Hi,
Can you please suggest what is the best / easiest way to see what caused prices to move in the past?
Say for example the USDCAD moved up strongly or down sharply, how can I go and look what was all the fundamental factors that caused that move?
Thank you in advance for your advise!
Kind Regards
Use the Economic calendar and observe how the high impact news influence the direction of the candlestick on a 30min or 1hour time price chart.
https://www.babypips.com/economic-calendar?timezone=Asia%2FSingapore&week=2018-W39
Thank you very much.
And yes this is more or less what I have been doing.
The problem here is that on one day there are sometimes multiple high impact announcements and how to tell which made the biggest effect.
The second problem is that sometimes the real effect only occurs hours or the day afterwards, which makes it hard to say which of the news events caused the move?
Does this make sense? Or am I missing it?
Here is an example:
On 11 Sept USDCAD took a drop. If I look at High or medium impact events for that day, the times do not correlate with the dip.
So was it the previous day’s GDP, Manufacturing news or the average earnings of the 11th Sept?
My gut feel says that commodity currency (CAD, NZD, AUD) tend to be more explosive and may have more weightage over other currencies.
Next in line would be GBP , brexit related news at the moment.
EUR watch out for Mario D speech, some crisis or bank default related jittery.
USD perhaps NFP or FOMC speech, but volatility seems to be waning.
CHF AND JPY seems like puppet currency, their news seems to only impact the momentum on an intraday basis.
Thank you.
Any tips if I want to go back two - three years and see what caused it?
I might not know what was going on then as we now know because of watching news?
I don’t bother with medium impact news. Correlations can change, it doesn’t matter whether the news cause the dip or spike up. I’m more concern with the after shock and how long the push is going to last. Usually, till the next high impact news.
Correlation often change. Save your effort.
@A31Trader, “what causes price” to move" past, present future can be summed up in a word, Sentiment. Indices are great barometers of sentiment. I use the DXY.
We all trad a trend, it may be up or down but the movements are caused by sentiment. Obviously, our central bank that controls the Pairs with supply and demand have to respect the sentiment as well.
What to know where PA is going? Draw a trend line, plot the highs and lows of the time period and previous, where is PA on the trend line. Location, location same as real estate. As Larry Williams stated in four things I have learned; 1. Structure.
Rookie.
Thank you very much! I will take a look at DXY and how it correlate. Thank you
@A31Trader, BP has a few good classes on the subject of trading the stronger against the weakest, Mataf Currency Index - Mataf has a very good tool for comparing currencies. They also have other valuable tools such as the correlation table with time frames.
Thank you very much. After looking at all this, I am unsure that a correlation is the way to go.
I am lately leaning towards mainly looking at fundamentals, then using technicals for entries & exits.
Do you guys also read analysis (fundamentals) for these things? If so, where, and how much do you “trust” their analysis? Or is it something you don’t do and would just rather do it yourself?
First, you’ll need to have a reliable source of events calendar (eg forexfactory.com).
With that done, all you just have to do is to check when the big move happened & correlate with your event calender.
However, not all events may be captured in your events calender. Usually, it’s just the regular events that are captured.
Well it depends on the magnitude of price action. Noticeable market changes after release of important economic news, comments of Central bankers, and different political events. Usually they’re covered by Bloomberg, Zerohedge or WSJ