My guess would be that gold is falling precisely because of the selling and fear. Perhaps buyers want to buy gold, but sellers are unwilling to sell because they want to hang onto their gold. And as happens on Betfair, people who are in a trade sometimes panic when it looks like the music is about to stop, which may cause a stampede in the opposite direction of the trend.andyfuller wrote:Can some one explain why Gold is currently falling despite all the selling and fear?
good luck with that!sweetybt wrote:I don't know exactly Andy as I am short on gold
andyfuller wrote:Can't say I get your thinking Jeff tbh.
superfrank wrote:sorry, but I haven't seen a fall in gold for the past month, apart from the odd slight correction (to be expected).
superfrank wrote:good luck with that!sweetybt wrote:I don't know exactly Andy as I am short on gold
I know what you are saying but usually it just isn't people closing out their positions, there is another reason behind it as well. In your example the people who would be closing out theirs lays are the people who can't see the overall pattern of what is happening i.e. the backers still aren't there and the layers as you say still want to push up the price.Ferru123 wrote:When there is a strong move in one direction in a market, and it looks like it might be about to end (for whatever reason), it can trigger a surge in the opposite direction. This is partly because of people who have open trades rushing to close their trades, and partly due to speculators betting on a reversal.
Let's use an analogy. You've laid a horse, and after drifting a bit, you sense that the market is running out of juice - that the layers want to push the price up, but the backers just aren't interested. They want a higher price than the layers are willing to offer. My guess is it won't be too long before the layers start thinking about closing their trades, causing a steam.
Rumours were swirling around the City that hedge funds were being forced to sell assets such as gold in order to cover deepening losses on other investments. This led to a surprise 1% drop in the value of gold, which in recent weeks had risen to record highs of more than £1,000 an ounce as a safe haven bet during the eurozone and US debt crisis.superfrank wrote:sorry, but I haven't seen a fall in gold for the past month, apart from the odd slight correction (to be expected).
If they know nothing about the markets how do they know they even existFerru123 wrote:People like John W Henry and David Harding have made fortunes of hundreds of millions without knowing anything about the markets they're trading, or even predicting them. They simply follow trends that emerge, and get out when the trends end, using simple algorithms.
A trend follower assumes that trends sometimes self-perpetuate due to irrational crowd behaviour, causing some trends to go on for far longer than is rational.andyfuller wrote: And if they follow trends they must know that trends exist in the markets.
In the case of pure trend followers, it's true. They might not even place the trade themselves, instead saying to a computer 'scan these 900 markets, and when criteria x, y and z are met, open a trade, and close it when criteria a, b and c are met.'andyfuller wrote:When people say they know nothing about xyz market I never believe it.
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