What happens in the real world to cause movements? | Forex Factory

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What happens in the real world to cause movements?

  • #1
  • First Post: Mar 27, 2009 6:03am Mar 27, 2009 6:03am
I've been wondering lately, what *exactly* happens in the real world to precipitate a huge movement? It's safe to assume it's people buying or selling, of course... but that happens all day, too. And I can understand how a big movement keeps building momentum once underway if others jump on board, as limit orders are fulfilled, or stops are triggered, etc. But even that doesn't occur till the movement has proved to be a big enough push in either direction, correct?

So my main question still comes down to, is there usually a singular event that causes sudden breakouts like this? I'm linking to an image attached by another user BoredToLoose in the EURUSD Trading thread in reference to the drop on March 27 at around 08:00 on his chart. Is there any particular reason that dropped was that severe at that exact time? Why not at 07:16 or 08:28 or some other random time? Why did it occur *right* when it did? Of course, I understand lots of crazy movements are usually preceded by some sort of news, and that makes sense. But there also sometimes seem to be totally random breakouts that occur at random moments out of nowhere. I'm just wondering if, in real life, there isn't usually one individual out there that's responsible for initiating these chain reactions that grow into huge movements at their whim sometimes...


http://www.forexfactory.com/attachme...1&d=1238149217
  • #2
  • Mar 27, 2009 10:47am Mar 27, 2009 10:47am
Not enough time to explain it all, but there are VERY DEFINITE time periods that things happen in the forex world and can be counted on to always happen.

we discuss it on my thread, and ive gone over the "times" a few times, but rest assured --- there ARE REASONS !

enjoy and trade well

mp


Quoting van
I've been wondering lately, what *exactly* happens in the real world to precipitate a huge movement? It's safe to assume it's people buying or selling, of course... but that happens all day, too. And I can understand how a big movement keeps building momentum once underway if others jump on board, as limit orders are fulfilled, or stops are triggered, etc. But even that doesn't occur till the movement has proved to be a big enough push in either direction, correct?

So my main question still comes down to, is there usually a singular event that...
  • #3
  • Mar 27, 2009 5:02pm Mar 27, 2009 5:02pm
Looking back at the specific example I posted, I realized that might not be the best one to use to illustrate my point... it was looking like the EURUSD was heading south before then, so the drop itself wasn't really a surprise. What I did find confusing though was: 1) the severity of the drop (both the speed and amount), and 2) that it occurred in the hours before NYC opening, which is usually pretty dead. If it happened at NYC open, I think it would have made a little more sense.

But referring back to my original question in the first post: when we see a big movement that appears like it's totally "out of the blue"...not during any market changeover/overlap time...not at any trend/fib/resistance/support lines...etc...is it safe to assume that is usually the work of one BIG party or institution that then causes a chain reaction (especially since it might break through a trend that people were following, thus causing chaos, and a scramble which just makes things worse and worse)?
  • #4
  • Edited 6:08pm Mar 27, 2009 5:42pm | Edited 6:08pm
OK, I have more time now

Int the real world, direction of the forex pairs is well known to the powers that be. If you look at the attached chart, the 3 white lines are called the LRC or linear regression channel and the overwhelming truth about most indexes and forex is that price makes its way from the BOTTOM line (support) to the TOP line (resistance)

starting a few hours before the NY forex open and taking into account that news was coming out, the currency was DROPPED extremely quickly, as you can see to get the price DOWN, to where the price could then be RAISED.

to accomplish this, SOMETHING or SOMEBODY instituted a tremendous downside move, which was caught by the remainder of the traders who followed along (they all KNOW anyway, but they dont always know WHEN it will happen) and DOWN went the currency so as to be able to BOTTOM the price before they moved it back UP.

the LARGE move was because the price at 6am was TOO FAR FROM THE BOTTOM, neccesatating a HUGE move to get down on time for the news release !

The LRC is one of the MOST important trading tools available, and shows so much so easily.

but anyway, THAT is what happened with EUR/USD this morning !

enjoy and trade well

mp

Looking back at the specific example I posted, I realized that might not be the best one to use to illustrate my point... it was looking like the EURUSD was heading south before then, so the drop itself wasn't really a surprise. What I did find confusing though was: 1) the severity of the drop (both the speed and amount), and 2) that it occurred in the hours before NYC opening, which is usually pretty dead. If it happened at NYC open, I think it would have made a little more sense.

But referring back to my original question in the first post: when we see a big movement that appears like it's totally "out of the blue"...not during any market changeover/overlap time...not at any trend/fib/resistance/support lines...etc...is it safe to assume that is usually the work of one BIG party or institution that then causes a chain reaction (especially since it might break through a trend that people were following, thus causing chaos, and a scramble which just makes things worse and worse)?

http://www.forexfactory.com/images/buttons/quote.gif

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  • #5
  • Mar 27, 2009 9:05pm Mar 27, 2009 9:05pm
Quoting van
Looking back at the specific example I posted, I realized that might not be the best one to use to illustrate my point... it was looking like the EURUSD was heading south before then, so the drop itself wasn't really a surprise. What I did find confusing though was: 1) the severity of the drop (both the speed and amount), and 2) that it occurred in the hours before NYC opening, which is usually pretty dead. If it happened at NYC open, I think it would have made a little more sense.

But referring back to my original question in the first post:...

So price moves up and down dependant on where it is on an indicator? The LRC does basically the same thing as an MA, helps the user to determine an average price, nothing more or less.

Thread starter, ignore this guy.
Living the adventure in my head.
  • #6
  • Mar 27, 2009 9:16pm Mar 27, 2009 9:16pm
unfortunately, as history over many years will attest, youre completely wrong

In no way does the LRC resemble or act as an MA, since its job is to do nothing but show historic support and resistance points --- in actuality, although i dont teach it, one can take a trade from either the top or bottom line and set a tp at the midpoint and be guaranteed a good trade, and thats on any timeframe you wish.

while the truth of the matter is that this ALWAYS happens, what can NOT be predicted is how LONG it will take on the higher timeframes.

On the lower timeframes, one can fairly accurately predict how high or low and when it will happen.

Im afraid, having seen the same remarks from you everywhere on this site and on my thread also, that you simply havent a clue !

My apologies, but like monarch of the glen, you just seem to be practicing your keyboard skills, but have NOTHING to add to education.

When YOU can produce a minimum of 350 pips a day, I might have a conversation, but until such time why dont you just let people who KNOW the market answer questions asked seriously !

enjoy and trade well

mp




Quoting Leonlorenzo
So price moves up and down dependant on where it is on an indicator? The LRC does basically the same thing as an MA, helps the user to determine an average price, nothing more or less.

Thread starter, ignore this guy.
  • #7
  • Mar 27, 2009 9:50pm Mar 27, 2009 9:50pm
Quoting mparker

In no way does the LRC resemble or act as an MA, since its job is to do nothing but show historic support and resistance points --- in actuality, although i dont teach it, one can take a trade from either the top or bottom line and set a tp at the midpoint and be guaranteed a good trade, and thats on any timeframe you wish.

mp
Mid-point = average price, and has nothing to do with Support or resistance.

 

  1. guaranteed a good trade
  2. the truth of the matter is that this ALWAYS happens.
  3. On the lower timeframes, one can fairly accurately predict how high or low and when it will happen.
  4. 350 pips a day,

Not just the thread starter, everyone should ignore this guy. Id say ask for proof, but you wont get it.

Dont wont to spoil the thread so thats it.

Living the adventure in my head.
  • #8
  • Mar 27, 2009 10:05pm Mar 27, 2009 10:05pm
Van,

Logic says there is a reason for every movement small or large, but most of the times we will never know the reason. Some of the times we will only know the reason after the move and Maby If we work very very hard we will find small instances where we can assume with high enough probability that a move will happen and we will know the reason,finding an inefficiency, I wouldnt expect that to come easy though.

'Knowing the reason' requires that you stop using charts as your only input to trading.

I wouldnt bother trying to find a reason for every move.

Leon
Living the adventure in my head.
  • #9
  • Mar 27, 2009 11:00pm Mar 27, 2009 11:00pm
I will not continue to discuss with someone who cant discuss --- all i ever ask of anyone is for them to TRY it on a demo and see if it works for them.

of the people who have gone along what i say, all are making money where they were not before, with some as high as 50 successful trades in a row.

if i were selling the information i give out freely, i would obviously have an agenda, but since its free and posted on a number of sites, since i am CEO of a registered NYS hedge fund and I have some VERY happy clients, as well as a load of very happy newbs, its best to take your negativity and take it to where someone might believe you, cause by the very nature of your posts all over this site, you have NO positive thoughts about anything and a simple search of your alias produces THAT truth !

the midpoints has NOTHING to do with average price, as it is not an average of ANYTHING except support and resistance, WHICH, if you actually bothered to look, you would see

a moving average is a whole different animal and while it CAN be a support or resistance point in and of itself, that point has NO bearing on what we speak of.

and btw, since what i do is for the assistance of the newbs, many have traded right alongside me at night via yahoo, and close to 200 pips has been SEEN during a few hours, and that doesnt include what came before during the day.

JEALOUS ??

mp




Quoting Leonlorenzo
Mid-point = average price, and has nothing to do with Support or resistance.

  1. guaranteed a good trade
  2. the truth of the matter is that this ALWAYS happens.
  3. On the lower timeframes, one can fairly accurately predict how high or low and when it will happen.
  4. 350 pips a day,

Not just the thread starter, everyone should ignore this guy. Id say ask for proof, but you wont get it.

Dont wont to spoil the thread so thats it.

  • #10
  • Mar 27, 2009 11:28pm Mar 27, 2009 11:28pm
Quoting mparker
I will not continue to discuss with someone who cant discuss --- all i ever ask of anyone is for them to TRY it on a demo and see if it works for them.

of the people who have gone along what i say, all are making money where they were not before, with some as high as 50 successful trades in a row.

if i were selling the information i give out freely, i would obviously have an agenda, but since its free and posted on a number of sites, since i am CEO of a registered NYS hedge fund and I have some VERY happy clients, as well as a load of very happy...
I try to be helpfull when I can.

Its hard to trust someone whos every post looks like an advertisement.

What is your motive for posting, goodwill to all men?

Doesnt running a hedgefund and being online at this site take up alot of your time?
Living the adventure in my head.
  • #11
  • Mar 27, 2009 11:43pm Mar 27, 2009 11:43pm
I think there are different trading styles. There are news traders who move the trend initially, there are trend traders who follow the trend to push it ahead... without the counter part no single trading style can benefit from price movement. right?

nothing is perfect each time... and no strategy is best for each market move.

Quoting Leonlorenzo
Van,

Logic says there is a reason for every movement small or large, but most of the times we will never know the reason. Some of the times we will only know the reason after the move and Maby If we work very very hard we will find small instances where we can assume with high enough probability that a move will happen and we will know the reason,finding an inefficiency, I wouldnt expect that to come easy though.

'Knowing the reason' requires that you stop using charts as your only input to trading.

I wouldnt bother trying to find a reason...
  • #12
  • Mar 28, 2009 12:15am Mar 28, 2009 12:15am
sometimes being trolled can be a tremendous source of fun, but if you had read my original posts, your questions wouldnt exist.

ive NEVER heard a complaint concerning "goodwill to mankind", except perhaps by Scrooge in his "pre conversion" period ---- what an unusual thing to say.

as for advertising ---- WHAT am i advertising ---- FREE INFORMATION that proves to work ?

What you have in me is someone you will be hard pressed to ever meet again, because i really DO BELIEVE, after such a wonderful life as i have led, that I must payback and pass on that which helped me so much.

NOTHING ELSE --- no hidden agendas or motives, just nice free information that makes money.

and my time is spent as i like it because forex is so SIMPLE these days that I hardly pay attention even when scalping ---- do the same thing a few thousand times, and the fingers do it automatically, leaving me free to help newbs learn how to do the same thing.

NOW, you can learn or you can be suspicious --- its up to you to decide !

enjoy and trade well

mp




Quoting Leonlorenzo
I try to be helpfull when I can.

Its hard to trust someone whos every post looks like an advertisement.

What is your motive for posting, goodwill to all men?

Doesnt running a hedgefund and being online at this site take up alot of your time?
  • #13
  • Mar 28, 2009 12:22am Mar 28, 2009 12:22am
you forget that the greatest traders of them all, the bank desk traders, are the ones who set the pace and control the market, moving it between support and resistance.

that the market reacts as it does is a given, only the amount of time it takes to get there is the unknown ---- I can set a tp that wont come true for a month or so, and while i shall suffer tremendous drawdowns as the price moves up instead of down, sooner or later it will drop to where its supposed to, and one takes profit.

Not the most efficient way to trade, but certainly works if thats what you want, speaking of which --- many are the institutions that take a YEAR LONG trade, setting their tp points for a year down the road and allowing their desk traders to make up for any paper losses the institution suffers during a dip in the price --- its simply SOP and done constantly.

MANY are the types of traders who are out there and many are the combinations of styles used by even one person, so the answers are not simple because the question is not but forex simply presents, during news, recovery from news or no news at all, a tremendous opportunity for those who learn its meanderings and gain the experience to become just a bit bored with the whole thing.

mp

Quoting billye
I think there are different trading styles. There are news traders who move the trend initially, there are trend traders who follow the trend to push it ahead... without the counter part no single trading style can benefit from price movement. right?

nothing is perfect each time... and no strategy is best for each market move.
  • #14
  • Mar 28, 2009 12:38am Mar 28, 2009 12:38am
Quoting van
I've been wondering lately, what *exactly* happens in the real world to precipitate a huge movement? It's safe to assume it's people buying or selling, of course... but that happens all day, too. And I can understand how a big movement keeps building momentum once underway if others jump on board, as limit orders are fulfilled, or stops are triggered, etc. But even that doesn't occur till the movement has proved to be a big enough push in either direction, correct?

So my main question still comes down to, is there usually a singular event that...
My thinking is it happened because DOW futures were down during European session. USD was needed to go into treasuries because of risk aversion. If the traders want to trade at exchange open, money is needed for it before the market opens. It is called the cyclic nature of currencies and happens pretty regularly in non-volatile periods
The only way to get smarter is by playing a smarter opponent.
  • #15
  • Edited 1:01am Mar 28, 2009 12:50am | Edited 1:01am
Quoting billye
I think there are different trading styles. There are news traders who move the trend initially, there are trend traders who follow the trend to push it ahead... without the counter part no single trading style can benefit from price movement. right?

nothing is perfect each time... and no strategy is best for each market move.
Yes, there are Informed/value Traders who study values and come to a conclusion of a currency/stock/futures (supposed)true worth and If price is not Inline with that valuation then they will trade.

Then this information will be handed over/released to another group of people who will, if they see fit, create further price movement towards the supposed true value.

Then there are the traders who see a trend and jump in, late to the party and only basing their decisions on what has happened in the past, these people are uninformed and their participation most likely only creates profit for the trend initiators and those close to follow.


....or so ive herd.
Living the adventure in my head.
  • #16
  • Edited 4:44am Mar 28, 2009 4:32am | Edited 4:44am
well... up till now no one claim to be responsible for usd rise...

probably because... jim rogers short usd and he is a reverse indicator?

I think you're right on most of the below

but our problem is those who criticize citing the rule 'follow the trend' also will jump out after a trend finish...

and if you compare fundamental and tech.A,
the latter is more likely to shout that 'oh I was right, look at my analysis yesterday was correct' after a trend happen to finish in his paper's favor at 50% probability.
but did he trade on the spot that he published his insight ahead of 'trend'?? no one knows...

don't be serious I'm just saying it is hard to tell. trend is somehow a collection of people's opinions... you only know a trend happen after it finish...

one example, on Mar.24 about within 0.5hr after dow open low, it was attempting to recover... and then it suddenly turns back down by -0.5% or -1%
a lot of people who jump on the spot of recover 'trend' formation was then turned down by -50 pips or so... trend is a difficult judgment, also not 100% correct. so it's also chance game.

Quoting Leonlorenzo
Yes, there are Informed/value Traders who study values and come to a conclusion of a currency/stock/futures (supposed)true worth and If price is not Inline with that valuation then they will trade.

Then this information will be handed over/released to another group of people who will, if they see fit, create further price movement towards the supposed true value.

Then there are the traders who see a trend and jump in, late to the party and only basing their decisions on what has happened in the past, these people are uninformed and their participation...
Attached Image
  • #17
  • Mar 28, 2009 7:29am Mar 28, 2009 7:29am
Well this is an interesting discussion.

Part of my structure for trading the forex is to follow the bankers, not necessarily the trend. I have been reviewing a thread on FF on technical analysis falicy, and they seem to think we are in a battle of some sort with the forex, deploying troops and other nonsense. I think mparker has it right. When you figure out how bankers are flying the big machine called the forex, you can begin to anticipate their moves and the changes in trends. Once that is done, you can pretty much see where they are going, if you understand why they are doing what they are doing. Gaps are created, and gaps are filled. It's how they make money.

Edit: And there are definitely time periods to focus on, and other times to sit it out.
  • #18
  • Mar 28, 2009 8:49am Mar 28, 2009 8:49am
Quoting Peglow1
Well this is an interesting discussion.

Part of my structure for trading the forex is to follow the bankers, not necessarily the trend. I have been reviewing a thread on FF on technical analysis falicy, and they seem to think we are in a battle of some sort with the forex, deploying troops and other nonsense. I think mparker has it right. When you figure out how bankers are flying the big machine called the forex, you can begin to anticipate their moves and the changes in trends. Once that is done, you can pretty much see where they are going,...



Technical Analysis Fallacy thread. It's like some kind of cult for a guy who speaks like a fortune cookie. Always talking about "GBP is ready to dance" and other nonsense like that.

I love those people, they give me money all the time!
  • #19
  • Mar 28, 2009 9:09am Mar 28, 2009 9:09am
Thursday for EUR/USD is a NR7/ID (narrow range 7 & insider day). Since euro already stayed in a top range for 5 days, such kind of volatility dried down would indicate a high probability trending day tomorrow. See my Thursday post on my blog. For a NR7/ID, there is no need to predict which direction market will breakout, cause either direction is possible. We just need to follow what the market is leading us. Detail information about NR7 setup can be found in Linda Raschke's Street Smart or Toby Crabel's book.
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  • #20
  • Edited 12:24pm Mar 28, 2009 11:24am | Edited 12:24pm
Quoting Peglow1
When you figure out how bankers are flying the big machine called the forex, you can begin to anticipate their moves and the changes in trends. Once that is done, you can pretty much see where they are going, if you understand why they are doing what they are doing. Gaps are created, and gaps are filled. It's how they make money.
Does the bold above actually meen anything, or did it just spill out?

EDIT:This may actually be possible If you are extremely well connected to the point that you would be very rich and powerfull in the first place, its not going to be possible by just looking at a chart though.
Living the adventure in my head.
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