Pivot Trading

I made first time my own calendar analysis. Even when my calendar is by far not the best and I am an absolute beginner when it comes to fundamentals, I have to say, that I learned already a lot from the analysis. No I know when big events will occur and for what to look next week. Thank you Davit to bring me to this point.

Critic and Comments are very welcome.

Mark Douglas’s “Trading in the Zone” is a seminal classic of trading psychology. The book should be read from cover to cover but it's essential tenents are :

1. Anything can happen.
2. You don’t need to know what is going to happen next in order to make money.
3. There is a random distribution between wins and losses for any given set of variables that define an edge.
4. An edge is nothing more than an indication of a higher probability of one thing happening over another.
5. Every moment in the market is unique.

Everyone one of those points is a fundamental truth trading and the title itself is a reference to the idea of trading without fear. When you are in the “zone” you focus on process rather than outcome and therefore build an indomitable psychological mindset that helps you perform to your best ability every single day.
Douglas’s points are timeless and true, but I want to discuss something much more mundane -- literally trading in the actual “zone”, which is often overlooked as a key ingredient to trading success.

This week I was in Philly for an impromptu get together with some of my oldest and dearest camp friends. Now I am a horrible map reader and whenever I get to a new place I usually just try to get the general direction of where I am going and then set out on foot. So against Google Maps better warning that I should take public transport or Uber, I simply stepped outside the 30th street station, found my way to Chestnut Street and then just headed to downtown Philly.
Philadelphia is less than 90 minutes away from New York but like almost every New Yorker I know, I never visit the place. Which is a shame. Because it’s a great city with a wonderful history, beautiful architecture, a thriving nightlife and generally a level of cool that no longer exists in the stodgy you-can-only-live-here-if-you-are-a-billionaire Manhattan.

But my walk down Chestnut was more than just a rumination on gentrification, it was an indelible lesson in geography. I quickly grasped how Philly is contained between the Schuylkill and Delaware rivers. As I crossed Chestnut and Broad I finally understood the term Broad Street Bullies ( a name given to the legendary 1970’s Philadelphia Flyers hockey team). And as I made my way towards the Delaware river I could see Indendence Hall on my right and literally imagined Franklin and Jefferson writing the country’s constitution.

My pedestrian stroll through the City of Brotherly Love made me more knowledgeable about the place than any Google Map ever could. Nothing beats touch and feel for not only acquiring but absorbing knowledge.
Which brings me back to Trading the in Zone. Being mentally tough is a laudable goal for sure, but what about trading in the actual zone? What about studying every tick and quirk of the timeframe you trade. For the past several months K and I have been making Market Mapper tools to help traders see price patterns more intuitively. But it was only after walking those maket maps day in and day out that I started to pick up subtle clues to price action that improved my edge tremendously.

This is why wizened market veterans always talk about the need for screentime. And it’s absolutely true. There is just no substitute for engaged observation. That’s why newbies traders who are just looking for a “winning setup” always fail. There are no winning setups. There are only setups that you adapt to your own style. So just like a native of a city, I can point the tourist in the right direction but to truly discover the place you need to do your own walking and discover the Zone that works for you.

Boris Schlossberg.

Hi guys I get PM 's about how I understand the fundamentals. 1st before I get into it I want to stress screen time is critical specially when news releases and how price reacts and where it goes and where it stops.Without much observation its futile reading about it.

The way I approach my calendar and news events is understanding dominate pairs for the week.This week we got EUR GBP CAD less AUD less NZD not much on USD. You got to see Friday data then look Monday Tues Weds Thurs. Friday Euro Flash manufacturing Tues German Economic sentiment Thurs ECB .Why 1st look Friday because you want to know if anything market is holding back until Friday.
You put all these events its logical deduction Euro may very well become bullish and Euro crosses like EA EC EN EU may get pushed up setting nice spots to sell later.Example Euro may get pushed up to ECB Thurs making swing highs then get dumped after by Friday fizzle out even if flash data prints green..
Market usually prices in the event before the event example CAD may be bullish up to CAD monetary policy then get dumped after.
These are nuances I want you to pay attention to.Its developing intuitive feel how events shape price

Never say before chart PA "I will sell AUD" Its lot better to say AUD most likely be on my sell box based on forecast data and sentiment of previous week.This allows psychic flexibility in your mind that you could be wrong and market is showing you something else maybe you should buy AUD and Sell the Cad.Bottom line live Market conditions is king.What we are doing now is laying the ground work for possible scenario trades.
Trading is war no question about it.We are doing our terrain studies, fortifications etc. Remember ignorance IS NOT AN EDGE

When looking at chart determine market condition for the pair
Is it trending or ranging?
Short swings long swings
Understanding this allows position sizing. If set up is great but price is ranging in 50pip you can go bigger lots if its longer swings maybe reduce lots and hit it multiple times on small rallies/dips. Its adapting to the pair movement why I never set fix lot size but do have max cut out size.
Example NC I usually trade bigger lots.EA smaller lots but usually hit it more then once.I never understood some traders place same lots on every trade.Does not work for me.

POINTS I am Considering for next week (NOT COMPLETED YET. I will delete some attch on tuesday)


Mon

JPY Policy Rate
Japan rate decision:The Bank of Japan has left its negative interest rate of 0.1% unchanged for several years and it also maintains its vast bond-buying scheme. Its most notable change of late has been pledging to keep low rates for as long as necessary. Will it take bolder steps amid stagnating inflation? The chances are slim. Given the recent weakness of the yen, the BOJ will likely keep its powder dry for some time.
My Trade Idea:
I will not trade JPY, Since I am already holding AJ and EJ long. I would prefer stay out.

Tue

GBP - Unemployment Rate
UK jobs report. As tension is mounting toward the upcoming BOE decision on January 30, labor market figures for November may provide more insights. The unemployment rate stood at 3.8% in October, around the historic lows. However, wage growth extended its deceleration and hit 3.2% after peaking at 3.9% in July. Without an increase in salaries, inflation – the BOE´s mandate – is unlikely to rise.
My Trade Idea:
I will hold short GU while sentiment is bearish, loading more GU. In the case of a dovish sentiment shift, i am consider long GBP, probably against CAD..


EUR German ZEW Economic Sentiment
After long months in negative territory, ZEW’s 300-strong survey turned positive in December with a score of 10.7 – the fourth consecutive upside surprise. A similar score is likely in the early survey for January. Changes in business confidence are eyed by the ECB.
My Trade Idea:
Looking for LONG EU and short EC when price reach 1.456


This one below, also in negative territory (lvl 50), now in recovery
Look at this link here ==> https://www.fitchratings.com/site/pr/10108050

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Weds


CAD - CPI & Canada rate decision
The Bank of Canada has left its interest rates unchanged throughout 2019 and it is unlikely to stray away from this trend in the first decision of 2020. While the labor market is off the peak of early last year, the recent jobs report was encouraging. Inflation – figures for December are due out shortly before the decision – has also been healthy. Overall, Governor Stephen Poloz, who is stepping down in June, will likely leave rates unchanged and signal satisfaction with the Canadian economy.
My Trade Idea:
ON London Open, I will watch the market sentiment, if bullish CAD prevails with the positive CPI expectation, I will consider Short UC.
However, I would prefer to stay out of the rate decision, and enter after the decision of the bank of canada.



AUD - Employment Change & Unemployment Rate
Australian jobs report: Australia’s labor market rebounded in November after a fall in October, adding 39.9K jobs. The jobless rate also improved with a drop from 5.3% to 5.2%, but it remains above the Reserve Bank of Australia’s 5% target. Overall, a satisfactory report may help the Aussie hold its ground and push back the next rate cut by the RBA.
My Trade Idea:
I will hold my long AJ and AN. I will consider short AU if the sentiment tends to bearish.

EUR - Main Refinancing Rate
Eurozone rate decision: President Christine Lagarde will meet the press at 13:30. At her inaugural meeting, Lagarde promised to learn and announced that the bank will conduct a strategic review. After her predecessor Mario Draghi restarted the QE program and cut rates, the new president has time to learn the new jobs. The ECB is unlikely to change its policy at this juncture, but Lagarde’s comments on recent development are set to shake the euro. Is economic growth picking up? Or were recent figures only “green shoots” without any follow-through. The bank does not publish new staff forecasts at this juncture, so Lagarde’s general tone on the economy will set the new direction for EUR/USD.
My Trade Idea:
I would prefer to stay out of the rate decision, and enter after the decision of the ECB

Fri


EUR - Eurozone Flash PMIs (France & Germany)
Eurozone flash PMIs: France & Germany . Its figures for December mostly showed growth – apart from in German manufacturing, the most important sector. That Purchasing Managers’ Index dropped to 43.7 points, well below the 50-point threshold separating expansion from contraction. Let see if manufacturing is dragging the economies down or if consumers can continue driving it forward. Apart from the German Manufacturing PMI, the composite figure for the whole eurozone is of interest.
My Trade Idea:
Despite this, I will not buy EUR. I prefer MM pushes the price up, so I'm going to short EC and EA.

GBP - UK Flash PMIs (Flash Manufacturing PMI & Flash Services PMI UK flash PMIs: Similar to the continent, Britain’s manufacturing is suffering from a slump. However, the revised services sector figure for December hit 50 points, a perfect balance between expansion and contraction. Is the UK’s largest sector recovering? Or will it slip back down? Given the recent negative GDP read, a disappointment cannot be ruled out.
My Trade Idea:
I will hold short GU while sentiment is bearish, loading more GU. In the case of a dovish sentiment shift, i am consider long GBP, probably against CAD..

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EUR - Trading opportunities. (if actual numbers come in below the minimum or above the maximum forecasts.

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GBP - Trading opportunities. (if actual numbers come in below the minimum or above the maximum forecasts.

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JPY - Trading opportunities. (if actual numbers come in below the minimum or above the maximum forecasts.

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USD -Trading opportunities. (if actual numbers come in below the minimum or above the maximum forecasts.

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NZD -Trading opportunities. (if actual numbers come in below the minimum or above the maximum forecasts.

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AUD -Trading opportunities. (if actual numbers come in below the minimum or above the maximum forecasts.

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CAD - Trading opportunities. (if actual numbers come in below the minimum or above the maximum forecasts.

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Tue
JPY BOJ Interest Rate decision (Here in Italy time it's on Tue) previous -0.1%. The forecast is BOJ will keep its monetary policy steady without a change of the interest rate.
The words of the central bank in the last regional report: “All nine regions reported that their economies were either expanding or recovering, domestic demand continued on an uptrend, with a virtuous cycle from income to spending operating in both the corporate and households."
The downgraded of three regions is due to weak exports and output caused by the global slowdown.
However, Kuroda said that they are ready to intervene: “We will adjust policy as necessary to maintain momentum towards our price stability target while examining risks. We will not hesitate to take additional easing steps if risks heighten to an extent that the momentum towards the price target is undermined.”
EUR German ZEW Economic Sentiment Forecast of 15.2 from 10.7 Four green datas (greater than expectations) in the last 4 releases going from -44.1 to 10.7. A good data here could boost Euro giving great opportunities to short it from high levels.
USD Start of Trump Impeachment Trial. We saw that USD went sell-off in december when the Impeachment was official, so USD could gain some strenght if the impeachment doesn't pass the Senate. To watch

Wed
CAD CPI m/m Forecast of 0.2% from -0.1%
CAD BOC Interest Rate Decision Forecast of 1.75% from 1.75% A rate cut isn't expected here (chance of rate cut by April is less than 20%) because effects on GDP and Inflation would be too small.
Moreover, the solid job growth is a key factor to consider. However, Poloz could do some adjustment in the monetary policy due to the bad results of the housing market (very important for the canadian economy).
UC is on my radar here

Thu
AUD Employment Change Forecast of 11.2K from 39.9K
AUD Unemployment Rate Forecast of 5.2% (5.3% in FxStreet) from 5.2% Everyone are expecting bad results here. Maybe fires caused too damaged and affected employment too.
AN and AC on my radar. I would love to see AN going down to pick it up at a low price
EUR Main Refinancing Rate Forecast of 0.0% from 0.0% Not much to say here. Europe economy is not in a good shape (A lot of data like economic growth rate or inflation are not in a good shape and far away from their goals e.g. inflation at 2%), so in my opinion it's not wise to long Euro now also because of 31st there will be Brexit decision and UK doesnt want to stay close to EU.
However, like different other times in 2019 Euro could be pumped up in the press conference or before. I would love too see that so my focus would be on EA, EC and EU
NZD CPI q/q Forecast of 0.4% (0.1% in Fxstreet) from 0.7% Finally a good data that can move NZD (next important data about employment on 5th February)
Focus on AN, NC and NU. AN mostly if bad data from AUD come in.

Fri
EUR French Flash Services PMI Forecast of 52.2 from 52.4
EUR French Flash Manufacturing PMI Forecast of 50.5 from 50.4
EUR German Flash Manufacturing PMI Forecast of 44.6 from 43.7
EUR German Flash Services PMI Forecast of 53.2 from 52.9 Some green data may be expected here. They may provide good liquidity for the last day of the week
GBP Flash Manufacturing PMI Forecast of 48.8 from 47.5
GBP Flash Services PMI Forecast of 51.1 from 50 They may print whatever they want, I don't trade GBP
CAD Core Retail Sales m/m Forecast of -0.2% from -0.5%
CAD Retail Sales m/m Forecast of 0.1% from -1.2% Positive forecasts. From what I read about canadian economy I expect good data here (personal opinion) so CAD will be on my radar if it is in a good position by then
USD Flash Manufacturing PMI Forecast of 52.6 from 52.4 The only important data of USD this week. Could give a chance to quick trades (careful, the week after there will be FOMC Statement)
Great week full of opportunities. Focus will be on CAD and EUR mostly, but AUD and NZD could give great great spots to enter.

https://www.investopedia.com/article...rrelations.asp

A great article about correlation between forex pairs and commodities. I read this article as an refresher for me for next trading week.

I have reached the limit for attaching files. Tuesday I will remove some and i attach some more during the week as long as there are interested in this type of attachment OR i delete all.

Correlation trading may look easy but it requires hard work and often doesn't achieve the desired result. Here is a chart with a correlation indicator.
Have fun but my recommendation is to stick to pivot trading since it's a proven strategy that works.

It's not about what you call "correlation trading". It is about to know about the correlation between commodities and some currencies. It's not a strategy, it's an indication which helps you to understand the background why an currency price could have changed or to better gauge the market conditions of this currency.

My Calendar Events week four January

Sharp focus on EUR CAD AUD.

Tues
JPY BOJ Outlook Report
JPY Monetary Policy Statement Don't expect much volatility here. With no monetary ammunition left to support the economy, BOJ Gov. Kuroda will have to be content with the $120 billion of fiscal spending announced in December to soften the impact of the recent sales tax increase.
JPY BOJ Policy Rate To remain unchanged at -0.10%.
EUR German ZEW Economic Sentiment Green expected here. To edge up 15.2 from 10.7. This may give boost to EUR north if data prints green.
CAD Manufacturing Sales m/m Projection of 0.3% from -0.7%. I don't think this is a mover. Fireworks for CAD on Weds.
NZD GDT Price Index

Weds
CAD CPI m/m To edge up 0.2% from -0.1%. Depending on market sentiment towards BOC Rate Statement, even a red number may strengthen CAD or green number weaken CAD.
CAD BOC Monetary Policy Report
CAD BOC Rate Statement
CAD Overnight Rate Expected to remain at 1.75%.
CAD BOC Press Conference While the BOC is unlikely to change its current stance following recent labour market data, market wil be looking at any change in Monetary Policy Report outlook to assess the possibility of a rate cut in the coming months. AC and EC on watchlist.
AUD Employment Change Projection of 11.2K from 39.9K. AU, AC and EA on watchlist.
AUD Unemployment Rate Expected to remain steady at 5.2%.

Thurs
EUR Main Refinancing Rate
EUR Monetary Policy Statement This should be a non-event. No new economic projections are published and the board’s risk assessment is unlikely to change compared to the December outlook. EUR might be driven mainly by the PMI data release on Friday.
EUR ECB Press Conference
NZD CPI q/q Projetion of 0.4% from 0.7%. AN and NC on watchlist.

Fri
EUR German and France Flash Services PMI Some small improvement is expected. EA and EC on watchlist.
EUR German and France Flash Manufacturing PMI
EUR ECB President Lagarde Speaks
CAD Core Retail Sales m/m Projection of -0.2% from -0.5%. UC, AC and EC on watchlist.

I will be looking for opportunities on EUR, AUD and CAD crosses.
My prime candidates are EA, EN, EC, AC and AN.

Let's pile the pips!

Quick and basic wrap up for the week ahead by Kathy Lien.
http://www.bkassetmanagement.com/fea...ry-ahead_13896

https://www.wsj.com/articles/libyas-...de-11579353234

https://www.aljazeera.com/news/2020/...062412807.html

can this impact the price of CAD?

Hutch,

I'm wondering why you posted the correlation indicator here? For those of us who trade pivots, it's an unnecessary distraction and only confuses new traders to this thread. At one point early in my trading I would have downloaded it in desperation as an answer for help for direction, but using weekly pivots for reversals is far more powerful than any lagging indicator. This thread is the most valuable, free, non-lagging information on FF out there. Davit has given his time and insight to all of us without hesitation. Many of us are blessed and better traders because of it. I'm sure you are one who's benefited from the wealth of information here. Personally, I spent good money on one of the top-rated correlation indicators in MQL5. It was a waste of money. Nothing compares with understanding price reversals at key pivots

I understand your sentiment. I also keep an eye on a few correlated pairs, knowing weakness in one may show strength in the other. Especially if at key pivot levels (and or PA). The Yen Carry trade has treated me well. Gold reaction can affect across Yen pairs, so i'll keep an eye on them. Example:

following my economic events calendar, yesterday at open market I loaded more GU short because I saw that UK debt and STIR futures maintain bullish momentum. I also read there is Heightened prospects of a near term BoE rate cut.
so, bearish sentiment for pound has increased and now I see that pound ranks as the weakest currency among the majors.

Best place to learn the carry trade? Thanks.

AUDUSD
AUD weakness still apparent!
Four sets of entries - dilemma approaching H&S!!!
Wednesday Red News may dictate more down??
Edit: 9am H4 Close below last weeks Low!

I got wind of Yen Carry trade a few years ago when it was frequently mentioned by people I follow on twitter. There's plenty info about it on google. Here's a good article on the yen/gold carry: https://www.goldmoney.com/research/g...ld-performance

Thanks Cs!