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Cable Update (GBPUSD)

  • #423,201
  • Feb 3, 2016 3:53pm Feb 3, 2016 3:53pm
Quoting Darkforce
{quote} It's only 3rd day of the month, who knows? There's even slight chance we might see [email protected] again this month, who knows?!
?? Have a look at a monthly chart and say that again. Although you did say slight chance...... and nobody knows...........There's always some sort of chance of anything happening.....
  • #423,202
  • Feb 3, 2016 4:08pm Feb 3, 2016 4:08pm
Sell on pound dollar. 146
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  • #423,203
  • Feb 3, 2016 4:20pm Feb 3, 2016 4:20pm
Quoting dean1star
Sell on pound dollar. 146 {image}
just waiting for the new day candle tight sl
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going 4515 profit take 4413 sell order 10 pip sl and tp 4450,gl
  • #423,204
  • Feb 3, 2016 4:46pm Feb 3, 2016 4:46pm
Quoting elbert3
{quote} just waiting for the new day candle tight sl {image} going 4515 profit take 4413 sell order 10 pip sl and tp 4450,gl
Your daily candle close quite early, I still got 1 hr left
  • #423,205
  • Feb 3, 2016 5:00pm Feb 3, 2016 5:00pm
145 850 second position Sell - Pound Dollar.
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  • #423,206
  • Feb 3, 2016 5:28pm Feb 3, 2016 5:28pm
People... I took a look around at the bigger picture after last nights outrageously powerful rally. The dollar collapsing amplified every single bullish move in every other currency. The dollar was slammed across all pairs. This move was heavily related to a sentiment shift in relation to the perception of the Fed and their rate hikes + future negative interest rate rumors/talk.

As for the GU. Looks like we finally have consolidation kicking in. Odds are sideways to slightly down. We will likely maintain a range tonight centered somewhere around 1.46 - 1.4575 until the MPC wildcard.

Have fun with your little counter-trend consolidation here bears! Don't get chopped up by the ranginess of it.
"Don't fear a bubble until it starts to burst."
  • #423,207
  • Feb 3, 2016 5:43pm Feb 3, 2016 5:43pm
LoL... Yea, maybe some days there is real "momentum" in the literal meaning of the word.

Actually, it's "positive feedback" in a situation like that, but that's just semantics!

Quoting Bones
don't fight the momentum of the day lol {quote}
"Don't fear a bubble until it starts to burst."
  • #423,208
  • Feb 3, 2016 6:13pm Feb 3, 2016 6:13pm
I see people with all these exotic resistance formulas... Pivot formulas and other similar resistance formulas do not work in Forex. The only really solid resistance in the market is located at the swing highs and swing lows. It's kind of a Paradoxical resistance though, because when price pushes into it, either the market stops dead after a little ways, or it explodes in a breakout as it clips buy stop pockets just above and/or people start to flood into the breakout.

You have to use your experience to figure out if price is going to stop or continue to run once it penetrates the level.

There is some other resistance though... Price has a tendency to regress once it gets too far from mean measured in average true range or averaged standard deviations of movement.

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"Don't fear a bubble until it starts to burst."
  • #423,209
  • Feb 3, 2016 6:22pm Feb 3, 2016 6:22pm
Quoting meanvel
Pivot formulas and other resistance formulas do not work in Forex. The only really solid resistance in the market is located at the swing highs and swing lows. It's kind of a Paradoxical resistance though, because when price pushes into it, either the market stops dead after a little ways, or it explodes in a breakout as it clips buy stop pockets just above and/or people start to flood into the breakout. You have to use your experience to figure out if price is going to stop or continue to run once it penetrates the level. There is some other resistance...
Depends on your Mathematical roots, Pivots in its pure equative formula is simply an array of numbers calculated over a set range of repetitive elements, if however your suggesting that the formula of the calculus is in appropriate for Currency markets then that of course is a seperate logical issue which might take one into a quantative or quantum level.
  • #423,210
  • Feb 3, 2016 6:27pm Feb 3, 2016 6:27pm
Pivot point (P) of a mark can be used as the base level for the the arithmetic average of the high (H), low (L), and closing (C) prices of the market in the prior trading period.

P = (H + L + C) / 3.

Sometimes, the average also includes the previous period's or the current period's opening price (O):

P = (O + H + L + C) / 4.

In other cases, traders like to emphasize the closing price, P = (H + L + C + C) / 4, or the current periods opening price, P = (H + L + O + O) / 4.

Wondering which part of the base equation is not correct then which leads to the corrective issue of non function?
  • #423,211
  • Feb 3, 2016 6:31pm Feb 3, 2016 6:31pm
What I mean is, they don't work for short term trading... They do not give you enough edge to get past commissions.

If you use pivots like many use them... Say your short a R3 which is the prior days median + 3x the prior daily range. There is no consistent statistical probability of any significance that price will close the day lower than that R3 level. This has been proven by people who fully statistically analyzed using pivots for trading and generating alpha. Trying to use them to predict tops in the direction of trend does not work with enough consistency to give you a enough of a edge. If there was no spread/commissions, that would be a different matter.

You could use them for a profit selling target in the direction of trend, but the reality is ANY random number generated any way will get hit in the direction trend is going... (Provided it's not unrealistically far away. Within like 3 ranges or standard deviations of the prior days prices.)

Quoting dean1star
Pivot point (P) of a mark can be used as the base level for the the arithmetic average of the high (H), low (L), and closing (C) prices of the market in the prior trading period. P = (H + L + C) / 3. Sometimes, the average also includes the previous period's or the current period's opening price (O): P = (O + H + L + C) / 4. In other cases, traders like to emphasize the closing price, P = (H + L + C + C) / 4, or the current periods opening price, P = (H + L + O + O) / 4. Wondering which part of the base equation is not correct then which leads to...
"Don't fear a bubble until it starts to burst."
  • #423,212
  • Feb 3, 2016 6:38pm Feb 3, 2016 6:38pm
Next few weeks, a lot of action will come, r:r and trade.
  • #423,213
  • Feb 3, 2016 6:44pm Feb 3, 2016 6:44pm
Quoting meanvel
What I mean is, they don't work for short term trading... They do not give you enough edge to get past commissions. If you use pivots like many use them... Say your short a R3 which is the prior days median + 3x the prior daily range. There is no consistent statistical probability of any significance that price will close the day lower than that R3 level. This has been proven by people who fully statistically analyzed using pivots for trading and generating alpha. {quote}
Interesting POV.

Probability in the extent to which an event is likely to occur, measured by the ratio of the favourable cases to the whole number of cases possible.

In simplicity one might say a range calculated to denote an outcome. presumed favourable.

Or the quality or state of being probable; the extent to which something is likely to happen can be cacluclated with a reasoning factor included.

An example from ones main focus or event could even be on a natural level, such as an external factor, or how we might say in trading an event which is factored in as Probable.. This is a favourite one of mine -

The rain will make the probability of a postponement even greater. Probable that is ..
  • #423,214
  • Feb 3, 2016 6:54pm Feb 3, 2016 6:54pm
Do you know what the father of quantitative trading said? The guy who invented it...

Paraphrasing: "You can throw numbers at the markets until the cows come home. Markets only have approximate probabilities, and that probability is based upon "what you know.""

Markets are Knightian Uncertain.

If you are using a Pivot formula and consistently trading successfully with it, there is nothing wrong with that. However, realize that the formula is not what is giving you success... Your decisions are being shaped by other factors. The formula is just providing arbitrary reference points just like a price grid does. Actually, a price grid isn't arbitrary if it's at the quarters and evens. Those are options strike prices.

Plus, all the orders that go through and are build up around those levels causes real effects.

Quoting dean1star
{quote} Interesting POV.
"Don't fear a bubble until it starts to burst."
  • #423,215
  • Feb 3, 2016 7:12pm Feb 3, 2016 7:12pm
And, here is how the structural and psychological factors at the even numbers and options strikes can be proven... Do a statistical analysis of the order book analyzing order density at different numbers, and you will come up with a anomalously high correlation of high order density at even numbers, a weaker correlation at the fifties, and a very weak to nonexistent order density anomaly at the 75/25's.

Even though this is just the Oanda order book, you will see the same pattern across all brokers, and even the interbank market if you can get the data from a bank.

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Quoting meanvel
Actually, a price grid isn't arbitrary if it's at the quarters and evens. Those are options strike prices. Plus, all the orders that go through and are build up around those levels causes real effects. {quote}
"Don't fear a bubble until it starts to burst."
  • #423,216
  • Feb 3, 2016 7:13pm Feb 3, 2016 7:13pm
Quoting meanvel
Do you know what the father of quantitative trading said? The guy who invented it... Paraphrasing: "You can throw numbers at the markets until the cows come home. Markets only have approximate probabilities, and that probability is based upon "what you know."" Markets are Knightian Uncertain. If you are using a Pivot formula and consistently trading successfully with it, there is nothing wrong with that. However, realize that the formula is not what is giving you success... Your decisions are being shaped by other factors. The formula is just providing...
The same principle agreed. Would anybody be so foolish as to even contemplate the Direction of a Market, if we focused even on a Particular pair. My point in certainty is here at FF how many traders constantly gamble either knowingly or unwittingly and how many of them are convinced they know which way the market is heading, convinced being the manner of communication. Just read the posts of today with people constantly aiming for attention, look its going here and then there and now u know .. etc etc - every trader walks the thin line and from my humble experience its a challenge to accept and become accustomed with.

Interesting how you quoated Tony earlier one of the finest and most respected traders here at FF.
  • #423,217
  • Feb 3, 2016 7:20pm Feb 3, 2016 7:20pm
Who is Tony?

Quoting dean1star
{quote}Interesting how you quoated Tony earlier one of the finest and most respected traders here at FF.
"Don't fear a bubble until it starts to burst."
  • #423,218
  • Edited 7:42pm Feb 3, 2016 7:29pm | Edited 7:42pm
Quoting meanvel
LoL... Yea, maybe some days there is real "momentum" in the literal meaning of the word. Actually, it's "positive feedback" in a situation like that, but that's just semantics! {quote}

Here is a great example of positive feedback tail events... Bitcoin! Real world positive feedback like a bank run is usually exponential, in markets exponential positive feedback (price to price feedback) can usually only be detected with volume and price. Price itself doesn't usually go fully exponential, it just accelerates.

For those who don't know what positive feedback is... Take a microphone hooked up to a speaker and a amp, and move the microphone near the speaker. That is positive feedback. That is why counter-trending in many situations can be deadly. The market can exponentially ramp farther than you can believe, and there is no way to predict the exact end of the spike because it's so fast and violent.

That is what you get when one person buys, then the increase in price causes another couple people to buy, then that increase in price causes a few more people to buy... Price to price feedback just snowballs!

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"Don't fear a bubble until it starts to burst."
  • #423,219
  • Feb 3, 2016 8:14pm Feb 3, 2016 8:14pm
Quoting meanvel
Who is Tony? {quote}
Quoting Bones
don't fight the momentum of the day lol {quote}
  • #423,220
  • Feb 3, 2016 9:16pm Feb 3, 2016 9:16pm
I like this quote I remember from this retired proprietary bank trader. "Any trade taken without conviction is gambling."

I find that it is a great rule. If your not absolutely convinced the top is in, there is no reason to short. If your not absolutely convinced the bottom is in, there is no reason to buy.

The rule only really helps those with market experience that can judge markets. You know your convictions, and if your confident your convictions are on average in-line with other experienced traders, whales, fund managers, etc... The market won't drop until everyone is convinced it is ready to drop, because all of the smart players are all thinking about the same things... And, if were all thinking that were not confident the top is in, then were probably not going to start shorting aggressively and dropping the market hard.

You have to realize the degree to which trading is a self-fulfilling prophecy to get this. Back in the eighties when market forecasters were all the rage... Prechter just making a Elliott wave prediction would move the market around 2% just that day from people listening to him shifting positions based upon his prediction. LoL!

Nowadays central bankers are the kings when it comes to influencing markets...
"Don't fear a bubble until it starts to burst."
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