Forex Market Commentary
Just a quick point.
And this point rather emphasis my growing skepticism surrounding some pretty fantastic marketing ads going round the internet on automated trading. certainly bots would have got stopped out on yesterday's wild swing in the EUR/ USD.
Yesterday the EUR/ USD had an incredible 400 pip trading range
A quick look at the daily charts as provided by Oanda and the 15 min charts just goes to show us that technical indicators would not have prepared a technician, or for that mater, a bot trader, for the massive trading range that ensued.
Fundamentally, the yo-yo in the EUR/ USD on Thursday this week was initially prompted by an aggressive stimulus package by the ECB that saw the EUR/USD fall to $1.0821 on Thursday after a 10 bp cut to minus 0.4 base rate for the Euro currency. But that sharp drop reversed quickly as mr Draghi commented that there would be no further need for rate cuts to push the Euro yield even deeper into negative territory. The rally in the EUR/ USD on Thursday went to $1.1218 was largely due to the ECB announcing on Thursday a plan to start buying high grade Euro corporate debt. Overall the high and the low saw a trading action ranging some 400 pips on the EUR/USD for Thursday.
Day Chart courtesy OANDA:
Intra-day 15 min chart courtesy OANDA:
The purpose of technical trading of course is to gauge a probability of future price action; yet, fundamentally, news events greater than trader expectation can drive price action against technical probabilities.
I'm quite certain Bot trading platforms must have hugely got it wrong on this day as the day chart illustrates the previous 3 day successive higher prices but would have erroneously have had to close positions on a 300 pip sudden fall or more before the resumption of upward trading. Binary trading with put options can always provide an element of hedging should the trader not use trailing stops. But stops are always advised even if in fast price action those stops get over-run by a large distance to get a fill. Good swing traders trading news events like this would have enjoyed the momentum and followed gut downwards in a temporary contrarian trailing action against all other technical indicators signalling higher prices. Fundamenal events drive markets and make the dust which shapes the form of technical patterns.
To sign up for OANDA platform please visit:
http://pages.oanda.com/forex-trading.html?gclid=CP_bn-yiuMsCFQqkvQodlSwAhQ
Pieter Bergli - DeLoren Trust Holdings
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Disclaimer - U.S. Government Required Disclaimer - Commodity Futures Trading Commission
Futures and Options trading involves risks of losses. No representation is being made that any reader and account will or is likely to achieve profits or losses similar to those that are being discussed on this blog http://forexeducationperspective.blogspot.com/. The past performance of any trading system or methodology discussed is not necessarily indicative of future results.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
All trades, patterns, charts, systems, etc., discussed in this blog http://forexeducationperspective.blogspot.com/ are for educative and illustrative purposes only and not to be construed as specific advisory recommendations for actual trades. Disclaimer - http://forexeducationperspective.blogspot.com/ bears no responsibility for the trading actions of its readers.
* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies
A non-profit commitment to provide education on the properties of currency markets. Forex market commentaries and media reports for free
Disclaimer - U.S. Government Required Disclaimer - Commodity Futures Trading Commission
Futures and Options trading involves risks of losses. No representation is being made that any reader and account will or is likely to achieve profits or losses similar to those that are being discussed on this blog http://forexeducationperspective.blogspot.com/. The past performance of any trading system or methodology discussed is not necessarily indicative of future results.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
All trades, patterns, charts, systems, etc., discussed in this blog http://forexeducationperspective.blogspot.com/ are for educative and illustrative purposes only and not to be construed as specific advisory recommendations for actual trades. Disclaimer - http://forexeducationperspective.blogspot.com/ bears no responsibility for the trading actions of its readers.
* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies
