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Help Me Establish The GbpUsd After Dinner Club 40 replies

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  • #18,621
  • Apr 11, 2015 8:37am Apr 11, 2015 8:37am
Quoting infinitus
{quote} Hi Sixer, great to see you. Do not know if it is related to ECB activity. The ECB has done so far around 7% of the QE they would like to do. The ECB announced it at the 4th of March. EU stood at 1.12 roughly. If these activities would translate into drops each time, we can calculate the effect approximately: let us see: 1.12 as start of 4th of March now, 11th of April, 7% QE established, price at 1,06 delta is 600 pips or better 5,4% +7% QE (14%) EU @ 1,06 -5.4% = 1,01 21% = 0,96 28% = 0,90 35% = 0,85 42% = 0,81 49% = 0,76 56% = 0,72 63%...
Nice equasion there going Infinitus, always like it when traders dig little deeper and figure things out. Absolutely agree with what has been said there. Simply judging price moves based on ECB QE on EU pair is very naive, especially when things have been mostly priced in and are going behind curtain. Let me point out again: QE does not mean money printing directly into markets and increasing supply by ton. This means that anyone who thinks that QE ongoing is actively debasing currency is wrong. Yes it does happen in small terms, some money does go there, but thinking about trillion...no not even near. This is ofcourse speaking of derivates based QEs of nations like EU and USA.
Now why cant EU moves be suggested from QE? Becouse there is USD flows that impact EU hugely every single day. And with rate talks in last year, even more. So simply there is not possible to predict clean market move in term of mathematical equasion becouse there are so many different flows always ongoing. The only difference is when supply and demand balance is ruined hugely lets say on confirmation of hike on that and that date, then the market leg could be up to 90% assumed on where flows have come, and maybe for next few days one could assume directions also from it. But that is extreme times when picture is so skewed that normal market balance is destroyed.
Now but lets not theorize, i like to explain market trough PA if PA gives clues. Sixer pull up XXXUSD charts of past 3 days. You will see. USD. And thats how it should be done most of time, dont overcook it becouse its not gona taste good, and its counter-productive in terms of results.
  • #18,622
  • Apr 11, 2015 8:50am Apr 11, 2015 8:50am
Quoting infinitus
{quote} Hi NorthTrader, what a coincidence. Just yesterday I checked FF, if you were active or missing in action LOL How are you?
Yeah, I'm fine thanks. Not very active on FF these days due to offlist research and non-trading workload. But I'm hoping to post some of the results of the research I've been doing about TZs very soon

As you probably know, I live in northern Japan, not too far from Fukushima. So I'm very careful about what I eat these days. I don't eat nearly as much seafood as the locals do, and obviously try to avoid any fruit and vegetables grown in Fukushima. It says on the packet that they're safe, but without my own Geiger counter I'm not taking any chances!

Having said that, a few CT scans would probably be much worse for you, so got to take it all in perspective.
You reap what you sow.
  • #18,623
  • Apr 11, 2015 9:20am Apr 11, 2015 9:20am
Could not resist - was in the cowshed again


Quoting fxtyrant
{quote} I dont need no charts all i can see is a 1-2 year window inthe future for usd to continue its strengthagainst the euro because of us rate hikes and ecb continuing the easing You can scratch your head as much as you want and show me pretty charts etc etc, with multi year trendlines and stuff If you got bloomberg why dont you do a correlation chart between the us fed vs ecb interest rate swaption spread differential chart and plot it against the eurusd chart You'll realise the us vs euro spread increasing and when this happens eurusd falls...

I think I have to put you off ignore only for rebuttal of all the muck you are preaching.

You surly have never read the paper of Rogoff or Kui-Wai Lee or Campbell and Clarida


so I give you the opportunity to enlighten you on the aspects of rate differentials

Attachment

Attachment

Attachment



Or this study from Patra


Long Run Relationship between Real Exchange Rate and Real Interest Rate Differentials: The Cointegration Approach




Now we have a look at a study, which at least in part opposes the above views:

Real exchange rates and real interest
differentials
Have we missed the business-cycle relationship?
Marianne Baxter*

Attachment

But although she found good correlation under certain conditions, she concluded:

What should we conclude about the link between real exchange rates and real
interest differentials? Since real interest differentials are related only to the
temporary component of real exchange rates, and since most of the movement in
real exchange rates is due to changes in the permanent component, the link
between real exchange rates and real interest differentials is necessarily very
weak. This may also help explain why prior studies have had so much trouble
uncovering a statistically significant relationship. In fact, as summarized above,
the link between temporary components of real exchange rates and the real
interest differential is itself quite weak. Most of the movement in the temporary
component of real exchange rates is attributed, in this study, to the unobserved
‘risk premium’ from the open interest parity relation.


Further:

Our findings suggest two fruitful avenues for further research. First, since the
data show that the link between real exchange rates and real interest differentials
occurs at business-cycle and trend frequency bands, the next step is to construct
international macroeconomic models which generate comovement at these
frequencies. For example, many of the models discussed in this paper view
monetary policy as the driving force behind movements in the real exchange rate
and real interest differentials. It remains to be seen whether existing models of
this type can produce the observed business-cycle link between these variables.

Second, there is the empirical problem of discovering the underlying causes of
movements in real exchange rates and real interest differentials. An early
contribution to this literature is Barro (1983); Baxter (1993) also investigated
whether an array of policy variables could explain (in a statistical sense)
movements in these variables. Both of these studies failed to find policy variables
or other macroeconomic variables which could explain movements in real
exchange rates or real interest differentials. Thus it remains an open empirical
problem to discover the underlying determinants of fluctuations in real ex-
change rates and real interest differentials.




Look here at the following chart and tell us, where and when we had good and poor correlation


http://research.stlouisfed.org/fred2/graph/?g=17l9



Would I be a teacher I would say to you: "Inadequate! Sit down!"
  • #18,624
  • Apr 11, 2015 9:59am Apr 11, 2015 9:59am
Quoting infinitus
Could not resist - was in the cowshed again {quote} I think I have to put you off ignore only for rebuttal of all the muck you are preaching. You surly have never read the paper of Rogoff or Kui-Wai Lee or Campbell and Clarida so I give you the opportunity to enlighten you on the aspects of rate differentials {image} {image} {image} Or this study from Patra Long Run Relationship between Real Exchange Rate and Real Interest Rate Differentials: The Cointegration Approach Now...
Very constructive of you to put this on. I really like he always replys and tries to explain even that 90% he has really nothing to add. He knows it. But he just reconfirms himself. Anyone with decent market knowledge can see trough him,but that anyone is not majority of EU thread, no disrespect though, everyone is beginner somewhen.

I dont want to sound like some sort of muppet that agrees with all you say on this thread, but mostly thats just what it is. What you higlighted there is exactly how i see it. Empirical problem to really determine real exchange rate of currencies. Becouse you cant throw 2 X currencies into pair and think impact on exchange rate will be the same as on Y 2 currencies paired. Its just so many other factors behind capital flows of interest rates that impact it. Its safety of markets, its scale of markets, its scale of status, its scale of capital of sup-dem by real economy, its current supply, its so many other things one can name of.

But most of all Infinitus this thread is not worth mentioning him, this thread should be as refuge from mud going on there. You know that, altrough i understand your frustration. He is prince there, so let it be. You cant change the nation becouse peoples are blind altough most of them you cant blame. Its problem of king, and prince who is bad aswell. If you throw all longer term FF members (3 year+ traders) you will notice 90% of them do not participate on EU thread. It a reason.
  • #18,625
  • Edited 1:05pm Apr 11, 2015 12:40pm | Edited 1:05pm
Quoting infinitus
{quote} That was what I wanted to hear. If one uses volume candles etc. on a too high TF, it gets worthless. Even the interpretation of 1h TF may be critical I think most value for seeing where the S/R levels are is to look at the volume or market profiles with volume/price. Do we have now a very good volume profile MT4 indicator where one can put the lookback period in flexibly, without bringing the performance ofthe whole computer system down? Or do I need to stick to my Excel solution?
1/ Personally I think that Supply/Demand shift can be seen through these volume indicators - an example of the EU 1H chart is the first picture attached. Candlevolume indicator is in action.

2/ The most valuable thing arose at the higher TFs is PA. VSA methodology is very welcome indeed.

3/ However if you trade at the lower TFs 1-15 Min, there is no time to analyse volume almost always, although such an analyse is helpful most times. That is why those indicators published above are needful for one to see the direct time moment, which the supply/demand shift happens at. For the illustration you can look at the 5 min chart of mine - the second picture below.

Best,
D.P.
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: 2015-04-11_20h39_10.png Size: 50 KB
Hunting High and Low
  • #18,626
  • Apr 11, 2015 12:46pm Apr 11, 2015 12:46pm
Quoting NorthTrader
{quote} I'm hoping to post some of the results of the research I've been doing about TZs very soon
Nice to hear. NorthTrader, that you are doing something about TZs. Very interesting to look at it. Anyway look at the picture above and find TZs .

Best,
D.P.
Hunting High and Low
  • #18,627
  • Apr 11, 2015 1:03pm Apr 11, 2015 1:03pm
Quoting infinitus
Would I be a teacher I would say to you: "Inadequate! Sit down!"
Exhaustively !
Definitely you buried your teacher-entity in the past . I would be successful that way.

Best,
D.P.
Hunting High and Low
  • #18,628
  • Apr 11, 2015 3:13pm Apr 11, 2015 3:13pm
Quoting infinitus
Could not resist - was in the cowshed again {quote} I think I have to put you off ignore only for rebuttal of all the muck you are preaching. You surly have never read the paper of Rogoff or Kui-Wai Lee or Campbell and Clarida so I give you the opportunity to enlighten you on the aspects of rate differentials {image} {image} {image} Or this study from Patra Long Run Relationship between Real Exchange Rate and Real Interest Rate Differentials: The Cointegration Approach Now...
lass es es sind eh nur schwachmaten die indisch supported werden
  • #18,629
  • Apr 11, 2015 3:14pm Apr 11, 2015 3:14pm
Quoting infinitus
{quote} I got suspended for half a day -another one gets ignored life-long
It would not surprise me if one say that there is a contract on you :most wanted live or dead.

Take care Clubers

I'm out have read enough.
Don't be smart. Be rich.
  • #18,630
  • Apr 11, 2015 3:23pm Apr 11, 2015 3:23pm
Quoting janpec1000
{quote} Very constructive of you to put this on. I really like he always replys and tries to explain even that 90% he has really nothing to add. He knows it. But he just reconfirms himself. Anyone with decent market knowledge can see trough him,but that anyone is not majority of EU thread, no disrespect though, everyone is beginner somewhen. I dont want to sound like some sort of muppet that agrees with all you say on this thread, but mostly thats just what it is. What you higlighted there is exactly how i see it. Empirical problem to really determine...

My friend,

I value you the most for not agreeing with me everytime and forcing me to rethink the one or other
  • #18,631
  • Apr 11, 2015 3:25pm Apr 11, 2015 3:25pm
Quoting maximinus
{quote} It would not surprise me if one say that there is a contract on you :most wanted live or dead. Take care Clubers I'm out have read enough.

Hi Maximinus,

my brother in arms

How are you? Everything all right? Where are you hiding?
  • #18,632
  • Apr 11, 2015 3:31pm Apr 11, 2015 3:31pm
Quoting Dr.Phoenix
{quote} Exhaustively ! Definitely you buried your teacher-entity in the past . I would be successful that way. Best, D.P.

  • #18,633
  • Apr 11, 2015 3:37pm Apr 11, 2015 3:37pm
Quoting infinitus
{quote} Hi Maximinus, my brother in arms How are you? Everything all right? Where are you hiding?
I'm fine Markus. I'm not hiding, I'm not as dedicated as you to bump against idiots, I tend to stick away of them and idiots are mushrooming in the luppanars and I don't want to catch any form of "cerebral syphilis"

Believe me, life and trading is better without logging in FF.
Don't be smart. Be rich.
  • #18,634
  • Apr 11, 2015 4:43pm Apr 11, 2015 4:43pm
[quote=Dr.Phoenix;8199189]{quote} 1/ Personally I think that Supply/Demand shift can be seen through these volume indicators - an example of the EU 1H chart is the first picture attached.

Phoenix, see the volumes sometimes is difficult. Sometimes is good and sometimes not. Sometimes gives you a map. For example, from Friday.. I like when H1 + M30 + M15 candle draws you a widden gap or big volume, more or less at the same place. So on , on Friday the big sellers volume is at 9,00. and M30,M15 and H1 match at on end at 06,48-50. For me, that's the hurdle. I would never buy there. You must buy before. 05,80?? There were a lot of selling activity from 06,72-06,50. It can be an agressive selling at 06,50?? As my experience, sometimes is good, sometimes not.

What are your thoughts? I agree that make an analysis on M5-M15, it's very hard. It happen so fast sometimes..
  • #18,635
  • Apr 11, 2015 7:30pm Apr 11, 2015 7:30pm
Quoting maximinus
{quote} I'm fine Markus. I'm not hiding, I'm not as dedicated as you to bump against idiots, I tend to stick away of them and idiots are mushrooming in the luppanars and I don't want to catch any form of "cerebral syphilis" Believe me, life and trading is better without logging in FF.

made my day, ähhh, night
  • #18,636
  • Apr 11, 2015 9:03pm Apr 11, 2015 9:03pm
http://www.zerohedge.com/sites/defau.../picture-5.jpg
Draghi Is No Longer Bernanke's Best Friend (Or The End Of The Mainstream Theory Of QE)
  • #18,637
  • Apr 12, 2015 6:02am Apr 12, 2015 6:02am
TIFF COT Data

COT Index (CI) in first chart. Its lookback period is 26


The TIFF COT gives a better picture than the usual COT data

When we can g´have an isolated look at the Swap Dealers, one can see very nicely, that they reduced the net-long holdings in the week starting 03.02.2015

That coincided with the final drop in EU so far.


Bulls should worry now, that the Swap dealers are reducing long positions, still.

It has resulted in a drop in COT Index from 100 to now 32.

What may also troubeling for the bulls is the fact, that the non-reportings (smaller speculators) have reduced their short holdings and have now a COT Index of 100 (which is bearish).


As ever: keep in mind that this data is now nearly a trading week old.



If one, who is able to do so, would like to build a COT indicator for MT4, I would strongly recommend to do this with the TIFF COT data (Traders in Financial Futures)
Attached Image (click to enlarge)
Click to Enlarge Name: mm.png Size: 132 KB
  • #18,638
  • Apr 12, 2015 6:21am Apr 12, 2015 6:21am
Quoting Dr.Phoenix
{quote} Indeed. Is it monthly or weekly report? D.P.

ups, overlooked this question:

I think it is monthly


what a pity for us


and I do not know if it is available for free each month, because I can not find older reports
  • #18,639
  • Apr 12, 2015 6:23am Apr 12, 2015 6:23am
animusX sentiment survey for EU shows, that traders are again fairly bearish EU, but not extreme yet
Attached Image
  • #18,640
  • Apr 12, 2015 6:26am Apr 12, 2015 6:26am
DAX sentiment analysis from Goldberg


sorry, only German


http://www.boerse-frankfurt.de/de/na...ger+kalt+81788
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