SECRET YOU NEED TO KNOW.
Perhaps you have been trading Forex for long or just found it, this write-up is for you as an eye-opener to the reality of this market you are trading. To begin with, many forex traders are fond of complaining of price, pairs and trends manipulations but looking closely, it is not so in most cases. Let me ask you these questions:
Have you been wondering why one currency among the Majors; USD, EUR, GBP, CHF, AUD, NZD, CAD and JPY would just strengthen and another weak? Have you ever wondered why the one so weak now would just wake up from slumbering and begin to dominate others later? Is there any lesson from the FX Crosses for traders at all?
Answers to these will be provided in this write-up for your learning so that you will cease from calling Forex Trading a monster.
NOTE: Whatever happens in the markets or you see their trends doing, slow or fast, people will keep complaining. Therefore, prices move at the speed of the markets' prices and not at the speed of any trader's expectation.
I will use the current market's situation as a case study. looking closely, of the FX Majors, since March, 2020 (D1 Timeframe) the USD has been the weakest and followed by the JPY. Do you know why? It means these two are DETERMINERS: If the USD is weak, expect the JPY to be weak also. If the JPY is strong, expect the USD to do the same. It is because both of them are like measurements for weighing all the basket of currencies when it comes to trends or charts.
I am using D1 Timeframe of the InstaTrader for the analyses: The USD has suffered the following Pips until date against these currency Majors since the Covid-19 market volatility of March, 2020.
EUR/USD: = 1000 Pips, GBP/USD: = 1400 Pips, USD/CHF: = 700 Pips, AUD/USD: = 1700 Pips, NZD/USD: = 1200 Pips, USD/CAD: = 1300 Pips
Use these analyses to do justice to the currencies against the JPY and you shall see different results in the number of Pips recorded.
EUR/JPY: = 1000 Pips, GBP/JPY: = 1300 Pips, CHF/JPY: = 700 Pips, AUD/JPY: = 1700 Pips, NZD/JPY: = 1200 Pips, CAD/JPY: = 639 Pips.
DISCOVERY: We should ask why the USD has suffered 1300 pips against the CAD but has only recorded just 639 pips against the JPY. Manipulation?
2nd: Unless you are not familiar with the movement of GBP/JPY, why did it record 1500 pips but erased it and now trading around 1300 pips? You know that GBP/JPY moves faster than they all. (Enough! you call that manipulation? wait a bit more). Do you notice them all using the MN Timeframe?
The CHF has been the outperforming currency against all Majors for the past years. Now let us do analyses of it against them since the month of March, 2020 till date. (D1 Timeframe)
EUR/CHF = 220 Pips, GBP/CHF = 670 Pips, AUD/CHF = 1200 Pips, NZD/CHF = 820 Pips, CAD/CHF = 250 Pips.
DISCOVERY: Turn to the MN Timeframe (backspace) of these pairs and do proper analyses. You shall ask why the GBP and CAD have recorded but few pips against the CHF when they are trading around multi-years' lows. In addition, why did the EUR/CHF remain stagnant all through the month of March when the volatility happened but only lifted up and recorded but a few pips against the Swiss Franc despite trading at multi-year's low? Manipulation?
Lessons To Learn.
i. Hardly you can know the actual destination of the market trends using only the Majors for analyses. Include the Crosses in your analyses and see the clear understanding that prices wait for one another and unless they all are balance, trends will not turn.
ii. Whenever you see any currency of the Majors weak or strong, do not arrive at the judgment that it is manipulation but prices and trends correctness. it is for your education so as to know and prepare for another round of opportunities coming your way in the trade.
iii. Opportunities cease NOT in Forex Trading. Markets go and come, the wise makes much but the fool lose much and complain. The fool enters when he should leave and leaves when he should enter. Educate yourself because the basis of Forex trading is analyses.
iv. Each of the Majors paired with another currency of the Majors in at least 10 different places. For instance: USD/CHF, CHF/JPY, AUD/CHF, CAD/CHF, NZD/CHF, EUR/CHF, GBP/CHF, CHF/NOK, CHF/SEK etc. Do not arrive at a conclusion with analyses on just one pair because you might not know what is happening in any other. What many traders refer to as manipulation of prices is nothing but correction of prices and trends. They are opportunities in disguise!
v. Unless one currency of the Majors tapers in prices, another one will not begin to rally. With these analyses above, what can you discover will happen to both Determiners; USD and JPY? Begin another analyses from here and discover. Lack of analyses leads to paralyses and ignorance cannot make any permanent profit in the Financial World. Education is key in arriving at financial liberty!
NOTE: It is not manipulation but a way of letting you open your intellect and understanding to reality so that you can benefit from the stupidity of the markets. Keep calling it manipulation, you become blindfolded more and more and many great opportunities pass you by!