ForexSpirit

Ben Bernanke’s two days of talking this week didn’t have much impact on the currency markets. Wednesday’s US CPI and housing numbers were ho-hum while Thursday’s US Leading Indicators saw a drop into negative territory to -0.3%, blamed on the housing slump. No surprises there.

EUR-USD price continued to hover all week around the 1.38 level, being pretty rangebound, if anything with a slighly upward slant. I managed to successfully nab two bread and butter trades. My small toe-in entry from the previous week is still open.

There’s an interesting thread on the Forex Factory forum that is worth reading, especially the posts by Trader888. He’s an ex-bank spot forex trader who recounts some great tales on the inner dealing of how the banks go about their trading business. His first comment starts at post number 26.

While there might be an element of confirmationary bias at work when I focus on these posts I, never-the-less, think it gives some great insight into how the banks trade.

Confirmationary bias is when I have found some information that mirrors my own current outlook. I gravitate and associate more closely with this information as it is in tune with what I currently already believe.

The information recounted by Trader888 shows the importance that large institutional traders, with millions if not billions of dollars under their control, place on using fundamental analysis as a core part of their trading approach.

If riding on their coat-tails makes me money then I am perfectly happy to do that!

Another thread on Forex Factory which has caught my eye but which I have not read fully yet is Jacko’s Forex House of Pleasure and Pain. Jacko’s trading approach is really what it’s all about: trade with the long term trend, don’t get sucked into the random noise in the short time frames, and keep it really simple.