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Using WM/Reuters Benchmark Rates in trading

  • #181
  • Feb 13, 2015 11:57pm Feb 13, 2015 11:57pm
Quoting genghistar
I will only say this once and never again. You are Only 65% correct and there is still one key/major element missing. Hope you every success in your discovery quest..... GS.
Please enlighten us with the missing element GS
  • #182
  • Feb 14, 2015 12:04am Feb 14, 2015 12:04am
Quoting GreatNorth
{quote} Those are levels within the Fibs.
Really appreciate the effort you have put into explaining everything.
  • #183
  • Feb 14, 2015 1:30am Feb 14, 2015 1:30am
Quoting sclipp
{quote} Please enlighten us with the missing element GS

THE missing elements:

WE (we have to decide what to do, looking carefully at those levels)

Time factor (It includes the stop loss and taking profits, some time market reacts faster some times slower)

IMO

ReAl MoDe: ON
  • #184
  • Feb 14, 2015 2:30am Feb 14, 2015 2:30am
Quoting genghistar
I will only say this once and never again. You are Only 65% correct and there is still one key/major element missing. Hope you every success in your discovery quest..... GS.
I guess the missing ingredient is that fib levels change for every pair.
  • #185
  • Feb 14, 2015 4:30am Feb 14, 2015 4:30am
Quoting GreatNorth
So where to the numbers come from? They come from the WM/Reuters as I shared above. So each pair has a START date that can be found here: http://extranet.datastream.com/Codes...ge%20Rates.xls So using EUR/USD as the example, we can see that the Benchmark started on December 31, 1993 and unless you pay hunderds of dollars to access bloomberg or the Thomson Reuters datastream terminals you won't ever know what the Benchmark was on that date. I have the information and it December 31, 1993 the EURUSD Benchmark was 1.115...
Hi,

I looked in the excel and on the links but couldn't find the value 1.115 for EU anywhere.
Could you please indicate the source (link, excel/worksheet etc.) where you did take the value from? This is very unclear to me.
Also it would be useful if you can share the values for GBPJPY because this is the pair I trade due to its volatility.

Thank you
  • #186
  • Feb 14, 2015 4:45am Feb 14, 2015 4:45am
Quoting dragos_
{quote} Hi, I looked in the excel and on the links but couldn't find the value 1.115 for EU anywhere. Could you please indicate the source (link, excel/worksheet etc.) where you did take the value from? This is very unclear to me. Also it would be useful if you can share the values for GBPJPY because this is the pair I trade due to its volatility. Thank you

read post 56 to see where GN got the value from..........
  • #187
  • Feb 14, 2015 5:14am Feb 14, 2015 5:14am
Quoting sclipp
{quote} Please enlighten us with the missing element GS
There are plenty of missing elements when it comes to this thread sclipp. I wouldn't worry too much though.
Fibos are a drop in a very big bucket. And they are a very insignificant drop to say the least.
Institutions do not run some Fibs out and then come to the conclusion they want to net short Euros and get net long Mexican pesos

The biggest and best money you'll ever make will come from picking up early on potential divergences/convergences in central bank policy.
As they diverge/converge you'll be picking up the spread.
You'll get paid riding institutional flows as they net out that side of trade.

Could they be using Fibs at times for positioning, sure. Do they make their money from the Fibs, no.
All i'm saying here is don't place all your hope on Fibs for profitability.

Regards
  • #188
  • Feb 14, 2015 6:40am Feb 14, 2015 6:40am
Quoting msiamd
{quote} read post 56 to see where GN got the value from..........
I see. From a friend Thank you msiamd!
Kindly ask GreatNorth to share the GbpJpy values as well if possible.

With respect to skfx post, it is pretty obvious that this fibs levels are respected most often than not. So in my opinion is very clear that they can be useful, of course in conjuction with other tools (e.g. I use momentum indicators, bollinger bands etc.)
  • #189
  • Feb 14, 2015 7:06am Feb 14, 2015 7:06am
Quoting shiva
{quote} I guess the missing ingredient is that fib levels change for every pair.
Professional traders don't use Benchmark Fibs or anything like this. The reason people find correlations to Fibonacci numbers in price movement is because they're watching Fibonacci levels.

Price touches a lot of other levels too that the eye ignores if you don't have a line drawn there. It's a form of positive expectancy in wanting a system to work, so the mind ignores all the times price doesn't adhere to a number sequence. The same can be said of Pivots or any form of price deviation that's used for plotting targets.

Arbitrary price levels built on mathematical formulas have nothing to do with what price is actually doing or how money is actually made.

This isn't to say using Fibs for averaging is a bad thing altogether. It can be useful like any other tool if you want to divide a price chart into deviations to create some kind of logic, but it's a completely arbitrary correlation, like seeing bunny rabbits in clouds. I used to use Fibs until I learned how to read a chart properly.

The person who taught me how to trade posted this chart on his thread last week when I asked him why he said GBPJPY was going to make a new high if it broke 181.30 and to go heavy long. Price went 300 pips higher off that break.

There's more information in this one chart about market functionality, relevant levels, and how to trade those levels than hundreds of pages of irrelevant concepts on this forum. A level has meaning if you can identify what the buyers and sellers are doing at that level. 61.8% tells you nothing about a real trade to enter, it's just a number which is disconnected from actual market activity and the price discovery mechanism.

Benchmark rates are no different than the Libor, or the Gold fix. It's an investment valuation tool. So when they set the rate at 4PM London, it's a way for portfolio managers to properly measure ROE. It's not an old boy trading method to put Fibs on the Benchmark High Low to decide where to move price next. That's ridiculous. Fair valuation is based on a completely different metric.
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  • #190
  • Feb 14, 2015 7:41am Feb 14, 2015 7:41am
Quoting Luther
{quote} Professional traders don't use Benchmark Fibs or anything like this. The reason people find correlations to Fibonacci numbers in price movement is because they're watching Fibonacci levels. Price touches a lot of other levels too that the eye ignores if you don't have a line drawn there. It's a form of positive expectancy in wanting a system to work, so the mind ignores all the times price doesn't adhere to a number sequence. The same can be said of Pivots or any form of price deviation that's used for plotting targets. Arbitrary price levels...
Yupp, this is way more interesting.
Thanks.
My signature is: "Classified".
  • #191
  • Feb 14, 2015 8:06am Feb 14, 2015 8:06am
Quoting Robertk
I do appreciate your effort tho. Its just the topic title that annoys me. Just call the beast by its name.
Being annoyed is a choice.

Thanks for taking the time to sign in, read the thread and posting your message.

Have a great day :-)
  • #192
  • Edited 9:58am Feb 14, 2015 9:28am | Edited 9:58am
Quoting Luther
{quote} Professional traders don't use Benchmark Fibs or anything like this. The reason people find correlations to Fibonacci numbers in price movement is because they're watching Fibonacci levels. Price touches a lot of other levels too that the eye ignores if you don't have a line drawn there. It's a form of positive expectancy in wanting a system to work, so the mind ignores all the times price doesn't adhere to a number sequence. The same can be said of Pivots or any form of price deviation that's used for plotting targets. Arbitrary price levels...
WM/Reuter Benchmark, as I have described their use, are very important. Using them or not using them in your trading is a choice you make.

Charts are the evidence, everything else is filler. That is all.
  • #193
  • Feb 14, 2015 9:33am Feb 14, 2015 9:33am
Thnx for more appropriate thread title.

I'm following along in the background. It is interesting.
  • #194
  • Feb 14, 2015 9:36am Feb 14, 2015 9:36am
Quoting SunTrader
Thnx for more appropriate thread title. I'm following along in the background. It is interesting.
I did not change it. The powers that be must have.
  • #195
  • Feb 14, 2015 11:08am Feb 14, 2015 11:08am
Well, I do not know whether professional traders use or do not use fibs in their trading. However, what is posssible is that orders are clustered around these level because of emergent properties, similar to correlated colective behaviour of crowds at concerts or on football games. So I would not discredit these statements per se. What can be done in a quantified way is to see how the number of candles or better yet ticks changes versus price and check whether there is any correlation with these levels. From the plots shown here, that is actually very likely the case.

k
  • #196
  • Feb 14, 2015 11:57am Feb 14, 2015 11:57am
Quoting Luther
{quote} Professional traders don't use Benchmark Fibs or anything like this. The reason people find correlations to Fibonacci numbers in price movement is because they're watching Fibonacci levels. Price touches a lot of other levels too that the eye ignores if you don't have a line drawn there. It's a form of positive expectancy in wanting a system to work, so the mind ignores all the times price doesn't adhere to a number sequence. The same can be said of Pivots or any form of price deviation that's used for plotting targets. Arbitrary price levels...
...
Ghost Rider - WWTBMD?
  • #197
  • Feb 15, 2015 10:03pm Feb 15, 2015 10:03pm
Quoting Tomcat98
Hi all, interesting... Please see post # 74 Post 74 Cleanup Quote May 27, 2014 16:27 {image} skenobi Joined Oct 2007 | Status: Financial Markets Operator | 868 Posts Quoting...
Thanks for linking to me..

I've been following this thread quietly since its inception, more so because the OP implied this thread is about a method that "professional traders trade". Being a (semi?) professional trader and former institutional myself, I've always been interested in how the retail public perceives operators like me.

It's news to me, however, that pro traders use these "benchmark rates" for anything at all involving trading. Oh well...

I see the moderators have re-named the thread.

Anyways, I find this method somewhat similar to (but not the same as) this one by aebab. In both methodologies, some kind of reference baseline (different for each currency pair) is used to form the basis of fibo projections; aebab's baselines seem arbitrary, whereas GreatNorth's baseline is purportedly based on the "benchmark rates" (which I've never heard of until a few days ago). Even the "fibs within fibs" concept is a little familiar.

Not my cup of tea, tho'. While the benchmark rates seem to be set in stone, it still looks almost as arbitrary as aebab's baselines. Even the OP says these "benchmark rates" are the ones reportedly being manipulated by criminal elements (again, news to me), so I'm not sure if we should be basing anything at all on rates prone to manipulation. If I have to be arbitrary, I figured the arbitrariness might as well come from me.

In any case, my intent is not to be disagreeable. I'm sure this method (and aebab's) is useful to its proponents. I just thought the resemblance was interesting.

Quoting GreatNorth
{quote} WM/Reuter Benchmark, as I have described their use, are very important. Using them or not using them in your trading is a choice you make.
Very civil of you to remind us! Thanks heaps! And all the best to you in this thread!
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #198
  • Feb 15, 2015 10:53pm Feb 15, 2015 10:53pm
Quoting skenobi
{quote} It's news to me, however, that pro traders use these "benchmark rates" for anything at all involving trading.
I think OP refers to pro traders as retail traders that live from trading and not to institutional ones. Anyway, I learned about "benchmark rates" first time here. Interesting.

For my fallen angels.
  • #199
  • Feb 16, 2015 12:57am Feb 16, 2015 12:57am
Hi GreatNorth.

I think you can sure say one thing about this thread is that it has brought out many of the High (Red Card) & Low (Yellow Card) traders in such a short amount of time. Very interesting to read their varied comments as well.

Trading like most things in life is Horses for Courses if you ask me.

Just wondering if you have any benchmark levels for the EUR JPY.

Cheers
Healthy, Wealthy & Steady!!
  • #200
  • Edited 1:49am Feb 16, 2015 1:48am | Edited 1:49am
Hello GreatNorth,

Great idea and great that you are prepared to "Pay forward" be sharing with us. I thank you most sincerely.
Will you be able to keep up the supplying of these bench mark figures? Thank you again for sharing.

Lastly, are the crosses available such as G/J ?

Continued success to you.
Hercs
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