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.

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.

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.

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).

Trades taken since the last post in June.

An update on some of the trades taken.

 

4hr charts W pivots

The 4hr charts again clearly show the importance of the W pivots and support/resistance levels and the relatively few number of significant moves that can be expected in a week (2 to 5).

Not all wicks are created equal EURAUD - what happened next

This goes back to the 5th June when we looked at the large hammer and what seemed like the rejection of a move lower. This suggested a move up would happen but we had doubts based on how we view the market. The flow of the market from 6th June would have been the deciding factor.

Hindsight is always a perfect science, but your trading can be greatly assisted when these scenarios occur live if certain candle patterns can be expected. The lower high, engulfing negative closes below the moving averages on the 1hr on 9 June was certainly not the kind of price action expected of a market moving up.

Please see these popular posts that looks at flow and our view of the market:

http://vantagefx.blogspot.com/2013/11/trading-101.html
http://vantagefx.blogspot.com/2013/06/question-on-absolute-basics-of-method.html
http://vantagefx.blogspot.com/2012/11/question.html
http://vantagefx.blogspot.com/2012/11/recap-29-nov-method-expanded-multi-time.html