Optimism everywhere

Beginner Questions
1

There is an expression coined by a political leader in the U.K. that “a week is a long time in politics”

That just as easily be applied to the financial markets if not more so.

The short-termism that pervades financial markets nowadays means that sometimes “a day is a long time in FX”.

Technical analysis allows traders to trade without emotion as what they see within their method is black and white, up or down, right or wrong. The interpretation work has been done in the setting up of the method at the outset.

Those looking at the fundamental factors need to use interpretation on every release. what does the data tell us about the market within our chosen time-frame?

There is an interesting article on yahoowhich discusses traders in banks turning to performance coaches to re-evaluate their trading techniques.

Being able to look at oneself when in the middle of a bad run is critical as in the day trading business it is very difficult to find genuine mentoring.

This week has clearly been a good week for the Euro where the stars have lined up with technical and fundamental factors driving the single currency higher. But can such optimism really continue for any length of time.

Can we trust the data releases from the U.S.? Can we trust that the EU leaders meeting tomorrow can deliver a lasting solution for the debt crisis? Is china going to continue to grow at a pace that can rag the global economy along with it.

“Who cares I am only looking at one hour charts anyway and as long as the market moves I can make money”

That is a perfectly genuine and valid quote but it brings me back to a point I have made several times before.

If the statistics are to be believed, losses far outweigh profits in day trading and there must be a common reason. I have said many times before, to me it is down to experience and understanding of the marketplace in which we all operate.

There is a place for scepticism regarding the motives of the big players but it is now a volume game and spreads have been driven lower by liquidity not the motive of sucking traders in.

My view on spreads, particularly five decimals, is that the proliferation of HF trades is a far greater threat to your profitability than stop hunting.

Lets just see how the rest of the week pans out but the optimism scale looks to be heavily in overbought territory right now

2

I use the VIX to monitor the market optimism. 5 decimal spreads are given for precision rather then a threat to your stop or profit. HFT often exaggerate the move (up or down) but I find it difficult to believe they are affecting the spread as higher liquidity is injected into the market. What are you basing your view on? About EU Summit, Greek finance minister said no big decision will be made tomorrow, a more-important meeting is due at the end of October. China is expected to grow, the question is by how much. Questioning US data releases can ultimately lead into questioning any data releases, no much from which country. Could be Italy, Spain, Turkey, New Zealand, Australia etc. The market varies from today-to-day, understanding the markets will enrich your financial knowledge but not neccesarily your pockets :slight_smile:

3

I base my judgement on my knowledge and experience of the interbank market and also comments from practitioners from within that sphere. I do not question U.S data myslef but there are a lot of people who do. I agree with you that in that case we question everything.

Understanding financial markets WILL enrich your pockets as I do not see experience and knowledge as being any less important than technical or fundamental analysis. That is just my opinion but given the the statistics for profitable leveraged traders clearly something is missing

4

Well I agree. As to me as a newbie is rather important the ability of gathering all information fundamental and technical analytic. And of course experience to use both of them. But how to use it real trading and understand the fundamental signals?

5

And your point is? Not meaning to be rude but I just didn’t understand the thrust of your post. Do you mind restating please?

6

The thrust of my post is two fold. Firstly that markets are becoming ever more un-predictable and short term in their outlook and that there are three very distinct parts to being a successful trader not one or two as most leveraged traders seem to think

7

Or maybe I am just in the wrong place!

8

Could you please back up this statement?

9

Five decimal places helps no one except High Frequency trades as the algo’s are able to place very large orders at miniscule pip profits to drive the market in a certain direction.

Stop hunting is a fallacy, the large banks trade liquidity in FX nowadays as the vast majority of trading is on platform.

There is no need for any currency to be quoted to five decimal places in our market. It is Ok in the interbank market where liquidity, especially in Eur/Usd is so great but it is pointless for the leveraged community. IMO any broker quoting less than 1 pip is simply paying you to trade with him and it is unsustainable.

10

100% agree

11

If you think it is a conspiracy don’t become a trader then. 5 digits, since it was implemented , it was a great thing to me because since then i had not a sinlge requote and the execution became faster. Also it helped to the retail trades a little more access to STP and NDD brokers. Well, it is true that ther is a lot of HF but i still can profit. Maybe there is a dark side of HF we are not watching yet, like the mortgages scandal, I think thif HF traders like most the majority are losing money, just a few are making the doug, it is my algorythm against yours against the whole world, it is too much risk for just a few fractions of pips.

Regards.

12

How much do you know about HFT that allows you to blame them?

The new five decimal system cuts retail trader’s spreads. Instead of a 3 pip spread on the GBPUSD (as an example), retail traders now have the options of 2.1, 2.4, 2.6, etc.

Most of HFT deals with order routing and the order book, which contrary to your argument, creates liquidity (however “false” you may wish to argue) that cuts the costs for many traders.

You are automatically associating HFT with parasitic trading, which are two different things. Although yes, there are systematic trading algorithms that are parasitic in nature and CAN BE HFT-geared. That is not to say that all HFT is parasitic.

Edit: I think that it’s very embarrassing to be criticizing something when one apparently has zero experience in, in an attempt to promote their 4 digit AKA higher spread brokerage firm.

13

I think it is also highly embarrassing to be critical of my motives when you clearly do not understand them. My issue with five decimals has nothing to do with driving spreads higher.

I know a great deal about HFT trading both theoretical and practical.

It is typical that someone with a lot of theoretical knowledge but little experience would question the actual market.

When you have a bit more experience maybe we will be able to have a more rounded conversation

14

Hmmm… That doesn’t seem to match with your earlier response.

Instead of SOLELY criticizing me let’s hear some facts then. Because right now you’ve got no argument to back up your statement, whereas I brought up an example to back up my argument. You want a more rounded conversation, then it starts with a valid argument, then banter all you want, like I did to you. Instead your entire post was a fallacy.

You’re a new member here on BP, and judging by your posts you’re hear to promote your new brokerage firm, the odds aren’t great.

So let’s hear it, I’m always open to learn.

PS. You don’t know how much experience I have in HFT either, theoretical or practical. :wink:

16

I have zero interest in getting into a conversation with you. You are a theorist. I have come across so many like you.

Good luck with your trading career. You will need it

17

That doesn’t sound very optimistic!

18

Clark at it again,

:smiley:

19

Oh no, not again. PLS!!! I am sick of knuckleheads and bullies. What is wrong with this people.

21

I am sorry but I think you pick the wrong site to post your add…

I am waiting and see how long all your post will last :slight_smile:

Good-luck… you will need it :slight_smile:

22

I too am a little skeptical, you have provided nothing concrete about Forex profitability, if you’re a genuine 100% high quality broker, you would want your clients to make money so that they provide endless spread profits for your company, in which case it would be in your interest to provide this wonderful babypips community with the tools and know how that you have to help us.

So far I have seen nothing on those lines, but I’m sure you are coming to that, will be looking forward to it.