Bill Williams and his strategies... - page 17
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In addition to the previous post, in order to define the concept of volumes and the most trivial notion of how the market works, you can try to simulate the market with a primitive model:
- let's have 10 people, 5 of them have 100 EUR and the other 5 have 100 USD.
- in the initial state, the price is 1EUR=1USD.
- All 10 people want to exchange their money at a certain profit, i.e. nobody is willing to do it at the rate of 1:1.
_______________________________________________________________________________________________________
How would the exchange rate look like if
1. one of the participants leaves with its money in USD, and comes back a few hours later?
2. One of the exchangers left with its own money in USD, and a few hours later comes back, but somewhere along the way managed to get another 100USD?
In economic theory, this problem has long been formalized. In any textbook on OET or Microeconomics, there is a section devoted to the equilibrium price as the point of intersection of supply and demand curves. Only it does not take into account which of the market participants went where and what they found where they went.
don't sit on a loss, either! ))))
Sometimes the whole market goes up or down, and that's where the moment of truth comes in, when you sit on the losses. ))))
SZS: I remembered Niroba's thread - he stood by his losses until he burned down to zero, or rather in minus - he even replenished his deposits in time to look decent in public opinion
I`m afraid, or maybe luckily, I do not know who Niroba is )))) But judging by how it is mentioned in various threads, this esteemed colleague has long become a legend on the forum )))) Now about sitting. If you have a competent and proven MM, then what the hell is wrong with it? Suppose you have correctly identified the beginning of the downtrend and opened a sell order, but the price keeps going up. All the technical indicators are going high and shouting for a downward movement, but the price keeps going up. ))) Thus, we have a pure divergence. What to do? 1. start worrying - close the sale with a loss and open a buy position or do not enter the market at all. 2. Take a short time 3. To fill a position against the price movement (by the way, Williams calls to do the same), though it looks like madness. ))) If we look closer to divergences in general, there is little logic, they are driven exactly by tick volumes, the jerking of which pushes the price in the direction opposite to what indices show. The more so, a strong fall or rise starts afterwards. )))
The second order was opened on the top of the divergence wave and on the border of the Fibo time zone. So, what do we have? Instead of one losing order we have two profitable ones. I have seen on the forum that many do not trust Fibo levels and they are right to do so if they are set off from scratch. But I don't know why this shit works for me. And I don't even want to know. Otherwise it turns out that you lose money on craps, but the trash of knowledge and experience that led to those craps stays in your mind. It's harder to get rid of delusions than to lose money. )))
In economic theory this problem has long been formalized. Any textbook on OET or Microeconomics has a section devoted to the equilibrium price as the point of intersection of supply and demand curves. Only it does not take into account which of the participants in the market went where and what they found where they went.
Throw away your textbook ;) the speculative market has completely different laws, supply and demand don't work because the liquidity of the forex market is amazing,
imho - the market will swallow $1 million for 10-15 ticks, even the price will hardly change its direction ))))
Spas, I have long ago and safely studied economics and have forgotten about it ))))
Throw away your textbook ;) the speculative market has completely different laws, supply and demand do not work because the liquidity of the forex market is amazing,
imho - the market will swallow $1 million for 10-15 ticks, even the price will hardly change its direction ))))
I've learned the economics a long time ago and have forgotten about it.)
The textbook is not mine. It's by Samuelson and he won the Nobel Prize for what it says.
Supply and demand work in all markets. "Speculative" is no exception. And the price will always be the equilibrium point of the intersection of supply and demand curves in forex regardless of forex liquidity. And it doesn't matter if it is 1 million or 1 billion or 1 trl, the price will always be a derivative of supply and demand on Forex. And the law of supply and demand will always work in Forex. And the price on Forex will be ALWAYS determined solely by DEMAND AND SUPPLY. No other factors simply do not exist.
You, when you say that supply and demand do not work in Forex, discover new economic laws that destroy all the world's known economic theories - Keynesianism, monetarism, the theory of rational expectations, etc. All the theories known to mankind to date.
IMHO If you follow through, you'll win a Nobel Prize))))
Demi: И цена на Форексе будет определяться ВСЕГДА ТОЛЬКО СПРОСОМ И ПРЕДЛОЖЕНИЕМ.
No other factors simply do not exist.
There are textbook examples - debt forgiveness, devaluation. Do they fit into your scheme? Supply is great, but where is demand? There is none. And the price is determined by a political decision, or force majeure. I would not argue that there are no factors other than supply and demand.
Demand and Supply are not factors, but drivers of the market. The Demand-Supply system works in all the open markets of the world and it is extremely efficient. If someone wants to write off a debt or pay for someone out of their own pocket, they have every right to do so. Neither supply nor demand will change the market. You can give alms every day, but it won't mean that the whole world will change and give you food and water for free.
If Forex is so powerful and great, why is it so correlated with other markets: commodities, stocks, bonds? There is only one global market and one global supply-demand system. It rules everything. Everything else is just details.
There are textbook examples - debt forgiveness, devaluation. Do they fit into your scheme? Supply is great, but where is the demand? There is none. And the price is determined by a political decision, or force majeure. I would not argue that there are no factors other than supply and demand.
Forex (as well as the stock market) is influenced by everything. I would not claim that Forex is influenced by anything, even a controversial election in an African country or a riot in Egypt. Where is forex and where is Egypt, it would seem. But all these factors influence supply and demand and they shape the price. And they are the only ones.
All cataclysms and factors affect market participants and they form supply and demand. supply and demand form the price. Even the central banks in the forex market can only influence the price through supply and demand. The statements of the heads of central banks influence market participants and, depending on the nature of the information, either supply or demand rises.
Forex (as well as the stock market) is influenced by everything.
You are just at the beginning of Forex, keep it up, I think your opinion will change quite the opposite, and you will see that even the economic motives are served after the fact, in fact you do not understand the difference between freely convertible currencies and everything else (other currencies and other markets), read this quote:
Convertibility facilitates international trade, but complicates financial management at home. Foreign currency inflows become the equivalent of domestic money issue, which can lead to uncontrollable inflation. Currency convertibility, on the other hand, may allow inflation to be "exported" to other countries. This requires transferring the inflationary money supply generated domestically to other countries, for example in the form of low-interest loans.
And think of the food chain: USA - developed countries - third world countries (resource suppliers), where resources come from and where inflation is fused. Eh, good economic theory but only in theory and not in real life. ;)
You are just at the beginning of Forex, keep it up, I think your opinion will change quite the opposite, and you will see that even the economic motives are served after the fact, in fact you do not understand the difference between freely convertible currencies and everything else (other currencies and other markets), read this quote:
and think about the food chain: USA - developed countries - third world countries (resource suppliers), where resources come from and where inflation is fused. Eh, good economic theory but only in theory and not in real life. ;)
1. I don't know what "economic motives" are in forex. I used to think that the main and sole purpose of forex participants is to make profit, which is, a priori, an economic motive. Perhaps you meant economic performance?
2. Forex is only about freely convertible currencies. And in the forex market the price is only the result of the supply and demand ratio. I do not want to go further into a quote torn out of someone else's mouth.
3. Do not think about the food chain. Do not. If you go further along it, you may be surprised to find yourself as one of its links. You do not need it. There is forex, forex is freely convertible currencies and there is supply and demand for each of them, and there is a price. And there is TA and FA. And there is the FORUM and there is MQL4. What else does a trader need to be happy? Nothing.
P.S. Find the discarded textbook, it will come in handy.)
P.S. Find the discarded textbook after all - it will come in handy)
;)