Why are the banks intervening? Are you concerned? | Forex Factory

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Why are the banks intervening? Are you concerned?

  • #1
  • First Post: Dec 13, 2007 3:59pm Dec 13, 2007 3:59pm
  •  TrevA
  • | Joined Oct 2007 | Status: my brain has a mind of its own | 166 Posts
Greetings Forexers!

Over the last few days we have seen big bank intervention in the currency markets with huge moves. Carry traders are feeling much better but is this activity going to benefit you or the banks?

I don't have the answers but have some theories.

Theory
Banks more than any other business are driven by profits and they are very good at their business so recent activity on their part raises questions in my mind.

No group of banks has the liquidity to control market prices medium to long term so the temporary injection of liquidity seems to be a two edged sword. It is creating temporary stability through liquidity and at the same time causing concern (possibly fear) in the minds of traders.

Question So, what is the payoff from all this activity? How do the banks benefit?

I invite your perspective and views on this matter.

TrevA
  • #2
  • Dec 13, 2007 5:42pm Dec 13, 2007 5:42pm
TrevA this is a very interesting question but once again my personal views may not be the general norms. Retail traders have been using wrong methods both in technical indicators and use of fundamental analysis. This have clouded our judgments on what we should be doing: that is to speculate the activities of banks or the interbank markets.

As soon as you have taken off the coat of a speculator and you now assume that you can come up with good mathematical methods that can predict the market then you will be drawn into the battle of the interbanks - which should be profitable to good speculator.

If you tell people that there are camarillas that manipulate the central banks and other big commercial/investment banks, the answer is always that the forex is too big to be manipulated by few people over a long term. But over a short term it is possible by your opening statement. And since most retail traders are short term people these manipulations becomes real threats if you do not understand them. Recent happenings have shown that some how, some one came up with the ideas for central banks to wade in to the market. They did not just decide to act individually on their own. They were advised to intervene.


Quoting TrevA
No group of banks has the liquidity to control market prices medium to long term so the temporary injection of liquidity seems to be a two edged sword. It is creating temporary stability through liquidity and at the same time causing concern (possibly fear) in the minds of traders.
This should not really be a problem for a good day trader who speculates. Only people who with wrong trading methods that are afraid of the market. Time like this also prove wrong the traditional believe of long or medium term holding of a position by retail traders. It also proves wrong the use of traditional indicators e.g, trend lines etc. For weeks now, most trend traders have been conflicting themselves. A retail trader should not actually attempt to take side or speculate the market for more than 24hrs. With good liquidity and good methods, you can also recover your losses which may not be bigger than +-100pips. In any given day.


Quoting TrevA
Question So, what is the payoff from all this activity? How do the banks benefit?
Unless one is trading for banks, this again is not our business. In the long term the banks do not benefits in trading against each other: the central banks will always come around to bail them out. Financial market always behave like this - sometimes it is stable, and for no reason it will flip over and become dynamically unstable for a longer time.

It is only when you have come to the understanding of how market is chaotic that you can really benefit from its behaviours - the understanding or studying of the behaviours of the interbank markets is the business of the retail traders.
  • #3
  • Dec 13, 2007 5:49pm Dec 13, 2007 5:49pm
The banks themselves didn't buy or sell any of the pairs afaik, they are merely setting up new alternatives to lend people money "secretly" at bargain rates, since that's what the "credit crunch" is all about.

Seems everyone's calling it a placebo however and dismissing it.

No idea how this would affect the common trader / "end user" so far.

As for the benefit - get money to work with without your name instantly showing up on Bloomberg I guess. No idea...tons of sources to read educated opinions on this from people with actual degrees everywhere...here it'll most likely be a bit more..."wild".
Trust price. Know yourself.
  • #4
  • Edited 6:22pm Dec 13, 2007 6:09pm | Edited 6:22pm
  •  TrevA
  • | Joined Oct 2007 | Status: my brain has a mind of its own | 166 Posts
Quoting fxbroker
As soon as you have taken off the coat of a speculator and you now assume that you can come up with good mathematical methods that can predict the market then you will be drawn into the battle of the interbanks - which should be profitable to good speculator.
Are you saying fxbroker, that if we are intraday traders then we should spend our time on technical analysis instead of fundamental analysis?

Quote
If you tell people that there are camarillas that manipulate the central banks and other big commercial/investment banks, the answer is always that the forex is too big to be manipulated by few people over a long term. But over a short term it is possible by your opening statement.
To say that we can manipulate the market as individuals to our benefit on a short term basis is very true... but, does more money mean you have a greater ability to manipulate forex over the medium to long term? Do banks have an advantage here?

Quote
They were advised to intervene.
Out of interest, do you know who asked them to intervene and for what purpose?

Quote
A retail trader should not actually attempt to take side or speculate the market for more than 24hrs. With good liquidity and good methods, you can also recover your losses which may not be bigger than +-100pips. In any given day.
I totally agree with your point. I personally do not feel comfortable holding interday positions or carry trades. Having said that, my biggest returns were positions held for a few days. :-)

Quote
It is only when you have come to the understanding of how market is chaotic that you can really benefit from its behaviors
I think this is also a really good point for experience and new traders alike.

Thanks for your view.

TrevA
  • #5
  • Dec 13, 2007 6:12pm Dec 13, 2007 6:12pm
  •  TrevA
  • | Joined Oct 2007 | Status: my brain has a mind of its own | 166 Posts
Quoting SeekingLight
The banks themselves didn't buy or sell any of the pairs afaik, they are merely setting up new alternatives to lend people money "secretly" at bargain rates, since that's what the "credit crunch" is all about.
Really? I was of the understanding that the banks have provided liquidity that ultimately flows into the currency markets.

Quote
As for the benefit - get money to work with without your name instantly showing up on Bloomberg I guess. No idea...tons of sources to read educated opinions on this from people with actual degrees everywhere...here it'll most likely be a bit more..."wild".

Hmmmmmm, not sure you need a degree to post an educated opinion. After all, we all have brains.

Yes, the "wilder" it becomes the happier I am trading. Current volatility will not last forever so I think we should enjoy the ride while it lasts.

Thanks for your comment.

TrevA
  • #6
  • Dec 13, 2007 6:20pm Dec 13, 2007 6:20pm
Let Me See If I Understand.

The Banks Have Nothing To Do With Anything.

It's Your Method Or Your Indicators And Understanding Anything On Our Part. As Retail Traders.

? Greenspan Him Self Said ( He Know It Was Going To Happen But He Did Not Think It Would Be This Bad. )

He Had Control For Years And He Let It Happen Anyway.

No They Are Trying To Hurt The Small Guy. Just Lend Money To Pepole Who You Know Can Not Repay It. And Then Say Oops.

No Matter Credit Card, Car Loan, House, Bank To Bank Or Country To Country. If You Know They Can Not Repay You Should Not Do It.

Do You Think That Maybe It Is The Bank's Method's And There Indicator's That Could Be Bad.

Just Take A Look At Non Farm Payrolls, Do You See The Mistake Month After Month And Most Others.

This Economy Is Fake It Has To Break Some Time Anything That Is A Fake Or Lie Has To Be Found Out .

Sorry Just My Opinion

Good Trading
  • #7
  • Dec 13, 2007 6:33pm Dec 13, 2007 6:33pm
Quoting TrevA
Are you saying fxbroker, that if we are intraday traders then we should spend our time on technical analysis instead of fundamental analysis? ?
That is not exactly what I am saying. Take for example the GBP/USD market. And assumed there are two main interbank forces – those demanding and supplying it. Retail traders should only be studying the intrigues played by these forces to defeat themselves on daily basis. But we have today is that retail traders are trying to be like George Soros, of cause many can but they have big money in millions not mini accounts.


Quoting TrevA
To say that we can manipulate the market as individuals to our benefit on a short term basis is very true... but, does more money mean you have a greater ability to manipulate forex over the medium to long term? Do banks have an advantage here?
This is not what I am saying. How can retail traders have the ability to manipulate the market that is not their own? You can only manipulate something you have control over. Only banks whether central /or commercial banks can move the inter bank markets whether for 1min or longer term.

Quoting TrevA
Out of interest, do you know who asked them to intervene and for what purpose? ?
.
This is too big a question and controversial what is import is that history has it that there are people who advice or control central banks of the world since the establishment of world central banks systems.

google history of central banks and world bank, maybe you will
come up with something

  • #8
  • Dec 13, 2007 6:35pm Dec 13, 2007 6:35pm
Something Else I Just Found Out Each Tick On My Chart Your Chart And Everybody's Chart.

Each Tick Is Delayed 15 Minutes And If You Get It From A Sub Broker Add 15 More.

That Means They Know Were Price Is Going Long Before You Even Think About It.

Interesting Is It Not.

Sorry But True.

Good Tradeing.
  • #9
  • Dec 13, 2007 6:51pm Dec 13, 2007 6:51pm
  •  TrevA
  • | Joined Oct 2007 | Status: my brain has a mind of its own | 166 Posts
Out of interest, do you know who asked them to intervene and for what purpose?

Quoting fxbroker
This is too big a question and controversial what is import is that history has it that there are people who advice or control central banks of the world since the establishment of world central banks systems.
Fxbroker et al... "Why are the banks intervening?" is the whole reason for this thread.

Controversy and opinion is encouraged provided that it is not personal. "Argumentum ad hominum".

Thanks All!

TrevA
  • #10
  • Dec 13, 2007 6:55pm Dec 13, 2007 6:55pm
  •  TrevA
  • | Joined Oct 2007 | Status: my brain has a mind of its own | 166 Posts
Quoting Forex It
Something Else I Just Found Out Each Tick On My Chart Your Chart And Everybody's Chart.

Each Tick Is Delayed 15 Minutes And If You Get It From A Sub Broker Add 15 More.

That Means They Know Were Price Is Going Long Before You Even Think About It.

Interesting Is It Not.

Sorry But True.

Good Tradeing.
Can you verify this? How did you find this out?

I thought that the interbank forex network was realtime..... For example.... when news is released such as the US interest rate statement the other day, the market immediately moved in a chaotic way within 15 seconds of the announcement. If it were delayed by 15 minutes then the chaos and volatility would have occurred 15 minutes later. Hmmm, I'm not sure if you're correct about this but thanks for your view.

TrevA
  • #11
  • Edited 7:19pm Dec 13, 2007 7:04pm | Edited 7:19pm
Quoting Forex It
Something Else I Just Found Out Each Tick On My Chart Your Chart And Everybody's Chart.

Each Tick Is Delayed 15 Minutes And If You Get It From A Sub Broker Add 15 More.

That Means They Know Were Price Is Going Long Before You Even Think About It.

Interesting Is It Not.

Sorry But True.

Good Tradeing.
The brokers don’t know where the price is going to. They don't really need to know. All they know is that there are two guys in the market one will make mistakes anyway and the other will win.

Then he sees you loafing around looking for ways to make quick money and your broker will say hey man come and bet in the interbank market and I will pay you more, provided you have small deposit to support your answer!

In the market one will lose and the other will win. Your broker lures you to guess because they know you cannot spot it on your chart why the winner will make the loser lose. Or how the loser is trying to regain his/her previous day losses

Look it does not matter whether your chart is 15min late, the winner has certain behaviour of winning and have ways of even pausing and taking few punches from the losers while he is away boasting about his winnings. The loser also has certain behaviour of always losing all the time. If you can spot these behaviours on your chart, you will be able to spot ahead of your late 15min chart that the winner will pause (corrections they call it). And take advantage of it, against your broker.
  • #12
  • Dec 13, 2007 7:43pm Dec 13, 2007 7:43pm
Quoting Forex It
Something Else I Just Found Out Each Tick On My Chart Your Chart And Everybody's Chart.

Each Tick Is Delayed 15 Minutes And If You Get It From A Sub Broker Add 15 More.

That Means They Know Were Price Is Going Long Before You Even Think About It.

Interesting Is It Not.

Sorry But True.

Good Tradeing.
I find that hard to believe. If it were it would be the biggest financial exploit ever, and I am sure it would be abused and exposed.
  • #13
  • Dec 13, 2007 7:59pm Dec 13, 2007 7:59pm
Quoting TrevA
Can you verify this? How did you find this out?

I thought that the interbank forex network was realtime..... For example.... when news is released such as the US interest rate statement the other day, the market immediately moved in a chaotic way within 15 seconds of the announcement. If it were delayed by 15 minutes then the chaos and volatility would have occurred 15 minutes later. Hmmm, I'm not sure if you're correct about this but thanks for your view.

TrevA
I LOOKED AT THIS QUESTION ON MY OWN.

WATCHED MY CHARTS AND THE THING I FOUND OUT WAS PRICE ACTUALLY WILL START TO MOVE 1 MIN BEFORE OR RIGHT AT THE EXACT TIME.

YET I CAN NOT GET THE INFO UNTIL 5 MIN AFTER THE FACT EVEN IF I SIGN UP TO GET IT DIRECT 5 MIN, EVEN ON FOREX FACTORY 5 MIN.

SO HOW DO THE PEOPLE WHO ARE MOVING THE MARKET IN 15 SECCONDS KNOW. WHERE ARE THEY GETTING THEIR INFO TO MOVE IT?

REALTIME TO WHAT YOU SEE AND SHOULD BE.

IF MY COMPUTER IS CONNECTED TO A SERVER DIRECT ONCE THE INFO ON THAT SERVER IS INPUTED AND DONE I SHOULD RECEIVE IT SECONDS LATER RIGHT?

WELL WHY DO I NOT GET IT THAT FAST.

CHAOTIC YES BUT DO YOU THINK IT CAN BE CONTROLLED.

I DO.

JUST MY OPINION.

GOOD TRADEING
  • #14
  • Dec 13, 2007 8:01pm Dec 13, 2007 8:01pm
  •  TrevA
  • | Joined Oct 2007 | Status: my brain has a mind of its own | 166 Posts
Quoting ScottH
I find that hard to believe. If it were it would be the biggest financial exploit ever, and I am sure it would be abused and exposed.
I also find this very hard to believe.... an urban legend perhaps?

TrevA
  • #15
  • Dec 13, 2007 8:07pm Dec 13, 2007 8:07pm
  •  TrevA
  • | Joined Oct 2007 | Status: my brain has a mind of its own | 166 Posts
Quoting Forex It
I LOOKED AT THIS QUESTION ON MY OWN.

WATCHED MY CHARTS AND THE THING I FOUND OUT WAS PRICE ACTUALLY WILL START TO MOVE 1 MIN BEFORE OR RIGHT AT THE EXACT TIME.
Yes, i too have observed that price around newstime tends to move before the news release.

I have concluded that either the news has been leaked early or people are "jumping the gun" in anticipation of the expected result or that some traders have faster access to news releases.

I might be ignorant of many things but I don't see how this is evidence of a conspiracy to delay prices by 15 minutes.

Anyway, back to the thread topic......

TrevA
  • #16
  • Dec 13, 2007 8:36pm Dec 13, 2007 8:36pm
Quoting TrevA
Yes, i too have observed that price around newstime tends to move before the news release.

I have concluded that either the news has been leaked early or people are "jumping the gun" in anticipation of the expected result or that some traders have faster access to news releases.

I might be ignorant of many things but I don't see how this is evidence of a conspiracy to delay prices by 15 minutes.

Anyway, back to the thread topic......

TrevA

SORRY NEOTICKER IS WHERE I READ THIS AT. MAYBE I READ IT WRONG I KNOW I HAVE BEEN WRONG BEFORE.

LIQUIDITY OK WHERE DID THE LAST LIQUIDITY GO JUST A MONTH OR SO THEY PUMPED LIQUIDITY INTO THE MARKET SOME OF THE SAME BANKS.

WHERE DID IT GO. I HAVE NOT SEEN ANYONE SAY THAT IT HELPED.

DID THE RETAIL TRADER GET IT.

I DO NOT KNOW HOW MUCH IF ANY.

SORRY DID NOT MEAN TO UPSET.

GOOD TRADEING
  • #17
  • Last Post: Dec 13, 2007 8:42pm Dec 13, 2007 8:42pm
  •  TrevA
  • | Joined Oct 2007 | Status: my brain has a mind of its own | 166 Posts
Quoting Forex It

SORRY DID NOT MEAN TO UPSET.

GOOD TRADEING
No worries Forex It... thanks for your contribution.

TrevA
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