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Cable Update (GBPUSD)

  • #423,081
  • Feb 3, 2016 3:13am Feb 3, 2016 3:13am
The Jack D. Schwager books are really good. "The Market Wizards", and "The New Market Wizards."
They are interviews with Americas top traders.

However, another good book is "Reminiscences of a Stock Operator."

That guy knew how to play... He collapsed the oat market in order to trick traders in Chicago into thinking a market corner was being attacked which caused them to sell corn hard which allowed him to cover his underwater corn short with little loss. This only worked because someone had these markets cornered and people thought another big player was trying to break the corner.

I am not really sure how much markets get cornered any more. Regulators have things tightened down pretty well with position limits and mandatory reporting. However, the hunt brothers managed a successful market corner in Soy using all their family members to get around the position limits. They got their silver corner blown up by the rules of the game being changed on them.

How markets really work is very very different from how people just getting into trading think they work.


Quoting alz
Hi meanvel I have really enjoyed reading your last few posts. Can you recommend a good book with insights on how the trading is done at institutional level and how big players think of the market. {quote}
"Don't fear a bubble until it starts to burst."
  • #423,082
  • Feb 3, 2016 3:16am Feb 3, 2016 3:16am
UK Services PMI Seems +tive!!!!! as the pair started Rallying
  • #423,083
  • Feb 3, 2016 3:16am Feb 3, 2016 3:16am
Ok, buyers are attracted, take some profits if you took that one. Hold some for attempt at highs.

Quoting meanvel
Btw, if anyone accumulated GU after the 1.4390 order pocket clearing, be careful and tighten stops. The GU should be popped over 1.4 here to attract buyers... But... I'm not entirely convinced that bottom will hold... I'm looking for solid 25+ pip runs and I didn't take that setup.
"Don't fear a bubble until it starts to burst."
  • #423,084
  • Feb 3, 2016 3:19am Feb 3, 2016 3:19am
Medium/Low impact economic news doesn't matter at all for directional market movement, however... It does increase emotions in traders a bit and increase volatility, which amplifies how far price moves.

Quoting Dr.Zain
UK Services PMI Seems +tive!!!!! as the pair started Rallying
"Don't fear a bubble until it starts to burst."
  • #423,085
  • Feb 3, 2016 3:20am Feb 3, 2016 3:20am
Quoting meanvel
However, do realize that big players can get stuck in bad positions and cause massive tail invents... Quote from New Market Wizards. Interview with ex-Salomon Trader. "Interviewer: One percent of a $3 billion position is $30 million! Did this loss transpire in just one afternoon? Salmon Trader: It transpired in just eight minutes. All I wanted to do was to make it through to the Tokyo opening at 7 P.M. for the liquidity. If you really have to buy $3 billion, you can do it in Tokyo; you can't do it in the afternoon market in New York-you can't even...
Interesting stuff, but no longer applicable in today's markets, at least as far as banks/market makers are concerned. The new regulatory environment that came about post 2008 crisis limits the ability of banks to take on big risk (proprietary) positions on their books and strongly "encourages" them to stick to executing client orders on a best effort basis. This includes running stops which is just hedging and order execution....the "old" Salomon Brothers would not have a place in the current market unfortunately...
  • #423,086
  • Feb 3, 2016 3:22am Feb 3, 2016 3:22am
Quoting meanvel
Medium/Low impact economic news doesn't matter at all for directional market movement, however... It does increase emotions in traders a bit and increase volatility, which amplifies how far price moves. {quote}
FF tells that its High impact news.

Meanvel

What are the real High impact economic news ?
I might be wrong , I have been wrong before
  • #423,087
  • Feb 3, 2016 3:26am Feb 3, 2016 3:26am
There is tons of money concentrated into Mega hedge funds and institutional players in these markets, and they are MUCH bigger than ever before. The fact that it's hedge funds and large firms and not proprietary traders at banks really doesn't make any difference.

Big players with big money dominate markets still.

Just look at the wealth concentrations in the world. Like 68 Billionaires have more money than the bottom half of the world combined?


Quoting ez0770
{quote} Interesting stuff, but no longer applicable in today's markets, at least as far as banks/market makers are concerned. The new regulatory environment that came about post 2008 crisis limits the ability of banks to take on big risk (proprietary) positions on their books and strongly "encourages" them to stick to executing client orders on a best effort basis. This includes running stops which is just hedging and order execution....the "old" Salomon Brothers would not have a place in the current market unfortunately...
"Don't fear a bubble until it starts to burst."
  • #423,088
  • Feb 3, 2016 3:28am Feb 3, 2016 3:28am
hold on to your hats its going to be 4300 or 4600
  • #423,089
  • Feb 3, 2016 3:35am Feb 3, 2016 3:35am
It doesn't matter who they are, whales are still present in all markets. Just look at a CFTC Cot Report... Eight traders or firms hold 47.7% of the Silver short interest... Four traders or firms hold 31.2% of the short interest.

http://www.cftc.gov/dea/futures/deacmxlf.htm
Silver Futures - Percent of Open Interest Held by the Indicated Number of the Largest Traders
By Gross Position
8 or Less Traders
Long: 29.3%
Short: 47.7%

Quoting ez0770
{quote} Interesting stuff, but no longer applicable in today's markets, at least as far as banks/market makers are concerned.
"Don't fear a bubble until it starts to burst."
  • #423,090
  • Feb 3, 2016 3:38am Feb 3, 2016 3:38am
Quoting elbert3
hold on to your hats its going to be 4300 or 4600
1.46! Before Friday
  • #423,091
  • Feb 3, 2016 3:43am Feb 3, 2016 3:43am
Quoting Darkforce
{quote} 1.46! Before Friday
morning late one this morning ,even the wife got the taxi ,, lats nights little order stopped out at 20 pips but only a £ a pip, no support 4450 ?? watch 4437 ??
  • #423,092
  • Feb 3, 2016 3:49am Feb 3, 2016 3:49am
Quoting meanvel
Medium/Low impact economic news doesn't matter at all for directional market movement, however... It does increase emotions in traders a bit and increase volatility, which amplifies how far price moves. {quote}
Some time the news has some impact<<<
UK Services PMI Actual 56.5 Forecast 59.2 Previous 59.5 GBP Dropped 100 PIPS 2015-06-03
  • #423,093
  • Feb 3, 2016 3:52am Feb 3, 2016 3:52am
Quoting meanvel
There is tons of money concentrated into Mega hedge funds and institutional players in these markets, and they are MUCH bigger than ever before. The fact that it's hedge funds and large firms and not proprietary traders at banks really doesn't make any difference. Big players with big money dominate markets still. Just look at the wealth concentrations in the world. Like 68 Billionaires have more money than the bottom half of the world combined? {quote}
Fair point, large institutional speculators are still there. Many of them, among the most successful ones, are HFT's nowadays...
  • #423,094
  • Feb 3, 2016 3:56am Feb 3, 2016 3:56am
That is simple... The real high impact news is news which investors and traders are unprepared for. New events which their asset allocations are all set up incorrectly for like surprise interest rate shifts like the BOJ. Things that come out of nowhere... They can move the market for a while.

The Fed interest rate shifts use to be big events which caused the markets to move strongly for weeks and months, but not anymore... The reason is simple. They telegraph intent with continual speeches and statements. Decades ago they would just shock and awe the market with a sudden 2-4% rate change...

These little economic announcements don't really matter much. Many firms have the results modeled out beforehand and they are pretty much priced in. Today is the age of big data... Most of this economic data like the GBP Manufacturing PMI can be modeled out beforehand with decent accuracy.

However, the moment of that news release when the liquidity was thin was a great strategic point to spike the market into the buy stop pocket above the highs. Very cheap to do right then.


Quoting Mandariin
{quote} FF tells that its High impact news. Meanvel What are the real High impact economic news ?
"Don't fear a bubble until it starts to burst."
  • #423,095
  • Feb 3, 2016 4:04am Feb 3, 2016 4:04am
Quoting meanvel
That is simple... The real high impact news is news which investors and traders are unprepared for. New events which their asset allocations are all set up incorrectly for like surprise interest rate shifts like the BOJ. Things that come out of nowhere... They can move the market for a while. The Fed interest rate shifts use to be big events which caused the markets to move strongly for weeks and months, but not anymore... The reason is simple. They telegraph intent with continual speeches and statements. Decades ago they would just shock and awe...
morning just been reading your posts, and me and dark, welcome you to our spam club,,lol i cant make up my mind if your long or short or if you have any trade at this time,,,regards E
  • #423,096
  • Feb 3, 2016 4:06am Feb 3, 2016 4:06am
HFT firms don't hold positions overnight for the most part. They do dominate a lot of the intraday volume in futures though. Lot of micro-exploratory trading and other shenanigans.

Quoting ez0770
{quote} Fair point, large institutional speculators are still there. Many of them, among the most successful ones, are HFT's nowadays...
"Don't fear a bubble until it starts to burst."
  • #423,097
  • Feb 3, 2016 4:07am Feb 3, 2016 4:07am
Quoting meanvel
Big players with big money dominate markets still. {quote}
And they are after us, beware!!!
... I'm not crazy, just Paranoid ...
  • #423,098
  • Feb 3, 2016 4:10am Feb 3, 2016 4:10am
Nothing right now. I missed the boat on that one as I said in my post. There will be plenty more rides tonight. Were probably going to get even bigger market moves after ADP.

Quoting elbert3
{quote} morning just been reading your posts, and me and dark, welcome you to our spam club,,lol i cant make up my mind if your long or short or if you have any trade at this time,,,regards E
"Don't fear a bubble until it starts to burst."
  • #423,099
  • Feb 3, 2016 4:13am Feb 3, 2016 4:13am
Imagine you were sitting at a poker table with three players.

Whale One has $210k in Chips,
Whale Two has $150k in Chips,
And Joe Blow has $1.5k in Chips...

Do you really think the two whales give a damn about Joe Blow? Honestly...

Quoting Charith
{quote} And they are after us, beware!!!
"Don't fear a bubble until it starts to burst."
  • #423,100
  • Feb 3, 2016 4:18am Feb 3, 2016 4:18am
Quoting meanvel
That is simple... The real high impact news is news which investors and traders are unprepared for. New events which their asset allocations are all set up incorrectly for like surprise interest rate shifts like the BOJ. Things that come out of nowhere... They can move the market for a while. The Fed interest rate shifts use to be big events which caused the markets to move strongly for weeks and months, but not anymore... The reason is simple. They telegraph intent with continual speeches and statements. Decades ago they would just shock and awe...
IMO:

News is what they use as market triggers.
Haven't you seen a high impact news which had lesser impact in real market and vice versa. I have.
Haven't you seen the market jump up and down without any news? I have.

They do what they want to do using news as the trigger, analysts and we retail traders try to give interpretations to them.
... I'm not crazy, just Paranoid ...
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