is buying GBP/USD at this level a good trade?

[sKaLpZ]

Quote from Ivanovich:

See, and I think the hugely negative sentiment drove people into going long USD (which is why all majors lost against the USD). Regardless, if you call a near 1000-pip drop in 7 days "steady", I would hate to see what you think is not steady.

LOL

I'm beginning to see the market having something like cattle prods that rush the herd one way then another.

Example: When EUR/USD when from 1.2100s in Sept 2004 to 1.3665 in the end of Dec. 2004 the cattle prod was the fear that "foreign money would evaporate from US debt."

Now the prod is US interest rates.

You can always tell a mania-driven spike up or down because it is based on a single factor that doesn't take into consideration the whole scenario.

For now the cattle prod is interest rates.

Moo... or should I say "Oom" (since I'm a contrarian).

 

[illiquid]

Quote from Ivanovich:

See, and I think the hugely negative sentiment drove people into going long USD (which is why all majors lost against the USD). Regardless, if you call a near 1000-pip drop in 7 days "steady", I would hate to see what you think is not steady.

I was just referring to the steady (but fast) pace of the fall, with not much retracement at all -- smells like long liquidation rather than shorts pushing. The euro on the other hand managed to retrace every drop attempt this week, staying relatively close to the prior breakdown level (1.20).

 

[trc49492]

according to my technical indicators, GBP/ USD is now ready for a long trade with a tight stop right under the most recent daily bar low..

The risk reward ratio here for longs is quite good considering how steep and fast this decline was...

this is of course only a short term trade to the long side

when the risk appears to be the highest, which is the case with the GBP / USD it is actually in this case the least...

looking at the price chart, it almost looks like a price crash. you can be sure that right now the smartest money is going long down here

The euro on the other hand managed to retrace every drop attempt this week, staying relatively close to the prior breakdown level (1.20).

for this reason, this trade could also be called a 'sympathy trade'... the euro the early hint.

 

[ElectricSavant]

Why does a price fall or rise. Illiquid again, illustrates one of the reasons, which I concur with. But I am now posting after the London Bombing News, because I had not noticed this post earlier.

Thre are a lot of gems hidden in ET...The quoted text, is one of those observations that you should place in your rule box.

Now don't get all puffed up, illiquid...get back to work!

Michael B.

Quote from illiquid:

I was just referring to the steady (but fast) pace of the fall, with not much retracement at all -- smells like long liquidation rather than shorts pushing. The euro on the other hand managed to retrace every drop attempt this week, staying relatively close to the prior breakdown level (1.20).

 

[Ivanovich]

Quote from illiquid:

I was just referring to the steady (but fast) pace of the fall, with not much retracement at all -- smells like long liquidation rather than shorts pushing. The euro on the other hand managed to retrace every drop attempt this week, staying relatively close to the prior breakdown level (1.20).

You could say the same thing about the rise of EUR in December of last year. Steady (but fast) pace of the rise with no retracement at all. And then look what happened come Jan 1.

 

[sKaLpZ]

I knew I was gonna get battered and cut up when I opened my long GBP/USD trade: You just can't get into the pit and expect not to get hurt.

The bombs going off in London with the resulting 250-point plunge, .04% of my overall live trading account went up in smoke - the trade being more about controlled bloodshed.

Good luck to silver longs.

sKaLpZ

 

[illiquid]

Quote from Ivanovich:

You could say the same thing about the rise of EUR in December of last year. Steady (but fast) pace of the rise with no retracement at all. And then look what happened come Jan 1.

Yes, it's mostly a matter of timing, among other things. I'm not reading too many articles or posts on the coming demise of sterling, however, so I'm not buying the herd mentality argument in this case. If you're looking for a dollar retracement, maybe euro could be better bet? jmo.

 

[Ivanovich]

Honestly, I'm more worried about the EMU and it's bickering lasting for far longer than any "soft spot" or lasting effect of the terrorist event in the UK.

 

[sKaLpZ]

Quote from Ivanovich:

Honestly, I'm more worried about the EMU and it's bickering lasting for far longer than any "soft spot" or lasting effect of the terrorist event in the UK.

You know, you're right (again) Ivanovich, there could be some clearing up of the EMU matter, resulting in the luster returning to the shiney euro.

Ah... wouldn't that be nice... have the sucker fire to 1.3000s again.

On the other side we got USD as "brittle" as ever, livin' analysts' check to check

Nice thing about that currency - today it's the darling of the market, tomorrow it's the worst horror imaginable.

You're one great currency/trade analyst, Ivanovich.

 

[Ivanovich]

Thank you for the compliment, but I don't consider myself great at anything (except making pelmini - Russian dish I make with awesome lamb, and sour cream...er...where was I). The market is like the ocean, and we're all captains. The moment we think we understand it and lose respect for it, the moment it consumes us.

I will take luck where luck visits me, however, on calling a nice Sterling rise

Quote from Ivanovich:

Fact is, it's beginning to look as if almost everyone is short GBP. And when that happens, it's time to examine what is around the corner.

Which is why I was long sterling. Since open today it's went about 200 pips up.

Cheers.