It's so funny how many people claim to love and respect the book Reminiscences of a Stock Operator but get involved in these ridiculous conversations about why things are going to go here and there and justification, etc. The answer to Ivanivich's question is, it's the Trend stupid- the single most powerful force in the universe. The same thing that took the Nasdaq to such ridiculous heights that it will be spoken about in textbooks 200 years from now. The market is a single, living breathing animal which operates based upon the laws of Physics just like every other living organism. Nothing else to say. Now can we go back to talking cars, music and girls? By the way, I'm quite sure that all the talk about the cars is just adding levity and hyperbole. Personally, I only own 1 of those Ferraris that Coinz (snipe) posted and he doesn't own a Pinto (he owns a Dodge Dart).
Chinook's EUR/USD (E/$)Mumblings
- Thread starter chinook
- Start date
The world need a strong currency where money can seek refuge. Sometimes it's the CHF - but the last few years it has become overshadowed by the single currency.
Since the gold standard was abandoned, there have been much more uncertainties about the real monetary values - to our advantage and disadvantage.
The IMF has it's own "monetary system" but largely the USD has been the benchmark for most currencies and economies since the election of it instead of the Bancor.
During the last century this has proved a boon to most western economies which trade extensively with the US. Now, with the single currency the $ has some competition.
So unless investors would start grabbing those Yuans or Yens I don't see why the ⬠can't continue to rise even more. The EU is the world's largest trading bloc, and has far, far more upside potential than the US economy has had for decades.
Those are fundamental views that are hard to avoid - even though growth in the US still outperforms EU growth easily. But with the new rapid-growth nations under the EU umbrella this might change, also with some unfair trade practices increasing popular sentiments and shifting focus of international trade somewhat.
Is real change coming ? Sure - I think so. Seeing this common perception also reflected in currency trading should not be such a big shock - unless you have other emotional reasons to be shocked.
Since the gold standard was abandoned, there have been much more uncertainties about the real monetary values - to our advantage and disadvantage.
The IMF has it's own "monetary system" but largely the USD has been the benchmark for most currencies and economies since the election of it instead of the Bancor.
During the last century this has proved a boon to most western economies which trade extensively with the US. Now, with the single currency the $ has some competition.
So unless investors would start grabbing those Yuans or Yens I don't see why the ⬠can't continue to rise even more. The EU is the world's largest trading bloc, and has far, far more upside potential than the US economy has had for decades.
Those are fundamental views that are hard to avoid - even though growth in the US still outperforms EU growth easily. But with the new rapid-growth nations under the EU umbrella this might change, also with some unfair trade practices increasing popular sentiments and shifting focus of international trade somewhat.
Is real change coming ? Sure - I think so. Seeing this common perception also reflected in currency trading should not be such a big shock - unless you have other emotional reasons to be shocked.
Hello Ivan.
Yes, we do.
A few key sentences in your reply beg addressing.
The first part indicates euro bulls perceiving what is referred to as a "trend" upward. Therefore... investors... not seeing acceptable fall backs in price within toleration based on topical numbers (NFP, for example) say to themselves, "We don't understand this but... what the hell, GO FOR IT!"
The second part of your reply has to do with "Current Account." That of the USD. But little is said globally in the news about the CA of the euro-zone.
*Current* account is just that - current, not future. Well, I'm not saying we should trade like fortune tellers but I am pointing out that euro bulls appear to be trading with wreckless abandonment with no regard to any future (negative) euro-zone economic numbers coming out.
It's like wrapping themselves in sheets of metal and dancing out in an electical rain storm.
Lastly, I've placed 1000s of trades. Yet I cannot remember a single one done irrationally. I can't sanction irrational trading, even if it means big potential profit. The downside is just way too risky.
Apparently euro bulls are trading like this: They're taking out huge long positions with tight downward stops. Perhaps they are using money gained already from their previous longs so if they lose it or some of it they see it as the "market's money" anyway.
So it's purely mechanical trading, overriding fears of loss. It's kind of like, "If it works go with it."
Has this system pushed the price up the last 300 to 500 points? Will it push it up another 400 or 500 points? Perhaps. I mean, why not?
Anytime the masses (majority) of market participants toss rational trading principles to the wind in a unified fashion anything is possible: It doesn't mean it's right. And it doesn't mean it's good trading.
This is similar to frenzied panic buying. But... those same ones are always subject to being the first ones to hit sell when it hits the fan in the market. And, hitting the fan is a principle/event that I, for one, am keeping on the look out for.
When it happens we could easily see a 500 point spike down even in a 1/2 day. That would wipe out a lot more stop losses than have been tapped at any time during this climb. Market commentators would then be shouting about an inevitable "correction." Therefore, a lot of euro bulls are going to be sitting on their duffs seeing stars due to the hit(s) they just took.
_____
Let's look at the flip side of your post briefly.
Last time the rate was at a record (1.2929) it was not NFP numbers that caused the following 500 point fall. And it was not purely numbers from Current Account that drove it up there either.
What broke the climb? Pure warnings from Euro-Zone economic leaders.
Now, if a similar mechanism of trading long despite fears was in place then warnings should have not worked. Yet the price tumbled and kept on tumbling down 700+ points.
Current Account numbers hadn't changed for the better. NFP numbers were not all that different. Neither were any of the other numbers all that altered to warrant what ultimately become a drop into the 1.1700s.
Yet it happened.
Why?
That's all I'm pointing out here.
That the guys on this site who trade forex with their own money take the whole picture into consideration - not just the irrational momentary upper levels of this climb.
If I was flat right now, I still would not open a long trade. I can't see justification for it. But I can see justification for selling euro. I still hold that the money-making game here is in shorting EUR/USD. That view strengthens on every point the price moves... upward.
So far, I have not read anything in these threads that would convince me to go long. And, a temporary trend doesn't cut it anymore than blind irrational exuberance hysteria trading does even though that kind of trading creates "trends."
In reality "trends" don't exist. They are a myth losers bite into to justify their trading. So ultimately they can say, "It wasn't my fault (losses)! The trend changed!"
fxs
"The market is a single, living breathing animal which operates based upon the laws of Physics just like every other living organism."
No, the market is an unrelated, totally unconnected mass of chaos made up of proud, humbled, angry, irrational, fearful, greedy, over-confident, depressed, exuberant, confused, misinformed market participants.
Oh, and also a few real traders. Of whom I am one.
_____
fx
Good, post, Gringinho!
Some truths. Some things left out.
Two views:
1. Euro is the next shining star of the globe containing seeds of the future superpower economies therefore the price of EUR/USD should rightly be (now climbing to) 19.0000 instead of where it is now sitting (undiscovered) at 1.2900s. Within the next 3 years all euro longs will be billionaires while all euro bears will file for bankruptcy forsaking currency trading, and returning to work at Walmarts and 7-Elevens.
2. Euro, at best, is nothing more than a fledgling "tester" currency harboring utterly failing nations who could not even make it on their own due to their inability to survive economically. In the future look for the EU Commission to begin excommunicating some of the nations due to them filing for bankruptcy, ultimately the whole euro concept will be scraped in a "Heh, nevermind" scenario. The whole euro-zone area will succumb to drugs, alcohol, prostitution and mass starvation, unemployment rocketing past 53%.
Which of these two views hold true is what causes volatility in the pair, spiking the price up to 1.3000 and slamming it down to below 1.800s.
Sniper
Quit it dude, it ain't gonna go back down.
Get out and stay alive.
Please don't kill yourself if you lose, we all love you
There are more bears than bulls in the EUR/USD market right now. Your not alone. That is is the risk. :eek:
A crowd of rational people can add up to make irrational market movement. That is the key.
Get out and stay alive.
Please don't kill yourself if you lose, we all love you
There are more bears than bulls in the EUR/USD market right now. Your not alone. That is is the risk. :eek:
A crowd of rational people can add up to make irrational market movement. That is the key.