Priced In Already - How does it work?

This is a discussion on Priced In Already - How does it work? within the Forex forums, part of the Markets category; Originally Posted by Nowler Thanks for the input mate. But how did the market move if they didn't enter their ...

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Old Dec 28, 2017, 11:24pm   #9
 
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Originally Posted by Nowler View Post
Thanks for the input mate.
But how did the market move if they didn't enter their positions?
Well, if you are trying to off-load a couple of 1000 shares due to a rumour of bad news, you would keep lowering your price, lots of other people doing the same
would drive price down, supply is out-stripping demand.
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Old Dec 29, 2017, 12:06am   #10
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Well, if you are trying to off-load a couple of 1000 shares due to a rumour of bad news, you would keep lowering your price, lots of other people doing the same
would drive price down, supply is out-stripping demand.
Ok, thanks for the info my friend.
As you can likely see, my conceptual understanding is not on point yet but I'll work on it.

I was reading this thread a few mins ago http://www.trade2win.com/boards/firs...ed Into Market, which was somewhat helpful.

It raised the point that I should probably not be trading news so early in my trading career (stick to TA) and also largely because I dont have direct access to news releases. Still though, I feel I really should have a decent understanding of this stuff. After talking to 2 of the lads here I really ramped up my macro efforts
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Old Dec 29, 2017, 1:10am   #11
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I just read an article about 2 possible rate hikes for the GBP in 2018, which the article says is already priced into the market.
Can you please provide a link to that article that you referenced. Context and specfics are important. I am frankly skeptical without reading the conditional statements that usally accompanies such an opinion. Typically the ongoing pricing is expressed in terms of probability, not certainty because the dynamic variables are projections and cannot provide a certainty of outcome. Frankly I am skeptical of a 100 % priced in so far out on a probable event. It is just not typical of the market pricing mechanism.
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Last edited by Brumby; Dec 29, 2017 at 1:54am.
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Old Dec 29, 2017, 1:19am   #12
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Can you please provide a link to that article that you referenced. Context and specfics are important. I am frankly skeptical without reading the conditional statments that usally accompanies such an opinion. Typically the ongoing pricing is expressed in terms of probability, not certainty because the dynamic variables are projections and cannot provide a certainty of outcome. Frankly I am skeptical of a 100 % priced in so far out on a probable event. It is just not typical of the market pricing mechanism.

Of course - https://www.dailyfx.com/forex/market...P-in-2018.html

I just want to point out though that I was only using the GBP context as an off-the-cuff example. I have no informed opinion of such GBP hikes personally. I was just catching up after my few days off and when I came across the phrase "already priced in", I remembered that I had a question on it
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Old Dec 29, 2017, 1:25am   #13
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... I am frankly skeptical without reading the conditional statments that usally accompanies such an opinion. Typically the ongoing pricing is expressed in terms of probability, not certainty because the dynamic variables are projections and cannot provide a certainty of outcome. Frankly I am skeptical of a 100 % priced in so far out on a probable event. It is just not typical of the market pricing mechanism.

This makes total sense.
I will be keeping an eye on this as it plays out.
Thanks for your insight. It's helpful, though I dont know enough to continue the discussion unfortunately.

I'll certainly listen if you want to continue though
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Old Dec 29, 2017, 1:32am   #14
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Of course - https://www.dailyfx.com/forex/market...P-in-2018.html

I just want to point out though that I was only using the GBP context as an off-the-cuff example. I have no informed opinion of such GBP hikes personally. I was just catching up after my few days off and when I came across the phrase "already priced in", I remembered that I had a question on it
Personally I would interpret what was said as an opinion because there is no reference source on "priced-in". Credible analyst provides a reference source because "sources" e.g. Fed market watch actually works out the probability based on some complex mathematical inputs.
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Old Dec 29, 2017, 1:52am   #15
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O
I just want to point out though that I was only using the GBP context as an off-the-cuff example.
Just to finish off on this conversation say when you are referring to a currency pair GBPUSD, it is not just about GBP prospective rate hikes but also USD prospective rate hikes. Prospective rate hikes affect bond yields e.g. on both US10Y and GB10Y which their yield spreads has a bearing on currency pair pricing. It is not some static but dynamic conversation involving many variables.
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Old Dec 29, 2017, 10:43am   #16
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Forgive my ignorance but how does this work? . . .
Hi Nowler,
If you've not read it already, you might find this Sticky useful: Essentials Of Technical Analysis. If you don't want to read the whole thing, the section most relevant to this thread is entitled: 1. Market Action Discounts Everything.

Additionally, be sure to check out post #3: 'Other Resources on T2W & Beyond' - especially the very last entry under 'EXTERNAL LINKS' about EMH.
Tim.
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