Firstly, yes, I use the term "smart money" to refer to the institutions. Believe me, I make no statement regarding their actual intelligence which is why I dubbed it "so called" and put it in quotes.
Secondly, your examples are insufficient. One trade, no matter the size, is enough to create sustained price movement. A massive trade could cause a quick pop in prices, especially in a thin market, but once that trade is filled then prices will stablize. It takes sustained volume to move the market, or at least the market view that more volume is coming behind the initial trade.
I still don't understand why you refuse to accept that not all trading goes through the majors, and that the major crosses play a big part in the game. You once used the fact that the AUD/JPY spread is wider than for either USD/JPY and AUD/USD to argue (I think) that the execution of that cross had to be done through the majors as a two legged thing. I'm looking at EUR/GBP and EUR/CHF with 1 pip spreads on my broker screen right now. Those are lower than EUR/USD, GBP/USD, and USD/CHF. That would seem to contradict your earlier argument.
And by the way, these days the bigger funds can do trades at least as large at the central banks. The reason the cbs still move the markets with their action has more to do with psychology than volume. They are sending a message, not actually trying to bully the market with flow, which wouldn't work anyway, as they found out in the past.
|