Discussion of article "Market Theory" - page 3

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The approach outlined in the article, as it seems to me, works only on large time intervals and for significant price changes. It will not help us, small traders, to determine price levels on the scales we are interested in.

The situation was somewhat similar in the "from theory to practice" thread - the analysis was based on huge samples of the price series, and the result of trades depended on much smaller samples. It turned out that the price outliers fell out of the analysis, but strongly influenced the results of real trading.

As justification, I will give an excerpt from A.G. Shulgin's manual "Exchange rate and international finance":

As is known, there are two approaches to the consideration of foreign exchange (In principle, both approaches do not contradict each other: the first one studies a rather long-term period of time, the second one deals with short-term dynamics of the exchange rate).

1. Currency as a commodity. If we consider foreign currency as a commodity, then it is necessary to analyse the supply and demand of this commodity by means of elasticities of supply and demand curves. Such consideration of currency was prevalent in the past, when the movement of capital between countries was practically impossible and the main reason for buying/selling foreign currency was export-import operations. We will study the main ideas of this approach in the topic "Purchasing Power Parity".

2. Currency as an asset. If we consider foreign currency as a financial asset, we cannot apply the elasticity approach, because for financial assets the elasticity of supply and demand is very unstable, in other words, it is not applicable for analysis. In order to analyse currency as an asset, we will have to use the tools of return and risk analysis. Modern studies show that in countries with high capital mobility and floating exchange rates (which are practically all developed countries of Europe, America, and in the near future Russia) the volatility of foreign currency exchange rate is close to the volatility of the main financial market instruments (stocks and bonds). The volumes of buying/selling foreign currency to purchase foreign financial assets far exceed the volumes of export-import operations. It is with the consideration of this approach that we will begin our presentation of the exchange rate theory.

 
Hi all, I am like from the "every man for himself" section, I am fond of reading "open interest" in the"Quickstrike" application from CME, I calculate the optimal favourable price for the dealer, there are contracts of "small speculator" and "large speculator", I noticed that the dealer always looks for the optimal price between put and call contracts from small speculators, apparently to pay less money, but if a contract from a large speculator comes, he pushes it deeply,the dealer is always looking for the optimal price between put and call contracts of small speculators, apparently to pay less money, but if a contract from a large speculator comes, he pushes it deep "into the money", I mean in the area where contracts of small speculators are concentrated,and when calculating their forward price and premiums and when a contract of a large speculator appears, so-called support and resistance levels are formed, support means they will not push a small speculator "into the money", resistance means the contract of a large speculator will not let the price go higher and we will crash under expiry, I notice good volatility on the market just under expiry of weekly and monthly contracts, here I have a question for everyone who is here, naive, naive, am I talking rubbish and nonsense here? Or are you wandering in the wrong forest?
 
MihailGradov:
Hi all, I am like from the "every man for himself" section, I am fond of reading "open interest" in the "Quickstrike" application from CME, I calculate the optimal favourable price for the dealer, there are contracts of "small speculator" and "large speculator", I noticed that the dealer always looks for the optimal price between put and call contracts from small speculators, apparently to pay less money, but if a contract from a large speculator comes, he pushes it deeply,the dealer is always looking for the optimal price between put and call contracts of small speculators, apparently to pay less money, but if a contract from a large speculator comes, he pushes it deep "into the money", I mean in the area where contracts of small speculators are concentrated,and when calculating their forward price and premiums and when a contract of a large speculator appears, so-called support and resistance levels are formed, support means they will not push a small speculator "into the money", resistance means the contract of a large speculator will not let the price go higher and we will crash under expiry, I notice good volatility on the market just under expiry of weekly and monthly contracts, here I have a question for everyone who is here, naive, naive, am I talking rubbish and nonsense here? Or are you wandering in the wrong woods?
It's not rubbish and nonsense. And how are you doing on the CME? Or is it still theoretical?
 
There is the macro level of the Forex market, the market of states and their currencies. The money of a state can be seen as a "stock" of that state, and for a purely mercantile purpose, as a unit of exchange and control of other markets. Speculative price targets are weak at this level, more political or economic, news, fundamental component. Predictability of this part of the market, based on the trading history of the instrument, is very low. This component is discrete, it has price targets regardless of the state of the market at the moment, the development of trading events in the prehistory. It is impossible to predict the price targets of the fundamental component by technical analysis, unless you have insider information. As we go deeper from the macro level to the micro level, the special component grows, the environment of traders changes, the instrument is the same, the price targets are different. There is a technical division into trading sessions. Forex market is a market of exchangers, large, large and small. Level of Banks. Lots (amounts) of banks. While the Upper Macro Level sets the climate, and there is one set of price targets, the level below - the market makers, make the weather. In addition to solving technical problems - currency exchange - speculative problems are solved at this level. Market makers are liquidity providers for clients. Clients can be from their level as well as from smaller ones. Brokerage firms among others. There is a different set of long-term and short-term price targets here. Participants at this level can only speculate about price targets at the upper macro level. As well as price targets for the period at their level, because of the multiplicity and sufficient diversity in terms of the amount of liquidity used for activities for the participants of the level. There is a diversity of reasonable price targets, and all those who set them are trying to achieve them. A separate layer are brokers, liquidity providers for traders aiming to earn money in a speculative way. And if the market is trending upwards and a trader buys, someone sells to him. Who sold to him on the rise of the rate goes against the market and as the trend upwards develops more and more at a loss. Possessing considerable sums of money, he starts to shape the market to his profit, setting and achieving price targets of local, lower, deeper, short-term level with its own set of laws of activity, very different from the laws of the upper macro-levels. There is also a level of traders who are able to influence the price formation by an organised mass. From the opening, the London session significantly makes adjustments to the price targets before its opening. As, in fact, does the American session. The ways of influence of large lots on the formation of price movements are using either deals with large, huge lots, or promising money with the help of fencing pending orders with a significant lot, so-called scarecrows or invitations, which create a seed that will either grow, or not, a "critical mass" of lots in the desired direction. If the critical mass is gathered, an avalanche will form, an impulse, which will be skilfully stopped near the price target to be reached. Work with the formation of movement with large lots is constantly near the spread. The target of market makers of the local level, stops and orders of traders. They do not see anything else. They are not interested in TRs.
 

Yusuf - good afternoon! What about the bidding! Any results?

Are you alive? In the market?

 
Roman Shiredchenko #:

Yusuf - good afternoon! What about the bidding! Any results?

Are you alive? In the market?

Take the course


 
Vitaly Muzichenko #:

Take the course


sometimes it seems like you're not the one writing....)

with such "stupid" entries.... )


download the theme!!!

 
Roman Shiredchenko #:

Sometimes it seems like you're not the one writing....)

with such "dumb" entries.... )


download the theme!!!

Bring up all the useless threads on the forum ...

You have nothing to do, a lot of extra time and lack of attention? Get married, and you will not be deprived of attention and excess time.

 
Vitaly Muzichenko #:

Bring up all the pointless threads on the forum ...

You have nothing to do, a lot of extra time and not enough attention? Get married, and you will not be deprived of attention and excess time.

it seemed that the topic is not finished!!! )

I laughed! )

thanks. )

PS already divorced (or divorced )), exhaled, paying alimony, thanks again - so far I've had enough!

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