Price and My Bus Analogy
Well, it's the weekend so I thought I'd share with you my analogy.
Price is like a bus, for the most part just driving around town picking people up dropping them off. Most of them are tourists just paying their money to see the sights but there's some commuters in there too.
Then occasionally the bus will head out of town on its way to the next town. I like to jump on the bus just as it leaves town and when I'm aboard, I sit back, put my headphones on and drink a glass or two of wine until that bus gets to the next town.
Now, it's not always a direct route. And there will be some unscheduled stops along the way. Some people will get off here, mistakenly thinking this is the terminus. Or even thinking they've got on the wrong bus. And occasionally the bus may even head back to town to pick up more passengers - particularly if there's some rich Americans or Asians there flashing there money having missed the departure.
Eventually we're off again toward the next town.
And when we get to that town, I get off the bus. I don't just drop my kids off, I don't just drop my luggage off. I GET OFF THE BUS. All of me. And I wait, while the bus then drives around town picking up and dropping off the tourists and commuters.
Back to FX: I think the cable left town a little too fast. It's got a long journey ahead of it and I think it's gonna need to pop back and pick up a few more people... Selling at 5065, target 4915.
Good weekend all!
Comments are closed for this blog post
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Comment by raj patel on March 2, 2013 at 10:56am -
Hi Jasmine,
You will be surprised to know that the majority of the passengers in bus are riding in the opposite direction they continue to pile in more fares with the view that the bus is about to head North.
Jump off when last passenger(bull) is broke and the bus turns empty for me that stop and turn is 158 until such time I am hoping on and off pointing south
Good luck
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Comment by Jasmine C on March 2, 2013 at 1:12pm -
Hi raj,
Are you saying that people are buying the cable thinking it is about to go up? You know, it may well be about to head North but I just trade what I see and until it breaks 5220 we are in a clear down trend and I am a seller.
Actually I favour the view that this bus is heading all the way to 1.4200 (kinda like a NY - Seattle Greyhound. Is there such a thing?? :-) ).
What's 158? 5158? I'd sell that for sure... In fact, I'm hoping that price gaps higher on the open before a big sell off. But I don't think we had a strong enough close for that :-(
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Comment by raj patel on March 2, 2013 at 9:21pm
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Jasmine, The retail Forex and small commercials have been buying cable since the rate broke 1.58 on 15th of January and from the chart l posted you will also see that the ratio of longs have increased since while cable has been falling. The cross has lost almost 14 cents in that time.
The current ratio in cable is 2:1 ( 2 longs for every 1 short). The rate is approaching a floor where cable is expected to correct 3 to 4 cents in next few sessions. This is also an area where retail Forex may flip their long positions in to shorts as there a fear of further falls into 140's. look at this sentiment chart to understand trade positions.
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Comment by Romano on March 2, 2013 at 9:25pm -
The question is, are those people in the bus illegal immigrants and is there maybe a will to offload them from the country, or is the bus really only transporting fine hardworking locals around the country?
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Comment by Sir Gissachance on March 2, 2013 at 9:57pm
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Hmm good question Romano and well done for thinking out of the box and one should also think:
Can one rely upon the Bus Company getting those passengers there on time or will there be traffic congestion?
Will the Bus Company suddenly increase their fares?
Do you travel well before the rush hour or well after to avoid the stampede and crush?
Is the driver actually fully trained or does he suffer from sudden bouts of road rage which could cause an accident?
What about other drivers and collisions?
Will all the stops be fully operational?
Will bad weather cause delays?
What about if some Oil Sheik wakes up one morning and starts belly aching about the lack of profit he is making from his oil. Will this push up fuel prices making it not viable to take the Bus anymore?
Best Regards,
Sir Gissachance (PPND)
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Comment by talisman on March 3, 2013 at 4:25am
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hi raj, interesting points as always. i m curious who says cable is reaching a floor and excpected to retrace 3 or 4 cents ?
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Comment by pandora on March 3, 2013 at 5:51am -
NoNo Romano, the bus is a bunch of eager wannabe traders who have just been on Fxstreet International Traders Conference ..
There Fxstreet chief analyst Gonzalo Moeira have just told them that GBP / USD will during the next week rise to 15500 ..
But we must not forget in the the same bus is an elegant lady with headset which mean the prize will go opposite , who have right .. no clue!!!
I only react to what happens on a 5 min chart ..
The price goes up, I will buy, it falls I sell ...
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Comment by Jasmine C on March 3, 2013 at 7:38am
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Hi pandora, you are right on so many levels :-)
If you are trading the 5 min chart just react to what you see in front of you. Chances are, you are in your trades for just 5,10,15,... mins so D1 is really not too important.
I trade D1 and H4 mainly, so I am in trades for generally quite a few hours. But even still, I'm not sure how Raj charts and info can be of any use. My chart says down I trade down. Until price breaks 1.5220 then my chart says stand aside. :-)
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Comment by pandora on March 3, 2013 at 8:14am
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Hi Jasmine,, may i ask what music you listened to one the bus ☺
The price tends to continue in the direction it is into..
To predict the turning point is a great way to blow out you trading account !!..
The is interesting in this case when the price was down to testing round number like 1500 is that the price often breaks through 15-20 pips and then take a trip back .Often price will take a little trip north to test out a few resistance levels then the price will try to test out the lowest level and maybe make a new low,,,
In other words, I guess we get a little rang trading next week,
before the price will plow on down or take a slightly longer walk north,,,Who knows, I do not know I try to react to what is happening,
As a trader, I like to be active, to sit and wait for the perfect trade is an inhuman thing, it's like sitting watching grass grow,
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Comment by Jasmine C on March 3, 2013 at 9:13am
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Well, I love the Les Mis Soundtrack...
I dreamed a dream in time gone by, price was high my trades were winning, I dreamed that LIFFE would never die, i dreamed that Brokers were forgiving...
But moving on... I blew out a couple of accounts trying to pick bottoms. I placed my trades and within minutes they were in the red. Very depressing.
I agree with your sentiment, wanting to be active, to be in the market all the time. But be careful. Its very easy to make bad trading decisions with this attitude :-)
I am nearly always in the market, so i always have a position and an interest but i'll leave the in-out-in-out to the guys!! ;-)
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