Forex Blog - Liquidating Market - When Will It End?
On the top of my trading
checklist is to identify the type of market you are trading. Is it a trend,
sideways, range, congestion, consolidation, or liquidating market? These can be
subjective terms and often not clear until after the fact but having a feel for
the type of market you are trading can be a valuable tool.
For day traders, liquidating
markets can be difficult and timing is important. One reason is that movements
tend to come in spurts.This is often
characterized by sudden moves when a liquidating order is executed and then limited
follow through once the order is completed unless the move sets off stops or violates
technical levels that trigger fresh selling (or buying as the case may be) and
more liquidation. This often sees price moves set up false bottoms or tops
(depending on whether it a bear or bull market) once the order is done, then
backing and filling before the next order hits the market.
In the current environment,
liquidations have been dominating for some time. Normally, liquidating markets
do not last long as positions and stops get exhausted. Then the market has to
decide whether to continue this as a trend or reverse once the liquidating
flows are done. However, we are in extraordinary times with extraordinary
volatility driven by extremely high levels of risk aversion. The extent of the
unwinding and de-leveraging of positions seems never ending. Just when you
think how much more can be left in the market, another wave hits. For that
reason, those trying to trade it as a â€śnormalâ€ť market, searching for bottoms or
tops or reacting to news, have been in a perpetual squeeze and run for cover.
It is not easy to avoid the temptation to â€śbottom fishâ€ť or contra trading so
discipline and quick feet are needed to trade that side. Those who continue to
trade this as a liquidating market and avoid the temptation to â€śbottom fishâ€ť
have been rewarded. . In any case sound money management is needed to navigate
What is behind a liquidating
Examples of what is behind a
liquidating market are illustrated in updates posted by Shanghai bc on the Global-View Forums this week and are worth
repeating. It suggests selling of
currencies had little to do with price or technical levels but a need for
liquidity. This is why trying to trade off technicals in a liquidating market
can often prove difficult.
shanghai bcOctober 22, 2008
Euro and Pound liquidation:
The main flow was from Japanese funds and banks
repatriating what they can to shore up their stocks..Money from Australia i.e Aud/Jpy
was used up a few weeks before..Now money from Europe i.e Eur/Usd
and Gbp/Jpy being used up this week..Japanese contingent may have done their
repatriation by and large this week..Chinese are not interested in
repatriations from Europe and that is a non-factor..So even if
the Japanese want more repatriations later, they are highly likely to wait till
Euro and Pound bounce a bit from the present levels..
Then after a pause on
Thursday, the market resumed its panic driven liquidation on Friday.
Shanghai bcOctober 24, 2008
All started from panic driven Tokyo stock
market..Margin calls have to be met and Yen repatriation and liquidation is the
only solution those investors have..And the herd-instinct of those types of
investors all moving in the same direction with tens of billions like snow
avalanche..Forex market is dancing to the tune of stock markets at
present..Unless we see very strong US stock
performance tonight,we may have the repeat of today next week till money runs out
or investors are thrown out of the market..Nothing like panic-driven
market..Then,once this panic is over,the bounce will be almost as fast as its
drop..Trading lightly or stay out of the market is not a bad strategy in market
like this because we never know which bullet will catch us in a panic-driven
market..Never dance with unpredictable partner..All the best..
So, how long will this
liquidating market go on? If I had the answer I would not be typing now but
sipping a drink on my own SouthSea island waiting to cash in my chips. In any case, there
is little choice but to let the flows play out and for charts or price action or
some other event tell you when the liquidating markets have run their course or
at least ready to take a breather. In this environment, eur/yen is acting as a
key barometer of global risk aversion/appetite and should continue to be used
as a guide going forwards.
Forex Trading News
Daily Forex Market News Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Forex News Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
Actionable trading levels delivered to YOUR charts in real-time.
Tue 17 July 2018 AA 08:30 GB- Employment A 13:15 US- Industrial Production AA 14:00 US-Powell Testimony Wed 18 July 2018 AA 08:30 GB- CPI A 12:30 US- Housing Starts/Permits AA 14:00 US-Powell Testimony Thu 19 July 2018 AA 1:30 AU- Employment AA 08:30 GB- Retail Sales A 14:30 US- EIA Crude A 12:30 US- Weekly Jobless Fri 20 Jun 2018 A 12:30 CA- CPI/Retail Sales
John M. Bland, MBA co-founding Partner, Global-View.com
Global-View Affiliate Program
We are starting an affiliate program to market some of our products.
Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.
Put the word "affiliate" in the email subject line.
Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.