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Cable Update (GBPUSD)

  • #306,601
  • Apr 5, 2012 10:39pm Apr 5, 2012 10:39pm
Quoting eggs
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?
Talking about Gold... it'll be hard for you to believe but gold futures around the world could only be bought with USD... its a given... Gold is only traded in USD... now you may see exchange rate like XAU/EUR which is the gold price in Euro... when the fact is XAU/EUR is the denomination of XAU/USD (gold price in US) x EUR/USD (the exchange rate of between EUROtoUS) to arrive with the exchange rate of XAU/EUR...

GOld has and always been the USD reserve currency's dominion when it comes to purchasing it, you need to buy USD first...
i never researched into it but maybe the gold mint/gold auction is in US

However... dont be surprised because lately a lot of criticism on this is Why only the USD gets to link it with gold... why not others... Well guess what General Ghadafi was one of the people who proposed a new currency linked with gold just so they could avoid US monopoly on Gold, and look what happened to him... the US took him out because US knows if US aint the monopoly on Gold then their economy will be threatened big time....

I know i know ur gona say "but general ghadafi died because of his massacres in libya"
i can tell you you are right... but thats not the only reason why US went against him... i mean... Ghadafi has been killing god knows how many people before the revolution already and US didnt care... arent you curious as to why he became the focus all of a sudden... well a lot of people dont know but its because of that plan i just talked to you about...
You wont see a lot of that in US media though... US media is covering up this story of him creating new currency linked to gold...
We live in a finite world with infinite possibilities.
FxTyrant M-Series (Live - Darwinex) All Time Return: 0.7%
  • #306,602
  • Apr 5, 2012 10:41pm Apr 5, 2012 10:41pm
Quoting eggs
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.
well ive been trading since 14... interest started when i saw dad playing on demo and ever since ive been reading and ive even got a mentor in New Jersey teaching me this stuff... hes a full time forex trader just so you know...
We live in a finite world with infinite possibilities.
FxTyrant M-Series (Live - Darwinex) All Time Return: 0.7%
  • #306,603
  • Apr 5, 2012 10:42pm Apr 5, 2012 10:42pm
Quoting A-speculator
how can you say h4 is exhaused? can you please show me with your chart..
sorry I don't know how to copy the chart, ajumma style of trading. i'm using simple indicator stoch, volume and trendline.
  • #306,604
  • Apr 5, 2012 10:45pm Apr 5, 2012 10:45pm
Quoting A-speculator
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..
dont try and find order in chaos... the trial can often lead to people going insane ....
same theory goes with dont trade on technicals alone because when market moves with fundamental, fundamental may dominate the market before technicals could make any sense by then you would've blown the account if you are risking at high lots...
We live in a finite world with infinite possibilities.
FxTyrant M-Series (Live - Darwinex) All Time Return: 0.7%
  • #306,605
  • Apr 5, 2012 10:49pm Apr 5, 2012 10:49pm
Quoting bguguen
dont try and find order in chaos... the trial can often lead to people going insane ....
same theory goes with dont trade on technicals alone because when market moves with fundamental, fundamental may dominate the market before technicals could make any sense by then you would've blown the account if you are risking at high lots...
imho, yes fundamental is a crucial part in investing but you cannot use fundamental solely in trading, in trading the most important is technical analysis and market timing skills..
  • #306,606
  • Apr 5, 2012 10:56pm Apr 5, 2012 10:56pm
BTW to answer egg's question

i think i know why Gold is based on USD....
it is as simple as US being the #1 largest Gold Bullion holder around the world... with 2nd place being Germany however... US holds 2.36 times more than Germany in Gold Bullions...
Probably the reason why...

or maybe there might be a treaty involved in the creation of IMF... that the world would agree on setting the price standard of Gold to be linked with the USD...

just couple of searches online to find these theories...

someone can correct me on this though... id also be interested to know why the US is such a monopoly in gold prices...
We live in a finite world with infinite possibilities.
FxTyrant M-Series (Live - Darwinex) All Time Return: 0.7%
  • #306,607
  • Apr 5, 2012 11:28pm Apr 5, 2012 11:28pm
  •  eggs
  • | Joined Nov 2011 | Status: Everybodys A Central Banker Here... | 819 Posts
Quoting bguguen
BTW to answer egg's question

i think i know why Gold is based on USD....
it is as simple as US being the #1 largest Gold Bullion holder around the world... with 2nd place being Germany however... US holds 2.36 times more than Germany in Gold Bullions...
Probably the reason why...
So this week Gold tanked as well. And assuming all spot gold is transacted in USD the the following should be true:

selling pressure pushes the price of gold down. If the market is a 0 sum game then for every sell there has to be a buyer. These buyers will need USD increasing the demand for the dollar. Inversely. If the price of Gold goes up. Buyers are coming into the market. 0 sum -- so there must be traders willing to sell to the buyers the buyers will ALSO need USD to transact gold increasing the demand for the USD.

If the above is true. What am I missing? Gold goes up = USD demand. Gold sells off = USD demand.

  • #306,608
  • Apr 5, 2012 11:41pm Apr 5, 2012 11:41pm
Quoting bguguen
dont try and find order in chaos... the trial can often lead to people going insane ....
same theory goes with dont trade on technicals alone because when market moves with fundamental, fundamental may dominate the market before technicals could make any sense by then you would've blown the account if you are risking at high lots...
I feel it depends on your trading style. To say don't trade on technicals alone sounds like coming from a trader with a strong fundamental education? We will often see only what we focus on, there is always another picture we often miss. If you trade on pure technicals and commit to one direction only regardless of fundies, I agree you can be easily #%^*ed, but day traders will often not give a toss about fundies and go with the flow. Scalpers?, well wtf do they care of fundies. In short, there are many ways to skin a forex cat
Come with me if you want to live....
  • #306,609
  • Apr 5, 2012 11:48pm Apr 5, 2012 11:48pm
Quoting eggs
So this week Gold tanked as well. And assuming all spot gold is transacted in USD the the following should be true:

selling pressure pushes the price of gold down. If the market is a 0 sum game then for every sell there has to be a buyer. These buyers will need USD increasing the demand for the dollar. Inversely. If the price of Gold goes up. Buyers are coming into the market. 0 sum -- so there must be traders willing to sell to the buyers the buyers will ALSO need USD to transact gold increasing the demand for the USD.

If the above...
You are missing something... the transaction from USD to Gold that pushes XAU/USD up is a sign of USD transfering its Demand towards gold...

So heres the scenario...
Say if a european wants to buy gold...

whats happens is

Euro > turns to USD > Turns to Gold...

Dollar appreciates as demand comes from EURO... but depreciates when USD buys Gold...
You are right in a sense that there is Demand for USD when Gold Goes up but only applys to Step 2... as soon as Step 3 happens that USD Demands is Translated to a Demand for Gold... So Gold is the one that gets the strength
We live in a finite world with infinite possibilities.
FxTyrant M-Series (Live - Darwinex) All Time Return: 0.7%
  • #306,610
  • Apr 5, 2012 11:52pm Apr 5, 2012 11:52pm
Quoting bguguen
dont try and find order in chaos... the trial can often lead to people going insane ....
same theory goes with dont trade on technicals alone because when market moves with fundamental, fundamental may dominate the market before technicals could make any sense by then you would've blown the account if you are risking at high lots...
By the way, your recent posts on supply/demand/other stuff was very helpful , the S/D stuff is quite clear and obvious but the rest was an eye opener. If you look at TL's on a 4hr and daily chart, I think you will find market timing very useful, there is absolutely nothing chaotic about that system at all. It is another approach widely used. Just saying that's all.
Come with me if you want to live....
  • #306,611
  • Apr 5, 2012 11:53pm Apr 5, 2012 11:53pm
Quoting Ill-b-back
By the way, your recent posts on supply/demand/other stuff was very helpful , the S/D stuff is quite clear and obvious but the rest was an eye opener. If you look at TL's on a 4hr and daily chart, I think you will find market timing very useful, there is absolutely nothing chaotic about that system at all. It is another approach widely used. Just saying that's all.
Particularly with GU and EU pairs from what I see although I only trade GU.
Come with me if you want to live....
  • #306,612
  • Edited Apr 6, 2012 12:04am Apr 5, 2012 11:53pm | Edited Apr 6, 2012 12:04am
Quoting Ill-b-back
I feel it depends on your trading style. To say don't trade on technicals alone sounds like coming from a trader with a strong fundamental education? We will often see only what we focus on, there is always another picture we often miss. If you trade on pure technicals and commit to one direction only regardless of fundies, I agree you can be easily #%^*ed, but day traders will often not give a toss about fundies and go with the flow. Scalpers?, well wtf do they care of fundies. In short, there are many ways to skin a forex cat
You are very correct intraday traders and Scalpers can also make lots of money specially on thin markets, as soon as news approaches you will see Scalpers resist trading...

and i do admit different people suit different trading style... ive never tried to criticise about Scalpers....
i just criticise on people who arent scalping who trades on Techs alone... because as soon as you start trading in H1 time frames you got to start getting fundies involved in it as some news events come in at weird times like 9:15 and stuff

But you are right... Both Scalpers and Day Traders/long term traders me and many others here would do fine...
difference is Scalpers, Lower TF, more trades per day, Less regards to news.
Scalpers dont really care much bout news when market can move up and down 20 pips ina 5 minute time frame...
We live in a finite world with infinite possibilities.
FxTyrant M-Series (Live - Darwinex) All Time Return: 0.7%
  • #306,613
  • Apr 6, 2012 12:04am Apr 6, 2012 12:04am
Quoting Ill-b-back
By the way, your recent posts on supply/demand/other stuff was very helpful , the S/D stuff is quite clear and obvious but the rest was an eye opener. If you look at TL's on a 4hr and daily chart, I think you will find market timing very useful, there is absolutely nothing chaotic about that system at all. It is another approach widely used. Just saying that's all.
by the way Glad you found my post interesting on the Demand and supply of the dollar with fundamentals involved...
though my recent post to eggs on the demand and supply for US Dollar is just to help him understand a bit of the economics behind... he was saying something about how Ben saying QE3 is off the table would decrease the money supply when its not the case...

wasnt in my intention to link it so deep into a particular pair liek GBPUSD or EURUSD though... just talking about the Demand and supply for the dollar with no specific levels though...
We live in a finite world with infinite possibilities.
FxTyrant M-Series (Live - Darwinex) All Time Return: 0.7%
  • #306,614
  • Apr 6, 2012 12:10am Apr 6, 2012 12:10am
Quoting bguguen
You are very correct intraday traders and Scalpers can also make lots of money specially on thin markets, as soon as news approaches you will see Scalpers resist trading...

and i do admit different people suit different trading style... ive never tried to criticise about Scalpers....
i just criticise on people who arent scalping who trades on Techs alone... because as soon as you start trading in H1 time frames you got to start getting fundies involved in it as some news events come in at weird times like 9:15 and stuff

But you are right......
Yep, totally agree on the 1hr TF stuff and I don't see many traders here referring to it regularly, too choppy and uncertain. 4hr is very common practice and daily etc.
Come with me if you want to live....
  • #306,615
  • Apr 6, 2012 12:14am Apr 6, 2012 12:14am
Quoting Ill-b-back
Yep, totally agree on the 1hr TF stuff and I don't see many traders here referring to it regularly, too choppy and uncertain. 4hr is very common practice and daily etc.
4hr and daily needs some serious fundy considerations involved with techs...
Fundy should define your idea of the direction it should be going and using techs to trigger and pinpoint your entry is the best mix of fundy and tech working in harmony...

as soon as fundy and techs are not in harmony when fundy says Down and Tech says Up... you should instantly have the idea that Big Boys are in play, and the market is manipulated
thats why im wasnt fancy on navin longing.... techs were there no doubt bout it since hes very good at techs... but fundies just wasnt there... in fact fundies wasnt there when GBPUSD rallied from 5500 to start with...
We live in a finite world with infinite possibilities.
FxTyrant M-Series (Live - Darwinex) All Time Return: 0.7%
  • #306,616
  • Apr 6, 2012 12:24am Apr 6, 2012 12:24am
Okay felllas a bit of an update here.. and this is what im seeing...
Break above for possible retracement??
or break below for possible bear continuation?
Personally still thinking break downwards... since MACD is still in a bearish not... but then i could be wrong...
Attached Image (click to enlarge)
Click to Enlarge Name: gbpusdh4.gif Size: 18 KB
We live in a finite world with infinite possibilities.
FxTyrant M-Series (Live - Darwinex) All Time Return: 0.7%
  • #306,617
  • Apr 6, 2012 12:29am Apr 6, 2012 12:29am
Quoting bguguen
4hr and daily needs some serious fundy considerations involved with techs...
Fundy should define your idea of the direction it should be going and using techs to trigger and pinpoint your entry is the best mix of fundy and tech working in harmony...

as soon as fundy and techs are not in harmony when fundy says Down and Tech says Up... you should instantly have the idea that Big Boys are in play, and the market is manipulated
thats why im wasnt fancy on navin longing.... techs were there no doubt bout it since hes very good at techs... but fundies...
NAVs is based on a 16 month chart, that is some serious high TF, he scalp the daily and weekly
Come with me if you want to live....
  • #306,618
  • Apr 6, 2012 12:35am Apr 6, 2012 12:35am
tell me something bro,those candles that come out at the beginning of your trendline,exists or not?isn't it better to count them as well and waiting for price to touch that first,I mean like this
Attached Image (click to enlarge)
Click to Enlarge Name: 2nd.png Size: 22 KB
  • #306,619
  • Apr 6, 2012 12:38am Apr 6, 2012 12:38am
Quoting bguguen
Okay felllas a bit of an update here.. and this is what im seeing...
Break above for possible retracement??
or break below for possible bear continuation?
Personally still thinking break downwards... since MACD is still in a bearish not... but then i could be wrong...
hello，bguguen，the same down trend line，but it has broken on my chart .i am waiting for the 1.5890. but who knows .

good luck .
Attached Image (click to enlarge)
Click to Enlarge Name: GU.jpg Size: 84 KB
A chart helps those who can read it.
  • #306,620
  • Apr 6, 2012 12:42am Apr 6, 2012 12:42am
Quoting geniusztc
hello，bguguen，the same down trend line，but it has broken on my chart .i am waiting for the 1.5890. but who knows .

good luck .
No not quite the same... i took the High where a couple candles back form the one you drawn the trendline from... i know it sounds stupid but on the daily i only looks as though its a attempted break of the trendline but it closes below it... in fact Draw the trendline on the daily chart and you'll know what i mean...
my trendline started from 1.6059 while yours is at 1.6037 or something...
We live in a finite world with infinite possibilities.
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