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Why price really moves in the forex market and how the bank guys paint the charts.

856 ratings | 41538 views
The reality of price action is that it is a random walk with pockets of non-randomness often caused by the actions of the big players in the market. In this video, I describe this process here with a simplified example and also give some chart examples of the fake out shake out moves often seen in forex.
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Text Comments (73)
Silver ImpAct (13 days ago)
Pathetic
Hen Chr (1 month ago)
This market turn over 5.3 trillon USD per day and in 3 to 4 days that reaches the total annual GDP of EU. The major part is generated in the US and Europe session. About 30% of that is exchange in Euro and USD and 500 mln. is 0.03% of a days trade in euro and usd. More than 95% of the turnover per day is not commercial exchange, it is speculation. This banker can hold power in a single or few minutes demand or supply with that amount, if we calculate an average and let 2/3 of the trade be in the US and Europe session. But that power can easily be reduced to zero, by others sitting with the opposite position, unless they coordinate it so the both benefit from it. ( It is not legal to coordinate the market), if not coordinated a lot of things could spoil the planning of this trader. Another bank could sit with the same amount for an opposite position or an Algo could catch the idea in a split second and spoil the idea. I agree we see those huge moves now and then, they are huge and with short lifespan, but could just as well be random as they can be controlled, One thing which tells me they may not be controlled is they happen in the busy US and Europe hours and if you really wanted to impact the market in a direction, you should do it during the Asia sessions where the turnover is much less and you would have much more power. We seldom see them there. I am not speaking on behalf on the major institutions I am just saying, I have never seen any solid proof that they are playing games in the market and control the supply and demand in coordinated efforts. Maybe a Bank trader could shade some light on the subject. I would listen very carefully to him. If they are not traders will ask, who is then doing it. There are to options randomness or Algos and I am not able to tell which one, but I am able to see that randomness can easily explain it. These jumps are easily absorbed in a yield distribution and their only presence is told in the tail of the distribution, which is so small a fraction of the overall that they are nearly invisible in the overall picture. Then I disagree with you when you claim that the currency market is a Random Walk with Levy effect. (Look up in Wikipedia for Levy distribution) it will require a heavy skewed yield distribution and I have never seen such a yield distribution in any analysis I have ever made on the major currencies. I have only seen normal distributions with very little skew when there are sufficiently many minutes in your sample. You may be able to create a local one over some few minutes and you may not, they actually play out with a lot of different ones on such short periods. You did not mention it, but the comments did. Some traders deny that there is randomness in the currency market and I give them that much, that it is nearly never or at least very seldom anyone tries to give that explanation in a clear scientific way. It is always lose statements and explanations with a picture of some mountains which they compare to the price charts and say they look like each other. You do not have to deny randomness, it is not spoiling your opportunities to trade, because the nature of it is exactly what you see in your charts. It is hidden to the naked eye and it does not stand out and shout randomness, but it is there and it can work in your favor or the opposite. I has always puzzled me why it is so forgotten and denied in the market, when it actually could give more market information and more clever decisions if it was recognized and used. In fact the word randomness may be a wrong word, it might be better to call it a systematic ruled based system which is difficult to forecast in the short run, but in the long run there is no doubt about how it performs. A months trading is enough to make it play out perfectly clear. It is a bit like a puzzle, you cannot see what it will become if you have only a few pieces assembled, but at some point, you start to see how it will look like when it is finished. Until then it is hidden to the naked eye what these pieces will add up to. However you can be very sure, they will add up to the full picture.
888 dnl (2 months ago)
how come you and me use the same fucking colors for trading I have the same fucking colors, just to make you little bit scare ill tell you something, I think we are connected and you are missing one important number i have besides the yellow which i think represents Rubik​ :) contact me. I know what represents the blue and the purple. dark blue and I also use white. You are missing the green one. Ive got the number.
markuss lesmale (7 months ago)
+Peter Brennan +Billy Everest, Thanks for the video, but it's been known for many many years and has been in the public realm and pubic knowledge that the big banks around the world influence currencies and there not the only ones, wasn't China influencing the market a few years back? It's only illegal if we get information from the inside and then trade with it, not for big banks and governments to in use it for there own benefit. All Banks and Governments work to together under the table it's a well known fact. You very rarely see anyone going to goal for fraud, corruption etc..... They either pay a fine and keep there job or they take a golden handshake and leave, Nothing New! Anyway keep up the video's Peter and keep helping the poor traders who are only trying to make few extra bucks. We all know forex trading is another form of gambling as everyone bets if the price will go up or down, and the Banks are the bookmakers and the Governments are the regulators who are so far behind the big players that they can't keep up and only act if something goes horribly wrong, For example? Financial Crash 2008.
T Diddy (7 months ago)
depressing
Fernando Costa (7 months ago)
It's time to forbiden the forex to retail investores. It's a scandal the banks steal money worldwild and don't be punished. Those guys should be in prision. Millions of retail investors are scam by them. The market move allways against them no mather what they do, long short, low, high leverage. Forex is a scam, so should be forbiden and the bankers put in jail.
Ted Bowman (3 months ago)
Fernando Costa oh piss off! thats just what people say that do not have the skill/ mind set to make money.
Lingsbord (1 year ago)
Great video, but are IBM really dumb enough to accept 40 pips away from the interbank rate?
Michael 534 (1 year ago)
Lol the market is definitely NOT random. I can predict moves well beyond them happening and Elliot wave isn't rubbish (unless you think all the institutions who use it are stupid)
RobosergTV (8 months ago)
lmao, you can predict the market? The smartest brains on the planet cant even do. You are funny, maybe write a research paper about how to predict the market?
CHATS AND LIVE TRADES (1 year ago)
I trade both the 1 min and 5 min quite successfully and so do many other traders. I wish people would not tell others what they have the ability to do. It is like all of the people who kept telling Nikola Tesla that ac wouldn't work.
vin tomas (1 year ago)
everyone on here is trying to sell you some magical course so they are biased advice.
Brickstun Ram (1 year ago)
"Institutional forex trader " *bullshit lines and colors all over charts*
Ryan Michaels (1 year ago)
Random?? Very lazy word and view Nothing random about the currency markets at all. That randomness you speak of is the market makers you are failing to see how they accumulate. That levi flight is the large speculators moving price and it will be done at specific times. Nothing random at all.
John Smith (1 year ago)
Didn't finish watching so I can't say whether it is beneficial or not but thank you very much for breaking this down into easy concise steps to understand. Does this apply to other markets as well? Specifically NASDAQ and NYSE stocks.
Celtic Tiger (1 year ago)
Hi Peter, I really enjoyed your interviews with other professional traders, any in the pipe line?
irwan iskandar (1 year ago)
True (exdealing desk department)
Forex_Shark (1 year ago)
I've been using ElliotWave and harmonic patterns along with candlestick reading using an intraday tick chart. I risk 1-3% of my capital on any one trade as i scale in and out of my positions. I've been very profitable for years now.
kemarb12 (1 year ago)
SMH!!!
kemarb12 (1 year ago)
Trust the market is not random, by listening he does not really understand the market...Biggest tip I'm going to give is that M high W low..Market cycle don't listen ppl who don't understand institutions...traders please under market cycles that's my biggest tip for y'all..
BillG37 (1 year ago)
I wish these banks would alert me when they are about to manipulate the market. I trade the indicative on Nadex, so I wouldn't even be trading with them in the actual market... In other words, they don't need me to be on the opposite side of their trade because I'm only using Nadex. :D
Alex Shikula (1 year ago)
the car part of the video looked so awkward haha
Alex Shikula (1 year ago)
thumbs up for the content though :)
Marc Frommhold (1 year ago)
next time I will be in Dublin lets catch up Peter! great one
Dizzie Davidz (1 year ago)
Man said nonsense stuff gartleys and that
Conor T Keane (1 year ago)
Actually a good way to trade forex is to use a number of freely available tools on the internet . Then do the opposite of what these technical analysis tools tell you to do. works quite well.
linda paluci (21 days ago)
I only figured that out now 🤣👏
Nyjiah Ingram (8 months ago)
ironically, I've made profits by determining the obvious bias, & then going the complete opposite direction
Max Eisenhardt (1 year ago)
I'm a software dev for Citadel Investment and we use a lot of the tools/resources that you call "silly" e.g. (Elliot Wave) and we do quite well using these tools in conjunction with machine learning, mkt micro structure, etc...
HIM Solar Gate (1 year ago)
The market is never random, it is always seeking capital.
Peter Brennan (1 year ago)
I believe I said the market was pseudo random. 'Always seeking capital' does not apply to forex.
Gregory Whoee (2 years ago)
forex is just a manipulated scam for benefit of those who control th charts.
BrandonLamarMusic (1 year ago)
Gregory Whoee OH REALLY? SO I GUESS THE 50K USD PROFIT IN TOTAL I MADE LAST YEAR WAS JUST MY IMAGINATION HUH?? YOU GOTTA STUDY MAN, OR TRADING JUST MIGHT NOT BE FOR YOU.
PatientBull (1 year ago)
Completely disagree, your excuse is used by every trader who did not succeed in the markets. Its the most manipulated market on earth but being profitable is possible.
Gregory Whoee (1 year ago)
Case in point a week or so ago I had reasonabley large sum on euro/jap going up [its been down so long]. Almost as soon as i put it on going up it immediately deviated in opposite direction against me until all of my money was gone! Then since has resumed its upward ascension? At same time i had much smaller sum on US/jap going up which it continued to do! Cause US/jap and Euro/Jap usually do same thing. This happens too damn often. Never put stop losses on cause they target you until you slowly but inexorably lose all of your money. -Retail traders continually get screwed basically sad to say forex is a scam. And even if one did win a large sum I kind of doubt the brokers would ever let you take it from them without HUUUGE commissions fees- so that one had practically nothing left of the take? [I don know what those lines going thru my words mean but happens a lot to me on youtube replies???]
. (1 year ago)
you dont fool, this shits not black and white.
HIM Solar Gate (1 year ago)
Know how do you use this to win?
oystermann (2 years ago)
Nice video, but author clearly has no institutional experience. Prices are not agreed in advance. There is no magical cushion (40 pips, are you joking!?). Large orders are usually executed at the fix (client chooses which fix). Half a yard is not small for any bank trader as he claims. And on and on. BTW, if you want to get filled to short above the market, you leave offers, not bids. Basic.
Abie Mokobane (2 years ago)
Hey Peter man, u are mentioning hard killer facts here. Please bring us more info and videos. God Bless!
Miroslav Stojic (2 years ago)
1 minute into video ====>>>> SUBSCRIBE... finaly some1 who thinks like me ... just advanced :O :)
adrian fundescu (2 years ago)
Retail trader can also divide his positions in zones.Or should.One entry is a mistake as you do not know if it's the best price.Ulterior price action can show one whether to fill the position with increments of a preestablished size,leave it as it is or reverse it ,if necesary.And technical analyse does work.Depending on the skills of who does it.Of course.Fact is that there are a lot of traders with respectable names and achievements that you are contradicting.But of course,diversity of opinions is necesarry.Anyway....traders that actually trade(Joseph James for instance)are a bit more convincing.Since trading is much better than talking about.Great difference.Talking about and analysing is a good first step.Actual trading cam be a bit different.
wes wes (2 years ago)
fair play opened my eyes to what really geos on
Fx SamuraiRobot (3 years ago)
Thanks for sharing, impressive! I got extremly good results by using free Samurai robot. Check it on my page
Chris S (3 years ago)
Hi Peter, Do you have get `insider information` from interbank circle? Do you think retail traders dont have the information will have great disadvantage?
Chris S (3 years ago)
I mean the information investment bank guys have, like the IBM orders in your example
Peter Brennan (3 years ago)
'Insider info' by its nature is never publicly available. Retail traders never see this info unless they maybe have the phone number of Mario Draghi or other central bankers. 
Richard Rossouw (3 years ago)
Hi Interesting. I came to my own conclusion that the Forex market is Random and that you can't win on the long run, What do you think about this: PROOF that Forex is Random http://youtu.be/EZdBzFcvwQY
Peter Brennan (3 years ago)
That is a great video. I have not watched it all yet as it is long but will. Meanwhile, I believe the market is pseudo random rather than purely random. See https://www.youtube.com/watch?v=GzgWu9GThP4
vogelszijnlelijk (3 years ago)
In a random walk market you can absolutely make money. You just can't predict when you will make money.
Gatsby Light (2 years ago)
+vogelszijnlelijk In the short run however, you can also lose money. Just like you can lose money in a casino.
vogelszijnlelijk (3 years ago)
+Peter Brennan In the extremely long run you are correct. In the short run however you can make money, just like you can make money in a casino. I agree with you though, your expected gain is negative.
Peter Brennan (3 years ago)
If the market was a true random walk then it is mathematically impossible to make money. Best case scenario is that you will lose money as a function of your spread cost * frequency of trading. 
Paul Amand (3 years ago)
Thank you for posting another informative videos. You are illustrating why 80%+ of US retail traders (dumb money) loose money. (90%+ in the UK). One question...what would it take exactly for the bank to 'push the price' 50-100 pips? and squeeze the stops?  I.e. What type of order/s would it take?
Poooter100 (4 years ago)
Very good video but the car bit at the end is bit awww awkward after watching your other videos on scams etc this looked so out of character.
Brickstun Ram (1 year ago)
Xplocial OnlineNetworking hahahahahahahhaahahhahahahahaha
you must be poor... do not trade until you can afford to lose lots of money. clearly peter knows what he is talking about, believe me, as a professional trader myself.
Poooter100 (4 years ago)
Cool man all good! :)
Peter Brennan (4 years ago)
Youtube advise that you make the videos interesting with scene changes etc. In some of the other videos, Malahide castle is in the background. However, I am not hinting I live in a castle. I guess we all have different perceptual biases. 
Poooter100 (4 years ago)
lol ok, so obliviously staged so you were obv trying to make some kind of subtle hint, again you seem very genuine, its just that that ending to the video (even if not intended) seemed a bit eewww anyway you are not a film maker, but a money make, so you crack on son!
Dimitri (4 years ago)
Thanks for sharing. You are a fund manager?
Peter Brennan (4 years ago)
Hi Maxseek. Please send questions to [email protected] 
Peter Brennan (4 years ago)
The reality of price action is that it is a random walk with pockets of non-randomness often caused by the actions of the big players in the market. In this video, I describe this process here with a simplified example and also give some chart examples of the fake out shake out moves often seen in forex.
Izahg Ila (1 year ago)
Exactly my point. I do top down analysis. Monthly to Daily. 4H chart is what i visit very rarely. Nothing lower. This video is to warn day traders, not swing traders.
Chris H. (1 year ago)
That is a good video. But one thing bothers me. I would say, this random walk occurs mostly on smaller time frames. The higher you get on time frames the less noise or randomness you get. After all, markets are driven by supply and demand, even though market makers can add to supply / demand for their purposes if they want to. But the bottom line is, that supply and demand in the forex market is determined by imports and exports of nations, besides other factors, which in turn is determined by e.g. consumer demand on foreign countries.

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