Central Banks Interventions

Does anybody agree with it?

Well, if you people find good information on central banks interventions that could include news or other good material just post it here and that will save us time. I go by :"None of us is smarter than all of us". Thanks and enjoy the thread.

I'm not sure what you're asking. Are you asking whether we think it actually happens? Or whether we think it's okay that they do?

That it happens we all know it does.
I am asking : do you think it's okay that they do it?
Any comments and examples on it are more than welcomed.

Here is an intervention example:

http://www.reuters.com/article/usDol...15637720090624

"FX intervention hinges on inflation target - BoC"

http://www.reuters.com/article/usDol...00245420091028

"Fujii May ‘Take Action’ on Yen; G-7 Seeks ‘Stability’"
http://www.bloomberg.com/apps/news?p...d=aHba7mgngEik

Sure it's ok that they do it. Who's to tell a country what they can and cannot do with their money?

They can only manipulate a market for so long, they will eventually lose the money to continue.

As long as we know where they move it, it's all good to us. right?

This is basically how I view it too. If they really want to spend their money this way, I think they should be allowed to . . . and therefore it's okay.

Of course I reserve the right to change my mind, if it causes me to lose a trade . . .

I'm not sure why it wouldn't be okay. The motivation is to slow either the strengthening or weakening of a country's currency when it is getting out of control. It works as a temporary fix and sometimes that's all that's needed to avoid more drastic measures. The alternative would be government economic policy changes.

There are real interventions and implied interventions. Sometimes mentioning an intervention (implying) is sufficient. The Japanese are noted for verbally manipulating the market in this way. And for releasing news in bits and pieces to gauge the reaction.

The important thing to remember is that the market will do what it will regardless. An intervention will slow a trend but not reverse it. The need for intervention actually validates a strong underlying trend.

There are two ways to trade interventions. To trade with the intervention is to trade against fundamentals which will ultimately prevail. Timing is critical for this to work. I've failed badly a few times, trying to trade with the intervention.

An easier way is to simply wait for the reaction to subside and get back in with the trend. Fade it.
Sometimes the intervention will overshoot it's goal and create a terrific opportunity in the same direction as the original underlying trend. Consequently, central banks try to intervene with as little force as possible.

The sensible thing, unless you've done some serious study and have a firm grip on fundamentals, is to trade another currency for a while and avoid the one being manipulated.

Central banks want to get the most bang for their buck. An intervention will be timed to get the biggest psychological response for the least amount of money. It may occur when the intervening country's markets are closed. The intervention may occur in several small maneuvers, or it may be be withheld after it has been implied.

The reasons for interventions are valid, but they're not implemented or scheduled to benefit speculators (us).

Great post billflet,

Constin

http://www.fxstreet.com/news/forex-n...a-c1c1115bdf2e

If this is true then the level 1.5 for EURCHF is still valid. I think that SNB find it more effective to move USDCHF.

"SNB’s Currency Action Successful So Far, Jordan Says"
http://www.bloomberg.com/apps/news?p...d=aAWq9TJFal8k

Thats a propper post

Good post billflet. Well outlined.

I am wondering how the SNB is going to react to this:

how the snb reacts is of little importance, the real question is how are you going to react?

You are right my friend. I reacted well on my demo account:

Did anybody else trade this setup ?

Again to 1.5