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  1. #1
    Senior Member analyst75's Avatar

    What Would Happen Next to the EURUSD? !!!

    “It is not so important to be right, but how to make money when you are right.” – Ivan Hoff

    I remember what happened at one interesting trading conference I attended about 5 months ago. It was an interesting conference indeed. At one stage, the moderator showed us a EURUSD chart (whose dominant trend was bullish, but the short-term trend was bearish) and asked us this question:

    Where do you think the price would go next?

    There was silence in the hall. Predicting the future is a great challenge; plus it’s senseless to talk about the future price action with an utmost certainty. A few traders stood up and tried to give their opinions. I later stood up, took the microphone and said that two things could happen at that juncture: the price could turn in favor of the dominant trend which would continue OR the short-term bearish correction could actually be the beginning of a strong bearish outlook. Was I wrong?

    One man quickly got up to announce that I was wrong. He said that the price MUST turn upwards since the dominant trend was bullish. I kept quiet. Can you see how traders showcase the mindset that can endanger their career?

    This was a bone of contention; some seriously thought the pullback would end up blending with the overall trend. But the reality was that it could be the beginning of another long term reverse trend.

    Being opinionated is a not a good thing in trading. Those who’ve enjoyed lasting success in the markets know how to admit their errors, get out of losing trades and look for the next signals which may be profitable. However, opinionated traders would never admit their mistakes and would take a decision to run their loss for as long as the market goes contrary to them. An opinionated trader may even be confident enough to open a very large position (like 20% or 40% risk), believing that the price MUST go in their favor. The person may even refuse to put a stop for disaster prevention

    Was the man right? Yes, he was right, but the short-term correction took the price downwards by up to 500 pips before the price went in the direction of the dominant bias. In some cases, the market could even go down by over 1500 pips within the next few weeks before any meaningful reversal, if that would happen at all. Can you see how people make decisions that have adverse effects on their portfolios?

    Was I also right? Yes. I gave two possibilities of the price direction – either up or down. In order to benefit from this expectation or ensure that an adverse movement doesn’t affect my portfolio, I truncate my loss when I’m wrong and give my gain some leeway when I’m right. I’m not opinionated: I know what to do whenever I’m proven wright or wrong.

    Being Bearish or Bullish Makes No Difference
    It’s common for many a trader to say ‘I’m bearish/bullish on this market.’ That doesn’t make any difference. What would happen when a swing trader goes short in a market because she/he hears a scalper announcing being bearish? When a position trader says she/he is bullish, do you think an intraday trader can make a ‘fool-proof’ long trade?

    I look at a EURUSD chart and I say I’m bullish, but you look at it and say you’re bearish. A chart is a chart, plus both the bear and the bull can make money in the same market. When a dominantly bearish market rallies by over 600 pips, the bull can make some gains. In the same market, the bear can also make some gain when the price pulls back in the direction of the dominant bias in which the buying selling is prevalent – what make the difference are the timing methods and trading styles.

    Being bullish or bearish makes no difference. What makes difference is your respect for the realities taking place in the markets. A confirmation of a reversal wouldn’t happen overnight; it takes days or sometimes, weeks. The transition from a downtrend to an uptrend doesn’t happen in a flash; instead there would be a gradual thinning out of the downtrend which then translates into an uptrend, causing lower highs amidst consolidation and swing lows. No matter how significant a counter-trend bullish or bearish engulfing candle pattern is, it doesn’t mean the trend is over, unless the next series of candles continue to hold onto the reversal long enough. Otherwise, the significant bearish or bullish engulfing pattern may be a spike which gives traders an excellent opportunity to enter the market on a good bargain.

    Conclusion: The FX markets are among the most liquid trading markets in the world, and therefore, when a strongly trending instrument assumes an established bias, it may go on longer than anticipated. In the face of this fact, a reversal in the context of the established bias may either be transitory or be a start of a protracted movement in the opposite direction. Rather than being opinionated about a direction, you’ll help yourself by aborting your losers and riding your winners – the only way to face the vagaries of the markets victoriously.

    This fact is summed up in the quote below:

    “I spend my day trying to make myself as happy and relaxed as I can be. If I have positions going against me, I get right out. If they are going for me, I keep them.” – Paul Tudor Jones

  2. Thanks Lelyz9 thanked this post
  3. #2
    Legendry Member milos's Avatar
    daily weekly monthly
    Stochastic ( 9;6;3) Sell Sell Sell
    RSI (14) Buy Sell Sell
    SMA 20 Buy Sell Sell
    MACD(12,26,9) Buy
    SMA50 Buy
    SMA100 Buy

    Entry points 1.0870 target 1.0920.

    Daily charts is bullish while weekly and monthly bearish.

    Click image for larger version. 

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    Last edited by milos; 01-27-2016 at 10:55 AM.

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  5. #3
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by analyst75 View Post
    “It is not so important to be right, but how to make money when you are right.” – Ivan Hoff

    I remember what happened at one interesting trading conference I attended about 5 months ago. It was an interesting conference indeed. At one stage, the moderator showed us a EURUSD chart (whose dominant trend was bullish, but the short-term trend was bearish) and asked us this question:

    Where do you think the price would go next?

    There was silence in the hall. Predicting the future is a great challenge; plus it’s senseless to talk about the future price action with an utmost certainty. A few traders stood up and tried to give their opinions. I later stood up, took the microphone and said that two things could happen at that juncture: the price could turn in favor of the dominant trend which would continue OR the short-term bearish correction could actually be the beginning of a strong bearish outlook. Was I wrong?

    One man quickly got up to announce that I was wrong. He said that the price MUST turn upwards since the dominant trend was bullish. I kept quiet. Can you see how traders showcase the mindset that can endanger their career?

    This was a bone of contention; some seriously thought the pullback would end up blending with the overall trend. But the reality was that it could be the beginning of another long term reverse trend.

    Being opinionated is a not a good thing in trading. Those who’ve enjoyed lasting success in the markets know how to admit their errors, get out of losing trades and look for the next signals which may be profitable. However, opinionated traders would never admit their mistakes and would take a decision to run their loss for as long as the market goes contrary to them. An opinionated trader may even be confident enough to open a very large position (like 20% or 40% risk), believing that the price MUST go in their favor. The person may even refuse to put a stop for disaster prevention

    Was the man right? Yes, he was right, but the short-term correction took the price downwards by up to 500 pips before the price went in the direction of the dominant bias. In some cases, the market could even go down by over 1500 pips within the next few weeks before any meaningful reversal, if that would happen at all. Can you see how people make decisions that have adverse effects on their portfolios?

    Was I also right? Yes. I gave two possibilities of the price direction – either up or down. In order to benefit from this expectation or ensure that an adverse movement doesn’t affect my portfolio, I truncate my loss when I’m wrong and give my gain some leeway when I’m right. I’m not opinionated: I know what to do whenever I’m proven wright or wrong.

    Being Bearish or Bullish Makes No Difference
    It’s common for many a trader to say ‘I’m bearish/bullish on this market.’ That doesn’t make any difference. What would happen when a swing trader goes short in a market because she/he hears a scalper announcing being bearish? When a position trader says she/he is bullish, do you think an intraday trader can make a ‘fool-proof’ long trade?

    I look at a EURUSD chart and I say I’m bullish, but you look at it and say you’re bearish. A chart is a chart, plus both the bear and the bull can make money in the same market. When a dominantly bearish market rallies by over 600 pips, the bull can make some gains. In the same market, the bear can also make some gain when the price pulls back in the direction of the dominant bias in which the buying selling is prevalent – what make the difference are the timing methods and trading styles.

    Being bullish or bearish makes no difference. What makes difference is your respect for the realities taking place in the markets. A confirmation of a reversal wouldn’t happen overnight; it takes days or sometimes, weeks. The transition from a downtrend to an uptrend doesn’t happen in a flash; instead there would be a gradual thinning out of the downtrend which then translates into an uptrend, causing lower highs amidst consolidation and swing lows. No matter how significant a counter-trend bullish or bearish engulfing candle pattern is, it doesn’t mean the trend is over, unless the next series of candles continue to hold onto the reversal long enough. Otherwise, the significant bearish or bullish engulfing pattern may be a spike which gives traders an excellent opportunity to enter the market on a good bargain.

    Conclusion: The FX markets are among the most liquid trading markets in the world, and therefore, when a strongly trending instrument assumes an established bias, it may go on longer than anticipated. In the face of this fact, a reversal in the context of the established bias may either be transitory or be a start of a protracted movement in the opposite direction. Rather than being opinionated about a direction, you’ll help yourself by aborting your losers and riding your winners – the only way to face the vagaries of the markets victoriously.

    This fact is summed up in the quote below:

    “I spend my day trying to make myself as happy and relaxed as I can be. If I have positions going against me, I get right out. If they are going for me, I keep them.” – Paul Tudor Jones
    do you have a point? are you going to make a prediction? what about a trade? what are your targets? Oh yeah, you probably don't have targets cuz this post is just BS right?

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  7. #4
    Legendry Member willyw's Avatar
    Quote Originally Posted by Michael Hodges View Post
    do you have a point? are you going to make a prediction? what about a trade? what are your targets? Oh yeah, you probably don't have targets cuz this post is just BS right?
    You are right, Micheal; it's pure BS

  8. #5
    Rookie Member TheBinaryAdvisor's Avatar

    So what affects EUR/USD and how? !!!

    To answer the question we should figure out what factors affect EUR/USD currency pair.

    Firstly, we should consider recent releases of inflation data. The US inflation rate has been reported at a level of 1.4% in January 2016. That has been noted as a 15-month high. In addition, jobless rate for in the US was measured as 4.9%.

    Another factor which affects the second part of the currency pair is producer prices in leading economies of the European Union such as Germany where the figure plunged by 2.4% over the previous month year-on-year.

    These factors reflect the bullish trend in USD provided the European Union is battling low inflation growth.

  9. #6
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by TheBinaryAdvisor View Post
    To answer the question we should figure out what factors affect EUR/USD currency pair.

    Firstly, we should consider recent releases of inflation data. The US inflation rate has been reported at a level of 1.4% in January 2016. That has been noted as a 15-month high. In addition, jobless rate for in the US was measured as 4.9%.

    Another factor which affects the second part of the currency pair is producer prices in leading economies of the European Union such as Germany where the figure plunged by 2.4% over the previous month year-on-year.

    These factors reflect the bullish trend in USD provided the European Union is battling low inflation growth.
    even more important than all of that is central bank policy. the ECB and the FOMC are on divergent paths that could see the pair fall back to parity... the ECB is on a loosening path, the FOMC on a tightening path. the data affects market perception of where those paths are heading, ad drives near term movement in the eur/usd. The thing to remember is that when the ECB meets and the FOMC meets, if they do not live up to market expectations they could send the pair shooting higher... the ECB might not loosen, or loosen as much as expected, the FOMC is likely not to tighten at this next meeting and their statement could be either hawkish or dovish... for now I expect to see the pair trade within a range near the 1.1000 level with news and data moving it up or down within that range.

  10. #7
    Senior Member analyst75's Avatar
    Quote Originally Posted by Michael Hodges View Post
    do you have a point? are you going to make a prediction? what about a trade? what are your targets? Oh yeah, you probably don't have targets cuz this post is just BS right?
    “Look, chances are people aren’t going to like me after I tell the story, so at no point am I ever, ever, ever going to try to get the reader to like me.” - Turney Duff

    The biggest mistake most traders make is to think they can predict the markets. Van K. Tharp once went to India where he was trying to emphasize on a TV program that successful trading has nothing to do with the ability to predict the markets. We want to make money without knowing what the price will do next.

    Unfortunately, the presenter was too myopic to grab the point. She was asking Van to mention what he thought the price would do next. It’s a pity!

    Making money is more important than knowing what the price would do next.

  11. #8
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by analyst75 View Post
    “Look, chances are people aren’t going to like me after I tell the story, so at no point am I ever, ever, ever going to try to get the reader to like me.” - Turney Duff

    The biggest mistake most traders make is to think they can predict the markets. Van K. Tharp once went to India where he was trying to emphasize on a TV program that successful trading has nothing to do with the ability to predict the markets. We want to make money without knowing what the price will do next.

    Unfortunately, the presenter was too myopic to grab the point. She was asking Van to mention what he thought the price would do next. It’s a pity!

    Making money is more important than knowing what the price would do next.
    how do you make money without at least having an idea what price will do next? It's not like we're using equity options to trade delta and theta neutral positions... if you have no idea what prices are doing or where they are going you have no business trading the markets. Technical analysis and speculative trading is all about predicting which way the market is going and what prices will do next.

  12. Thanks analyst75 thanked this post
  13. #9
    Moderator Kolyo's Avatar
    You can not predict the future but if you want to make money you need at least a statistical edge that your guesses will be more than 50% right and that’s a prediction. So no way to make money trading without some idea on what is going on in the market! The more information we have the better our results will be. That’s why I am using a combination of tech stuff and fundamentals and sentiment trading. Checking the news wire and order books and finding S/R levels, all this stuff are ways to predict the future some or other way, but it works, otherwise we won’t make money at all.
    "The goal of a successful trader is to make the best trades. Money is secondary." - Alexander Elder

  14. #10
    Senior Member analyst75's Avatar
    Quote Originally Posted by Kolyo View Post
    You can not predict the future but if you want to make money you need at least a statistical edge that your guesses will be more than 50% right and that’s a prediction. So no way to make money trading without some idea on what is going on in the market! The more information we have the better our results will be. That’s why I am using a combination of tech stuff and fundamentals and sentiment trading. Checking the news wire and order books and finding S/R levels, all this stuff are ways to predict the future some or other way, but it works, otherwise we won’t make money at all.
    You're right, Kolyo.

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