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How To Make 1000's of Pips by NFX

  • #61
  • Edited 10:50am Jun 23, 2009 10:39am | Edited 10:50am
Quoting belekas
Yes, but that doesnt mean it cant/wont form an ascending triangle (dayly) which is continuation pattern on its own and breaks out upward 73% of the time ,if price rises into the pattern, according to T. Bulkowski
Right. And all this can't/won't, maybe yes/maybe no, 73% of the time based on a statistical sample that is probably too small to be valid who the hell knows BS is exactly what I want to avoid.

When prices can only go one way is what I want. MFE.
  • #62
  • Jun 23, 2009 10:47am Jun 23, 2009 10:47am
My opinion on the Fed statement is that it would be very supportive of the markets if they were to indicate they see a time in the not too distant future when some of these liquidity programs could be wound down, because it would indicate they see a favorable economic outlook.

That would allow stocks and commodities to rise and weaken the dollar.
  • #63
  • Edited 11:26am Jun 23, 2009 10:48am | Edited 11:26am
Quoting NewstraderFX
Right. And all this can't/won't, maybe yes/maybe no, who the hell knows is exactly what I want to avoid.

When prices can only go one way is what I want. MFE.
Why you care about "where its going"? Just follow the footprints of the smartmoney by reading the tape and you cant go out of bussines. Just my 2 cents.
  • #64
  • Jun 23, 2009 11:27am Jun 23, 2009 11:27am
Quoting egkid
Thanks for starting this thread. 100% agree with you and i'm following this scenario since 2/2009 also talked about this and very good traders here mention this.

Where are we now? As you said we in the middel
I have question "What will happen If us index fall to 60?"

In other hand what will happen Then to eur/oil/downJ? And the result to world economy will be....hmm Recovery or New reserved currency?
No answer to my question ! Ok better stop talk on this thread.
cya @us index 60
  • #65
  • Edited 12:08pm Jun 23, 2009 11:56am | Edited 12:08pm
I think fundamentals for most of the time are not only news or policy announcements. they are only modulators or noise or enablers... fundamental is supply and demand, price/cost and profit.

I cannot explain fed printing money leading to econ recovery.
and I am not yet convinced of latter as a matter of fact.

but from dollar weakness point of view you might be right.

the last thing I think is looking at every news and waiting to analyze in order to run faster than market....
this have caused most people to be very tired trading forex... staring at computer for hours every day...
day after day. only to get undetermined indication or guess where market is going, return of effort in news analysis is pretty low.

going on higher time frame then we can for many cases avoid these noise, if trade monthly timeframe w/o leverage I think most news we can ignore.

on monthly timeframe, the reason USD drop is because of econ recovery...
if Fed print money=USD cheaper, then at end of March Gold is only 900$, you can make a million just by longing GOLD with assuming that USD cheaper.... it's not that simple.... GOLD drops to 880$ and stay there for whole April and at that time it's already known that Fed will print dollar.

another example, the reason everyone left GOLD market in April is actually the news/policy annoucement that IMF will sell gold and prevent gold as alternative to us dollar currency. but after holding it low for 1 month, it rise again...
we can see most news or policy annoucement only impact the market for a short period of time, like 1 week or 1 month... fundamental is value, return on investments, cost, supply and demand, where policy may not change instantly....
more often than not we see market over-react to a policy than what is the real effect.

before March 2009 Fed print money, in past 3 years there has already been several attempts every 1 or 2 quater and each time policy maker will annouce it works and saved house market.... after all these years only thing we know is ignore policy and let market show the objective reality.

Quoting NewstraderFX

Also, we're not at the start of an MFE now-we're in the middle of one (dollar weakness).

1. You have to recognize when an MFE has occurred.

2. You have to understand how markets will be affected after the MFE has occurred and the correlations between the different asset classes (currencies, stocks, bonds and commodities).

The MFE we are in now began on March 15, the day of Bernanke's 60 Minutes interview in which he said the Fed was printing money. Go to this.
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  • #66
  • Edited 3:11pm Jun 23, 2009 2:36pm | Edited 3:11pm
Quoting belekas
Why you care about "where its going"? Just follow the footprints of the smartmoney by reading the tape and you cant go out of bussines. Just my 2 cents.
There is no smart money-if they were so smart they wouldn't have lost like they did. Aside from that, a lot of the movement you see intra day is all about stop hunting anyway. In other words, if you know where the stops are, that's where you guess direction is going (impossible-forget about it).

If you look at the last couple of weeks, you'll see how the trend has stalled. This kind of up and down movement is death to traders-it'll shread you so fast you won't believe it.

The time to trade was as close to the start of the trend as possible, which is when Bernanke made his famous announcement, because prices can only go one way (don't worry about catching the exact top and bottom-no one can do that either).

Prices can go either way right now, and I said this 2 weeks ago when I mentioned we're in the middle.

Did you read the article I posted on John Henry? if he can't trade trend-less markets, you and I can't either. But what's more important is that he can recognize a strong trend, which for the most part occurs after a MFE.
  • #67
  • Jun 23, 2009 3:10pm Jun 23, 2009 3:10pm
Quoting NewstraderFX
The time to trade was as close to the start of the trend as possible, which is when Bernanke made his famous announcement, because prices can only go one way (don't worry about catching the exact top and bottom-no one can do that either).
Hi NTFX

I understand that the dollar weakened initially when Bernanke made his famous announcement but then the EUR retraced basically all of that move and then started trending up. So was his announcement still considered an MFE?

Thanks
Nothing worth having is easy.
  • #68
  • Jun 23, 2009 3:15pm Jun 23, 2009 3:15pm
I would say so-yes. What's interesting on the euro is that the retrace found support pretty much where price was on 3/15, the day Bernanke went on 60 Minutes. And if you look at the pound and aussie, they pretty much went in a straight line.

Perhaps the best way to trade this was to divide the total amount of your trade by 3 and buy those pairs.
  • #69
  • Edited 1:50am Jun 24, 2009 1:02am | Edited 1:50am
Quoting NewstraderFX
I would say so-yes. What's interesting on the euro is that the retrace found support pretty much where price was on 3/15, the day Bernanke went on 60 Minutes. And if you look at the pound and aussie, they pretty much went in a straight line.

Perhaps the best way to trade this was to divide the total amount of your trade by 3 and buy those pairs.
NSFX, I concur here fundamentals do drive prices but just a question, with all the major's Central Banks pumping up liquidity into the monetary supply (especially the Euro) wouldn't that also dampen the effect of a USD bear? I was watching the news last night and I've heard that the Euro increased the liquidity in banks and at least pumped $60 billion into the money supply.

Wouldn't that also suggest a declining value in the Euro as well? For now I've liquidated all my trades and will wait for Bernanke and the FED's decision tomorrow regarding interest rates. If they stubbornly retain the interest rates as is, will the USD suddenly go bear? But if I take into account the Euro they've also debased the value of their curency as well. I wonder whose actions have more weight..decisions, decisions..

(But ultimately though, I still believe the USD will be bear if they retain their interest rates. despite the fact that the ECB has added more liquidity into the market, none of this is compared to the trillions of dollars of deficits being pumped by the FED due to Obama's deficit spending)
  • #70
  • Edited 5:08am Jun 24, 2009 3:58am | Edited 5:08am
Quoting [Sniper]
NSFX, I concur here fundamentals do drive prices but just a question, with all the major's Central Banks pumping up liquidity into the monetary supply (especially the Euro) wouldn't that also dampen the effect of a USD bear? I was watching the news last night and I've heard that the Euro increased the liquidity in banks and at least pumped $60 billion into the money supply.

Wouldn't that also suggest a declining value in the Euro as well? For now I've liquidated all my trades and will wait for Bernanke and the FED's decision tomorrow regarding interest rates. If they stubbornly retain the interest rates as is, will the USD suddenly go bear? But if I take into account the Euro they've also debased the value of their curency as well. I wonder whose actions have more weight..decisions, decisions..

(But ultimately though, I still believe the USD will be bear if they retain their interest rates. despite the fact that the ECB has added more liquidity into the market, none of this is compared to the trillions of dollars of deficits being pumped by the FED due to Obama's deficit spending)
In a word-no. The dollar is the reserve currency, which means you can buy pretty much anything in the world with it. And when the man in control of the printing press says he's printing more (electronically or otherwise), the world is going to react to that.

It's interesting what's happened over the last couple of weeks; after there had been a lot of talk about hyper-inflation and after oil prices and interest rates started to get a bit out of hand (due to Bernanke's depreciation efforts) a lot of commentators and economists started saying that inflation was not a danger due to the enormous amount of slack in the global economy and especially in the U.S. labor market. What that did was to help put a stop to the dollar's slide, which has naturally stalled the stock and commodity rally.

What also helped to stop the dollars' fall was that traders in Fed Funds Futures began pricing in a rate hike by the end of the year-it actually got to the point where a 40% chance of an increase was being priced in (this was also reflected by a narrowing of the spread between 2 yr and 10 year Treasuries once rates in the shorter end of the yield curve really jumped).

So here's why Bernanke is trying so hard to depreciate the dollar now (or imbed the idea of depreciation into the market's consciousness). If investors believe inflation is going to be a threat they naturally will want to get rid of cash and bonds because they will decrease in value. What they'll want to do is be in is an asset (like stocks and/or commodities) which will appreciate and therefore provide a hedge.

There's another asset class, a very important one especially now, where investors and everyone else will want to be in if they believe inflation is a threat-real estate. Certainly, if a buyer can afford to buy (and more can now since prices have fallen), they will do so if they believe prices are going to rise.

So today (supposedly) the Fed is going to say that interest rates will not rise for a long time in the hope that the market will take that to mean the dollar is going to depreciate (thereby boosting stocks, commodities and real estate). But what might really happen?

Well, the dollar could fall but let's dig a little deeper. Isn't it true that the Fed has created all these liquidity programs and cut interest rates because of all the problems in the financial markets? And where have stocks and other assets gone since the Fed started cutting interest rates back in September of 2007? Down.

So, if the Fed today indicates that rates will not rise and that their liquidity programs will need to stay in place for a long time, doesn't that mean the Fed believes the problems in the economy are still bad enough to warrant these extraordinary actions? And isn't it possible that the market could come to believe that the economy will be very weak for a long time and therefore not buy the riskier asset classes? I think so.

So, Bernanke's job is incredibly difficult. He basically has to depreciate the dollar while talking up economic prospects. But how can you talk up economic prospects at the same time as you're assuring the market you're going to keep rates low? ("Green Shoots")?

It would probably be better at this time if he were able to say that economic prospects look good enough to warrant a withdrawal of some liquidity programs and to say the Fed stands ready to raise rates if inflation becomes a threat.

The Fed really needs for investors to be a bit concerned about inflation because people will buy riskier assets if they believe prices will rise (which they will if they believe the dollar will depreciate which is the same thing).
  • #71
  • Jun 24, 2009 4:27am Jun 24, 2009 4:27am
once again,the snb has intervened to suppress the value of the franc. Your examples of sure things has so far been in hindsight up till now yet you dismissed my suggestion that snb stating ccy intervention as nothing major (fundamentally i assume).

In the last fortnight there have been two occassions that eurswiss has almost reached 1.5 and twice this level has been vigorously defended with up moves of over 100 pips. If the readers of this thread want a sure thing to go in heavy with limited downside risk, this trumps all.
  • #72
  • Jun 24, 2009 5:45am Jun 24, 2009 5:45am
I didn't dismiss it-I just said it's something I don't follow that closely. Aside from that, the SNB, as far as I can see, has only been able to manage some short term price movements, so I don't see where their actions have been able to create a sustained trend which is what an MFE does.
  • #73
  • Jun 24, 2009 6:41am Jun 24, 2009 6:41am
for the past few months, I am always under impression that all central banks do this on a collective manner so you wouldn't find any indication of dollar devalue from forex data. that was March to Apr and G8/G20 is platform to align and generate this crime plan (call it crime because it drains every individual's cash value).

they even threat to sell gold by IMF so gold will also not reflect devalue of currency.

people who jump on longing stocks, realestate and gold with leverage starting Q1 has collected some profit shared by those cent-backs as a result of more money in the world and every currency unit devalue.

Quoting [Sniper]
NSFX, I concur here fundamentals do drive prices but just a question, with all the major's Central Banks pumping up liquidity into the monetary supply (especially the Euro) wouldn't that also dampen the effect of a USD bear? I was watching the news last night and I've heard that the Euro increased the liquidity in banks and at least pumped $60 billion into the money supply.
  • #74
  • Jun 24, 2009 7:19am Jun 24, 2009 7:19am
when Jun number is 342K,
they modified published number for May from 352K to 344K...
so they can say May-Jun is 344->342, flat...

this only tells me that gov want econ up and they will do whatever to achieve it (manip data, print money, stimulus, lower loan rates, whatever...)
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  • #75
  • Jun 24, 2009 8:26am Jun 24, 2009 8:26am
interesting matters, I would follow your next comments.
  • #76
  • Jun 24, 2009 9:04am Jun 24, 2009 9:04am
Quoting NewstraderFX
I didn't dismiss it-I just said it's something I don't follow that closely. Aside from that, the SNB, as far as I can see, has only been able to manage some short term price movements, so I don't see where their actions have been able to create a sustained trend which is what an MFE does.
your phrase short term price movements indicates that time is the governing factor and not the change in price. the snb quite obv want to keep eurchf from dropping below a certain level for a considerable amount of time (i.e. until the recession, at least for them, is over). This in my opinion is a long term price movement and something they can continue doing indefinitely. We could very well be arguing over semantics but what i can say with conviction is that short term fundamental moves are less affected by noise that could affect the success of your trade than long term fundamental moves and what I find uncomfortable about your posts is that in essence you are doing what hundreds of backtesters do. Should you make a call after today's fomc, please provide some risk management advice for the readers who might take your advice and go in heavy
  • #77
  • Jun 24, 2009 9:52am Jun 24, 2009 9:52am
I'm not doing what backtesters do-I've been writing about the dollar/stocks/commods relation for several years now.

As far as i can see on USD/CHF it trended lower as stocks improved, than has gone sideways as all the others have since the dollar bear market stalled.
  • #78
  • Jun 24, 2009 10:00am Jun 24, 2009 10:00am
Quoting billye
for the past few months, I am always under impression that all central banks do this on a collective manner so you wouldn't find any indication of dollar devalue from forex data. that was March to Apr and G8/G20 is platform to align and generate this crime plan (call it crime because it drains every individual's cash value).
This is exactly what I wanted to clear up, we must remember that the market is heavily manipulated by these Central Banks' actions around the globe. Despite the fact that the FED has pumped up trillions of dollars in the US money supply, so do other governments around the globe! The question naturally would be, which actions have more weight? If both the ECB and FED for example pump billions into the money supply then who comes out stronger? If there's no way of knowing then fundamental analysis is also useless and might as well trade forex with a coin toss..

Quoting NewstraderFX
In a word-no. The dollar is the reserve currency, which means you can buy pretty much anything in the world with it. And when the man in control of the printing press says he's printing more (electronically or otherwise), the world is going to react to that.
And I agree with that, the statements coming out from the FED chairman with a very clear definition on how they create money ultimately of course affects trader's sentiments. So the USD goes bear for a long time. But you're forgetting one fact, Central Banks often manipulate the market as they wish. We've seen this in the financial meltdown in the late 2008 when the housing bubble burst. Even though the market crashed and was supposed to mean the dollar should fall, the opposite in fact happened - the dollar rose in value! But we must look into the fact that the many Central Banks in the world (especially the majors) sold their currencies to offset the fall of the dollar. And also noteworthy of mention is that people liquidated their assets due to the fear of being affected by the real estate meltdown and held on to their dollars also giving the impression that the dollar rose in value.

Naturally I would clear one thing up, which action bears more weight? Even if the FED is printing money like there is no tomorrow, so do other banks! Again, my question is after those statements from the FED, the Central Banks around the World have been ultimately doing the same thing - provide liquidity into the markets - meaning they also print money out of thin air and/or buy bonds to flood the market with paper money. In fact yesterday, I also watched in the news that the ECB provided as much as $60 billion liquidity in the Eurozone. They also flooded the Eurozone with paper money as well! We might want to ask why they would even go as far as debasing their own currencies, well simple - international trade! The cheaper the currency, the easier it is for other nations to purchase your export..

That's why despite the depreciatory actions of the FED there's no major reflection that shows the dollar is at complete disparity with other currencies in the forex market. If they did then it would like Weimar Republic all over again..

But ultimately, since it is clear that banks around the world are doing the same thing (debasing their currency), I just want to clear this one thing up since even though I've looked at this one way or another, it still escapes me on which moves by these monetary institutions bears more weight in driving the market up or down..
  • #79
  • Jun 24, 2009 10:31am Jun 24, 2009 10:31am
In the long term-it's the Fed. And if I see something in the Fed statement I'll let you know.
  • #80
  • Edited 11:08am Jun 24, 2009 10:52am | Edited 11:08am
Quoting NewstraderFX
In the long term-it's the Fed. And if I see something in the Fed statement I'll let you know.
Ok thanks for the tip though, I believe the key actions of this FOMC meeting will ultimately jumpstart the USD movement today. If the FED retains the interest rates at 0.25% I'm immediately going long on the Euro and AUD while shorting the USDCAD and USDJPY pair. The Austrian Economist in me says this is the way to go.

Obviously, I'm still new at forex so am I right to choose this long decision?
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