Inside the Currency Market: Pips, Values and Price Facts
Posted by Brian Twomey on February 23, 2015 at 12:50pmView Blog
Facts, Every Pip has a value, every pip movement is perfectly known, Pip prices are astonishley perfect. A purpose exists for every pip movement and that includes every pair, every second of every day.
Traders compete with absolute pros with astoundingly superior knowledge of Pip values, Few out here have this knowledge and why few can compete accurately V superior knowledge. My suspicion is 1 person in the FXStreet.com weekly Currency Forecast Poll has the knowledge.
Most academics from every institution elite and lesser known published failed papers and lack the knowledge. Many many math formulas are failures, few math formulas do work magically but only a few. Central banks are the professors not academics.
Collusion in prices is impossible, absolutely impossible. Stories about hunt stops, players, big boy collusion is bunk. Stops are always incorrectly positioned and are taken because they fell in line with intended price paths. A price path cannot be stopped, cannot be stopped. A currency price is like a dream house, its all about location.
Exchange rates is a wrong term, its not what all are doing, its not what all should do. Most traders especially retail don’t have desire to exchange. Pros exchange, not us. To align perfect FX jargon, they Swap.
Volatility is periodic, it Ebbs and Flows, Daily, weekly, yearly and multi yearly. Volatility calculates as well as a time dimension. Last May I saw present volatility coming and stated it but failed to record the time factor. Others don’t want to repeat this mistake. Not a day goes by when CNBC or other media outlets doesn’t mention volatility.
Then a few general terms that are profound misnomers. Safe haven. This term applied to days of Fixed V Gold exchange rates. It doesn’t apply today. It doesn’t exist in today’s markets.
Round numbers. A day or two may exist that offers a support or resistance level in a price that looks like this 1.1300. What does it mean, it means for that day or maybe for that hour or two, 1.3000 is a support or resistance level. After the hour or day is over, another number appears as new support or resistance.
More on the themes of pips and values will be seen in an upcoming article.
Brian Twomey Inside the Currency Market, btwomey.com