Forex Market Commentary
The Forex trading that I once knew came to a close on Brexit day with the rise of the Asian gamer cum machine trader.
For centuries civilizations clashed in the race for resources, politically and militarily as geopolitical supremacy rose and waned across the world. Two world wars and the friction of two political ideologies are responsible for the story of the 20th century. But today, after the electronic revolution became replaced by the new information technology revolution, with the advent of globalization, the pursuit of assets has taken a whole new meaning today where opposing players inter-act in the race for resources, economic and political advantages.
As a young dealer I can remember the hunting culture as we preyed Forex markets looking for spreads to carve out 3--4 pip bid-offer spreads and pile on our recorded efforts to make profits in the largest Inter-bank Forex market in London. Then come every Friday night, whether as a pin stripe Etonian or blue-shirted and high-spirited Essex lad, we all ventured into the same ritual mind-bender beginning with the traditional pup-crawl from Leadenhall St. towards the West End bars, ending up totally smashed until Saturday sunrise. Fortunately, the London culture of Forex traders was a once a week affair for the Brits really knew how to curb excesses when called for even through the absolutely rowdy indiscipline. In contrast to London, the Asian Forex culture is like a tradition on steroids. I used to think that Asia was symbolic of conservative pragmatism until I hit the neon streets and found a culture several levels raised in excesses. In Asia, from Shanghai to Seoul, from Tokyo to Hong Kong, the culture of the Forex trader was a complete surprise to me ith the sheer level of excess. The ritual of haunting the kærəˈoʊki and the sōpurando among the Forex traders was almost a daily affair! Astonishingly, no matter how copious the alcohol consumed nightly, the Asian trader would be at his desk to attention come 7 am the following morning.
As in Europe and the USA, in Asia too the Internet has led to the proliferation of Forex trading platforms which has seen a steady growth of day traders over the last few years. But whilst growing trader interest in Europe and USA has steadily consolidated itself incrementally, in Asia the rate of new account openings has become an exponential growth pattern. With over a billion heads and horse power to back it, the Asian Forex market now contains a massive 25% of such global day traders. With some serious capital at their disposal, and being positioned at the beginning of the global clock for the first time ever, this Brexit day, we witnessed the serious clout of the Asian day trader that was a culture totally non-existent during 2008. How sudden the Forex world has changed and the signs of the new changes are ominous as the Brexit event has illustrated. Nobody understands this new generation of computer-obsessed gamer, based in Asia, who have now become the most fervent Forex traders with the potential to do some serious damage in the global currency markets. But they are now here and now we really know that they are here.
The millennials of the UK bemoan the Brexit result but ahead of the clock on that day as the voting began it was the new culture of Manga Kissa or Internet cafe game-players turned Forex traders who began the very first flapping of the wings of a butterfly that caused the earthquake last Friday taking GBP/USD down from 1.50 to 1.33 as the main body of the price action by the time Dubai and then Frankfurt and London opened. Whispering in private chatrooms and initiating the very first short trades, auto bots soon followed compounding more short trades until by 8 am Tokyo the shorts were becoming a cascade on the Asian day trader platforms.
Whilst bankers and analysts will scratch their heads and ponder this day Brexit, we witnessed the rise of a new breed of Forex trader who grew up in a virtual world of computer games and who now have the stamina to beat the very best of traders from Frankfurt to London and New York. We witnessed the rise of the bot trader from Shanghai to Seoul, Tokyo and Hong Kong; young twenty-something Millennials dwelling in secretive chat-rooms, auto trading and hand-on trading working against a false long position that most of the Euro banks took during the voting day. Auto trading compounds fears. Short positions mounting that Friday morning on Tokyo opening fed into the mainstream Asian banking world as Forex brokers got wind of massive short orders piling up on the GBP/USD. Transferring that weight of opinion into the mainstream bank dealing world, one domino led to the other as the Nikkei fell and other equities markets crashed until the flapping of wings became a voluminous shout sprouting panic in London dealing rooms as dealers trekked into their offices to watch the horror of a Japanese tsunami come head on. The whispers in shady chatrooms had caused an earth-shattering combustion event that is still to be fathomed as the credit agencies shave off the UK AAA rating. Forever now smart Forex traders will watch the Asian markets astutely for any tell-tale signs of ripples in the Forex markets.
With growing interest and growing financial power and a young population obsessed with trading on a level similar to the computer game industry, witness the arrival of the new Asian day trader and ignore them at your peril. The weight of a ripple in Asia has become a game-changer as we witnessed on this Brexit day. What is really frightening is the sheer determination of such young Asian traders to play a numbers game with equal adeptness with their counter-part mainstream dealers from Europe and USA.
For centuries civilizations clashed in the race for resources, politically and militarily as geopolitical supremacy rose and waned across the world. Two world wars and the friction of two political ideologies are responsible for the story of the 20th century. But today, after the electronic revolution became replaced by the new information technology revolution, with the advent of globalization, the pursuit of assets has taken a whole new meaning today where opposing players inter-act in the race for resources, economic and political advantages.
As a young dealer I can remember the hunting culture as we preyed Forex markets looking for spreads to carve out 3--4 pip bid-offer spreads and pile on our recorded efforts to make profits in the largest Inter-bank Forex market in London. Then come every Friday night, whether as a pin stripe Etonian or blue-shirted and high-spirited Essex lad, we all ventured into the same ritual mind-bender beginning with the traditional pup-crawl from Leadenhall St. towards the West End bars, ending up totally smashed until Saturday sunrise. Fortunately, the London culture of Forex traders was a once a week affair for the Brits really knew how to curb excesses when called for even through the absolutely rowdy indiscipline. In contrast to London, the Asian Forex culture is like a tradition on steroids. I used to think that Asia was symbolic of conservative pragmatism until I hit the neon streets and found a culture several levels raised in excesses. In Asia, from Shanghai to Seoul, from Tokyo to Hong Kong, the culture of the Forex trader was a complete surprise to me ith the sheer level of excess. The ritual of haunting the kærəˈoʊki and the sōpurando among the Forex traders was almost a daily affair! Astonishingly, no matter how copious the alcohol consumed nightly, the Asian trader would be at his desk to attention come 7 am the following morning.
As in Europe and the USA, in Asia too the Internet has led to the proliferation of Forex trading platforms which has seen a steady growth of day traders over the last few years. But whilst growing trader interest in Europe and USA has steadily consolidated itself incrementally, in Asia the rate of new account openings has become an exponential growth pattern. With over a billion heads and horse power to back it, the Asian Forex market now contains a massive 25% of such global day traders. With some serious capital at their disposal, and being positioned at the beginning of the global clock for the first time ever, this Brexit day, we witnessed the serious clout of the Asian day trader that was a culture totally non-existent during 2008. How sudden the Forex world has changed and the signs of the new changes are ominous as the Brexit event has illustrated. Nobody understands this new generation of computer-obsessed gamer, based in Asia, who have now become the most fervent Forex traders with the potential to do some serious damage in the global currency markets. But they are now here and now we really know that they are here.
The millennials of the UK bemoan the Brexit result but ahead of the clock on that day as the voting began it was the new culture of Manga Kissa or Internet cafe game-players turned Forex traders who began the very first flapping of the wings of a butterfly that caused the earthquake last Friday taking GBP/USD down from 1.50 to 1.33 as the main body of the price action by the time Dubai and then Frankfurt and London opened. Whispering in private chatrooms and initiating the very first short trades, auto bots soon followed compounding more short trades until by 8 am Tokyo the shorts were becoming a cascade on the Asian day trader platforms.
Whilst bankers and analysts will scratch their heads and ponder this day Brexit, we witnessed the rise of a new breed of Forex trader who grew up in a virtual world of computer games and who now have the stamina to beat the very best of traders from Frankfurt to London and New York. We witnessed the rise of the bot trader from Shanghai to Seoul, Tokyo and Hong Kong; young twenty-something Millennials dwelling in secretive chat-rooms, auto trading and hand-on trading working against a false long position that most of the Euro banks took during the voting day. Auto trading compounds fears. Short positions mounting that Friday morning on Tokyo opening fed into the mainstream Asian banking world as Forex brokers got wind of massive short orders piling up on the GBP/USD. Transferring that weight of opinion into the mainstream bank dealing world, one domino led to the other as the Nikkei fell and other equities markets crashed until the flapping of wings became a voluminous shout sprouting panic in London dealing rooms as dealers trekked into their offices to watch the horror of a Japanese tsunami come head on. The whispers in shady chatrooms had caused an earth-shattering combustion event that is still to be fathomed as the credit agencies shave off the UK AAA rating. Forever now smart Forex traders will watch the Asian markets astutely for any tell-tale signs of ripples in the Forex markets.
With growing interest and growing financial power and a young population obsessed with trading on a level similar to the computer game industry, witness the arrival of the new Asian day trader and ignore them at your peril. The weight of a ripple in Asia has become a game-changer as we witnessed on this Brexit day. What is really frightening is the sheer determination of such young Asian traders to play a numbers game with equal adeptness with their counter-part mainstream dealers from Europe and USA.
Pieter Bergli - Trader X16
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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 service for free education on in the forex markets
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
