FX Trading June 25th > 29th

[JTrader]

GBPUSD was a very fast market in January, and maybe February also. I remember worldspreads putting all trades on dealer execution, and they widened the GBPUSD intraday spread from 1 to 2 pips.

Has cable in the past gone through similar slow spells, come out the other end, and gone back to "normal" - i.e. being a fast market?

Is there any reason to suspect that GBPUSD will not go back to how it has traditionally been (faster moving, liquid market, bigger trends etc.) again?

Going on my belief that GBPUSD is the best trending major (and perhaps the best value pair to trade when you compare spread, to ADR, and size of moves. etc.)
If GBPUSD's slower speeds is due to increased market participation in GBPUSD (causing grid-lock), and a sign of things to come, where do we go from here in terms of looking for value?

Do we have to wait for brokers to reduce the spreads on the minors pairs so that they become better values?

Or, do we need to perfect rangebound strategies?

Thanks.

PS. I agree, it is depressing when a 4h chart now looks like a 1h chart should/used to!

 

[geldmeister]

Jmho, the markets are ever evolving, but I would have to believe that the time of year, summer here, would have a lot to do with the downturn in volatility.

 

[zuke]

Morning all. Like HB, Ive kinda given up on Cable until I see a significant signal. Currently still holding last Friday's 166.81 short on Euro/Yen and currently +70. Im trailing it using 30M PSAR rather than a set number of pips and scaling out at pivots.

Still waiting for an hourly close below 9980 on Cable, before I get excited.

 

[JTrader]

Jmho, the markets are ever evolving, but I would have to believe that the time of year, summer here, would have a lot to do with the downturn in volatility.

Yeh..........Isn't August traditionally the worst month to trade through?

Is this due to less activity, due to people being on holiday?

I would have thought that this would lead to a fast (thinner market) and bigger moves, as happened over XMAS/New Year?

Are there any other reasons why August has a reputation as being the worst month to trade?

Thanks.

 

[wasp]

Yeh..........Isn't August traditionally the worst month to trade through?

Is this due to less activity, due to people being on holiday?

I would have thought that this would lead to a fast (thinner market) and bigger moves, as happened over XMAS/New Year?

Are there any other reasons why August has a reputation as being the worst month to trade?

Thanks.

Don't get me wrong here or nothing but isn't it still only June

 

[oiltanker]

got my cable 10pts ! which after 3 trades leaves me b/e today.

nice range breakout on eur/yen!

 

[JTrader]

Don't get me wrong here or nothing but isn't it still only June

It is a bit worrying.........

If you think about it -
If December is winding down for XMAS,
And January, is winding back up for the New Year,
August is a bad month (for whatever reasons I'm not quite certain of yet)..........
Then you've got the 5 additional (on top of XMAS/new year public holidays) UK public holidays, and then there's probably another 5 additional USA public holiday...........
This is a fair chunk of the year taken up by non-typical trading/price activity...........

 

[wasp]

I had a quick look earlier today at Junes past again and the grids on MT4 were all spaced at 45 pips apart (4hr chart) except for 2001 which was 30 and 2007 which was 20!!!!

I think its just a rough patch personally and we should ride it out and await the good times again... (It makes me feel better anyhow!)

 

[Crap Buddist]

taken a short 1.9983

 

[JTrader]

I had a quick look earlier today at Junes past again and the grids on MT4 were all spaced at 45 pips apart (4hr chart) except for 2001 which was 30 and 2007 which was 20!!!!

I think its just a rough patch personally and we should ride it out and await the good times again... (It makes me feel better anyhow!)

Thanks wasp, thats a clear way to compare the past months/years.
It's slightly reassuring that on the other past years items that you posted last week, 2001 saw a dip, but some of the following years increased on 2001 levels - so hopefully its just a dip.

$2 has SURELY GOT to be blown wide open!!! - but then I'm not a prophet, so if/when it does/doesn't happen, - so be it!

 

[wasp]

Thanks wasp, thats a clear way to compare the past months/years.
It's slightly reassuring that on the other past years items that you posted last week, 2001 saw a dip, but some of the following years increased on 2001 levels - so hopefully its just a dip.

$2 has SURELY GOT to be blown wide open!!!

Then again, like options signature, adapt or die' said the cockroach to the dinasour so maybe with the increase in traders and changing world, the end of cable is nigh and its time to move on to the next cable? Thats the great/terrible thing about trading, there is just no guarantee!

 

[free4440273]

already short from friday's high

 

[geldmeister]

The exact accuracy of the volume/tic data can be questioned but it should show the trend. Looks like the volume has been thinning over the last few years, my guess is it’s going into other markets.

The drop in average range could be the pattern we are experiencing. With the exception of the large spike in 04 and the low in 02 we are not far from the middle range. Summer doesn’t seem to play a factor.

 

[oiltanker]

i read over the weekend that money has being moving from the majors into the minor fx.

cot report

http://www.actionforex.com/forex_an...hf_short_positioning_stretched_2007062523791/

 

[wasp]

The exact accuracy of the volume/tic data can be questioned but it should show the trend. Looks like the volume has been thinning over the last few years, my guess is it’s going into other markets.

The drop in average range could be the pattern we are experiencing. With the exception of the large spike in 04 and the low in 02 we are not far from the middle range. Summer doesn’t seem to play a factor.

Way to brighten a Monday Monday Geldmeister

... but seriously, I am leaning to agree with you. Back in the day for cable, the options were limited. cable was 10-15 pip spread easy and half the pairs available now were never looked at. Everything was done via big chunky phones and retailers at home in their converted office/spare room didn't exist...

Now everything is available to everyone and you can trade anything from the Botswana to the ZAR from the comfort of your arm chair and just that is happening.

ZAR and Scandics may be wider in spread but think of it in % and its no different and at least the volatility is there. Time to get out there!

 

[JTrader]

Looks like the volume has been thinning over the last few years, my guess is it’s going into other markets.

The drop in average range could be the pattern we are experiencing. With the exception of the large spike in 04 and the low in 02 we are not far from the middle range. Summer doesn’t seem to play a factor.

To me it seems that lack of volume can lead to big moves though - because gaps can occur - quickly leading to a price change - when liquidity is thin.

If the order book is jam packed with orders price can move very slowly (i.e. if anyones ever looked at vodafone on the level 2 screen - i.e. can be something of a grid-lock).

On this basis, i'd have thought it seems more likely that the present lack of GBPUSD trends is due to increased participation/grid-locking of the exchanges that it trades on.



Therefore i suppose liquidity can be thick or thin, but at the end of the day, if no participants are collectively willing to buy/sell (trade in one direction for a sustained time period) price will stay stuck in no mans land..............

 

[wasp]

To me it seems that lack of volume can lead to big moves though - because gaps can occur - quickly leading to a price change - when liquidity is thin.

If the order book is jam packed with orders price can move very slowly (i.e. if anyones ever looked at vodafone on the level 2 screen - i.e. can be something of a grid-lock).



Therefore i suppose liquidity can be thick or thin, but if no participants are collectively willing to buy/sell (trade in one direction for a sustained time period) price will stay stuck in no mans land..............

This is along the lines of something I said to GJ about the increased number of retailers in the markets which he felt would be of absolutely no consequence so has there been a huge increase of institutional traders or........

 

[jacinto]

This is along the lines of something I said to GJ about the increased number of retailers in the markets which he felt would be of absolutely no consequence so has there been a huge increase of institutional traders or........

take what i am going to say with an absolute pinch of salt.

I remember reading some article some time ago (dont know where, but was relatively recent), regarding big banks and big market makers designing new order flow systems shuch that volume from BIG orders couldnt be seen, or the market would not be affected, etc. etc. I really cant remember the comments in the article, so just take it as that, some speculation of something i remember reading.

 

[wasp]

take what i am going to say with an absolute pinch of salt.

I remember reading some article some time ago .............

Oooh, I dunno, I like to keep my salt to go with my tequila!

EOD, I definately don't think anyone should be relying purely on cable these days be it a tight patch or not...

 

[JTrader]

This is along the lines of something I said to GJ about the increased number of retailers in the markets which he felt would be of absolutely no consequence so has there been a huge increase of institutional traders or........

Maybe forex price activity is only really affected/determined by the institutional (& governmental) transfer of money :idea: .


I can understand why the rise of the home based retail fx trader may not make a difference, because if you trade with a retail broker, you're not trading on the underlying spot fx exchange (be it bloomberg, reuters, EBS etc.)
Therefore it's more or less the same as the concept of spreadbetting Vodafone with CMC - we can see that this is not going to affect the underlying exchange traded Vodafone price activity.....you're merely "betting" on the movements of the underlying instrument based on the bookies prices.

However, if the SB CO./retail spot fx broker hedged trades in the same underlying market, this could have an impact on the underlying.

If you open an institutional account with FXCM, (i think) they say your orders are placed on the underlying exchange, in their name. So i can see why this model of trading may possibly have an effect on the underlying....