Sunday, January 18, 2015
4hr charts and W pivots
As usual the 4hr charts show the importance of support resistance levels, W pivots and the number of significant moves that can be expected per week (typically 2-5).
London open entries
Some examples from this week using the following simple ideas:
- the break and test of a range (see the red lines in the attached charts)
- a failed move in and around London open in one direction means a move in the other (followed by a higher low for a buy or lower high for a sell) has a high chance of success
This method uses 35 and 100 lwma's and higher lows/lower highs, abc's, 123 moves whatever name you prefer. Failed moves in and around London open, clean AB moves in the opposite direction that either test the range or break and retest the range (red lines). The BC retraces are small to set up clean higher lows/lower highs.
- the break and test of a range (see the red lines in the attached charts)
- a failed move in and around London open in one direction means a move in the other (followed by a higher low for a buy or lower high for a sell) has a high chance of success
This method uses 35 and 100 lwma's and higher lows/lower highs, abc's, 123 moves whatever name you prefer. Failed moves in and around London open, clean AB moves in the opposite direction that either test the range or break and retest the range (red lines). The BC retraces are small to set up clean higher lows/lower highs.
Thursday, January 8, 2015
Current strategy
I was asked about the 1hr strategy I was looking at. It looks quite good but am not using it at the moment. It uses 3 indicators for trend definition, buy above/sell below when a moving average, RSI 50 level and MACD 0 line agreeing. It takes this one step further needing a candle to open one side and close the other side of a daily pivot.
In addition to swing trades when time permits I am looking again at 1 and 5 min entries using the same higher low and lower high flow as we have used for years. The focus is on where pairs agree for example eurjpy and gbpjpy, euraud and gbpaud or in this case eur crosses. The green line is London open and you will see these eur pairs were all suggesting a move down.
Using some simple concepts:
- the break and test of a range (see the red lines in the attached charts)
- a failed move in and around London open in one direction means a move in the other (followed by a higher low for a buy or lower high for a sell) has a high chance of success
- confirmation from other currencies would suggest we are trading with strong against weak
The attached charts show all these eur pairs were below the purple trailing line suggesting a move lower after London open (green line).
In addition to swing trades when time permits I am looking again at 1 and 5 min entries using the same higher low and lower high flow as we have used for years. The focus is on where pairs agree for example eurjpy and gbpjpy, euraud and gbpaud or in this case eur crosses. The green line is London open and you will see these eur pairs were all suggesting a move down.
Using some simple concepts:
- the break and test of a range (see the red lines in the attached charts)
- a failed move in and around London open in one direction means a move in the other (followed by a higher low for a buy or lower high for a sell) has a high chance of success
- confirmation from other currencies would suggest we are trading with strong against weak
The attached charts show all these eur pairs were below the purple trailing line suggesting a move lower after London open (green line).
Tuesday, November 11, 2014
Strength weakness across pairs confirming?
If currencies are agreeing across the board your odds of success improve. Here gbp and eur move at the same time against jpy, see the red lines at 5.35 and 8.25. Jpy is obviously then weak against multiple pairs.
You can have a similar position with say gbp being strong (or weak) against multiple pairs.
You can have a similar position with say gbp being strong (or weak) against multiple pairs.
Some general trading rules of thumb
Nothing works 100% of the time but these are some good general guidelines. Don't believe a word I say check it out for yourself. None of this is rocket science and good to have in the back of your mind:
- If London open fails to move in a certain direction then a move in the opposite direction has a high probability of success.
Not suggesting you jump on everything but consider when your trade rules agree. Here London open failed to move higher and when the low of the immediate range (yesterdays high) was tested 1.8410 there was a nice move lower.
- A break and retest of a range has a high probability of success. See the arrow up.
- If London open has had a quick 50-70 pip move (depending on the pair) that will most likely be it for a couple of hours.
- If the London morning session is quiet then the US session is likely to be good, after all a pair has to get to its ADR.
- If London open fails to move in a certain direction then a move in the opposite direction has a high probability of success.
Not suggesting you jump on everything but consider when your trade rules agree. Here London open failed to move higher and when the low of the immediate range (yesterdays high) was tested 1.8410 there was a nice move lower.
- A break and retest of a range has a high probability of success. See the arrow up.
- If London open has had a quick 50-70 pip move (depending on the pair) that will most likely be it for a couple of hours.
- If the London morning session is quiet then the US session is likely to be good, after all a pair has to get to its ADR.
Thursday, October 23, 2014
Current 1hr chart set up
I have these 8 pairs on 1 screen so that I can immediately see if a specific currency is strong/weak as aud is at the moment or if eur or gbp is strong/weak against many crosses.
I am looking at a strategy at the moment which is why the specific macd and rsi settings are on.
I am looking at a strategy at the moment which is why the specific macd and rsi settings are on.
Trend v support/resistance
You never know what will win out trend or support/resistance. All you can hope for is to spot the SR level and see how price reacts.
After the Asian session move up this morning both GBPCAD and GBPAUD stopped at easily identifiable levels for several hours and had negative close 3 bar reversals (below the previous 2 candle closes) with little/no lower wicks. Great set ups for further moves lower.
I like to watch for confirmation across more than 1 pair. Either from various gbp crosses, see above, or against a specific currency eg gbpaud and euraud. This morning several gbp pairs closed lower and in addition euraud also closed lower.
Picking the right pair to trade doesn't work every time but in this case gbp was weak. Then euraud also confirmed, it would suggest gbpaud a good option to trade (gbp weak across more than 1 pair, aud strong across more than 1 pair). However any aud sell (eur or gbp) would have worked out as aud was strong against both and any gbp sell would have worked at it was weak (against cad and aud).
After the Asian session move up this morning both GBPCAD and GBPAUD stopped at easily identifiable levels for several hours and had negative close 3 bar reversals (below the previous 2 candle closes) with little/no lower wicks. Great set ups for further moves lower.
I like to watch for confirmation across more than 1 pair. Either from various gbp crosses, see above, or against a specific currency eg gbpaud and euraud. This morning several gbp pairs closed lower and in addition euraud also closed lower.
Picking the right pair to trade doesn't work every time but in this case gbp was weak. Then euraud also confirmed, it would suggest gbpaud a good option to trade (gbp weak across more than 1 pair, aud strong across more than 1 pair). However any aud sell (eur or gbp) would have worked out as aud was strong against both and any gbp sell would have worked at it was weak (against cad and aud).
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