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Cable Update (GBPUSD)

  • #306,581
  • Apr 5, 2012 6:58pm Apr 5, 2012 6:58pm
  •  eggs
  • | Joined Nov 2011 | Status: Everybodys A Central Banker Here... | 819 Posts
Quoting bguguen
BTW thanks for the vouch, and im glad you appreciate the whole theory on QE money on US treasury bonds
i've been trying my best to emphasize how important it is whenever Bernanke speaks... but i guess we see that now...
Its very hard to prove that he is or isnt lying... you can only grab hints here and there just like you are trying to figure out whether a poker player is bluffing or not...
i cant give you a definite answer that Ben was lying but one would beg to wonder why Ben was hawkish for 2 months turned dovish 2 weeks ago then so hawkish in...
Please correct me if I'm wrong, but if Bernanke conveyed QE3 would not be necessary this would in fact reduce the supply of fixed income securities. If demand remained the same with less supply we would expect to see a rise in the value of the dollar.... right??
  • #306,582
  • Apr 5, 2012 7:45pm Apr 5, 2012 7:45pm
Quoting eggs
Please correct me if I'm wrong, but if Bernanke conveyed QE3 would not be necessary this would in fact reduce the supply of fixed income securities. If demand remained the same with less supply we would expect to see a rise in the value of the dollar.... right??
Okay i hope this helps explain... first of all when bernanke conveyed QE3 is off the table... it doesnt mean the supply of money falls...
what drives the value of the dollar up has all to do with the Demand for the Dollar....
Say for an example... theres shitty news coming out of Europe... what people would to is to find safehavens like gold and other commodities to store their money (problem with value of gold not rising in value is because Europans are selling them to stay out of debt like the Brits did...)
Now because to buy commodities like gold, oil etc are Mostly bought with the use of USD... so if europe wants to run to commodity they are going to buy up USD to buy these commodities... make sense??
Now on the other hand... if US comes up with good news about their economy, people abroad would be interested to invest in US, mostly buying US Stocks now to buy US stocks you need to buy US dollar to do that... hence another reason why US Dollar Demand would go up...
Both scenario applies to this chart right here...
With the increase in the demand for US Dollar, Demand Shifts form D1 to D2 while Supply stays constant... Quantity demanded increases from Q1 to Q2 while Price or Value of the USD in this case also increases from P1 to P2
Attached Image (click to enlarge)
Click to Enlarge Name: USD.jpg Size: 65 KB


Now this is not the whole story... to explain further about US treasury bonds.. we need to understand the mechanism here...
US treasury bonds are often bought as a Risk-off mechanism to avoid losing money by putting the money with Government of which the government promises to pay you back over a period of time witha bit of interest...
Now if the World economy starts looking good... people would want to take out the money invested in those US bonds to invest in somewhere else with a higher return/gain... now when they take out money invested in bonds it translates to a Demand in the US Dollar... and a Increase in Treasury Bond Yields... or the Fall in the value of these Bonds...
If we're clear on that here comes the QE3 theory... Knowing that Ben Bernanke and Fed printed money in QE2 to invest in these Treasury Bonds, like any investors you wouldnt want the investment to lose value.. specially when its leveraged (printed money is somewhat leveraged, leveraged to the US people pays for it either by working much harder for less pay or etc) Sooo by threatening to Deploy QE3 which increases the Supply of US Dollar into the economy you can see that the value of the dollar drops if demand stays constant, this would put people off from drawing their money out of their bonds investments... keeping feds happy...
this theory comes with this chart to explain
As you can see below the increase in supply/QE3 would push the supply of the Dollar from S1 to S2, with Demand leaving constant... Quantity increases from Q1 to Q2 but Price/Value of USD in this case Falls...
Attached Image (click to enlarge)
Click to Enlarge Name: USD1.jpg Size: 66 KB


Keys: D= Demand, S=Supply, P= Price and Q= Quantity..

Hope its clear for you my friend and to all who pays attention to read this
We live in a finite world with infinite possibilities.
FxTyrant M-Series (Live - Darwinex) All Time Return: 0.7%
  • #306,583
  • Apr 5, 2012 7:50pm Apr 5, 2012 7:50pm
Quoting bguguen
okay i hope this helps explain... First of all when bernanke conveyed qe3 is off the table... It doesnt mean the supply of money falls...
What drives the value of the dollar up has all to do with the demand for the dollar....
Say for an example... Theres shitty news coming out of europe... What people would to is to find safehavens like gold and other commodities to store their money (problem with value of gold not rising in value is because europans are selling them to stay out of debt like the brits did...)
now because to buy commodities like...
Now you know why people like me just call them "Money Changers" or "BS"ers" "Con-Men" If the opposite of Pro is Con then the opposite of Progress is Congress! Thank you!
  • #306,584
  • Apr 5, 2012 7:59pm Apr 5, 2012 7:59pm
Quoting Allseeingeye
Now you know why people like me just call them "Money Changers" or "BS"ers" "Con-Men" If the opposite of Pro is Con then the opposite of Progress is Congress! Thank you!
well im glad you too find Ben bernanke a clown controlled by the pretty unobvious culprit of the US Fed Board of Directors... im not even gona dare people to bet on me but im 99.9% sure Fed and banks like SNB, ECB, BoE and investment institutes like Goldman Sachs, JP Morgan.... are in cahoots with each other to moved the markets up and down...
Hell i wouldnt even be surprised if one of the board of directors in the Fed used to be a guy working for Goldman or wtever... im telling you the sooner you realize Forex is a game of Scam Artist and Big Boy manipulators, the more you will make by understanding the Game they are playing with each others...
We live in a finite world with infinite possibilities.
FxTyrant M-Series (Live - Darwinex) All Time Return: 0.7%
  • #306,585
  • Apr 5, 2012 9:44pm Apr 5, 2012 9:44pm
  •  eggs
  • | Joined Nov 2011 | Status: Everybodys A Central Banker Here... | 819 Posts
Quoting bguguen
.

Hope its clear for you my friend and to all who pays attention to read this

Thanks for the quality explanation. I've read it a couple of times now for clarification. I have a question or two but should hit the bed instead maybe I'll holler back at you later.

Cheers.
  • #306,586
  • Apr 5, 2012 9:54pm Apr 5, 2012 9:54pm
morning guys.. seems like my long position yesterday turning green already..
  • #306,587
  • Apr 5, 2012 9:54pm Apr 5, 2012 9:54pm
Quoting bguguen
Okay i hope this helps explain... first of all when bernanke conveyed QE3 is off the table... it doesnt mean the supply of money falls...
what drives the value of the dollar up has all to do with the Demand for the Dollar....
Say for an example... theres shitty news coming out of Europe... what people would to is to find safehavens like gold and other commodities to store their money (problem with value of gold not rising in value is because Europans are selling them to stay out of debt like the Brits did...)
Now because to buy commodities like...


a university student's elaboration..just like the old days of mine
I trade to live
  • #306,588
  • Apr 5, 2012 9:57pm Apr 5, 2012 9:57pm
Quoting A-speculator
morning guys.. seems like my long position yesterday turning green already..


morning salam 1malaysia
I trade to live
  • #306,589
  • Apr 5, 2012 9:58pm Apr 5, 2012 9:58pm
where's navin? i need his support to push this price up, higher up..
  • #306,590
  • Apr 5, 2012 10:00pm Apr 5, 2012 10:00pm
Quoting A-speculator
morning guys.. seems like my long position yesterday turning green already..
what is your target for long?
I'm still holding short since yesterday
  • #306,591
  • Apr 5, 2012 10:02pm Apr 5, 2012 10:02pm
this is what i see..

actually the low yesterday was at about the asc trendline in daily and that is where the 61 fibo is.. as long as those 2 support hold, i'm betting against it.. the 161 fibo is where i think the max for the run up will be..
Attached Image(s) (click to enlarge)
Click to Enlarge Name: cable.gif Size: 37 KB
Click to Enlarge Name: cable1.gif Size: 37 KB
  • #306,592
  • Apr 5, 2012 10:04pm Apr 5, 2012 10:04pm
Quoting Nisda_
what is your target for long?
I'm still holding short since yesterday
as far as it goes actually.. until i see exhaustion pattern in 4h.. the max target is shown in my other post above, i think..

don't take that price as it will gets there.. it's just a target tho.. not necessarily gets there.. i will close this position if i see exhaustion pattern in 4h without hesitation..
  • #306,593
  • Apr 5, 2012 10:06pm Apr 5, 2012 10:06pm
  •  eggs
  • | Joined Nov 2011 | Status: Everybodys A Central Banker Here... | 819 Posts
Quoting eggs
Now because to buy commodities like gold, oil etc are Mostly bought with the use of USD... so if europe wants to run to commodity they are going to buy up USD to buy these commodities... make sense??
Maybe you could clear this part up for me. It may be a stupid question but why are commodities like gold & oil bought mostly with the US Dollar? I realize the USD is the most widely recognized & transacted form of currency, but I would think large European institutional $$ would be able to buy whatever they liked with Euros?? no?

Also. Given the sharp sell off this week following Bernanke's message. What would you say was the PRIMARY contributing factor to the sharp demand for US dollar?
  • #306,594
  • Apr 5, 2012 10:12pm Apr 5, 2012 10:12pm
A lot of traders, especially new ones, put a lot of trust in indicators thinking that prices would go and go directly to where the indicators say they should. A lot of traders believe that indicators can forecast the limits of behaviour. Traders believe that indicators can tell them what is reasonable or what is predictable based on the past.

The market as a whole is not reasonable; prices are set by traders, traders are impressionable and imitative, they are herd animals and follow the crowd either up or down, identifying the direction of the crowd is key; follow the dust trail, the noise of the stampede.

Prices and spreads vary they are not an arithmatic concept and fluctuate based on the societies they represent, Euro, USD, JPY etc.

Uncertainty is an indefinite condition, it does not follow indicators, it cannot be calculated.

A good dose of self doubt and perspective needs to check the indicators and what it is telling us before a trade is placed.

Even when traders get things right, prices cannot be expected to oscillate with precision of Elliott Waves or follow fib or trend lines precisely.

Today's prices cannot be inferred by yesterday's trend and data alone; trading should be a "whole" concept where all information is taken in by us the traders and a decision is made based on our interpretation of data.

A good trader is intuitive, using technical data, fundamentals and his "gut", his experience to enter and exit a trade succesfully.

Keep it simple, a few indicators that work for you (knowing their limitations) a TF and pair that you are comfortable with and have studied, one eye on bloomberg/yahoo/cnbc/bbc/ft/wsj, a good understanding of Price Action, risk vs reward, money management, lot sizing, support and resistance, trend lines, and off you go.
I trade to live
  • #306,595
  • Apr 5, 2012 10:17pm Apr 5, 2012 10:17pm
Quoting UbuFamily
A lot of traders, especially new ones, put a lot of trust in indicators thinking that prices would go and go directly to where the indicators say they should. A lot of traders believe that indicators can forecast the limits of behaviour. Traders believe that indicators can tell them what is reasonable or what is predictable based on the past.

The market as a whole is not reasonable; prices are set by traders, traders are impressionable and imitative, they are herd animals and follow the crowd either up or down, identifying the direction of the...
i believe there's still order in chaos mate.. you just have to find it.. anything must have order, even if it seems so chaotic..

the key to find the order will take you years of searching and hard work.. just my humble opinion..
  • #306,596
  • Apr 5, 2012 10:31pm Apr 5, 2012 10:31pm
Quoting UbuFamily


a university student's elaboration..just like the old days of mine
youd be amazed how easy forex can be when you manage to understand what the big boys are thinking and to not over complicate trading with numerous indicators...
one of the indicators i think though it works but take soo much effort and always confuses me a lot is the Ichimoku...
We live in a finite world with infinite possibilities.
FxTyrant M-Series (Live - Darwinex) All Time Return: 0.7%
  • #306,597
  • Edited 10:35pm Apr 5, 2012 10:32pm | Edited 10:35pm
Quoting abdul_halim
TP hits..

longg..
already lock +1
update..
TP - around upper BB period 24
Attached Image (click to enlarge)
Click to Enlarge Name: ttp.gif Size: 47 KB
  • #306,598
  • Apr 5, 2012 10:32pm Apr 5, 2012 10:32pm
  •  eggs
  • | Joined Nov 2011 | Status: Everybodys A Central Banker Here... | 819 Posts
I read an article last week that suggested a trader should expect to invest 10,000 Hours of screen time analyzing charts before expecting these intuitions to develop.
  • #306,599
  • Apr 5, 2012 10:35pm Apr 5, 2012 10:35pm
Quoting A-speculator
as far as it goes actually.. until i see exhaustion pattern in 4h.. the max target is shown in my other post above, i think..

don't take that price as it will gets there.. it's just a target tho.. not necessarily gets there.. i will close this position if i see exhaustion pattern in 4h without hesitation..
I'm might be wrong, H4 looks exhausted to move lower but overall daily still look bearish to me. I'll wait till europe open
  • #306,600
  • Apr 5, 2012 10:37pm Apr 5, 2012 10:37pm
Quoting Nisda_
I'm might be wrong, H4 looks exhausted to move lower but overall daily still look bearish to me. I'll wait till europe open
how can you say h4 is exhaused? can you please show me with your chart..
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