DislikedSkfx, thanks a lot for your valuable comments -- please continue posting. The more we think about the market, the better we understand it. An example of tight play now. We had a nice spike in EU today (EURUSD 5 MIN), it had already taken place when I started looking at the market. Decided to go for a high 1 chase, it worked: two entries, one out breakeven, the other 2 pip, plus 7 pip partial profits. At 7 pips I reversed to short, based on the tick chart. And again got 2 pips and 7 pips with a swing target left and now just leaving it from BE position....Ignored
You have to use your brain a little, but you are thinking about the the mechanics of trade and not trying to automate everything.
Very nice scalp trades here!
You are leaning on handle 1.10 (which money will be watching).
You are working macro if shorting EUR. Spread differentials and Greek risk will support shorts.
It makes sense to be shorting the EUR mostly, but it can and has been a funny shit to trade.
I am not a big fan of EUR pairs currently and choose to trade something a little cleaner.
Long GBP on the crosses has been working well, especially against comm currencies. (CAD=Crude oil under pressure, AUD=China up the shit, NZD= Dairy prices soft)
It isn't a one way bet though. You should factor in participant net positioning.
Just have a look at the kiwi today and that reaction makes perfect sense.
With a market that is heavily short NZD and a CB cutting only 25bps(some thought up to 50bps) any less dovish comments will set it off on a run to trim shorts.They had already over the last weeks priced the cut in, it's placed where it needs to be!
Trade higher was the greater risk! The risk for kiwi to run further down was almost non-existent!
Can you see how there is edge there if you think about it right?
USDCHF is also a solid trade with the SNB looking to protect against CHF appreciation.
The rate differential(front-end>>belly) there is also solid.
So long UC on discount/dips makes sense and is low risk high probability.
You can see from USDCHF below that institutions are certainly buying dips here. They pick it up and trade highs.
I so no reason whatsoever to be shorting this cross. If you are shorting it, you are trading against CB's and institutions!
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Fed and BOE are the only two CB's looking to normalize with many other CB's cutting or running QE.
Long USD is also good but caution on timing obviously.
You can have a day/session every now and then and they cut the USD back. So sentiment will be off macro and you'll need to wait for the USD to stabilize to run sentiment on macro to minimize heat taken.
This is all FX 101 though and anybody that trades FX should be considering these factors.
They are what drive currencies.
Regards