I'm trying to understand this but I need help...

[Technically Fundamental]

Land of the blind

 

[montmorencyt2w]

Land of the blind

Very possibly. Just trying to be helpful.


Well, case in point this morning (perhaps):

EUR/CHF and USD/CHF sudden fall around 09:30.
Related to Swiss KOF data release?
I wasn't in the market at that point, but I was a short time later when the expected rise happened. Didn't expect it to be so large or so sudden. Intervention of SNB?
I don't know. I dare say we'll find out.

 

[Technically Fundamental]

I was agreeing with what you said in the post before lol.

 

[gooseman]

rumour it was intervention. GJ can no doubt provide more light than my mere flickering match.

 

[Rhody Trader]

Yeah, heard of SNB intervention done via BIS.

 

[Technically Fundamental]

Why?

 

[cr6196]

Well be that as it may, I found that after months of steadfastly "ignoring the news", I was getting a bit fed up of seeing a pair or whatever suddenly plunge or soar, and not having much clue as to why. I therefore decided to make a determined effort to get to know a bit more about the various forces that were making this happen. Is the market random? No I don't think so, although it can appear to be, especially, as you allude to, over short TFs.

Even if I can't directly trade on these factors (although more knowledgable and skilled people probably could), at least I now have a better chance of standing out of the way of some of these sudden moves.

TF: I don't know if this throws any light. Just his opinion of course, but might give some ideas:

After volatile week, we see euro coming out on top

well i didn't mean to say "ignore" the news...i think it is slightly pointless trying to attach meaning to every move when your trading and i would say that if your in the way of a sudden move then it is to do with a bad trade more than poor knowledge...also the retail trader is the last person to know when anything happens so if anything happens "suddenly" your going to get screwed either way, even if you know why it happened.

I would add studying economics has given me nothing useful to trade on cos i'm not trading economics, i'm trading opinion...just my view of it though.

 

[Rhody Trader]

Why?

Because they are trying to keep the Swissy from rallying, particularly against the Euro.

 

[Technically Fundamental]

Yeh but I don't understand what there motives are is all. I just find it all interesting

 

[GladiatorX]

Yeh but I don't understand what there motives are is all. I just find it all interesting

Tourism. The Europeans aren't going to go the Switzerland for their ski-ing and tourist holidays when they can go to France... If people get more CHF for their euro, then holiday-makers will come and much of the countries revenue comes from outside.

(Just a guess)

 

[SAINT]

To add to the correlation questions, I wanted to add this link:http://www.elliottwave.com/freeupda...s-Together-in-All-the-Same-Markets-Index.aspx

Over the last 6 or so years, a credit-fuelled correlation was built up and still remains. It's like the world vs the dollar and has made diversification an almost redundant concept, as was seen mid-2008 if you look at any commodity/carry pair/stock chart.

Fundamentals do work, but often after human emotion has distorted the asset beyond reality.

 

[N Rothschild]

To add to the correlation questions, I wanted to add this link:Everything Rises and Falls Together in All-the-Same-Market Index | Elliott Wave International

Over the last 6 or so years, a credit-fuelled correlation was built up and still remains. It's like the world vs the dollar and has made diversification an almost redundant concept, as was seen mid-2008 if you look at any commodity/carry pair/stock chart.

Fundamentals do work, but often after human emotion has distorted the asset beyond reality.

indeed there is very little point trading different markets these days, all just moves with the dollar you are either long everything, or short everything!

 

[montmorencyt2w]

well i didn't mean to say "ignore" the news...i think it is slightly pointless trying to attach meaning to every move when your trading and i would say that if your in the way of a sudden move then it is to do with a bad trade more than poor knowledge...also the retail trader is the last person to know when anything happens so if anything happens "suddenly" your going to get screwed either way, even if you know why it happened.

Well if you know that certain data releases are due, you might not know exactly what will happen but you can figure out a couple of scenarios, i.e. figures better than expected, or worse, and what is the likeliest impact of either.

It was actually a matter of luck the other day that I happened to be looking at EUR/CHF when it fell like a stone, but it wasn't a matter of luck that I had previously read about a relevant data release, and figured there was a fair chance that it was connected. I reasoned that the effects of this would be short-lasting and that it would make its way back again. I also had read that the SNB had been intervening and there was a fair chance they would stop the slide before too far. And failing that, I was relying on reversion to the mean to at least make a few pips out of it. I was pretty staggered at how fast and far it did move up though. I made a bit but not as much as I could have, as I had a modest TP in there! (Got some on the way back down though, although I notice it didn't really come back anywhere near where it started and still hasn't I don't think).

I would add studying economics has given me nothing useful to trade on cos i'm not trading economics, i'm trading opinion...just my view of it though.

You are right I think. It's not economics, it's what people (rightly or wrongly) make of it. Why, for example, should the dollar go down when the stock market goes up? Doesn't seem exactly rational, but that's what seems to happen (not all the time).

I'm guessing that the big smart money is on the lookout for when previous correlations start to show signs of breaking down. Maybe that's how they spot e.g. new trends.

I have to say that today's data releases (quite a few) haven't done a thing for my trading so far! (quite the opposite if anything...).

 

[Technically Fundamental]

Well if you know that certain data releases are due, you might not know exactly what will happen but you can figure out a couple of scenarios, i.e. figures better than expected, or worse, and what is the likeliest impact of either.

It was actually a matter of luck the other day that I happened to be looking at EUR/CHF when it fell like a stone, but it wasn't a matter of luck that I had previously read about a relevant data release, and figured there was a fair chance that it was connected. I reasoned that the effects of this would be short-lasting and that it would make its way back again. I also had read that the SNB had been intervening and there was a fair chance they would stop the slide before too far. And failing that, I was relying on reversion to the mean to at least make a few pips out of it. I was pretty staggered at how fast and far it did move up though. I made a bit but not as much as I could have, as I had a modest TP in there! (Got some on the way back down though, although I notice it didn't really come back anywhere near where it started and still hasn't I don't think).


You are right I think. It's not economics, it's what people (rightly or wrongly) make of it. Why, for example, should the dollar go down when the stock market goes up? Doesn't seem exactly rational, but that's what seems to happen (not all the time).

I'm guessing that the big smart money is on the lookout for when previous correlations start to show signs of breaking down. Maybe that's how they spot e.g. new trends.

I have to say that today's data releases (quite a few) haven't done a thing for my trading so far! (quite the opposite if anything...).

Thats what I think too. Something along those lines. Too much money involved and changing hands for them not to pay attention.

Can't hurt to look can it.