Money flows - Trading the strongest vs. the weakest

Money flows - Trading the strongest vs. the weakest

or simply - shifting probabilities in your favour by following the market-moving forces instead of trying to predict them.


The concept is rather simple and i highlighted a few things over in the following thread - http://www.forexfactory.com/showthread.php?t=334165

You might want to read into a few things there first before judging anything written here.

As time and the whole subject permits i will give a view on what i look at in my daily trading. I mainly trade AUDUSD / EURUSD / GBPUSD. From time to time on a decent setup their JPY minors too. I rather take a few "dustbin" style trades a day than trying to be some 200 pip trade hero. Compounding, R/R is what makes money for me not being on top of the pip hall of fame. That also means i will mainly focus on lower timeframes. You are free to ask for opinions on higher timeframes. The concept is universal on any timeframe.

This is no place to look for free "signals" or someone to make money for you. It is about people understanding the concept and improve their own strategies along with it - to learn and to share.

Remember: "You have not lived a perfect day, even though you have earned your money, unless you have done something for someone who will never be able to repay you."


Rules for the thread are simple:

1) respect fellow traders & principles ... there is no correct way of trading... any principle is welcome... make money!
2) relax & don't bicker
4) no commercial postings
5) collaborate - receive help but also give help & share
6) enjoy yourself - humour, cartoons, music, jokes welcome
7) the choice of wording is yours - as long as respect is retained


- Great minds discuss Ideas, Average minds discuss Events, Small minds discuss People. -


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Fridays close ended with small bounce on some USD majors led by AUDUSD. This was a nice example of being a good opportunity to short into "(non) strength" on the lower timeframes as USD volume overall did not really follow. As soon as it hit support on USDCAD along with EURUSD & AUDUSD, AUDJPY, EURJPY, etc we got a continuation to the downside right into the close. The close marked the almost perfect entry on EURUSD as we had EURGBP + GBPUSD short, EURAUD + AUDUSD (almost) short, EURCAD + USDCAD short along with EURJPY. I did not take any position as i never take positions over the weekend.

The opening confirmed that with EU gapping down to around 1.2116 and AU down to 1.0357.

Discussed this on the AU thread on Friday at - http://www.forexfactory.com/showthre...11#post5864511


Interest for now is in EURUSD area around 1.2130 +-5. After that 1.2102/7, 1.2091/7, 1.2051-63. Upside 2207/26/47, 2316/32. Levels only a rough guide. There are better people to follow here with more exact ones.

Although we are in a nice area for a possible EURUSD long im passing. Missing overall usd weakness with USDCAD/AUDUSD. Although both are hitting short term supports on H1 - just like GBPUSD so those bounces may give EU the trust it needs to go above 30 which is it trying right now.

I like high probability - short term setups more. This one here is more of a nice minimal statistical R/R but choppy longer type of thing from the opening low on playing for higher Mids around the Pivots at 22xx and then 23xx and 2132 acting as strong support. More times than not this number has provided decent bounces to the upside.

Overall usd better on the lowers now. Break or bounce on EU here.

Oh well just like AU misses EU/GU for the downside, EU misses AU/USDCAD for the upside. Illiquid chop chop... One majors bounces from support pushes the other into resistance...

Weakest AUD right now, Strongest EUR. Brave bastards would have played EURAUD.

Again this time EU/GU bounce from resistance pushes both AU/EU on support. This will usually continue till both do the break into one direction together for clean USD flows without a major will really make a clean move. You might just call that process - consolidation If you play the chops is up to you... there are enough clean moves every day so i try to control greed and avoid them. Most looser happen with the unclean / contradicting usd flows.

Why was EU still the best choices for the possible long? It had EU, EG, EJ, EA, ECAD long along with GU long and USDCAD/AUDUSD on support.

Watch AUDGBP here on the 0.6624s along with GU 1.56. Both down along with EU would make for a nice AU short. AUDGBP bouncing though and EU still lingering along with missing usd weakness so i will hit the bed. Nothing to see here so far. This needs some more time to play out. Possible but bad from both a statistical and R/R point of view setups only right now.

Overall i would rather be long EU to short above 1.23 but ... who cares. Take what it gives you.

Midpoint + historic + lower tf MA resistance on EU now aligned on 1.2132. Watch out for it. An upside bounce at it will need decent USD flows aka other USD majors going along with it. Usually that will be at least 2 of AU/GU/USDCAD. On average it will not move anywhere / provide an at least halfway acceptable R/R without.

EU probability of bounce higher than break at the moment but AU / GU playing a bit of catch up here.

GU went down along with GBPAUD/GBPEUR, both EU/AU bouncing from resis onto support. Chop chop chop. AU getting a bit of downside here and there through AUDCAD + USDCAD. Also AUDGBP breaking down again with GU holding.

That last AU bounce was a possible trade. Missed it. Checkin in @ bed. Cu at London.

Check.

AU was a nice example for a bounces type of thing. GU breaking down same with USDCAD (up). Both AUDGBP and AUDCAD running up into resistance which lets them bounces while GU/USDCAD continue with downside -> USD flows in favor of us + fresh AUD selling because of the bounces -> smooth as butter AU trade. That's what you want. No the unaligned choppy stuff before especially on EU which played out exactly as stated. You gotta be quick on the trigger there though. There will be no retests whatever. Such trades 90% will just go down/up make their pips and finished. Perfect on M5/M15 for the usual 30-50+ london style breakouts. R/R is everything with those trades. Especially lower on M2/M3 but also M5/M15. If you are good you can narrow it down to 5-10 SL. You got a bunch of those trades every day over 2-3 majors. Do your math but most importantly - patience is the key - patience & consistency.

Impressive thoughts, you really had impress me with your point of view.

Good London morning everyone. Little late today. Need a Ristretto first. I tend to do funky trades in the morning...

Decent EU bounce into resis right now but the spice is there. EU/EG/GU/EJ/ECAD/UCAD etc on the lowers. Let's see if we bounce/break. GU/AU not following right now.

EU options for the day: 2075, 2050, 2000.

Same shit as pre asia. EA + other minors pulling a bit on EU. No real loving without AU/GU. USDCAD is mixed.

Nice thing to watch for EU besides the obvious majors is always USDSEK/USDDKK. If USD is not even able to move such borderline things then you can't call it weak/strong. Besides the minors it helps you to determine if something is indeed strong or just getting induced strength through other minor weakness.

Break -> break EU. Both AU/GU hitting resis.