Comment by Amit Singh on June 3, 2011 at 5:51am

Dear Sir , a little guidance here please . How do you arrive at that conclusion that a majority of traders are willing? what move in the market is telling and how do you validate that statement?

"Now every dip traders taken short are willing to cover their shorts and turn long."

 

The reason I am asking that is , the forecast or reading follows the above assumption and if the above assumption is not validated than it can be wrong , is,nt it ?

 

are you taking this assumption as a calculated guess?

Comment by Dr. Sivaraman on June 3, 2011 at 6:17am

Dear Amit

In the market the supply and demand are estimated based on statistical calculations.

if the lower level buyers get exit opportunity then the lower level sellers are struck and if the lower level sellers get opportunity to book profti the higher level buyers are struck..All want to trade to make profit.So logically they want to either sell high and book profit during drop or buy low and book profit during rise.But the highs and lows are relative terminologies.because after seeing 1.49 we may feel 1.45 is good buy opportunity - after seeing 1.40 we may see 1.45 is good sell opportunity.so the levels are perceived differently during different time frames of the market.

every day the market sets the low and high.if the market stays near the high then it indicates the sellers are being trapped- if the market stays near low then the buyers are in trap.But permanently the market does not stay near high or low- because the traders taken lower level short do short covering and turn long  then the market drop- then some traders liquidate the long and turn short expecting further drop. this is how the collective herd mentality of traders work from time to time.Once you realise such traps the understanding comes whom they are trying to trap.

the market reading and forecast can go wrong sir.it is not 100% dependable- we only try to narrow the uncertanity using all the techniques including the fundamental and technical analysis and take calculated risk.to limit the risk only all are advising stop or hedging order.

Regards

Dr.Sivaraman

Comment by Amit Singh on June 3, 2011 at 6:43am

Dear Sir , I perfectly understand the theory which you have outlined . I have been a trader for quite some time and what you have written up there is standard explanation of market movements .

 

I am not even worried about forecast going wrong /right , I am just focusing on ways to read the market.

 

What I was try to get to that how do you ascertain "Now every dip traders taken short are willing to cover their shorts and turn long" which translates into market is ready to move as sentiment of the market is changed and contrarian principle will take the market in opposite side. but how do you enough traders have moved on other side because that will dictate the timing of the move.

 

Normal way of reaching such conclusion is sentiment indexes but I have not seen you referring to sentiment indexes . So what is the principle behind such observation? is it how much time it is in a narrow range ? because it was quite an unambigous and straight observation which caught my attention.

 

Apologies for asking too many questions but I want to learn and I have seen your blogs and your efforts about helping people to learn . I believe this is the key part of learning which is missing in the picture. Is it available as a paid course with you because I have seen on your website the charges for taking the paid package ? will that contain this information? 

Comment by SAAJITH GANGA on June 3, 2011 at 10:33am

SIr,

    Any updates before NFP.EUR/USD holding in higher leve.Do you think any chances for a drop more than 100 pips?

 

Comment by Dr. Sivaraman on June 3, 2011 at 11:37am

Dear Amit

Those info are given to the members taking professional trader training.

regards

Dr.Sivaraman

Comment by Dr. Sivaraman on June 3, 2011 at 11:42am

Dear Sajith

Only EURO is holding.The majors are doing contrarian moves showing nominal negative and positive net changes.But the commodity pairs are showing USd gaining move.Thin volume condition so the players are handling the crosses.They are expected to act on majors after NFP data release.Still EURO has not breached the high set during japanese session.So the chances of rising further is not envisaged.

Regards

Dr.Sivaraman

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