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     davkell
Member
Username: davkell
Post Number: 477
Registered: 07-2004
Rating: N/A
Votes: 0
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| | Tuesday, January 09, 2007 - 09:34 pm: |  
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Hi all;
Have been looking a little at currency trading (just out of curiosity with GreenCFD live data!). Did my first AUD/USD trade the other night just as a 'fiddle' trade, losing $7.00(USD)!!!
Can you trade the currencies on technical analysis of the charts alone? I've read that as a currency trader you should really have an understanding of the economics that affect the currencies as well, so you can be prepared for major changes to the market.
Would it not be the same as tech analysis of stocks, in that all factors are mirrored in the chart action?
Just curious to see if any experienced people have any ideas.
Cheers.
"Trade Your Way To Financial Freedom" - Van K Tharp
"Manage the downside; the upside will take care of itself" - Donald Trump
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hilarius
Member
Username: hilarius
Post Number: 2031
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Tuesday, January 09, 2007 - 11:34 pm: |
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Davkell
I do not believe that at any one point of time a chart mirrors all relevant factors
If an underground coal mine explodes on Christmas Day (yes it actually happened a few years back, and the stock was delisted) that impending methane gas explosion is not mirrored usefully ahead of time
The mirror is often a rear vision mirror
Which chart predicted 9/11 in time to sell?
Life contains tragedies which no chart can mirror beforehand
Slowly emerging sentiment changes or fundamental changes may be detectable, but fast moving unexpected events will rarely be seen in the mirror beforehand
If they are the interpretation is aided by fundamentals
It would have helped for example to know what was going to happen to takeover stocks before the offer, but the chart often gives no hint, even though some charts may, and insider trading knowledge (even when reflected in charts) is illegal
The greater the integrity of companies the less signals will be seen of coming events, outside shareholder announcements, which is the way it should be
That leaves the crooks and the insider traders and the pumpers and dumpers. Do we really want to trust their chart actions every time?
I prefer to trust companies with soundly and strongly growing fundamentals which will always drive the price with equivalent strength
Get rich quick impatience is not the way to real wealth which includes free time away from screens
Short cuts based on insider trader behaviour increasingly don't interest me. They can backfire so easily.
Hilarius
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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wadda
Member
Username: wadda
Post Number: 321
Registered: 10-2002
Rating: N/A
Votes: 0
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| | Tuesday, January 09, 2007 - 11:46 pm: |
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Davkell I'm of the belief that you can T/A it but also am interested to read an experienced response - I lost USD77 on my first dabble a few weeks back!
"Buy low, sell high is a cliche, not a blueprint for action. It blinds investors to the professionals' approach of buying high and selling higher." Stan Weinstein
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stoian
Member
Username: stoian
Post Number: 309
Registered: 03-2004Rating: N/A
Votes: 0
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| | Wednesday, January 10, 2007 - 05:38 am: |
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Hilarius,
You asked Davkell:
"......Which chart predicted 9/11 in time to sell?"
May I answer You?
Every chart which is long enough, 5 years before of the 9/11, or 5 years after the 9/11 can do it!!!!!
What You will need INDEED, IS TO TO BE ABLE TO SEE AND TO KNOW TO READ ABOUT SUCH "EVENTS"!
If you will look at my chart for the evolution of the parity EUR-USD, YOU WILL SEE THAT THE 9/11 EVENT, WAS
A RISK LIKE ANY OTHER NORMAL PAST OR FUTURE RISKS OF ALL OTHER EVENTS, IN COMPARISON WITH "SUCH AN AMPLITUDE FOR THE VARIANCE=ZIG-ZAG" IN PLUS OR IN MINUS AROUND THE TRENDLINE=MEANLINE IN TIME, LIKE THE USUAL=NORMAL RISK=VOLATILITY HAVE MANIFESTED BEFORE AND UNTIL YET.
But you have to recognize at first WHAT RISK=VOLATILITY IS, AND HOW IS HE/SHE LOOKING LIKE, and what is the DIFFERENCE BETWEEN A NORMAL RISK=VOLATILITY AND THE WHOLE=TOTAL RISK=VOLATILITY, and only after this PREPARATION, you will be able to read them both.
Like I have already told You, inside of the topic named Prediction Techniques, You should make a GREAT DIFFERENCE BETWEEN THE PROFANE "ZIG-ZAG", OR THE VARIANCE SHOWN BY THE TECHNICAL ANALYSE, AND THE "INITIATED" TREND, OR THE VARIABILITY SHOWN BY THE STATISTICAL AND MATHEMATICAL ANALYSE ON CHART=SMAC.
Dont forget, VARIANCE (a small kind of variation) IS EVER OBEYING TO THE VARIABILITY (a larger kind of variation).
And because VARIANCE IS A SMALLER VARIATION AS THE VARIABILITY, THEN THE FACTORS WHO HAVE, OR CAN HAVE, AN INFLUENCE ON THE WHOLE EVOLUTION IN TIME, SHOULD BE ALSO IN A SUITABLE=ADEQUATE MANNER DIFFERENTIATED.
So, if you have had at your disposal also, THE EVOLUTION OF THE PARITY GBP-USD, AND NOT ONLY THE EVOLUTION OF THE EUR-USD, FOR 3-5 YEARS BEFORE THE 9/11, you have had known THAT ..................... IT EVER GIVES A RATIONAL EXPLANATION FOR EVERYTHING, LIKE THE FACT, THAT THE USD WAS AT THAT - NOT QUIT FROM THE ANGLE OF THE 9/11 TO BE SEEN SO - HISTORICAL MOMENT OF TIME ON A TOP, HAD REACHED A MAXIMUM POWER=LIMIT AGAINST OTHER CURRENCIES=ECONOMIES.
Or, at least, this is showing me THE VARIABILITY=TREND!!!!
So, NOT ALL THAT IS INVISIBLE SHOULD BE ALSO NOT KNOWN BECAUSE IS INVISIBLE. NEITHER BEFORE, NOR AFTER!
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hilarius
Member
Username: hilarius
Post Number: 2032
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Wednesday, January 10, 2007 - 06:49 am: |
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Doru
I understand natural variation of data around a smoothed median, with most points falling within 2 standard deviations from the median
I do not understand how 9/11 could have been predicted from any chart
I do understand that once an event has occurred the data points which follow are capable of smoothing, with newly forming outer boundaries of probability for prices and a continuation or change of an existing trend becoming apparent
Events such as 9/11 or a mine explosion or a takeover offer that is not signalled via insider trading appear to be me to be totally unpredictable from data available prior to the event
I look forward to your demonstration that the contrary is the case
I do see that your charts are indicative of trend, but feel they have no practical use in this country for index and stock trading until you can produce a chart based on local data
With Best Wishes
Hilarius
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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lafee
Member
Username: lafee
Post Number: 265
Registered: 04-2003
Rating: N/A
Votes: 0
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| | Wednesday, January 10, 2007 - 08:15 am: |
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A little off the topic but interesting none the less. Was there an increase in volatility after 9/11 (US equity markets)? The answer might surprise.
Cheers
Lafee
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
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stoian
Member
Username: stoian
Post Number: 310
Registered: 03-2004Rating: N/A
Votes: 0
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| | Wednesday, January 10, 2007 - 05:27 pm: |
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Hilarius,
Yes, You are right, this is the answer: If You are far away FROM THE MEAN with 2 or 3 STANDARD DEVIATIONS in plus, or in minus, You should also EXPECT some EXCEPTIONAL will happen, because HERE IS THE PLACE OF THE LIMITS, HERE IS THE END WHERE THE WORLD=TREND WILL BEND.
But, if You are not consciously - and the Technical Analyse will not let you to be so, because of the TO SMALL VOLUME OF OBSERVATIONS SHE IS OFFERING YOU TO ANALYSE, FOR THE REASON TO TAKE "A DECISION???????" - about the FACT, that YOU ARE TOO CLOSE TO THE LIMITS=END, OR TOO FAR AWAY FROM THE MEAN,
YOU CANNOT EVER REALIZE WHERE YOU TRULY ARE!!!
Lafee,
And?
We wait!
It was an increase in MINUS volatility after the 9/11 on the US equity markets??
Regards,
Doru Stoian
(Message edited by stoian on January 10, 2007)
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lafee
Member
Username: lafee
Post Number: 267
Registered: 04-2003
Rating: N/A
Votes: 0
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| | Wednesday, January 10, 2007 - 08:33 pm: |
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Stoian,
Volatility dropped after 9/11. The top of the market was signaled by the large volatility pre 9/11.
Cheers
Lafee
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
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lafee
Member
Username: lafee
Post Number: 270
Registered: 04-2003
Rating: N/A
Votes: 0
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| | Monday, January 15, 2007 - 01:35 pm: |
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Regarding TA,
The structure of the forex market is very different from the stockmarket. From the fact that your broker is a counter party and that he is legally able to front run orders, 24 hour trading, much higher leverage etc.
All this tends to create a market that tends to exhaust over and over again and can move probably faster than any other liquid market in the world. Hours of boredom and minutes of terror.
To me, the idea that TA is transferable to all charts is not correct. There are structural differences between all markets and generalizing that all market participants react in the same way to price movement no matter the market is too simplistic. The fact that different markets have different types of participants, with different motives, different regulation and facilitation... etc etc.,
To apply TA to the forex you need to first study its tendencies in order to develop methods to take avantage of what you have discovered. There are a huge amount of 'TA tools' one can use to help with your research. I would not recommend blindly applying things that have worked well for you in equities to the forex.
Cheers
Lafee
If nobody can be certain of anything, how can I be certain of that?
Ayn Rand
When I was young people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.
Ernest Cassel
"My major hobby is teasing people who take themselves & the quality of their knowledge too seriously & those who don’t have the guts to sometimes say: I don’t know...." (You may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race).
Nassim Nicholas Taleb
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