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Sentiment is usually backward looking and is incorrect so frequently that it is used by professionals as a counter indicator of market direction. Daniel Loeb

The Forex Exchange market is the worlds largest financial market with an estimate daily turnover of over $5T, which is more than 25 times bigger than the US equity market. Although the FX market to some extent seems to be irrational because they don't follow the interest rate differential as expected. This could indicate that investor psychology plays a significant role in exchange rates fluctuations and there are consistently empirical evidence which suggest that sentiment may be the key to understanding this apparent irrationality.
Each and every trader will always have an opinion about where the market should go, and everyone will have their own explanation as to why the market is doing what is doing. Sentiment may drive trades however sentiment does not always translate into actual trades, so at times it can be deceiving.
It is what people actually did in the stock market that counted - not what they said they where going to do" Jesse Livermore

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aslamhammad avatar

nice

alifari avatar
alifari 27 Mar.

Nice article, well done..

WallStreet6 avatar

Thanks for elaborating on this very important  and too often underestimated aspect of trading

marius24 avatar
marius24 30 Mar.

I use this indicator when i am looking for trend reversals. Good work.

fso56 avatar
fso56 3 Sep.

Dear all
I can add this indicator on Jforex 3?

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3/33
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If the main macro theme of 2014 was the broad based dollar strength, the general consensus for 2015 is for further appreciation of the dollar. The implication of a strong dollar, and with the pick up in volatility, have also set in motion other trends, like the bearish commodity trends(see Metals and Oil), the carry trade has died (see AUD/USD and NZD/USD) and last but not least EUR/USD has finally started trading to the downside.
The broad based dollar strength can have a big impact on US economy, like lower inflation and this can be the trigger, next year 2015, for a considerable correction in the equity market but without altering the secular bull trend. I'm making a bold call here that the equity market will have a severe correction in 2015, once we complete a PI cycle from the 2007 high. "PI" the magic number has the following significance:
  • PI=3,141;
  • Multiply (Pi)*1000=3141;
  • 3141 days equal 8.6 year;
  • If you add 8.6 years to the 2007 high it bring us to October 2015 as the next intermediate top.

Because of the dollar's role as the world's primary reserve currency, the impact of the broad based dollar strength can trigger some "consequences" in other part of the world such…
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Daytrader21 avatar

JockPippin I really don't understand what are you trying to say.

WallStreetBlog avatar

Thanks!!!

salamandra avatar
salamandra 28 Dec.

Багато з чим не погоджуюсь... Але робота сподобалась в плані знаходження позиційного планування і інвестування...

foreignexchange avatar

Good Evening Daytrader21, thanks for the article. It could be very interesting. I like the article even there are parts that could be explained differently. HMM can probably prove mathematically the assumption in fig 5, maybe also other different stochastic processes ...... but I suppose that fractals are not so indicated. You should need a kind of  complex quadratic polynomials to calculate  swing below 1.3490. But if it is just your intuition it could be statistically compatible with other parametric models.  But .. GOOD JOB and THANK YOU VERY MUCH. Good trading 

marius24 avatar
marius24 30 Dec.

yap. I like this article. Let's see if you are right when 2015 ends. Good luck bro with your trading and hope you put all this work into practice.

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