ForeksKlub
http://www.fxclub.org '
http://www.fxclub.org '
Recently one of our Academy students asked a question: "Is there a link between the technical analysis of curves and objective (psychological, economic, political) causes of the market?"
Of course, the answer is obvious: of course there is. In fact, he and technical analysis. Limit the overall poucheniyami is the easiest, especially since all of our course, strictly speaking, and must give an answer to this question. But people like ??????? get any meaningful explanation at the beginning of his journey.
The best way to show concrete examples of the fundamental factors are found in the chart with the technical lines and what the reasoning for the trader had to clarify a situation to make a decision. A couple of examples I want to tell here. I think they deserve attention, not only those who learn in the classroom, so I designed these examples in a small article. Maybe someone interested.
Just want to say that these examples are taken from a live practice, that is, this is a situation in which it was necessary to take decisions on the opening (or closure) position on a real account in the real market. Hindsight, I can always pick up any number of beautiful examples to demonstrate the power of some methods. But in choosing the method does not account for: the position must be open (or not to open) now, and you explain everything in detail tomorrow. Then everything will be clear, and what forces move the market, and why it turned out, but will be too late. Therefore, if a particular position in front of you clearly are the main factors for you, on time and properly analyzed, was the right decision, but then another and the market agreed with you (that is, the position has brought a profit), it is a valuable example and is remembered for a long time.
To begin with, I wish to emphasize that it is the psychological motives of the market most of us are interested in the technical analysis of the hourly charts, for which we are forced to sell. By themselves, the economic factors may operate on the market long and slow. When the extent of the impact of actions such as changes in interest rates the central bank, and month, in general, not a period. But even if there is no doubt that the movement of currency rates dvinet it up, it does not mean that it is necessary to urgently buy. Not like in a month, but for a few days, the currency could manage to go in any direction for a few figures. Long-term movement would then, in full accordance with the macro-economic theory. But if you get a loss, then you are little comfort.
Therefore, for us it is important to understand that the mood with which the market perceives the current ekonomichekie specific data, financial news, political developments, not just economic theory conclusions or recommendations, written in the handbook on fundamental analysis for the trader. And the handbook and manual, of course, do not lie. But the market is always his opinion and it may not coincide with nothing written earlier.
The examples that I want to relate it to the psychology of the market, although the movements were the basis of financial, economic or political factors.
One of the key considerations that must be considered in the analysis of specific events or the publication of economic indicators: how the event (or value) is different from market expectations. If you figure out (the event) is quite consistent with the expectation of the market, it is usually already taken into account the market (that is, "discounted") movement in prices. A special exchange rate reaction to the published value (event) can not be, despite the overall economic importance of the indicator (interest rates, GDP, inflation, etc.). But if the market had expected one, but came out completely different numbers, or an unexpected event, the market reaction to the substantial economic indicators to be sure, and very often - very energetic.
Therefore, the analysis of the fundamental factors of your decision may be correct only if you have your opinion on the market. If you just read someone's forecast, it's just one of thousands of opinions, which at any moment can be found on the market. He and the price for this, irrespective of the credibility of those who expressed this view. It is not the credibility of the forecast, but in your perception of the market. And for that, choby to have their opinion, it is necessary to continuously monitor the life of the market for its problems, changes in attitudes and reactions. This should be remembered!
Vyhvachenny out of the market context of any economic indicator can not only provide useful information, but also mislead the trader. For example, a textbook for traders or in a book on macroeconomics says that if such a figure is increasing I (Iy), the exchange rate rise. When they saw on the screen is the most Iy, the trader buys the bulk up quickly this currency, and gets a loss, because the exchange rate then falls vigorously. Why is this happening? Yes, for example, because a few days before the publication of indicators on the market I had a lot of speculation, commentary and opinion surveys, showed that all are confident in the growth of this indicator, so that in these days the exchange rate has gradually been raised, because in anticipation of namely the data traders bought the currency. And after the data confirmed expectations that many have already completed their plans and now realize profits by selling at high price of the currency, which they previously had to buy cheap. Massive selling of currency certainly lower its rate, and it is sufficient to ensure a loss to those who do not follow all this time, the behavior of the market.
After the opening of morality turn to the example on this topic. Similarly, in such a scenario unfolded events and decisions on the eve of the Bank of England interest rates at its meeting on 10 February 2000 according to the dynamics of the economic cycle, the Bank's actions were aimed at preventing the threatened increase in inflation higher than officially announced guidance of 2.5%. The increase in prices stimulated activity in the real estate market, high consumer demand in the country and tight labor market. It is therefore expected to increase the basic interest rate (repo rate) at 0.25% to 6.0% per annum. Over the previous few days, a lot of comments from economists, experts and opinion polls statements of market participants have confirmed the general belief that the Bank will take such a decision.
That deal created a very meaningful situation for the trader, who gathered to open a position on the pound on 10 February. On the one hand, the day on the schedule could find a lot of benchmarks to open short position. By adding various technical indicators, could get even more sell-signals. On the other hand, to sell the pound for several hours before the expected increase in interest rates (which, according to all the textbooks, should strengthen the pound) at least risky.
But on the other hand, have a few days, since the beginning of the week, pound vigorously walked up precisely because the entire market was sure to raise the rates of the Bank of England. No wonder that when a meeting of the Bank and its decision confirmed the expectations of the market (the Bank raised rates by a quarter per cent), began a significant rollback pound.
This is a description of the painting retroactively. And here's how it looked in the live market. At the time schedule of the pound, I matured a signal to the discovery of short position for about 5 hours before the appointed time of the announcement of the decision. That is, at the plug, marked by an arrow, it was necessary to decide to sell or not. On the one hand, the trading system said strong sell, the other for four hours through the Bank will raise rates and the pound goes up. What I Soros or what?
On the other hand, the pound had already completed three and a half the figure for the previous four days. How else can? Of course, count on how many pounds dvinet 0.25% increase of rates is difficult. But even a purely formal, 0.25% is about 4 percent from 6%. So the progress in the three figures had already devoured the lion's share of this potential (in the long run) pounds to increase the reaction rate Bank. You can take the whole future course of currency markets have already chosen in advance. Then, after the publication of the decision (ie, when it will be as expected) would roll back a pound. In this case, a short position must be opened with a calm mind. Moreover, the pound directly to this begs. And even it does not matter on what system was there a signal here, and so everything is clear: the good and the trend line probita down, and the divergence of RSI has just formed (as a true divergence, it is then I do not like). The only thing that stops, the rate of four hours.
If you do not have at the head of the clear reasons that I have just raspisal, it is better not to do anything. The stakes have rates and the market can create for them something very nepotrebnoe how many times we have seen. Well, if there is full confidence and understanding of what is happening in the market, and the technical picture shows sell, you should fall without a doubt. What has been done in this case.
I think the answer to a question from the audience, this example provides a very vivid. All that happened over the screen, perfectly reflected in the chart. Technical analysis has never lie.
fundamental analizVtoroy example - it's just pull out of my textbook illustration of the fundamental analysis. A good week was in May 1999 and this policy and the war and the economy. At that time, just took place aggression against Yugoslavia, which is constantly davilo the euro down. Rumors that seemed to be agreement on the cessation of hostilities, immediately lifted the euro. Then, quickly passed the information that the hearing exaggerated, the war successfully, so the euro has gone his own way down further. The resignation of E. Primakov quite expected the market, but it was once linked to another date (for the meeting of the State Duma on the impeachment of Yeltsin). Event held on the earlier resignation had been expected, of course, unexpected obytiem (at least for most), but look at the progress of the euro in a few hours before the event. Who will be taken to convince me that the market is not suspected of this unexpected event. That we did not suspect. Therefore, when a white candle (in a couple of hours before the fall) is ripe buy signal, I have a long position and opened up, as it should be an honest trader. And that turned out? By the way, when a year later, I made back-test a very different trading systems, it is exactly in the same white candle emerged buy signal:
With a proper understanding of what is happening in the market, there should have been safely turn over the position, as in fact (if you read early reports of the resignation), the situation was extremely clear. Who recently came to the Forex, may not remember, but in earlier times was a good currency - the Deutsche Mark (DEM); veterans will remember with sorrow, what it was a good currency for traders. Among the many features of the currency was so: when any political napriyatnostyah in Russia it (s) course instantly fell. Who remembers Traders resignation of General Lebed to any public office performed by the same hands, remember, and a white candle at the time schedule of the German mark. Long after the candle was burning, General Lebed. By the way, the Swiss franc fine then strengthened on the occasion of the fall of the German mark, as on all written. Now is certainly not what the new euro currency heavily shuffled different factors (that's how Frank goes rope tied to the euro), but this is the property of the deutsche mark it is inherited: down with political squabbles in Russia (at least in 1999 . it was so). Many were then lengthy commentary in the press that the West accepted the resignation of Primakov as a positive factor for the great cause of Russian reform. But the technical analysis, we clearly shows that financial markets interpreted the resignation of Primakov as a negative factor for the pan-European currency. In terms of technical analysis is a good example of how the market sees a pre-planned by unexpected events.
Followed a few hours of the resignation of U.S. Treasury Secretary Rubin has appeared on the schedule is indeed an unexpected event. The sharp fall in the dollar interpreted by the fact that Rubin was considered an influential supporter of high-dollar policy. But in general, the schedule shows that the main trends of these developments have not changed.
More simply a quotation from a textbook, what then commented nothing to add. At the end of the week, data on U.S. inflation triggered another sharp market reaction: the U.S. consumer price index for April showed unexpectedly strong growth of 0,7%. For comparison - in March was 0.2%, and forecasts on the basis of interviews with experts predicting no more than 0.4%. Although the basic price increase was linked to took place before the rise in oil prices, but the main indicator of Core CPI, excluding from the consumer basket of food and energy, also rose by 0.4% (0.1% in March). The main thrust of the comments in this regard was that the factors favorable to a strong non-inflationary growth of the U.S. economy (the global financial crisis and falling oil prices), has already ended. The rise in oil prices and the start of recovery in other world economies, including in Asia, will cause a general rise in prices, also in the United States. All opinion was that the FED will soon raise rates, and this was seen as a negative for U.S. financial assets. So the prices of U.S. stocks and bonds, and at the same time with them, and the dollar came under downward pressure.
Because life goes on, it goes forward. The plot is arranged exactly a year, as specifically designed as a training model for novice traders, it was impossible to pass by, so now the continuation of articles:
The circumstances of the fall of the pound after the Bank of England lowering interest rates: 8.02.2001
Painting against the British pound to resemble last year's surprise (10 February 2000), right, up to the contrary: then-expected rate increase, and now decrease, while the pound rose a few days before the meeting of the Bank, but now he fell at least persist . Naprashivalas analogy: if in the past year, after increasing the rates of the pound has fallen, it is now, in response to the decline in rates was expected recovery rate pounds.
Before the meeting, the Bank of the pound had already been on the two-week minimum. Yesterday 23 of the 29 economists in a survey predicted reytrovskom lowering rates (which should have been the first decline in 20 months).
The low level of inflation in England (the inflation rate stood at 2.0% last time, and kept below the official benchmark (2.5%) over 21 months), the expected impact of the U.S. slowdown in the UK (released a few weeks earlier UKGDP Q4 was 0.3%), led to forecasts of future reduce the rates of BOE in the coming months (up to 5.50 or even 5.25). This expectation of future rate cuts commentators then announced a major factor podtolknuvshih pound 8 Feb, 2001 down after the announcement of a reduction in rates at 0.25%.
The reason for the fall of the pound rate also called the Euro, which does not refrain from falling against the dollar, despite the unexpectedly high figures on German industrial production. Commentators say that the market had by this time was crowded with long positions on the euro. In addition, persistently came rumors that the Bank of Greece at this time to sell euros in restructuring its foreign exchange reserves (the following day the Bank of Greece denied these rumors).
An interesting comment caught the next day. The point is that the recent market accustomed to the new logic: a reduction in the rates of the central bank is an incentive to increase the exchange rate, because all believe that the mitigation of the monetary policy of the Central Bank is a stimulus to the economy and therefore, will strengthen the currency. This is certainly evident in the response to the recent reduction in the rates of FED. Thus, the question about the pound is likely to work out why sizhenie rates did not stimulate growth. However, a rise of the pound had already on Friday and continued on Monday 12 February.
So, as you can see, history repeats itself really, but every little (and when and more) in a new way.
And now, back to the subject, with which it all began - whether the graphs show the differences in market sentiment then and now. Look at the following picture and everything will become clear.
If last year for pound, a convincing signal to sell, then at this time, in general, and there was no attempt to show the buy signal. Therefore, talking about istorcheskoy could be quite similar, and it would be correct, but the final decision can be taken only look at the schedule. As we remember - the technical analysis will never lie.
No comments:
Post a Comment