Actually I think that banks prefer assets with lower risk like state-issued bonds. The dealings done in the FX market represent mainly their orderbook (companies exchanging currency) which in fact should be dumb money. If I were a bank willing to invest in FX, I would prefer long term investment in something like carry-trades. I have also heard some insiders speaking about banks buying at a certain level and selling 100 pips above, so I'm not quite sure about it... also central banks use commercial banks to attract liquidity from the market so the game played by the banks in the FX market seems very complex.
In terms of banks analysis... BNP PariBas predicted a 1.43 EUR/USD in February for the end of April and look how good they were. So I think that bank analysis is as good as any correct technical analysis that you can find on the internet, that doesen't mean it's tradeable, making it tradeable is your problem. As Schlossberg from DailyFX.com said: put two good traders in the same position - one of them buys, the other sells - they're both gonna make a profit / put two bad traders in the same position - one of them buys, the other sells - they're both gonna lose.
Joined Jan 2008
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Status: Lunatic Supreme
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Google for it. It's just about how banks accumulate assets they plan to hold and how to use volume to determine that. Problem is... in forex there's no reliable volume measure, and most banks don't usually accumulate large stocks of currency for appreciation's sake anyway. COT report is more reliable anyway.
i'm interested to this 'volume spread analysis', could you explain further...
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Tom williams is the expert on this look up www.tradeguider.com he has a brief e-book on it and and very detailed e-book for $199 It works for Stocks commodities and forex
