Think in terms of how stocks trade. When one sector gets sold off it is often accompanied by a move into another sector. It is called rotation, especially when in a Bill market.
Same may be true for Fx when dollar is in a bear market. When a currency is sold odds are the seller is not going into dollars but a flow into another currency.
Mtl JP 18:09:39 GMT - 12/29/2020
what is "Bill market" ? tia
Minneapolis DRS2 18:20:08 GMT - 12/29/2020
"i" sits next to "u" on the keyboard.
GVI Forex10:05:22 GMT - 12/30/2020
It would serve you better to take note of what I wrote about rotation rather than focus on typos.
Minneapolis DRS2 10:56:57 GMT - 12/30/2020
Jay, a question about mechanics, because in retail we only deal in pairs. In the real world, am I right to assume that the rotation would simply be a direct exchange of "denominated currency" (for want of a better way of putting it) rather than pairs?
In retail, we only have pairs, so if we want to "rotate" we'd have to fool around with different pairs and the respective crosses. But it seems to me that commercial traders would just exchange USD, JPY, EUR, GBP etc. at agreed-upon rates. That's how I see commercials around here doing it...they have USD-denominated accounts, EUR-denominated accounts etc. at different banks, and when they want to buy/sell currency, they tell their banks to execute wire transfers (with each bank getting their cut of course, just because).
GVI Forex11:33:26 GMT - 12/30/2020
The dollar pairs are the main source of liquidity. When, for example, there is a large flow between eur and gbp, it will be executed as a cross but to get the liquidity it will be done vs usd pairs.
Depending on the overall trend, one side of the other will have more trouble being absorbed.
From a retail traderís perspective, rotation means finding either the strong or weak currency to trade.
From a commercial perspective, rotation may simply be a commercial transaction that sees a flow from one currency to another. As retail traders, all we need is to recognize when there is a cross flow going through so we can recognize what is driving the price action.
GVI Forex11:53:13 GMT - 12/30/2020
The point I was trying to make is that EURUSD has these bouts of one way moves on both sides ,often out of EURGBP I am focused on the corrections where it trades like crap but do not follow through.
Mtl JP 12:04:10 GMT - 12/30/2020
apparently there is a "Bill market" (that part of the financial system in the UK that acts as the channel where new money is supplied to the economy)
regardless of typo or mis-understanding: "how did you know that "most were long EURUSD" ?
GVI Forex12:15:45 GMT - 12/30/2020
Who wrote most were long euro?
Mtl JP 12:25:38 GMT - 12/30/2020
I put it in quotes:
"how did you know that "most were long EURUSD" ?
Mtl JP 12:40:09 GMT - 12/30/2020
in your 16:12 post
GVI Forex12:43:36 GMT - 12/30/2020
Price action, charts, forecasts
Mtl JP 12:52:52 GMT - 12/30/2020
If that were the case, normally I would see "most" being on one side of the boat as a mother of vulnerable positioning as the qtn is how many are left to push it further yet ... imagine a ferry on which most vehicules are on some one side. would you get on it ?
when euro was around 1.2250, some of my s/t signals were suggesting overbought but not overwhelmingly strong enough to mitigate the run at at the 1.2273 high.
GVI Forex12:56:38 GMT - 12/30/2020
That is one reason it corrects but does not go far enough for a reversal.
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