COT Report Analysis - a thread on market sentiment - Page 50
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  1. #491
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    Nov 2013
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    Hi Mike,

    I do like your new cross count method actually more! I do not start the mathematics now, so I do not know after 1 day if the result (+3) is accidently the same in both measurement or it will be different. We will see. If it is the same then it would not matter which way to use, if it is not the same (I would think this second option will happen) then I like the second. There is something though to keep in mind in the second measurement: a Major currency can only move between +3 and -3 and a comm currency can move between +5 and -5. So the extreme level is different and commodities are more likely to be on the very to or very bottom and majors have more chance to stick in the middle.

  2. #492
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    Sep 2013
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    Hey FE.

    I'm glad you looked at that.
    But, let me tell you (as stated before), it all shakes out the same. The boiled down number will always be the same. I ran so many back tests. Got tired of seeing the same thing. But, we do need to work on the measuring stick, for the gauge.

    I'll get it.

    Thanks!

    Mike

  3. #493
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    Nov 2013
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    Hi rookie and Mike,

    wow slow down guys. For all these posts I try to answer in 1.

    Aussie minutes: looks bearish to me.
    BOE: rookie already analysed (you do quite a lot fundamentals lately!). I do see 2-0-9 result quite bullish as usually we only see 0-0-9. peterma is the expert of GBP so I highlight his name to express the waiting for his opinion what he thinks about GBP.

    You guys write a lot about MG. Please send me the link. Want to see what he is doing. However, Mike you should I think pay attention. No matter how bullish we are on USD, you are long with it in long-term vs. most other currencies without a stop loss. That sounds dangerous.

    And rookie, why do we do all this work? I can tell you easily: to get the right direction! That is all! :-) An EA will never tell you what is proper lot size, if news is coming, what should be a stop loss, risk/reward ratio. I do believe there are good systems as we use our own system as well. But I would not trust a computer to do trades for me. It makes once a mistake and my account is maybe away.

    Good day guys. I do not plan to trade but read the thread.

  4. #494
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    Sep 2013
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    USA. Pittsburgh, Pa.
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    Hey guys...FE.

    Got caught up on the posts now.
    Man...I know what your talking about! When it comes to deciding on whether to get in or wait for a retracement. I've spent countless hours thinking about that! It is such a dilemma! Just after I got home from work yesterday, I checked the charts. Yeah, sure, USD was tearing it all up. But, I realize that just as much as a chance that it will retrace is about the same chance that it will just continue to flow the way it does. So, I just went ahead and put in some more trades. That's when I added on JPY, AUD, EUR to the portfolio. It didn't feel good, but, I just didn't want to be missing out on the action. So, this morning after I woke up, man, am I glad I did. This gives me more room to play with. USD is just continuing its march. And also I think that if I'm wrong, (this is how I rationalize this play) I will just hold on to it for a longer time period. That's why I told Rookie that I will plan on holding USD for days to weeks. That mindset is what got me into these extra trades. And I'm pretty lucky that their going my way. And meanwhile this is all after the huge spanking the US did to everyone on Tues. It is gut renching! But I guess I would rather take the loss than miss out on a serious roll. "If it's trending, I'm in it". That to me outweighs the losing part of it. Now the USD is trending. I just so badly want to be in it. Also I have in mind (the bigger picture) the fact of how everyone was wanting the US to be boss this year. Slated to anyway. That WAS the sentiment at the beginning of the year. And up to this point it was not the case. But I feel now is the time for that.
    Look...I'm nobody special. Not smart. Have no insight. But, given what you and our buddy Rookie have been saying about the retracement dilemma, I just had to throw in my thoughts on that. I know I can get burned at any time. But I guess my bottom line thinking is "If it's trending, I'm in it". I'm just glad that I have the guts (at this time anyway) to be in it.

    It takes a stomach.

    Mike

  5. #495
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    Hey FE!

    Check out the thread. It's a long one. That is fundamentally how I trade. But it is ONLY a methodology. Not a mechanical or signal strategy. You have to tailor it to your own liking.

    http://forums.babypips.com/show-me-m...4-7-a-123.html

    Start from the beginning FE. Page one. Sorry this is not the beginning, but will get you there to it.

    Mike

    PS...need to know what you think!

  6. #496
    Join Date
    Nov 2011
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    2,497
    I know I've harped on a bit about the CRB index and the fact that it has been falling lately, well that little baby can have an overall effect on a day's trading.

    John J Murphy asserts that the CRB trends in the same direction as Foreign currencies and opposite to USDX.

    The CRB tracks commodities, and as we know commodities are the raw material of business. The cheaper raw material gets - the cheaper the end prices become....and a fall in inflation.

    Some analysts were saying that traders must have "had a sniff" of the UK inflation numbers before release, maybe they just were aware of the CRB fall.

    Murphy in 2013: "John's Tips: Commodity prices and foreign currencies trend in the same direction and in the opposite direction of the US dollar".

    A further quote "The inverse relationship between the dollar and commodity markets is one of the most consistent and reliable relationships in inter-market work".

  7. #497
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    Default Trade Stocks and Commodities…– Larry Williams, pages: Introduction (6 Pages) and 1-12

    I start now a new series here, I write here down my own thoughts about my second COT book as I read it. I write down anyway always for myself what I think is important to look it back later, so I decided why not to post it here too? Important: I write down the own words of the author, in the right order as it comes in the book. However I will not structure the different thoughts and do not write down which pages they were. I just want to mention the sentences which I find important for myself. This is not the same value for you as reading the book (hopefully you will all read it when you have the time for it), however it is better than nothing. I also make my own summary in the end of each post.

    Introduction

    This is a rigged business. The exchanges, the brokerage firms, and the large funds have set the table for themselves, created for themselves that are different from the rules for the smaller players in the game. There is one set of rules for hat they can do and another for the average trader or adviser.

    Frankly, I have no problem with that. It is their game, and they have the marbles. But we need to know of those differences to not get sucked into their game. To win at this game you need not only know the rules but not be trapped into the fallacies.

    To that end let me expose a few of them:

    First fallacy: "These guys know something". Experts have been correct in predicting the future less than 22% of the time. (Wall Street Journal survey evaluation)

    Second fallacy: "If they knew something, the'd tell you". Finally, I got it; they (brokerage firms) are in business to make money and despite hat they say or do, brokers that generate huge commissions get huge rewards. The incentive is all about commission, not customers.

    My wake-up call. What I learned is that we are very much in this game on our own. There is one thing you have been told, though, that is true; there are people who know more about the markets than you. Lots more. You've searched high and low for these people, and thought brokers or the media would dredge up their advice. Wake up, Charley, that's not the way the game works.

    The superpowers. What you are about to learn is that there are true superpowers of the marketplace, so critical to market structure they are required, by federal law, to report their massive buying and selling once every week. If they don't report they will be hit with massive fines and/or go to jail. I suspect only one investor or trader out of 10 000 is aware of this vital information, posted, for free, on the Internet every week. Most investors are looking at charts instead of the buying and selling of these people who move the charts.

    85% of mutual funds don't do as well for you as if you had just bought the laggard Dow Jones Industrial Average stocks.
    When most people think of investing, they think of stocks and bonds. That's traditional thinking. What they are not aware of is that each day about five times more dollars change hands in the commodity markets.

    Meet Your New Investment Partner and Adviser

    The mission of the CFTC is to protect amrket users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and options markets.

    Futures contracts for agricultural commodities have been traded in the United States for more than 150 years and have been under federal regulation since the 1920s. In recent years, trading in futures contracts has expanded rapidly beyond traditional physical and agricultural commodities into a vast array of financial instruments, including foreign currencies, U.S. and foreign government securities, and U.S. and foreign stock indexes.

    Large hedgers that are users want to buy at low prices, hereas large producers want to sell at high prices.

    We were somewhat surprised to find that the Large Hedgers were consistently superior to the Large Speculators.

    Summary: well, it was some usual thoughts, I thought to grab out this time a bit of history too about CFTC. The first imporessions are good from the author, I am looking forward to start the real work!

  8. #498
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    Quote Originally Posted by Mike Wolski View Post
    Here comes the numbers.

    USD: +7 -0 0
    AUD: +3 -1 3
    EUR: +2 -1 4
    CHF: +2 -1 4
    JPY: +2 -1 4
    NZD: +1 -2 4
    CAD: +1 -5 1
    GBP: +0 -7 0


    So we have Majors +3. That's the way I've been doing it.
    Now I'll give you the M/C cross count. This is one side against the other with no internal counting.

    USD: +3 0 0 (against comms)
    AUD: +1 -1 3 (against majors)
    EUR: +1 -0 2 (against comms)
    CHF: +1 -0 2 (against comms)
    JPY: +1 -0 2 (against comms)
    NZD: +1 -1 3 (against majors)
    CAD: +1 -4 0 (against majors)
    GBP: +0 -3 0 (against comms)

    We have Majors added up = +6 and -3. Boiled down (6-3) = +3
    We have Comms added up = +3 and -6. Boiled down (+3-6) = -3

    So, that shakes out to Majors on top, by +3. It is the same, but, I think the "measuring stick" might be a little bit different. (I have to see what that will come out to be) That would be finding the extremes, for the gauge.

    Any case, a +3 is not by a whole lot. So yesterday was Comms +4. Today Majors +3. Technically Comms up by 1. But, we'll call it a foot race.

    Ok guys. Bedtime. See ya in about 7 hrs from now.
    Rookie, I'll give you my trades then. But, I'm for the most part all in with USD.

    Mike
    Hi Mike,

    Do you manually measure these correlations or do you use indicators for it? I found this indicator a while back and I think it does pretty much like what you do here. Correlations and sentiment analysis are pretty much new to me, so I haven't used this indicator much. Maybe you can find it useful (if you haven't used it already).

    Cheers,

    Name:  Currency Slope Strength.jpg
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  9. #499
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    Jul 2014
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    Erh... how to upload .ex4 or .mq4 files on this site?

  10. #500
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    Nov 2013
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    Quote Originally Posted by flows View Post
    Erh... how to upload .ex4 or .mq4 files on this site?
    Hi flows,

    it's already interesting that you could attach something as I thought you need 20 post for that. Well, the indicator is interesting. What is the name of it? I cannot read it on the picture. But hopefully it is not the same as Mikes. Don't destroy him. Once he will sell it for $$$$!

    Well if you look for sentiment and correlations then you pretty much landed on the right spot... But you have already posted here on 04.08.2014 so I guess you know what it is about.

    Good learning
    Last edited by ForExchange; 08-20-2014 at 01:51 PM.

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