DislikedI see trends a bit different than most.. see both charts below this post.. notice as IRD converges and diverges look at how price trends and responds.. look how price is trapped by steady rates.. notice how raises lead to raises until it plateaus and price shrinks as it converges until it plateaus .. price cycling and risk aversion and risk app.. cycling with the rates..Ignored
So, did you mean :
IRD affects the way the pair moves. Increasing IRD leads to the price moving up and decreasing leads to the price moving down..both time the movement is till the fair value (academically speaking) has been reached. Now IRD in itself moves with the macro-economic factors inflation etc.
Price cycles, interest rate cycles but risk app / aversion cycle too? I am skeptical about it...though this picture looks perfect for IRD ..isn't it true that in case of risk app we will have the market taking up carry trades and in risk aversion it is dumped like hot potatoes ?
What I mean is say there is an impending gap in AUD/CAD rates causing a rally...wouldn't a scenario like Dubai crisis cause a selling even with the IRD still intact ? Or a sudden ban by Chinese on imports ?
QuoteDislikedwhen the pairs dropped to 8800 so funds stayed the same we were dropping...
I analyzed the chart once again ...if we were to follow ...HL, HH, HL and break of previous HH to buy we would have been safe..but with one trade at around 9400...the next one coming at 89/90
Still not getting the point about Price was not in sync till the red line..though as it is explained in terms of the prop psych terms..so we can skip that.
Also, you were looking at pair reaching parity, why was that??
And why were you looking at EU for long? Isn't the IRD too close to take the trade?
Lastly, the diff between EU and A/C was the fact that , you look for a uptrend to be forming near the red line which happened in A/C but not EU. But then what is the max price movement you would still hold the trade? Like say the real uptrend happens 200-400 pips away from the yellow line, does it still count??
QuoteDislikedits reconsider a buy re look at fundamentals line... best example of this is the EURO.. when the EURO dropped under 40... this psych zone was broken and breaking the psych zone without a buy being triggered is a big NO sign re-evaluate the EURO and im not gonna lie I was bullish on the euro around that time.. I didnt have a trade active but i was looking to buy into that drop... but I saw the EURO bust through that zone with force.. and I had to take another look.. and then I believe around 34 we went short to 1.21 youll have to look back in this...
QuoteDislikedthere is no trade open yet price has to move up through these zones.. there are buy zones we dont buy as its dropping thats my biggest thing..
if you look at this thread youll see how I see two different types of support too
here
http://www.forexfactory.com/showpost...0&postcount=10
here
http://www.forexfactory.com/showpost...5&postcount=12
here
http://www.forexfactory.com/showpost...2&postcount=17
in post 17 im just talking about how they are built.. the psych zones and how the...
Well, would love to read the book on how big banks fade the move....but wasn't LTCM the hedge fund gone under cause of the Russian rouble trouble ? Dint find any specific trader names though.
One question about the supply and demand zones....a break on the HH will act as a demand zone (for AUD in case of A/C) and LL break as supply (for AUD and demand for CAD). Is that not??
QuoteDislikedprice drops unto these zones... for example falls into this audcad trade its an inside capitulation outside accumulation style psychological trade.. once in the zone we watch the support zones and make the buys on the break.. and sync with fundies.. these are usually very powerful and lead to outside wave patterns and V shaped reversals. we buy on breaks always.. nothing is hindsight traded.
Inside capitulation....Outside accumulation ...what are those? It took me 3 reads to break that one down
V-shaped recovery...well that is one from the economy journals. from what I understand you have done your MBA (or finance ? ) from Penn state....I plan to do my post-grad in finance/economy but currently broke Don't want to take out costly loans and with only 25 ..age is also on my side ..hopefully fx will pave the way.
QuoteDislikedhope all this sits well.. if I didnt explain well or there is questions just rephrase and ask again its not being a pain...
Thanks for patiently answering all my doubts.
PS: The interest rate table shows RBA rates lower...isn't that near 4 % ??