Looking for my next Forex trade
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Went ahead and closed out the AUD/NZD short and one AU short for some profits. I'd still like to see the upper zone on AUD/NZD get hit for a major short opportunity on the 4 hour chart so I'm treating this current zone as a secondary zone only. It dropped back to the 50% mark so I'm following Sam's advice and bailed here on the retest of the 50 level.
That's probably best, Heavy. There was a guy here on the board that was great with that kind of stuff. He was a moderator here...Gitonwithit.
He was a fantastic MT4 programmer, probably one of the best I've ever seen. He made tons of useful indicators for us. He even created an XLS interactive spreadsheet that analyzed the movements of the TDI on particular pairs and created a really cool graphic interface that allowed you to analyze the data easily.
He spent a lot of time analyzing fibs from a very detailed perspective, along with things like Gann lines. That stuff was way too deep for me but he has a very mathematically oriented mind so it was second nature for him.
I think one of his posts is still in the stickies at the top of the board on Gann theory.
Nothing wrong with indicators at all Heavy if they're used properly as confirmation or confluence, as you mentioned.
Where folks get into trouble is when they let the indicator be the decisive sole factor instead of just using it as an item on a larger checklist.
The ZUP you mentioned has some great stuff in it. I don't use it anymore because it's a resource hog on MT4 but it's still really good if you know how to interpret it and not get hung up on every pattern it shows.
Ahhh, that explains it. Somebody doctored it at Forexfactory most likely. I've used some stuff from there before and they have some pretty cool toys. But if it's been doctored, it won't behave properly in real time.
I'm still not sure that TDI version you have is reliable at all Heavy. It sure seems to do some weird things apart from the standard TDI.
It's almost like it's some strange custom version.
Yeah, I did the same. I still have 3 small positions on AU so I wasn't too concerned about closing out that other one today. I'm always flipping one or the other somewhere.
I got in short at 1.1116 so it was a pretty good entry...right at the bottom of the zone. I didn't even know AU news was coming out...I was just playing the zones...LOL!
TP set for 1.10.
AU dropping back hard, just like the 5 minute zone said it would. I closed much too early.
Retail sales month over month were 0.0%....that's right...a flat zero.
Smart money is piling in on the oil shorts again.
http://www.bloomberg.com/news/articles/2016-04-03/oil-speculators-bet-rally-s-over-as-doubts-grow-on-output-freeze
AU Weekly Chart
Anything can and will happen with the market. That being said, there is still a real possibility of a new daily low coming inside the current channel formation.
At the very least, between the supply zones and the overall trend line here, I think AU is going to find it very difficult to maintain this level.
The world is definitely ticked off Kirby. Remember the wife and market analogy...when she's mad, it's time to go away till she cools off...LOL!
Probably one of the best, single, concise statistical measurements of social mood in the world as a whole right here on Bloomberg this morning. The charts in the article basically show the world is ticked off and worried. That's what will ultimately carry over into the markets.
http://www.bloomberg.com/graphics/2016-angry-voters/
US Dollar Index Weekly Chart
All the way back to 1990 here. The current move up isn't done yet. We maxed out the indicators on the last high but there's been no response yet with a new high and lower low on the indicators to signal that a top is in.
The dollar index will very likely make it to the 61.8 fib retrace above 102 before it can fall back at minimum.
There's also the possibility that this entire move up from the lows back in 2008 is a new impulse series...a new bull wave movement. That would make this current move up part of a larger Wave 3 movement. But even if it's just an ABC correction move, C wave up isn't done yet at least until it hits 102.
It's hard to see on this chart but there's actually a supply zone way up in the 106 area. I wouldn't even rule that out as a top end target.
Just FYI...
AU closed right near the top end of the bearish range zone. That makes it a prime candidate for a nice gap down Sunday at the open. We'll see how it goes.
Everybody have a great weekend.
Well, I spoke too soon. AU made another slight new high in the bearish zone so I'm shorting it again here at 0.76813. Probably not a good idea this late in the day though but the zone is screaming bear.
Closed out the AU short trade from earlier for a couple of pips profit. No volume left so we'll look at it again next week.
I don't trust longs on UJ regardless right now because of the sideways channel on the larger time frame. It smacks of consolidation with another leg down coming. But if a larger leg down occurs, it won't be because of dollar weakness, it will be because the market is scared and they'll flock to US dollars and the Yen, buying both like crazy.
AU in the near term is nothing but bearish. When a top is finally hit on anything and the first real pullback hits, nobody believes it so they pile right back in and drive it right back near the highs, but they don't quite achieve a new high in the process. The big money steps in then and jerks the rug out from under them and leaves them hanging.
It's just like retail investors and the market. They always seem to buy on the recovery bounce after the top is in because they're afraid they'll miss out on the next big run. Same here on AU...the buying is a dead cat bounce because folks think it'll drive higher over the next week or two but it won't...it'll continue to drop, offset by rallies that won't be able to break previous highs, at least for a while.
Psychology 101...gotta love it.
I had the wrong chart on the last post to you Heavy...I just corrected it. I did the EW count on the 1 minute chart but I sent you the old 5 minute snapshot. It's correct now though after I edited the post.
Down we go...
The turn around created only a pivot point based on a weak consolidation zone further back. The zone below around 0.7570 is the real near term support so the pivot isn't likely to hold up the next time down. Should crash through it.
I hope you mean resistance and not support...LOL!
Yep, just shorted the sucker here with a big order. Should drop like a rock.
Dead cat bounce on the market in progress...they still believe the hype...LOL!
Sell the rally as soon as key targets are hit on these pairs. Supply zones formed from this morning are likely to result in big drops again.
It's Friday though so I ran for the hills...LOL! It'll move up higher but with it still stuck in a long term sideways channel, I do the hit and run thing for now off of the near term zones and let the rest ride.
The easiest way to approach trading is the same way people approach marriage.
When you first get married, you have to learn all you can about the other person. It's easy to get fooled at first because it's all new.
But as time goes by, you learn all the intricate little details. Eventually, you can read the other person just by looking at them.
Husbands especially learn after a while whether or not their wives are in a good mood or a bad mood. If she's in a good mood, all is well. But if she's in a bad mood, the world is crap no matter what you do.
Treat the market like your wife...LOL! When you learn to read the market using the same techniques you used to learn your wife, trading isn't nearly as difficult.
Went ahead and took profits on the UJ long. There's a small 15 minute supply zone just above here that could stall it for a bit. I popped it with a heavy trade in the public account because the zone setup was so good so less is more.
Yeah when it's that close, it's best to leave it alone.
No problem, Kirby. Just trying to shed some light in the dark trading world of Forex...LOL!
Very nice, Heavy. I should have kept my short because the two zones were stacked so close together, it wasn't gonna go much higher anyway. But I had enough on my plate already with other trades and pending orders so NJ was just extra gravy on the biscuit...LOL!
Ok gang, let's take stock here...
I'm not about to go back and rehash all the stuff I posted earlier this week about market dynamics, psychology, VIX charts, etc or about how the market was primed for a sell off that would boost the dollar and kill commodities after the quarter ended. If you like, you can go back and look up the posts on the conversations Qui and I were having. Today is just the beginning by the way...the market is headed for a lot more pain.
But bottom line is this...if you spend time digging into the deeper parts of the market and get to understand the inner workings, days like today are no surprise at all. Everything I posted this week about the market as a whole was all there for the finding by anyone. It's not hard to do.
Also, if you think for 2 seconds the only reason the market is selling off today is because Saudi Arabia said they wouldn't halt production on oil or that the jobs number was so good that traders are afraid the Fed will raise rates again like the article below states, then you're still missing the point. Saudi Arabia said long ago they wouldn't halt production in a freeze for now and one good jobs number isn't about to sway the Fed one way or another...it's all crap so the market can find a reason for moves like today.
http://www.bloomberg.com/news/articles/2016-03-31/asian-stocks-look-to-gain-before-data-run-while-oil-resumes-drop
The crap in that article is NOT why the market is selling off today. The market is selling because of psychology in the markets AS A WHOLE, which was reflected in charts like the VIX, the S&P, the $NYMO, etc., which all said SELL.
The move was pre-programmed guys...market mover folks didn't just wake up and say "I think I'll sell today when the news hits". When big money moves markets, IT WAS ALREADY SET TO DO SO WELL AHEAD OF TIME. They don't make this stuff up as they go along...it's already plugged in.
Charts are about reading psychology, not price action. It's not about news as a whole. The market is always trying to find a reason for a market move, just like they are today. That's why the talking heads on TV scratch their heads trying to figure out how good news tanks a market or bad news makes a market run up like crazy, which is contrary to the drivel they normally feed us.
Herd mentality...When you look at a chart, you're looking at the social mood of the world. And if the charts say the world is ready to sell, then it's gonna sell and there isn't anything you or me or anyone else can do or say that's gonna change their minds.
It isn't hard to look at an individual and tell by the way they act if they're pissed off or in a good mood or just somewhere in the middle. Same with a crowd...is it an angry mob or a group of supporters who are cheering?
The charts tell you every bit of that gang, way ahead of time. The timing tells you all of that. Looking at the general mood of the world by reading through articles in general tells you all of that.
I know folks probably get tired of me posting a lot of those articles and charts and such....and I'm sure I wind up ticking folks off sometimes when the picture isn't rosy...I'm more of a pessimist anyway by nature...
But I do it to try to get traders to broaden their horizons and look outside the box full of stuff they've gotten used to using that works on a hit or miss basis.
Learn market psychology first by studying price action and what drives it...watch social mood and learn how to interpret it and you will be in the 5% group of retailers that actually makes a living doing this vs. the 95% crowd that loses.
Be different...
These aren't horizontal lines, Qui...they're boxes drawn with the MT4 rectangle tool. Instead of manually having to place 2 horizontal lines around each zone, I can just draw a quick box and then expand it and the zone is covered. That lets me know where the origin point of the box is whereas if I just drop a couple of horizontal lines on the chart, they go forever in both directions, causing me to have to take yet another step to identify the zone area origin somehow.
I'm still looking for a way to automatically identify the price levels on the rectangle tool without having to use the Rectangle reader indicator...it just doesn't work well.
Forget the bounce, Qui. When in a downtrend, only look to short. Until the larger trend changes, you should be thinking where you can short it next, not where it's going to bounce.
Here's my current GJ hourly chart with the next possible low-side demand zone. But it's created a new supply zone this morning.