Juggling Forex ??

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Amsuna's picture
Amsuna
Status: Member (Offline)
Joined: Nov 19 2011
Posts: 1
Juggling Forex ??

I have been considering forex for a while now. I have been reading alot of books studying Fundamental, Technical, psychological analysis, market behaviour, risk management,..... and lots more.

And then now i have reached a point where i still have thirst for more knowledge, like i really want to dig out those hands that really controls economy, like the real hands inside the Muppet sock, coz i was not convinced with all what i have read, until I decided to retake all those economic courses i use to take back in college, and here i stumbled across Chris Martenson's crash course vids.

I am convinced 100 % of everything Chris said in his videos, and it made me wonder a few things about economic indicators i get in the economic calender, and probably have doubts about most of them if not all of them, like when i watched
(Chapter 16 - Fuzzy Numbers) talking about CPI and Hedonics it made me understand why most of the economic indicators did not affect the charts, when it should have gone high or low depending on the news, it didn't, but news in the economic calender have different affects on the chart, some take a one star, others take more accordingly to the degree of importance and effectiveness on currency.

After stating all of that, i would like to know if there are ways to avoid false indicators, and be able to detect and distinguish between actual real indicators from false indicators, and  i would be grateful if i would get more advice from people who are more experienced.

Travlin's picture
Travlin
Status: Diamond Member (Offline)
Joined: Apr 15 2010
Posts: 1322
Here there be dragons

Amsuna wrote:

I have been considering forex for a while now. I have been reading alot of books studying Fundamental, Technical, psychological analysis, market behaviour, risk management,..... and lots more.  <snip>

After stating all of that, i would like to know if there are ways to avoid false indicators, and be able to detect and distinguish between actual real indicators from false indicators, and  i would be grateful if i would get more advice from people who are more experienced.

Welcome Amsuna

Forex trading is usually considered the most difficult market. One reason is that governments directly intervene for political reasons so market forces are not reliable indicators. I think a bigger reason is because this is one of the largest, if not the largest, market and is dominated by the biggest players with the deepest pockets and best informed traders in the world. This is very risky for a beginner in the best of times. To enter this market during times of unprecedented turmoil strikes me as pure folly. Besides, as all currencies are being devalued simultaneously, any relative gain you may capture is still in a depreciating asset. So even if you win, you lose. I’d suggest you consider hard assets like gold, silver, commodities, and productive land.

Travlin

dshields's picture
dshields
Status: Platinum Member (Offline)
Joined: Oct 24 2009
Posts: 599
forex

I have been working full time in the forex business for 14 years.  When I first started all the traders were "manual" and there was far less volatility.  Since then machine traders (algorithm trading) have moved in and changed everything.  These days the market can move in one second farther than it used to move in a week.  14 years ago i could sit at work and watch the market and the moves made some sense.  A speech would be made or an event would occur and the market would react is some kind of predictable manner.  Also, back then when you looked at the relative values between the currencies it made sense.

None of this is true any longer.  There are wild fluctuations in prices every week.  Governments intervene directly in the markets.  Sometimes this is announced and sometimes it is not.  Sometimes prices move in ways that make so sense at all.  An example might be the US gets its sovereign debt downgraded and USD goes up big time.  Europe is on the verge of financial catastrophe and EUR/USD was 1.35 last week.  I find that amazing.  Based on what I see I would think EUR/USD should be around parity (1.00).  The market no longer trades on fundamentals, it trades on government announcements and what the US Federal Reserve and to some extent the ECB does.  Other reports like non-farm payroll, jobless claims, durable goods, various Fed reports, what is happening in China, etc. drive the market.

Good luck.  I have to work so hard to get the money the government(s) let me have that gambling in the FX market seems crazy to me.  You can take a bath in one second.  If you are rich and brave then you have a chance.  Remember who you are up against.  GS, JPM, BOA, RBS, and other major banks all over the world along with hundreds of hedge funds - the smartest people in the world.  Hedge funds are about half the interbank market.  If you can afford high powered computers, a high speed network, a stellar IT staff of experts, a staff of quants, and have a lot of cash to risk then welcome to FX.  We will be more than happy to take your money.

invest458's picture
invest458
Status: Member (Offline)
Joined: Dec 16 2012
Posts: 1
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