The euro fell, ending its longest weekly rally in nine months versus the dollar, on concern stress tests of European but this morning the disappointing news of German Industrial Production made euro to crawl back 120 pips :eek: Now suddenly the risk appetite increases ? Worst on worst is good in Forex ??
IMHO Forex market is one sided battle depends entirely on central banks sentiments, it really doesnt matter what news is coming & where market trend is going. This is driving me nuts and i am frustrated with this chaos. I been trading from six months and everyday market makes a fool out of me. :mad::mad:
you have to remember that the market has a lot of participants and they all have different views on what is high and low. also price is driven by order flow, and the order flow can’t favour one side forever without some period of consolidation.
when everyone is positioned on one side of the market, it’s actually an extremely vulnerable situation because everyone knows the party will end one day and it’ll be time to race to the exits. if you are last in that line up, you probably won’t be leaving with more than a few scraps at best.
You really think the smart money is going to side with market fervor if the economy can only get better long-term?
The point is, smart money looks to stay in trades for longer periods of time than most retail traders can stomach. What they see is not necessarily what you see. Just check the CoT reports for the euro. Would you have held a long for the 6+ years that the non-commercials did?
Do a no trade blockout during orange and red news from forex factory. I don’t place a trade about 2 hrs before and wait till 30 minutes after.
IMO, two hours before is often where they will slowly put price so they can move/spike it one way or another and profit. 30 M after is generally when the dust settles.
If a set up is still valid after that then I might take it.
According to strict Ewave theory, the market price does not move because of news but because of prevailing social moods & trends. Note the social moods influence underlying economic activity, e.g. socio-economic mood/trends in grains industry influence production & thus future price for those commodities, consumer fashion / trends on consumer good prices, ‘dollar-sentiment’ has measurable influence on forex prices, or trader sentiment in the NYSE influencing stock prices, e.t.c. The sentiment of demand and supply participants influences market prices.
Thus, news are a part of that sentiment (whether an article becomes big news, or whether the news provokes significant sentiment) and thus are factored into market price. Price discounts all market condition. Price is the market. Even catastrophic news & releases achieve only momentary effect (within 500 pips/points or less) on market prices. Thats why markets tend to trend, according to trending moods of participants. Mood swings, from upbeat (positive, boom-mentality) to uptight (negative sentiment / expectation, recession, scarce-mentality) and as such the market swings.
One can’t predict social mood or effect upon it, but one can use it (& its theory) to predict market movement. Therefore fundamental analysis, as a ‘pure’ approach to chart trading, is dead.
Google ‘The Investor E-book’ by Robert Pretcher, among other books by him. And of course, print it & boil it then drink the soup.
'Following the news headlines to make sense of the markets is like relying on a rear-view mirror at a fork in the road … ’
-The Investor Ebook intro; found at actionforex.com
That theory may hold up on weekly/monthly timeframe. But, anyone that’s traded for any amount of time knows first hand that a red/orange news releases, and their accompanying price movement reactions can really screw up a trade on the D1 down.
If you are lucky and on the right side of the spike it can propel the trade. If you are not ,it can instantly take out your stop in a matter of a second, and then go back in your favor anyway or just keep going and going against your position.
P.S. IMO eliot wave theory is garbadge. I’ve yet to find one person that trades just off of that profitably. Now, simply wave analysis, “higher highs/higher lows,” that is helpful.
But, adding 1,2,3, A.B.C. and saying because this happened this always happens…well thats prediction. By the time you count all those waves price is way beyond the most profitable entries.
Anyone that tries to predict the market is a sure loser, profitable traders find probibilities in their favor and react at a set up, they dont try to predict.
I don’t think it applies to all traders, there are also many traders who are successful because of their predictions. we can predict the weather so as the market but it is only a prediction, it is on the trader if he or she will believe on his or her predictions.
You can not compare forex with weather simply because the forces that move them are different. The market is moved by human behaviour, so the next direction that price will go is completely random. You put the odds in your favour by waiting the market to tell you something and then take the trade.
yeah, I am not comparing forex to weather, because they are completely different, maybe I said it wrong. weather can be forecast, forex market is analyzation.