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  • #3,621
  • Sep 17, 2008 8:13pm Sep 17, 2008 8:13pm
BRV, Iron-Man or anyone

While I have been trading this method I’ve noticed that news often comes out pushing price right up/down to my limit order (often to the pip) and then reverse creating a very profitable trade.

I am not at my charts all day to monitor news ect and if I had removed my limit orders due to news I would have missed many great trades.

Do you think this is just luck or is this often the case? Do you always remove limit orders during news or does it depend on the type of news?

It might be worth pointing out that I only take very high No Brainers and nothing much in between, I can understand the need to watch the news when trading the lower time frames as price could bust them far easier.

One other thing, Even though I have traded the forex markets for a couple of years I am still very lacking in the fundamental aspects of the game, I feel a bit like a fisherman who catches fish but has no idea what type of fish they are.. After reading allot of what BRV has said about the markets I have realised that I have to further my knowledge in this area if i want to succeed long term but I struggle to understand little if anything of what i read and I find it even harder to put that data into my trading decisions.

Any advice on these questions is greatly appreciated

  • #3,622
  • Sep 17, 2008 8:25pm Sep 17, 2008 8:25pm
Quoting pipeye
Then:
Since everyone is affected by this Credit Swap, and the dollar was strengthening based on the fact that we were the least sucky at the moment, now we are all just kind of all at the bottom of the suck barrel together. . . and no one knows what the hell to do..... What about some Classic NBT range trading between 1.4565 and 3882 until someone a) Cuts interest rates or b)another financial fails....

By the way BRV I was watching coverage about shorts today and there seems to be this theory that there are evil shadow people attempting to eliminate investment firms. . . . This means there is either a) a vast conspiracy destined to ruin the way credit works (a la fight club) b) very very dumb people with lots of money and influence who have the ability to move a stock price 20-30 dollars in a week and choose to do so in the negative direction as opposed to up-valuing their investments [ I will say nice work to the analysts who decided that this week was the week to decimate ratings....because we all never knew these firms had these problems until YESTERDAY. . . in my view they are as culpable in this "crisis" as anyone, downgrading them so quickly that they had no time to raise capital].... or C) People who blindly follow others in fear off of cliffs without thinking about what actually be going on. . . .

Based on my name I think one can figure out what I think.....

Now lets go jump off a cliff (Morgan Stanley I am looking at you......For the love of God just merge with WB so we can put an end to this madness)
  • #3,623
  • Sep 17, 2008 8:46pm Sep 17, 2008 8:46pm
Well we find ourselves back in the range again..... I am treading with caution because this is the 3rd test in 48 hrs. . . But there is a heavy trendline midway between my sell range of .6660-.6710 (Looks to hit about .6685) ...Aud looks to be bouncing right now too so that looks good for this trade
  • #3,624
  • Sep 17, 2008 10:57pm Sep 17, 2008 10:57pm
I don't mean to get off topic but is it any coincidence all this is happening right before the election?
  • #3,625
  • Sep 18, 2008 3:30am Sep 18, 2008 3:30am
I am very happy to see BRV around here in the past days so often and that the teaching has moved to another level focusing more on other important aspects of trading than technical analysis.

I started having some questions about how the market really works and when are the big players coming in when i went through BRV's trading results. Seeing trades like +250 pip prfit with 0 or -1 pip drawdown made me think that these trades can no way be purely technically made .

My questions regard mostly options and how to use them in spot trading:

1) BRV, you provided us a link to phxl.com where we can see option calls and puts with certain interest levels. Do you use them as a directional bias or you consider them as barriers also ? And when do you look at puts and when calls ?

2) as for option barriers, you considered USD/JPY to have a barrier at 105.50 (in your updated pdf file). Where did you get that number. From phlx.com i got other numbers you mentioned like 103.10, 108.70 and 111.11 but not 105.50.

3) option levels at phlx.com do you expect them do be broken and then a reversal in price or you expect a reversal before the level gets broken ?

4) option expiry: You said the overall bias seems bearish for dollar (22th aug). When i look at the charts i saw that 22th aug was very bullish for dollar. Can you comment on that ?

That is it for options for now

Another thing you talked about is the correlation between other markets like USD/JPY and S&P index, AUD/USD and gold, EUR and oil.

What is confusing to me is that what exactly are you looking for ? I mean that when USD/JPY and SPX correlate how can you use one to predict another ? If SPX fall doesn't that mean that USD/JPY is falling too about the same time leaving no edge ? And predicting other markets is like predicting fx market when doing it technically. Or when people say oil is falling meaning that USD is strenghtening but how is it possible to act on that, because oil can change its course like any other market. It's like talking what WAS not what's GOING to happen.

That is it for now i hope you can find time to explain the things i brought out.

Thanks.

By the way, what do you look for tomorrow regarding option expiry ?


Lumesh
  • #3,626
  • Sep 18, 2008 7:32am Sep 18, 2008 7:32am
Boy did it say thanks but no thanks or what on that attempted run past 1.4540?
  • #3,627
  • Sep 18, 2008 12:48pm Sep 18, 2008 12:48pm
Quoting Someone
BRV, Iron-Man or anyone

While I have been trading this method I’ve noticed that news often comes out pushing price right up/down to my limit order (often to the pip) and then reverse creating a very profitable trade.

I am not at my charts all day to monitor news ect and if I had removed my limit orders due to news I would have missed many great trades.

Do you think this is just luck or is this often the case? Do you always remove limit orders during news or does it depend on the type of news?

It might be worth pointing out that I only take very high No Brainers and nothing much in between, I can understand the need to watch the news when trading the lower time frames as price could bust them far easier.

One other thing, Even though I have traded the forex markets for a couple of years I am still very lacking in the fundamental aspects of the game, I feel a bit like a fisherman who catches fish but has no idea what type of fish they are.. After reading allot of what BRV has said about the markets I have realised that I have to further my knowledge in this area if i want to succeed long term but I struggle to understand little if anything of what i read and I find it even harder to put that data into my trading decisions.

Any advice on these questions is greatly appreciated
Hi there,
In regards to your question about the news, what works the best, in my opinion, is if the news spike is against the current trend, buy or sell in the direction of the trend after the news spike (eg if the trend is down, and the news spike is up, sell at a local resistance area on the spike). Price usually returns to normal if you're just dealing with average data.
If the news spike is with the current trend, buy into it on a pullback (eg trend is up and news spike is up, buy at a local support level). In both cases you're simply going with the trend. Most of the time price returns back to its normal state after moderate news. In consolidation or if the current trend is unclear, I wouldnt trade in general.
Setting limit orders during news can be a hairy practice in general, and I wouldnt neccessarily recommend doing it. Just because you never know how severe the data is going to be and what could happen next.

In regards to your question about fundamanetals, you can make out pretty well trading these levels at the best junctures with or without much knowledge of everything else that's going on, but fundamantals help you:
-determine the general direction of the market
-take the appropriate levels when price has basically exhausted itself

I try to make things as simple as possible here by using data from options, etc. to determine sentiment. But the fact of the matter is people are buying and selling these options in reaction to fundamantals and a situation of "what do people care about most" right now.

In other words, there are a bunch of fundamentals out there to look at weighing in on each currency pair at any given point in time. But there is going to be one or two in particular that are taking center stage and responsible for moving the pair in a given direction, and then another to which it normally falls back on.

The main things I look at are:

-oil - correlated to EUR and EUR usually snaps back to it after other things take the attention; this affect also rolls over to GBP and CHF; moves CAD
-gold - correlated to AUD, NZD is correlated to AUD, also people sell dollars and buy gold in times of uncertainty and the other way around
-equity indices, particularly the US - correlated to UJ, can roll over to other pairs; UJ is a proxy for carry trades, and when equity indices are doing poorly people sell carry trades
-interest rates
-comparative world economies

At any given point in time, one of the above is taking precedence over another. You just have to determine what people care about most on any given day and how thats going to affect the currency. My post above is an example of all the factors put together and the conclusion I came up with.

When you have the fundamental aspects down you can come up with a roadmap to figure out a general path for price at any given point in time. Just focus on what people care about most and whats getting the spotlight, because thats what really is moving the market.
  • #3,628
  • Sep 18, 2008 1:05pm Sep 18, 2008 1:05pm
Quoting lumesh
I am very happy to see BRV around here in the past days so often and that the teaching has moved to another level focusing more on other important aspects of trading than technical analysis.

I started having some questions about how the market really works and when are the big players coming in when i went through BRV's trading results. Seeing trades like +250 pip prfit with 0 or -1 pip drawdown made me think that these trades can no way be purely technically made .

My questions regard mostly options and how to use them in spot trading:

1) BRV, you provided us a link to phxl.com where we can see option calls and puts with certain interest levels. Do you use them as a directional bias or you consider them as barriers also ? And when do you look at puts and when calls ?

2) as for option barriers, you considered USD/JPY to have a barrier at 105.50 (in your updated pdf file). Where did you get that number. From phlx.com i got other numbers you mentioned like 103.10, 108.70 and 111.11 but not 105.50.

3) option levels at phlx.com do you expect them do be broken and then a reversal in price or you expect a reversal before the level gets broken ?

4) option expiry: You said the overall bias seems bearish for dollar (22th aug). When i look at the charts i saw that 22th aug was very bullish for dollar. Can you comment on that ?

That is it for options for now

Another thing you talked about is the correlation between other markets like USD/JPY and S&P index, AUD/USD and gold, EUR and oil.

What is confusing to me is that what exactly are you looking for ? I mean that when USD/JPY and SPX correlate how can you use one to predict another ? If SPX fall doesn't that mean that USD/JPY is falling too about the same time leaving no edge ? And predicting other markets is like predicting fx market when doing it technically. Or when people say oil is falling meaning that USD is strenghtening but how is it possible to act on that, because oil can change its course like any other market. It's like talking what WAS not what's GOING to happen.

That is it for now i hope you can find time to explain the things i brought out.

Thanks.

By the way, what do you look for tomorrow regarding option expiry ?


Lumesh
Hi Lumesh - in regards to options, there are a couple different types.

The ones on the Philly exchange are european style options, and are pretty good in determining the overall sentiment of the market. Just be aware that people use these options in all sorts of strategies (strangles, butterfly, straddles, etc) so you have to determine where there's heavy concentration by looking through the chain and where your "naked exposure" is, ex any strategies. Usually you'll find it in the area immediately surrounding the current spot price, or within a couple hundred pips or so. Once these levels get hit, yes, Im typically looking for price to start fatiguing soon thereafter, from a day or week.

When I talk about option barriers I'm talking about OTC options, which we really dont have comprehensive data to. These are mainly private deals among counterparties and dont get listed to the public. IFR gets in on rumors and publishes whatever they know, but its not the end-all to the situation. Option barriers can easily get taken out, we just like to note that they are there. How they work is basically if spot price is above or below them at the time of expiry they're in or out of the money, so volatility can be expected if there is known to be a really big one out there. Like if I'm a huge money manager and have a UJ option for $800mm at 105.50, I dont want 105.50 to get hit, so I'm going to buy a ton of the spot fx ahead of that mark in hopes of turning the market. That's basically how it goes.

About the stuff from the 22Aug, I'm not too sure and need to go back and try to take a look at what I was seeing.....I'll see if I can get back to you on that but I unfortunately dont have the data anymore so Im not too sure if I can. Let u know.
  • #3,629
  • Sep 18, 2008 2:40pm Sep 18, 2008 2:40pm
thanks for the reply BillyRay.


I hope you can continue post your september trades as well so i can go through them and find possible reasons behind them.

Do you also use any info from futures market as well ? You provided us a link to cmegroup.com. What is that you look for there ?
  • #3,630
  • Edited 8:17pm Sep 18, 2008 6:49pm | Edited 8:17pm
Quoting lumesh
thanks for the reply BillyRay.


I hope you can continue post your september trades as well so i can go through them and find possible reasons behind them.

Do you also use any info from futures market as well ? You provided us a link to cmegroup.com. What is that you look for there ?

Haha I wish I understood them half the time . jk. The COT (commitment of trader's) report, and options on futures, but not as much.

Again the options can be used as a meter but our goal is to get in ahead of all of this data. The COT report is published weekly and shows net positions of speculators, hedgers and small investors, but again, after the moves have happened. But regardless can clue you in on general bias.
  • #3,631
  • Edited 9:48pm Sep 18, 2008 9:37pm | Edited 9:48pm
Something decent from Bloomberg, but published yesterday:

http://www.bloomberg.com/apps/news?p...d=arA5uhYDD_UM

By the way Paulson's "RTC-like plan" seems to be weighing in on the currency markets tonight as it did on the stock market today (SPX up about 4 1/2%, most in 6 years) http://www.streetinsider.com/General...n/4002361.html

Stock futures are soaring in overnight trading as well, commodities drifting lower, etc....not much coming from abroad today, just german ppi at 2:00am new york time.

And lets not forget England's stop sign on short selling thrown into the face of investors today......gotta short something! Mine as well be the currency.

But so much for the USD shorts in the past day here. How quickly things change.

All we need now is Trechet to grab the microphone again and we're sitting at 0.5000 EUR/USD. But really its going to need a kick in the butt, and not from the US.

I've gotta grab some grub but decent plays on the horizon will throw up some charts a little later on.
  • #3,632
  • Sep 18, 2008 10:56pm Sep 18, 2008 10:56pm
[quote=BillyRayValentine;2226623]
This thread in general has evolved into a basic teaching of finding the best possible entries for trades in order to avoid any sick stomachs, but over the long haul, you simply have to know your stuff if you want to survive. That's why I bring up all these other issues in here, and not just post levels.

Thanks for all the extra education BRV on top of S&R trading. It really is a big help
  • #3,633
  • Sep 18, 2008 11:00pm Sep 18, 2008 11:00pm
Look like a nice short setup on the Kiwi, 0.6822ish.
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  • #3,634
  • Sep 18, 2008 11:45pm Sep 18, 2008 11:45pm
Looking for a short around 1.4280

Paj
  • #3,635
  • Sep 19, 2008 12:05am Sep 19, 2008 12:05am
Quoting Paj
Looking for a short around 1.4280

Paj
Was just looking at that before it crapped out and headed down again. That 4390 area has some good history behind it as well on any breaks higher, but not looking like thats going to be the case today so far. London has continued what Asia began and I'm not too sure about getting much of a NY fix today if equity markets keep doing what they're doing. Commodities might be the only pull upwards, but even they're looking kind of weak tonight.
  • #3,636
  • Sep 19, 2008 12:07am Sep 19, 2008 12:07am
Quoting bluesbrother
Look like a nice short setup on the Kiwi, 0.6822ish.
Nice confluence all around. That TL might kick in a little earlier and on a break 6900 area showing promise.
  • #3,637
  • Sep 19, 2008 12:14am Sep 19, 2008 12:14am
Quoting BillyRayValentine
Nice confluence all around. That TL might kick in a little earlier and on a break 6900 area showing promise.
6800 looks to be the magic #. . . nice and round both an s and an R. . . .

I love this currency. . . . .

P.S. Go Wamu! (It's like a hot girl with herpes.....sometimes you just gotta throw caution to the wind)
  • #3,638
  • Sep 19, 2008 2:42am Sep 19, 2008 2:42am
hi, anyone there can provide me the link to equity markets
STRENGHT IS LIFE ,WEAKNESS IS DEATH - SWAMI VIVEKANANDA
  • #3,639
  • Edited 7:17am Sep 19, 2008 6:21am | Edited 7:17am
BRV,


did you trade E/U, G/U, U/J or A/U long today ? If you did where did you get in and why long ? Anything to do with options expiry ? thanks a lot.

lumesh


one more thing: on the philly page when do you look at puts and when calls ?
  • #3,640
  • Sep 19, 2008 7:37am Sep 19, 2008 7:37am
Quoting lumesh
BRV,


did you trade E/U, G/U, U/J or A/U long today ? If you did where did you get in and why long ? Anything to do with options expiry ? thanks a lot.

lumesh


one more thing: on the philly page when do you look at puts and when calls ?
Hey lumesh - the move was mainly due to the huge buying going on in the equity markets today - driven by Paulson's announcement for a plan in the mortgage market and a ban on short selling financial stocks until the beginning of october. When you see the index going up or down like that so drastically youre going to see the yen crosses do the same - usdjpy went through the roof and eurusd went right along with it with heavy concentration on euryen. not to mention oil was rising in the midst of all of this. I was short earlier in the night on the way down but backed off when the market started to get really volatile. On the euro options, puts just signify price is expected to decline and calls when its expected to advance. you have to view each side and see where the concentration is.
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