Swing Trading on Gold and FX

7/19/2018 session3:
it is clearly a down trend for Euro at the moment.
short 1 lot to test water.
73% chance it will closed out of the red box.

i would rather to see a rebound above 1.1733 (Sep 6E contract) as the volatility can bring better risk award ratio.


this probably will not happen because .DXY is quite strong.
only the change of market sentiment will reverse this trend which i donot see any so far.


update: 0338 est, close the short, turned to long, as there is no bad news.
Euro may find some balance before the further selloff.

volumes picked up, choppy, everything is in red on my screen.
i see the potential room for upside in Euro.


will possibly reach the grey box in U.K. session.

7/19/2018 session3 recap:
buy the dip, i am sorts of comfortable to buy the dip under this situation - no bad news on Euro.
my logic:
Yen is safe heaven.
Sterling down because of fresh political uncertainty.
Aussie and Kiwi down because of weak CN Yuan.
CN Yuan down because of potential further easing of monetary policy.
however, Euro down for no reason.
as long as Euro did not touch the new low, buy the dip on intraday basis is reasonably practical.


62% Fibonacci retracement is expected.


update: 1019 est
62% Fibonacci retracement reached.

note that yield of both T-bond and Treasury Note are dropping, implied .DXY should go down.
half of profit locked, will hold the rest half a little bit longer.


update: 1012 est
62% Fibonacci retracement reached, exit another 25%.

UK session is almost done.
would like to keep the rest 1 lot till next session.
let's call it a day.

update: 1343 est
close last lot after the surprise.

this is crazy. headline for tomorrow.
Source: Reuters


update: 1342 est
last time he said U.S. Dollar too strong was 4/12/2017, sending dollar down immediately.

Source: Reuters

7/20/2018 session3:
after an instant pullback, markets still expect a strong dollar in the short term.
1) affirmative and consistent rhythm of Fed Chair testimony.
2) uncertainty of U.K. and Brussels non deal preparation no good to both Sterling and Euro.

short Euro, very likely it will fall below the lower bound of red box at close.
a forming ab=cd pattern also supports the short.

two different approach of red box calculation.
different range though they are on the same side.
need to check the formulas and refine it during this weekend.
Excel version, already reached lower bound:

chart version, eta 0400 est to touch the lower bound:

i trust the Excel worksheet more, because i control every step of calculation.

7/20/2018 session3 recap:
the set of trade was very emotional last Friday.
i refused to take profit, until the Euro short got hit by twitter post.
then i carried the trades over the weekend and that was a super bad decision.

however i must get over it rather than hold it.
the trade set wiped half of the profit of the week, which will reflect in the next week's statistics.
since the i had not closed the position at the time.


update:
Focus and Restraint are two very important things for me which i should remind myself from time to time.
i was very angry when market sentiment suddenly changed, i should let the stop order take care this part next time.

7/23/2018 session4:
gold and currencies retreated against dollar after the rally for two straight trading days.
statistically Euro will be down for a little bit more today.
hopefully will go below 1.1722 for Sep contract in UK session to avoid a divergence.

7/23/2018 session4 recap:
today is almost finished. probably will stay in the divergence zone at close.
typical Monday.
the rescue trade did well.


statistically it can go deep a little bit further.


there are two more things added in the to-do-list.
1) a full functional statistical model on daily high-low volatility, this may help me to place trading set better.
2) a new price grid for aggressive trade, by the way 1) could also be used in option hedging.

surely dollar is weakened after CNBC and twiter comments.
however the rising 2-year T-Note yield tells a different story.


red box today. still get chance to leave the divergence zone in U.S session.

An example of box theory:

7/24/2018 session3:
very narrow range of red box today.
suggesting a big move on either side.

hold a single lot of short.
daily candle analysis:


update: 0335 est after France & Germany PMI data.

up and down in the area for multiple times.
this time would probably stay below the red "line" at close.

7/24/2018 session3 recap:
what-if scenarios:
Euro up at close: 24%
down at close: 76%

profit range is narrow on Tuesday, risk is low, however, Euro is still in the battle zone of last week.

took part of profit and done for today.

Euro is relatively weak base on my eye observation on tick stream.
20 more pips down will confirm the weak Euro before Thursday.

7/25/2018 session3:
another quite day, no news in Euro zone.
thus the reference area for today helps very little.

very likely will be around the narrowed red box in the next couple of hours.


tend to short, as a strong dollar will be solution for this scenario.

ECB Press Conference tomorrow.
Markets expect that othing will be changed.
Source: ING