Two simple questions

[pboi]

Hello guys, I was hoping to ask a few questions here.

1) In your opinions, do the GBP/US and EUR/US markets exhibit the same traits most of the time?


2) When economic announcements are released, do the FX markets sometimes spike up or down reacting to them..lets say within a 30min timescale?


I believe the answer to both of these is yes..but then I know nothing about Fx...just what I observe from the charts.

 

[Rhody Trader]

1) Yes they often behave in a similar pattern, and the primary reason (in simple terms) for this is that what's happening to the dollar is by far the largest factor in the foreign exchange markets. So dollar strength will affect both EUR/USD and GBP/USD (as well as all the other USD pairs). Whether or not they move exactly in lock step down to the nearest basis point depends on all sorts of other factors.

I generally agree, but would qualify GJ's statement by saying that the USD is sometimes the largest factor. There are times when what's happening in the greenback is the absolute dominant theme and drives exchange rates across the board. You can tell this is happening when the majors are all moving but the crosses are fairly subdued.

The are times when the USD is not in charge, though. You could say that now is one of them, though the recent attention to US rates has gotten folks looking at the buck again. The whole carry trade subject over the last while, however, had a great deal of the action focused on the JPY and related crosses.

As for GBP vs EUR, my experience has been that it's more choppy. I used to compare the way it trades to a stock index like the S&P where there are some rapid moves and a lot of counter trend actions. I heard from several former forex dealers back in the day that GBP was the hardest to trade.

 

[pboi]

Thankyou guys.

I am currently working on something, and that has validated some of my logic.

( I know nothing about everything...its just maths I am playing with to grab some pips)

Once again, thankyou.

( Hopefully I can come back with some pips to show for myself)

 

[pboi]

Oh...maybe one more question.

Do any of you spreadbet the Fx? If so what platform do you use?

OANDA seemed to be the best..but then the extreme increase in spread size around announcements means its not suitable.

Capital spreads has a stable spread size it seems.

What do you use?

 

[options]

1) Yes and No!
Longer time frames they follow the same direction (Generally) and swiss will do the opposite. Jap at the moment has a life of it's own. Important to remember that they are all their own man.

2) On any time frame yes. The longer out you go the less you can see the spikes.

And in answer to your other question. Fxcm, cmc and IG. In order at the moment. (They do change around over time. Fxcm, IG then CMC.

Although Fxcm is not a sb firm, so you are liable for your own taxes!

 

[pboi]

so fxcm is consistantly the winner?


taxes...I will worry about that if I win

 

[Rhody Trader]

Longer time frames they follow the same direction (Generally) and swiss will do the opposite.

Lest anyone be confused, he means USD/CHF will do the opposite as GBP/USD and EUR/USD (generally speaking), not that the Swiss will trade opposite to the Euro and Pound.

 

[Akuma99]

Hello guys, I was hoping to ask a few questions here.

1) In your opinions, do the GBP/US and EUR/US markets exhibit the same traits most of the time?


2) When economic announcements are released, do the FX markets sometimes spike up or down reacting to them..lets say within a 30min timescale?


I believe the answer to both of these is yes..but then I know nothing about Fx...just what I observe from the charts.

1) Check out http://www.mataf.net/en/analysis-correlation_MarketVsMarket.htm to see the correlation between pairs, you'll see at the moment, the hourly correlation is actually very low, but the daily is somewhat higher.

2) Don't forget the spikes just before the announcements as well, they are just as common.