Ignoring fundamentals: paranoia or conspiracy?

[phreak]

Euro has been going North for quite a while completely disregarding positive dollar data for some mysterious reasons. Strangely, market still waits before buying Euro till strong US data is actually released just to completely ignore it and buy Euro one more time. Why wait? If fundamentals don't matter anymore, why care about news releases? It goes beyond any common sense and looks like mass mental disorder when traders simply buy Euro following some crazy idea rather than objective reality. What's going on? I personally don't remember cases when much higher than expected payrolls and interest rate increase caused dollar to lose value. Or we are dealing with some unprecedented conspiracy that is able to influence huge worldwide forex market? Any answers?

[elmagd2000]

This is the mystery of forex trading. Sometimes fundamentals take the upper hand and lead and the other times technical analysis lead whatever fundamentals say. Big players don't enjoy going the same direction with common people so when there are consensus on a specific direction they play the other one. It is not conspiracy theory. It is profit quest and this requires to get positions on the other track. I like to look at forex trading as a combination of both fundamental and technical analysis. Practice will give a clue about which one is leading. Good luck.

Hani

[socrates]

The escalating oil price is hurting the USD more than the positive data is helping it.

[Trader-X]

I think it really depends on what time frames you are looking at. On weekly and month charts, not much out of line. I used to be affected by every which whip of this market until I finally realized that it has its own mind and does what it wants on the short term. On the long term charts, the trend prevails at some point, its just a matter of how much whip you can take in the middle.

This market is luring in tons of novice traders by the month. And trading is a zero sum game, there has to be a buyer for every seller..even if your broker is the one taking the other side of your trade. So if you think about it, on the short term, a good way to get money from new traders is let them trade on what they think(we all know we did it at some point) and then just eat them up in the opposite direction. Thats just my theory.

If you look at the weekly charts, the Euro went up fast, and then came down faster..if you think as if you had millions or billions to trade...a lot of money in, a lot of money out..and now the Euro is somewhere in the middle..probably where it should be. Who knows? The point is trade what you see not what you expect.

I do pay attention to news dont get me wrong, news does work for long term positioning. When I was first learning how to trade, I took a seminar and the economist said something that made alot of sense to me. Economies take sometimes years to turn around, not days..sometimes sentiment can change from month to month, but a real turnaround takes time.

If you are really bold you can take a few pips off of a news trade, but if you are trying to make a position on it, be prepared to wait. Sometimes you get instant gratification and sometimes you get a black eye. If you use strict money management, you can take a few slaps and still be in the game.

I dont really think its a conspiracy, just the nature of the business

[comenow]

Originally Posted by elmagd2000

This is the mystery of forex trading. Sometimes fundamentals take the upper hand and lead and the other times technical analysis lead whatever fundamentals say. Big players don't enjoy going the same direction with common people so when there are consensus on a specific direction they play the other one. It is not conspiracy theory. It is profit quest and this requires to get positions on the other track. I like to look at forex trading as a combination of both fundamental and technical analysis. Practice will give a clue about which one is leading. Good luck.

Hani

I think you, like everybody else, overestimate what you call 'big players'. They don't know any better than small players. This is one myth that makes absolutely no sense to me. Why people think 'big players' have a crystal ball is a mystery. You will find that most big traders are trend followers who are right no more often that the average wannabie. The difference lies elsewhere rather than being good at predicting directional movement.

[comenow]

Originally Posted by socrates

The escalating oil price is hurting the USD more than the positive data is helping it.

JPY is much more vulnerable that USD to oil price boom, so that can't be the reason, given JPY has been the best performer in the last few days.

[Qazpur]

could it be that someone is filling their basket with EUROs?
i may be way off base, but i would imagine that the best time to fill a number of very large orders without moving the market significantly is when there is some counter action (such as positive US data).

[kramnave]

Unlike certain future contracts which i do suspect moves with fundamentals and technicals purely because speculators (Big Dogs and the rest of the world) are mainly trading them. What currency traders have to understand i suppose is that forex do not work this way...we do have to consider other parties who need to buy and sell currencies for business decisions, trade etc and not concerned about speculating in forex...like in future when the olympics are held in suppose London...loads of tourists would buy pounds and technically when they do that are selling their local currency at the same time...i'm not implying that this theory is sound and does affect prices in a material way but what i'm saying is that forex is much more complicated than just pure speculation and prices should move in a way that reflects fundamentals.

I used to read up on the news but sometimes i do think they are absurd. Like on the U.S Election day...when news came out that Bush was leading, dollar strengthened like 80 pips against the Euro...then came the news that Kerry was very close (at time leading if i remember) and threatened to 'dethrone' Bush...dollar weakened and more than made up for lost ground....so finally Bush Won and i was expecting the dollar to strengthen and save my position which was already -45 pips....guess what it never happened ! Why ? suddenly the Election didn't matter anymore...it was because of the growing trade deficit !

News wires do have the news that i do not care about...like they try to explained why a currency suddenly strengthens or weakens...sometimes i do read about dollar weakening on a particular day as the Arabs were buying the dollar or when the Yen (and the rest of the currencies as a matter of fact) strengthened against the dollar as lotsa overseas japanese are going back to Japan for the new year and giving up dollars for yen....

I should find a job in a news wire...i think im quite creative

there is no accurate way of forecasting currency movements...nobody ever can...we just have to make the probabilities in our favour..

Even if anybody disagrees with me...feel free to do so...just airing my views..i'm no professional and quite a newbie as a matter of fact