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Can someone explain this type of market movement?

  • #21
  • Jun 21, 2014 1:01pm Jun 21, 2014 1:01pm
Quoting leameem25
You should say it was the EURUSD pair and the number of pips. The roundtrip was 50 up and 70 down. It went up on the headline that ECBs Nowotny said that ECB has no tools to fight a stronger euro, and then went down as leveraged dollar short positions were covered for the FOMC minutes the next day, which indeed saw USD strenght.
lol i've already told what caused the up move. It was ECBs nowotny saying ECB had no tools to fight a stronger euro. The euro strenght side of that move is fully explained.
The other part of the move, USD buying, you can only speculate on, but dollar was being bought for some days because of expectations of a hawkish FOMC minutes the next day, so it makes perfect sense it was that.
  • #22
  • Edited 3:26pm Jun 21, 2014 1:56pm | Edited 3:26pm
Quoting haggis
Hi, I am a relative newbie and would like to ask if someone can explain to me in fairly simple terms how this type of thing happens in the market.
EU M5

well, it happens by buying/selling - but I would guess you knew that already - it wouldn't look so dramatic on a higher timeframe chart like this for eg.
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  • #23
  • Jun 21, 2014 1:59pm Jun 21, 2014 1:59pm
Quoting leameem25
{quote}The other part of the move, USD buying, you can only speculate on
The same as the first part off the move. You can only speculate on.
  • #24
  • Jun 21, 2014 2:32pm Jun 21, 2014 2:32pm
Quoting GU-Night
{quote} The same as the first part off the move. You can only speculate on.
The headline come on and exactly at the same time euro rose 50 pips. But okay, you are right, we don't know it was probably just a coincidence..
How much clear it must be, do you want the CEO of EURUSD market to make a press conference to officially say it was a headline driven move?
  • #25
  • Jun 21, 2014 3:02pm Jun 21, 2014 3:02pm
Quoting haggis
Hi, I am a relative newbie and would like to ask if someone can explain to me in fairly simple terms how this type of thing happens in the market. I have seen this sort of thing often when back testing over old charts. It is about 1hr 20 mins into New York session, 29th Oct last year on 5 min chart. I don't believe it is news related. How can the institutions push price up like this then back down to finish below. Obviously market manipulation but how and why (stop sweeping?!). Thanks, all answers welcome (I think) {image}
The move is commonly known as false breakout or a fade on the market. There are only 3 types of tactics on the market and no matter what anyone says they are all simply a deviation of some sort or either 1. Breakout 2. Pullback 3. Fade or counter trend move. May I suggest you study market structure and dealer, inter bank flow to firmly grasp this. Blaming it on hunting stops or just saying it was news is a very lazy response and not helpful. While I am lazy in that im not going to explain fully how everything works in one post I will tell you to study more the market participants andnhow the forex market actually operates. Only then can you know that this is just more than some 'institution' doing a dirty deed.
All posts are my personal opinion
  • #26
  • Jun 21, 2014 3:12pm Jun 21, 2014 3:12pm
Quoting leameem25
{quote} The headline come on and exactly at the same time euro rose 50 pips. But okay, you are right, we don't know it was probably just a coincidence.. How much clear it must be, do you want the CEO of EURUSD market to make a press conference to officially say it was a headline driven move?
I didn’t say it was a coincidence. You are dreaming, my German friend. Maybe is the image more clear, it happens all the time.
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  • #27
  • Jun 21, 2014 4:37pm Jun 21, 2014 4:37pm
Quoting GU-Night
{quote} I didn’t say it was a coincidence. You are dreaming, my German friend. Maybe is the image more clear, it happens all the time. {image}
If you say the first part of the move is open for speculation then you are implying that the headline that was out at the exactly same doesnt explain that move. Therefor you are saying it was just a extraordinary coincidence. As a logical driven person as I am, thats how I undestood your statements.
  • #28
  • Jun 21, 2014 7:24pm Jun 21, 2014 7:24pm
Quoting GU-Night
Nice trade. {image}

That would be nice. <little sarcasm there>
On a 5 minute chart on release day it would take a crystal ball.
That 5 minute spike candle could easily have covered the spike in the first 1 second.
It's not an entry candle. But it's an awesome hindsight dream.
I personally wouldn't call it a trade at all.
  • #29
  • Jun 21, 2014 7:39pm Jun 21, 2014 7:39pm
Quoting haggis
Hi, I am a relative newbie and would like to ask if someone can explain to me in fairly simple terms.....

Quoting GU-Night
Hmm, more nice. {image}

<cough> I call hindsight.

To draw a 45 degree line off of Gosh knows where and lining it up with a random vertical cross point doesn't look like analysis to me. Have I missed something ??

I would ask haggis to not be swayed by things that are not possible in real time.

A "relative newbie" has nothing to gain except starry eyes over an improbable entry on a 5 minute chart on what sounds like a data release.

Forgive me if I have made assumptions about.... I don't know what.

Quoting fighterdude
This is classic pump and dump to crack support.
What fighter dude said
  • #30
  • Jun 22, 2014 1:33am Jun 22, 2014 1:33am
Quoting Price
I would ask haggis to not be swayed by things that are not possible in real time.
What is not possible in real time? Identifying a range? A vertical line on the low of the range, or the 45 degrees angle on the previous high on a proper scaled chart? Maybe the intersection between the two? Tell me, I’m interested. (little sarcasm there)

Quoting Price
A "relative newbie" has nothing to gain except starry eyes over an improbable entry on a 5 minute chart on what sounds like a data release.
You can call it ‘improbable’. I do nothing else on a m20 chart, and I don’t trade a breakout during a data release. In my eyes has someone nothing to gain with: “it was a data release”. In my eyes has someone something to gain if you show how to profit from such a move, and when to expect a move like that.

I don’t care if it was in this particular situation a data release. The only thing that matters to me; price was moving in a range for hours. Once identified the range in real time I know for sure that it is not going to stay in the range forever. I don’t have to follow the news or think for that , I have to follow price out of the range with my eyes. Fairly simple terms, on how I look at that kind of situations.

If price was moving way to fast out of the range I didn’t enter but it doesn’t look like that to me if I see the price action, hindsight. It looks like a ‘normal’ breakout to me, one that happens too in the middle of the night when there is no data release in my timezone for the pairs I trade.
  • #31
  • Jun 22, 2014 2:27am Jun 22, 2014 2:27am
That's fair enough and I didn't mean to be an a$$. I just see a response to a newbie who might think that's the way to trade. A spike entry on a 5 minute chart isn't sound advise to a newcomer. I was more lookin out for the new guy than trying to dog on you.

I mean if you took that trade then I stand down. But I still tell the new guy, "Don't try this at home"
  • #32
  • Jun 23, 2014 6:01am Jun 23, 2014 6:01am
Quoting Price
But I still tell the new guy, "Don't try this at home"
What do you think if a breakout of the range to the upside occurs? As far as I know, if I have a short position and I want to close that position I have to buy an equal amount of the same currency pair to reduce my short position to zero.

Let’s take this to the example in this topic. Price was moving in a range for hours, traders in a short position saw that price failed to make new lows for hours. Shorts became afraid and close their positions (they have to buy an equal amount of the same currency pair to reduce their position to zero, to do that) In the end a breakout to the upside occurred where more and more new buyers came into the market. Long story short; this is in my opinion what the cause is of the imbalance between buyers and sellers. More and more shorts who close their positions, and more and more new buyers in the market at the same time. The breakout works in my opinion like a catalyst, and therefore if someone can identify this moments in the markets he has this to practice at home, and then to try at home.

I have no doubt you know what I’m saying but the topic starter asked an explanation for the move in fairly simple terms, and this is mine.

In my eyes is trading like this picture, some people see a young lady, some an old lady. Not everybody see both ladies at the same time, and therefore; can’t take both into consideration.
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  • #33
  • Jun 23, 2014 6:26am Jun 23, 2014 6:26am
Wow... truly there are many different ways to interpret market movement and very difficult to find a definitive answer methinks.

The reason I asked this question, indeed the question I asked when I saw my first Forex chart 3 or so years ago, is what makes the market move? Of course these days I do have some vague ideas about this having studied VSA to some extent, received some mentoring in this way of interpreting market movement and this has been mentioned in terms of buyer, sellers etc.

What most interests me about this movement is the very deliberate and 'clean' strong movement firstly up to a clear resistance level (the day's before top) and then down to a support level from about a week before.

I believe that it is rare that people around the forums REALLY know what is going on behind currency movement, they are few are far between. My belief is that a movement like this is quite literally a deliberate action by some person/institution/group of institutions to move price to a predetermined agenda.

I am not concerned about being wrong about this and wouldn't be surprised as I am a mostly ignorant trader. The discussion has been interesting however and I remain curious about market movement that is the 'deliberate' moving of price between levels, and in very real terms, quite literally, how this happens.
  • #34
  • Jun 23, 2014 3:27pm Jun 23, 2014 3:27pm
Quoting haggis
Wow... truly there are many different ways to interpret market movement and very difficult to find a definitive answer methinks. The reason I asked this question, indeed the question I asked when I saw my first Forex chart 3 or so years ago, is what makes the market move? Of course these days I do have some vague ideas about this having studied VSA to some extent, received some mentoring in this way of interpreting market movement and this has been mentioned in terms of buyer, sellers etc. What most interests me about this movement is the very deliberate...
Again I've already told you what caused the first part of the move, there is no room for doubt that it was a headline driven move. There wasnt somone behind it starting to buy deliberatly, with a hidden agenda. What is impressive is after telling someone the truth of what happen, people still dont believe it. They still think there is something suspecious going on..
  • #35
  • Jun 23, 2014 4:09pm Jun 23, 2014 4:09pm
I see this as a typical tug of war between short term traders and longer term position takers.

News comes out and short term day traders bought it, now they are natural sellers (to close their possies) plus after a while the price level gets through to the loner term players who have been selelrs in previous sessions anyway who then respond to a high advertized price as a gift to sell into. Their fresh selling plus the day traders closing longs by selling, sends the market back where it came from plus some.

Longer term sellers are even more confident now, seeing that price probes higher get rejected and we see them selling again in later sessions. Any market's purpose is to facilitate trade or volume. Price has to move to places to see where the volume is, and then has to go too far to find an "unfair" price. Rinse and repeat etc
  • #36
  • Jun 24, 2014 5:40am Jun 24, 2014 5:40am
Quoting GU-Night
{quote} What do you think if a breakout of the range to the upside occurs?

Range breakout is, in fact, a valid signal in many cases. This particular one was questionable, but the well thought out explanation is appreciated.
  • #37
  • Jun 30, 2014 8:40pm Jun 30, 2014 8:40pm
Quoting Hyperion
I see this as a typical tug of war between short term traders and longer term position takers. News comes out and short term day traders bought it, now they are natural sellers (to close their possies) plus after a while the price level gets through to the loner term players who have been selelrs in previous sessions anyway who then respond to a high advertized price as a gift to sell into. Their fresh selling plus the day traders closing longs by selling, sends the market back where it came from plus some. Longer term sellers are even more confident...
Thanks....yeah my hunch was this had to be a news triggered move, but I failed to find it with the resources I currently use when I back checked news events at this time.
  • #38
  • Dec 12, 2014 7:14am Dec 12, 2014 7:14am
From the market profile perspective - The price probed higher but it was met with opposite response. The higher prices instead of attracting initiative buyers, ended up attracting the responsive sellers. And based on the net balance of buyers Vs sellers intensity, the price fall back towards the value area.
  • #39
  • Last Post: Dec 12, 2014 7:47am Dec 12, 2014 7:47am
to make money?
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