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Geppy's Geppy Thread (GBP/JPY)

  • #15,941
  • Nov 11, 2014 1:43pm Nov 11, 2014 1:43pm
Ok lets leave it like this and all this crazy pairs PA)
  • #15,942
  • Nov 11, 2014 2:01pm Nov 11, 2014 2:01pm
Quoting stewrigh
Don't understand anyone looking for shorts on this pair - look to the left there is nothing SR wise til abt 88 and we just had a huge outside day - yeah it might turn on tje BRN but it just as likely will blast thru it - Now I said that watch it tank LOL.
IŽd like to answer this post if I may.

The reason I want to short here are the institutionals, for one simple reason: liquidity.

I mean we all know X/JPY are heading north because of fundamentals (QE), the retail may buy it high but the institutionals rather die than chasing price.

They just buy when 2 criterias are given:

1. When a new low is printed
2. When this low attract massive sellers

They pick up this liquidity to fill their own orders because they cant go market because of their volume, this typically happens at daily highs/lows.

Logically they do this also when they take profit, they cant just close their position when they feel like. They need liquidity. Actually we are in this area where they are likely to take profit, lets say the recent highs. This procedure never change simply because they cant change it. They need liquidity to open and liquidate positions. Its take out the highs and the lows. Typically retails push the market to highs and lows and institutionals pick them up, 99% of the time.
  • #15,943
  • Nov 11, 2014 2:09pm Nov 11, 2014 2:09pm
Quoting FX-Ray
{quote} IŽd like to answer this post if I may. The reason I want to short here are the institutionals, for one simple reason: liquidity. I mean we all know X/JPY are heading north because of fundamentals (QE), the retail may buy it high but the institutionals rather die than chasing price. They just buy when 2 criterias are given: 1. When a new low is printed 2. When this low attract massive sellers They pick up this liquidity to fill their own orders because they cant go market because of their volume, this typically happens at daily highs/lows....
I agree that's how it works, but the question I have in this scenario is 'why would an institutional want to sell when JPY and EU are clearly racing to the bottom, why wouldn't they just hold?' Am I missing something?
  • #15,944
  • Edited 2:21pm Nov 11, 2014 2:15pm | Edited 2:21pm
Quoting hollowhead
{quote} I agree that's how it works, but the question I have in this scenario is 'why would an institutional want to sell when JPY and EU are clearly racing to the bottom, why wouldn't they just hold?' Am I missing something?
Most of the times they buy below the low and above the high.

They carry more risks than an average trader, taking profit reduces their risks instantly and give them more margin in case they are wrong if they sell higher when opportunity is given.


Add:
Lets say youŽre an institutional and youŽre long GBP/JPY @ 176.00 for 2000Lots. Taking profits for 1000Lots now or above the high, just to wait for an entry at lets say 180.00 again.

1. Still long
2. Partial-risk taken out
3. Profit taken
4. Margin for re-entry

This is perfect risk-diversification.
  • #15,945
  • Nov 11, 2014 2:30pm Nov 11, 2014 2:30pm
Quoting FX-Ray
{quote} Most of the times they buy below the low and above the high. They carry more risks than an average trader, taking profit reduces their risks instantly and give them more margin in case they are wrong if they sell higher when opportunity is given. Add: Lets say youŽre an institutional and youŽre long GBP/JPY @ 176.00 for 2000Lots. Taking profits for 1000Lots now or above the high, just to wait for an entry at lets say 180.00 again. 1. Still long 2. Partial-risk taken out 3. Profit taken 4. Margin for re-entry This is perfect risk-diversification....
Technically, one of the reason why I felt comforable to buy at 168.00 while nobody paid attention to go long. The best trades are the hard ones.
Attached Image (click to enlarge)
Click to Enlarge Name: inst.png Size: 66 KB
  • #15,946
  • Nov 11, 2014 2:31pm Nov 11, 2014 2:31pm
Quoting FX-Ray
{quote} Most of the times they buy below the low and above the high. They carry more risks than an average trader, taking profit reduces their risks instantly and give them more margin in case they are wrong if they sell higher when opportunity is given. Add: Lets say youŽre an institutional and youŽre long GBP/JPY @ 176.00 for 2000Lots. Taking profits for 1000Lots now or above the high, just to wait for an entry at lets say 180.00 again. 1. Still long 2. Partial-risk taken out 3. Profit taken 4. Margin for re-entry This is perfect risk-diversification....
Ok - thanks. The other thing that doesn't sit well with me is this. It's often said that retail traders are only a fraction of the market, if that's true, how do we actually provide liquidity?
  • #15,947
  • Nov 11, 2014 2:35pm Nov 11, 2014 2:35pm
Quoting hollowhead
{quote} Ok - thanks. The other thing that doesn't sit well with me is this. It's often said that retail traders are only a fraction of the market, if that's true, how do we actually provide liquidity?
Considerable fraction imho.
  • #15,948
  • Nov 11, 2014 2:41pm Nov 11, 2014 2:41pm
Quoting FX-Ray
{quote} Considerable fraction imho.
I guess obviously enough. Thanks for the insights.
  • #15,949
  • Nov 11, 2014 2:42pm Nov 11, 2014 2:42pm
Quoting FX-Ray
{quote} Considerable fraction imho.
I agree. Not to mention all the retail "in and out" indecision that also creates liquidity. I mean, how many millions of retail traders are there? Hard for me to believe we all have little to no effect. I've always thought we "fill in the gaps" for the bigger guns. Just my 2 cents.

Great page of info here.
Ghost Rider - WWTBMD?
  • #15,950
  • Nov 11, 2014 2:48pm Nov 11, 2014 2:48pm
FX-Ray, thanks for posting

I definitely respect your experience, and view.

Your comments made me take a second look at my own view of what GBPJPY is doing now. And I noticed something I hadn't noticed before.

The decisive moves shown on M5 chart are all bearish (high-lighted by arrows on posted chart). The amazing thing is that, in spite of this, price is still on the rise. Of course, one more slam by the bears would probably be the knock-out punch. Will be watching closely to see if the bears slam it again...

Edit: There was one bullish response after the 2nd arrow from the left, but still 2 out 3 decisive moves bearish..
Attached Image (click to enlarge)
Click to Enlarge Name: GBPJPYM5.png Size: 68 KB
  • #15,951
  • Nov 11, 2014 3:01pm Nov 11, 2014 3:01pm
However... I'm still seeing the bulls winning in spite of the "bear slams". Obviously, in consolidation, and it could go back and forth for a while, or bears could slam it again, and that's that...

But, I compare today with 11/5 it was obvious the bears were going to drive the price down. But today, it doesn't seem quite obvious yet to me. Of course, I could be wrong, and will change my view if/when I see the price change direction...

But, of course, I recognize those bear-slams can't be ignored, and it has made me a little more weary and ready to change directions...
  • #15,952
  • Nov 11, 2014 3:38pm Nov 11, 2014 3:38pm
Quoting benaiah
{quote} If you DO decide that longer term is the way you want to trade, and primarily trade D1 time frame, I believe a break out of inside bar is the best kind of trade to take. So, if this price does break out (i.e. a NY daily close above 184.3) then I'd agree it's a good trade. But the SL would need to be below the open price of the mother bar, in my opinion... But if the SL is too big (as you seemed to allude to in your post), then the only choice I'd think you'd have is smaller SL on smaller time frames. If the break out occurs, then you have...
Hi Geppy man, thanks. Yes, you understood the problem of putting the SL under the last daily low. only other possibility would be to take the stop to BE as soon as poosible but that will produce a ton of S/O BE as well. Would you mind sharing a chart on that H1/H4 breakout trade you have described for better illustration?
Fix up, trade sharp ...
  • #15,953
  • Nov 11, 2014 3:43pm Nov 11, 2014 3:43pm
Quoting Hickson
{quote} Hi Geppy man, thanks. Yes, you understood the problem of putting the SL under the last daily low. only other possibility would be to take the stop to BE as soon as poosible but that will produce a ton of S/O BE as well. Would you mind sharing a chart on that H1/H4 breakout trade you have described for better illustration?
Sure...

Let me know if any questions. I've attached the chart, drawn a line at support, and arrow at my entry point.

So, SL below the tail of that H1 pin, which rejected support...
Attached Image (click to enlarge)
Click to Enlarge Name: GBPJPYH1.png Size: 73 KB
  • #15,954
  • Nov 11, 2014 3:44pm Nov 11, 2014 3:44pm
Quoting benaiah
{quote} Sure... Let me know if any questions. I've attached the chart, drawn a line at support, and arrow at my entry point. So, SL below the tail of that H1 pin, which rejected support... {image}
Also, just to be clear, I actually entered on M15 chart, but it's easier to show on the H1 after it confirmed the trade with that pin...
  • #15,955
  • Nov 11, 2014 3:52pm Nov 11, 2014 3:52pm
Since then took profit, and had a temporary brain freeze thinking it was good to go short. Tight SL, but closed that trade and went long again as per the M5 chart.

Obviously, now at a key level, and could reverse. So watching closely to see if I should TP and reassess, or hold longer...

But so far, all I see are bulls pushing up. Time will tell, one candle at a time...
Attached Image (click to enlarge)
Click to Enlarge Name: GBPJPYM5.png Size: 34 KB
  • #15,956
  • Nov 11, 2014 4:00pm Nov 11, 2014 4:00pm
Went ahead and TP. Not decisive enough as we approach NY close. Will see what happens and reassess
  • #15,957
  • Nov 11, 2014 4:04pm Nov 11, 2014 4:04pm
My broker spread going crazy now

Ideally, will be a pull-back, and enter again. Put that daily chart still causing me uncertainty. NY close couldn't quite make it above that last high. So, we may be back in a range again. Time will tell...
  • #15,958
  • Nov 11, 2014 4:12pm Nov 11, 2014 4:12pm
Yes spreads are going nuts at the O I saw 10 on AJ and 9.5 on GJ wonder what up with that LoL
  • #15,959
  • Nov 11, 2014 4:22pm Nov 11, 2014 4:22pm
Looks like it is trying to follow through on that break out attempt.

Scale in positions, low risk, and if price retraces, add to them (after pull-back reversal)...

Just a suggestion for long trade...

Edit: added above text in bold...
  • #15,960
  • Nov 11, 2014 4:31pm Nov 11, 2014 4:31pm
Quoting js5020
Yes spreads are going nuts at the O I saw 10 on AJ and 9.5 on GJ wonder what up with that LoL
My broker says spread widening "likely" during times of high profile news events, or high volatility. In other words, whenever they feel like widening the spread they'll do so, and especially if a lot to traders are entering trades

I've seen it happen a lot on some pairs, especially at NY daily close time...
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