates?
Trying my best.
  • #294
  • Feb 6, 2022 5:22pm Feb 6, 2022 5:22pm
Quoting moondoggie
{quote} I'm grateful for you typing out your thoughts like this, mate. I see now why consensus vs actual is incredibly important for big meeting weeks. I learned a whole lot, filled up my notebook a little bit more too last week. It was a first-hand look at some intense PA, never seen crazy movements like that before What a fun time to learn how to trade.
Yes i definitely agree i think it is the best time to learn forex trading. Quick 2 years of economic boom, fast rising inflation followed by also quick tightening, interest rate cuts and hikes just in two years. Someone who started trading for the last 1-2 years experienced and saw the things like he is trading for 10 years. This was like time travelling to 2008. Actually this is more educational than 2008 since that crisis builded up in 6 years and this one just took 2 years. We have seen the bottom in March 2020, expansion cycle till Nov. 2021, peak until January and now the contraction. So all the cycles are covered with first hand experience.

So you are just in time buddy, it's the hardest but the most educational era.

I like writing down my thoughts because it helps me ackowledge the problem better and it helps me put my thoughts together in a more clear way. As you know i have some problems with focusing, i get distracted easily and writing down is actually solving half of the matter for me.
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  • #295
  • Feb 6, 2022 5:30pm Feb 6, 2022 5:30pm
Quoting moondoggie
Question, if you gentlemen have the time Is it safe to say at this point that FED, ECB, and BOE are all hawkish at the moment? And that what I should be paying attention to right now is how soon these central banks actually raise their rates?
Yes, they are all hawkish. I think you should be paying attention to the consensus and actual differences between the central banks. Note which central banks were hawkish than anticipated.

For example, Reserve Bank of New Zealand is hiking the rates since November if i am not mistaken but those rate hikes were always aligning with the consensus, so it did not make much difference in the market. Actually when you look at NZDUSD you will see that it was falling until 28 January 2022. Despite RBNZ being more hawkish than the FED.

So i think when comparing the central banks, it's the consensus vs. actual difference that moves the market. And you really don't want to be caught up in that move like i did in EURGBP
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  • #296
  • Feb 6, 2022 9:00pm Feb 6, 2022 9:00pm
Inserted Video
  • #297
  • Feb 6, 2022 9:41pm Feb 6, 2022 9:41pm
Quoting Nordling
{quote} Yes i definitely agree i think it is the best time to learn forex trading. Quick 2 years of economic boom, fast rising inflation followed by also quick tightening, interest rate cuts and hikes just in two years. Someone who started trading for the last 1-2 years experienced and saw the things like he is trading for 10 years. This was like time travelling to 2008. Actually this is more educational than 2008 since that crisis builded up in 6 years and this one just took 2 years. We have seen the bottom in March 2020, expansion cycle till Nov....

Man I feel this so much nowadays. I feel like when I become a decent trader in my own right, I'll be able to look at these years as my trial by fire haha.

Quoting Nordling
{quote} Yes, they are all hawkish. I think you should be paying attention to the consensus and actual differences between the central banks. Note which central banks were hawkish than anticipated. For example, Reserve Bank of New Zealand is hiking the rates since November if i am not mistaken but those rate hikes were always aligning with the consensus, so it did not make much difference in the market. Actually when you look at NZDUSD you will see that it was falling until 28 January 2022. Despite RBNZ being more hawkish than the FED. So i think...
Noted! Would've never seen that correlation between RBNZ expectation vs actual. Fascinating how that works! Great share Would you care to elaborate more on your EUR/GBP position and why you feel you made a mistake?
Trying my best.
  • #298
  • Feb 7, 2022 4:46am Feb 7, 2022 4:46am
Quoting moondoggie
Would you care to elaborate more on your EUR/GBP position and why you feel you made a mistake?
Take a look at my last post in this thread about EG, before the ECB meeting, there's a line that says:

"Coming to the ECB, both inflation and core inflation data that came out yesterday was higher than expected. Which may trigger a more hawkish ECB than we expect. So it's better to be careful."

I kinda accepted the fact that risks on my EG shorts grew. But still tried to stay hopeful and kept my positions open. Which is not very logical.

Instead of doing that i should have thought like "Hmm inflation is way higher than expected, ECB can make a surprise, better take profits now and get in after the ECB meeting depending on how hawkish/dovish it was."

Now that would be way more realistic. Because it's better to react than predict. Especially when inflation came out higher than anyone thought.

But all in all, in my fundamental data sheet Pound ranks higher than Euro. Which is why it should still go down in my opinion. We have UK GDP numbers coming up late this week, so we will see if Pound can still rank higher or not.
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  • #299
  • Feb 7, 2022 4:55pm Feb 7, 2022 4:55pm
Quoting Nordling
{quote} Take a look at my last post in this thread about EG, before the ECB meeting, there's a line that says: "Coming to the ECB, both inflation and core inflation data that came out yesterday was higher than expected. Which may trigger a more hawkish ECB than we expect. So it's better to be careful." I kinda accepted the fact that risks on my EG shorts grew. But still tried to stay hopeful and kept my positions open. Which is not very logical. Instead of doing that i should have thought like "Hmm inflation is way higher than expected, ECB can...

Right! I see what you mean now. I can learn from your mistake now too haha. Thanks for explaining, mate
Trying my best.
  • #300
  • Feb 7, 2022 4:59pm Feb 7, 2022 4:59pm
Quoting moondoggie
{quote} Right! I see what you mean now. I can learn from your mistake now too haha. Thanks for explaining, mate
You are always welcome buddy!

Ordinary people learn from their mistakes, smart people also learn from other people's mistakes. You are a smart guy, keep going
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