Thread: I quit trading, but... can anyone explain this to me?

What the fuck happened this morning?! I’m operating GBP/NZD and there was no important news to justify a strong movement in this pair, but it still went off! Even the U.S. employment report (NFP)

It's a lower supply than demand, so the price started to rise, probably the institutionals and algorithms were buying while the emotional traders were shorting out... when those shorts closed their positions, fueled the momentum even more.

Last night I saw something similar to GBP/JPY, ups and downs abruptly for no apparent reason around 2:15am EST. I won a good pick the first time, but they swept me away the second. This year it will be moving. If you are over-leveraged, you can earn a lot... or clean you up in an afternoon.

I understand your frustration. I also went through that of looking for meaning for all movements. But you have to accept that many times the price moves by perception and not by facts. The market does not have to give you an explanation. Sometimes it just happens. In this specific case, it may have been a combination of factors: expectations with China, coverage of positions in NZD, or even speculation about future yuan movements. All this is reflected in the crossed pairs as GBP/NZD, even if there is no direct news about them.

Sometimes looking at the markets reminds me why I stopped operating. This week was crazy, and if you don’t have a chaos-proof strategy, it’s better to pause. I was lucky not to be exposed when the Swiss central bank removed the floor from EUR/CHF in 2015. Since then, I prefer to watch from afar. And seeing what happened with GBP/NZD today, I understand why.

The market has always been the same for centuries. What changes is us. From our perspective it seems that the markets are crazy... but in reality it is our perception that changes.

"Everything affects everything." Even if you were operating Amazon coconut futures, you should have been out before the NFP. I don't tell you borderline, it's just the truth.

That's how this works. Stop hunting. No mercy. And GBP/NZD is one of the wildest pairs when it gives you to move.

Many have already given you valid explanations, but here’s another one. GBP/NZD is calculated as GBP/USD divided by NZD/USD. If both pairs move through the NFP, this crossover will also do so, even if it has no apparent sense. And the NFP was complicated: the job came out strong, but the wages stagnated. Mixed result. That can cause strange reactions, with sudden spikes followed by smoother movements. Add the cross correlations and you already have the perfect storm.

The solution? Stop trading with retail brokers who manipulate the environment. Pass on to futures, the real market, and operate against the world.