Trading under the microscope

What are your thoughts on USDZAR, GBPJPY, NZDUSD and USDCAD

Hello Dips21, thanks for your question.
It really depends on what you are looking to do/what type of trader you are, but I'll tell you for me what I'm looking at for those pairs.

USDZAR: LONG
I do not normally trade exotics unless there is a really good opportunity. This is because I know very little about most of these exotic countries macroeconomics and how they work, so I most likely will not be trading this pair unless something crazy happens. That being said, USD is very strong at the moment and it does not seem to be slowing down on this pair. I would only look for long trades here but of course you need to pick your entries based on market structure and volume.

Key level to watch here is 15.00000

GBPJPY: SHORT
I made a small profit shorting this pair last week and it looks like there is some momentum for it to continue it's down move. Cross pair analysis is showing some strength coming back into JPY though, but probably not enough to outdo the POUND. Strength in GBP is due to Brexit but for me I am staying out of this one. There are just better opportunities right now imo especially with USD crosses that seem more obvious to me.

Key level to watch here is 142.000

NZDUSD: SHORT
This one is pretty obvious. USD strength seems to be way to much for NZD and AUD to handle at the moment especially with their much weaker dollars. In my opinion AUDUSD seems nicer for a short though. It's gonna be hard to find an entry here since the price is just shooting through support with not much pullback. Out of all the pairs you posted this one seems the most probable
and lowest risk trade but you have to wait and see what happens LIVE during the sessions to be sure...

Key level to watch here is 0.64400

USDCAD: LONG
I'm staying really far away from this one. Yeah it looks bullish but it's hitting an area where price dropped a lot recently in December. I just don't like this one especially when there are so many more obvious opportunities. What could easily happen here is price could stall and reverse to the downside rather than breaking through this area. USD is strong right now but so is CAD. Both interest rates are at 1.75%. The only thing that may cause a spike here is OIL which actually has bern really weak lately also so there may be a case to buy this but I'm not touching it.

Key level to watch here is 1.33000

WHAT ARE KEY LEVELS?
These levels are meant to be used for the following trading day so that would be today for me once the market opens. I use them on all pairs I look at. These levels are important to me for many reasons and I recalculate them each day by looking at the previous days order-flow. I only use them on pairs that I already analyzed on higher TF. They can be used in many different ways for different reasons.

1. Use as SL.
You can simply use these levels as your SL IF the price is too far away from it and you find an entry above/below the level. Place your stop in a logical area around this level where you believe price will not reach for that day and manage your trade that way. A good example of this is NZDUSD maybe depending on what happens today.

2. Use as your entry.
You also can use this area as your "killzone" or entry. If price is close to this area then you still can use it as your SL if you want to get a really good RR like 10R or something crazy like that but it's likely you will get stopped out. If your someone who can handle a low win % then over time you can use it this way. For the rest of us use it as your area of entry. See if price bounces from this area and get in with the flow. Put your stop far from here possibly around the ADR and let it ride. A good example of this is GBPAUD right now as it is very close to a key level.

3. Reverse or add to your position here.
These areas usually get revisited so you can also reverse or hedge a losing position using them. Let's say you are In long and price comes back down to this key level you can now decide a) Should I reverse my position here and go short? Or b) Should I reenter again and add to my long here. This all depends on what price is doing and varies for every trade.

Cheers.

Thank you for a detailed response.

Unfortunately, I am exactly opposite of your suggestions.

USDZAR SHORT
GBPJPY LONG
NZDUSD LONG
USDCAD SHORT

I will probably get murdered next week!!!

No problem.

I am not always right with my analysis so I wouldn't be to worried. Wether you "get murdered" depends on your trade size and what price you got in. I'm a firm believer in being able to get out of a losing trade with either a small loss or a profit by adding or reversing the position though. You don't always have to simply take it on the chin.

Indeed.

I will monitor your trades nexrt week

I never trade GBPJPY. That's a random pair for me and never works with logic.

Looking for lines and divergences, what it makes from your list: AUDCAD, AUDJPY, EURAUD EURUSD. Some doubts in EURCAD and USDCHF, but keepin an eye

stay green!

Stopped out for +16 pips, oh well on to the next

Sounds good.

Please remember that I do not post my full analysis on here. There's just not enough time. This is why trade copying and signal services do not work. Everyone's style and risk tolerance is different. All I'm trying to do here is post potential trades based on my daily analysis only. You must do your own analysis on lower TF and go under the microscope to find entries.

I do not take all the potential trades I post on here. There is much more to the analysis that needs to be taken into consideration before entering a trade, such as levels, market structure on lower TF, RR, and volume/liquidity. Not to mention news. I don't have the time to post all that here most of the time..

That being said I do like hearing what others have to say, and will answer any questions you may have/discuss trades you may already be in.

Just want to clear that up.

Cheers.

Really? I remember I had an automated system that made money live trading the 9 majors and GBPJPY made the bulk of the profits. This is pair discrimination! lol. Seriously though I have to disagree. GBPJPY is fine to trade but I find its extremely volatile. The versatility of it is great though since it moves a lot during both JPY and EUR sessions.

Glad this thread can help to provide some confluence for you though, thanks for the comment.

Cheers.

Profit is profit man, keep on pippin.

Cheers.

UPDATE ON SUNDAYS TRADES

Sunday I did get in to 3 trades out of the bunch. I took shorts on both GBPUSD and AUDUSD. I also took a long on GBPAUD since the opportunity was there, and also this allowed me to hedge some risk off my other trades.

That's all fine, the trades are running, and I am in profit so far but I am unhappy with my entries.

I jumped the gun on Sunday and should have waited to enter on all of them. They all immediately went into DD for a while since I entered the trades too early due to FOMO. I could be up much more on these and this is why they say to be patient with your entries. I did not wait for them to hit their levels and if I had I would have experienced almost no DD on all of them with the exception of GBPUSD.

All that said I will be staying in these through the next trading day as I did not see any major signs of reversal.



On my other account I also got in a long on XAUUSD and a short on DAXEUR which I am still holding.

POTENTIAL TRADE SETUPS PLUS KEY LEVELS FOR THE UPCOMING TRADING DAY

This is simply a rough analysis that I use to cherry-pick some pairs and get a directional bias going into the day.
Please note that the numbers next to the direction are what I call key levels. These ARE NOT signals to buy or sell at this price. That is not how I use them and if you do that you will most likely not make a profit this way.

Please refer to post #22 of this thread. I explain there how you may use these key levels. Remember also it is not possible for me to post my entire analysis on here. This is simply a guide that may provide some confluence for your trades, and also get some opinions/confluence for myself.

I look forward to hearing your comments.

FOREX MAJORS
AUDNZD BUY 1.04400
AUDUSD SELL 0.6700
EURCAD SELL 1.45600
EURCHF SELL 1.07000
EURGBP SELL 0.84650
EURJPY SELL 120.000
EURUSD SELL 1.09400
GBPCHF BUY 1.26150
GBPNZD BUY 2.01900
NZDCHF SELL 0.62550
NZDJPY SELL 70.250
NZDUSD SELL 0.64000
USDCAD BUY 1.33000

FOREX EXOTICS
AUDSGD SELL 0.93000
EURSGD SELL 1.52000
EURTRY SELL 6.58000
GBPSEK BUY 12.45500
NZDSGD SELL 0.88900
USDHKD BUY 7.76500

METALS/COMMODITIES
XAUUSD BUY 1571.00
XTIUSD SELL 50.500
UKOIL SELL 54.100

INDICES/INDEXES
DAXEUR SELL 13520.00
GER30 SELL 13525.00
UK100 SELL 7470.00
JPN225 SELL 23756.00
NAS100 BUY 9420.00
NDXUSD BUY 9424.00

CRYPTO
XRPUSD SELL 0.27000

I haven't posted in a bit over a week and it's because I was busy managing my losses. Usually when that happens I won't post since I need to focus on my current trades and do not want to take on too much risk entering more trades. That's the problem with trading is when you enter a trade and it goes against you you have two options, either you can hold on to your loss, close and reenter in the same direction at a better price, or abandon the trade completely. This is why I believe that closing a position is MUCH harder than opening one in the first place.

In the past 7 trading days I have entered 13 trades and am currently still in 3 of them.

Closed Trades
GBPAUD BUY
I took this trade due to weakness in AUD and strength in GBP. I got in with two good entries and closed with a bit over 3% profit on both trades combined.

GBPCHF BUY
I took this for the same reasons basicalluy as GBPAUD and also to offset my losses and drawdown that I was incurring with GBPUSD which I will go into more detail later in this post. I closed with a bit over 2% profit on this one.

GBPNZD BUY
Same as the above two weakness in NZD strength in GBP I really needed to offset my open drawdown on GBPUSD so these trades were necessary, I also closed them early since I was not sure if they would reverse with GBPUSD so I booked profits early, also I prefer to not stay in opposite directions for two long so I had to pick a side. I closed with a little under 2% for both of these trades combined one being a loss since I entered too early and did not want to hold on to it, if I did hold on though I would have made much more on all these GBP buys but I did not want to hold them long term as I believed there would be a down move coming, I was wrong but at least I booked some of the profits. Also this one was extra hard to make profit from since NZD interest rate really messed this trade up and my entry was horrible initially.

AUDNZD BUY
This one was also negatively impacted by the NZD interest rates that week which I knew were coming out beforehand but completely forgot about (made a big mistake). I ended up closing with a loss of about -1% on both trades I entered. I recovered some of the loss by reentering after the interest decision since my initial entry was correct but my entry on my first trade was early.

EURCAD BUY and SELL to attempt to recover.
This one was my worst trade so far. My direction and analysis was completely wrong. CAD was weak, so it wasn't the worst EUR pair that I could have picked, but EUR was still weak and I had no business buying this pair. I suffered because of this taking a 6% loss on this trade and tried to recover by taking the other direction but ended up abandoning it after shaving off about 1% of the loss from going short. I ended up losing about 5% trading this all together. Very bad trade and was 100% bad analysis on my part.

USDCAD SELL
This one ended up being just OK. It was not a fundamentally good trade since USD is stronger than CAD but I wanted to hedge some of my risk from my other USD trades and got in at a good price with good structure, plus CAD seemed to be strengthening across other pairs and this was at a very good area where sellers should come in. I did not hold it for long though since long term this pair should go up at least for now. I ended up closing with just under 1% profit.

AUDUSD and NZDUSD SELL
These trades were pretty textbook. Weakness in AUD and NZD and strength in USD plus a good entry on a higher solid structure timeframe. I ended up closing with about 10% profit on all the trades combined.

NZDCHF SELL

I took this also since I believed there was some strength coming back in CHF and the entry was nice. closed with about 3.5% gain on this.

Now on to the trades that I am currently in.

GBPUSD SELL
This was really really really bad initially. As you can see from the screenshot below. Just really bad all around. I was expecting a break lower but got in too early. However, I am confident in my direction so I held on to this and am till holding. I also added positions later when I saw another reversal sign at a good zone. I am up right now on all the trades combined but it was not easy holding on to this loss. Some cases I will hold on to losses and move on to other trades which is why I took all those GBP buys on other pairs to offset my loss from this one. It's all about covering your a** in this game. Right now I am not sure if I will close with a small profit or hold out on these trades. I will update.





AUDUSD and NZDUSD SELL
I re entered these sells since I wanted to book some profits and believe the downtrend will continue on both until further notice.

XRPUSD BUY

I got in this one to kind of offset all my risk that I currently have in buying USD against other pairs. Major have been outperforming Forex basically since they came out and they are great for hedging risk imo. I am not sure if I will hold over the weekend though since there tends to be big gaps in this market but I am still learning about the crypto side of things.

That's it. Those are all my closed trades and current running orders since I last posted.

I know this is a bit late but here is my outlook for this week I should have posted it earlier but was busy managing my trades.
Some of these would have been really nice if taken at the right times and used the microscope approach, unfortunately I had too much risk open already and missed out on some great BUYS in USD pairs and Gold.

SHORT
AUDUSD
NZDUSD
AUDSGD
NZDSGD
XTIUSD
UKOIL

LONG
EURAUD
EURCAD
EURCHF
EURJPY
EURNZD
GBPAUD
GBPCAD
GBPCHF
GBPJPY
GBPNZD
USDCAD
USDCHF
USDJPY
BTCUSD
XAUUSD
XAGUSD
XPTUSD
XPDUSD

UPDATE ON THIS WEEKS TRADES

GBPUSD
This trade finally came back into my favor but unfortunately I cut it way to early. I ended up making just a bit over 8% on since I had 3 separate positions on it but could have made closer to 20% I think if I held it, well everything is easier to say in hindsight.

AUDUSD and NZDUSD
The reentries of these trades proved to be profitable also, however just like GBPUSD I should have held for longer, right now the strength in USD is quite onviously the easiest trade in Forex at the moment imo. If I see any good re-entries for these I may take them again. I booked about 3% combined on these two.

If anyone wants me to post my reasoning and analysis I will for any of those trades.

I also currently found some entries I took on XRPUSD, XTIUSD, and GBPCAD. Those were all in my previous watch list post above as potential trades and their directions. I will also post my reasoning here for anyone who want's to know.

OUTLOOK FOR NEXT WEEK

For anyone who is still paying attention here is the outlook with pairs for next week and how I am currently viewing the market.

SHORT
AUDUSD
NZDUSD
OIL

LONG
EURAUD
EURCHF
EURJPY
EURNZD
GBPAUD
GBPCHF
GBPJPY
GBPNZD
USDCHF
USDJPY
XAUUSD
XAGUSD
XPTUSD
XPDUSD

Last weeks calls had some pretty nice moves of course you need to do your own analysis and entries using either your own methods or my microscope approach that I have explained in the thread. If anyone needs any clarification or has any questions do not hesitate to post your comments here.

Hi Vip,

Thanks for weekly market info, would you please analyse some goods situations listed for this week with images and how you reached to this conclusions, i have followed your previous posts but would like to see more examples. for example NU and AU both have been bearish since Jan, is it your main reason for more bearish this week or there are more reasons? for TIA

Hello Mohsen,

NZDUSD and AUDUSD

These pairs have been probably the easiest plays during the past few weeks. Due to many economic factors including the fires in Australia, and the interest rate reports recently released. These plays have been the most obvious as being overvalued against the USD.

NZD and AUD economy is very weak, and when compared to arguably the strongest currency at the moment USD, that is the driving factor behind the bearish moves we are seeing here. Of course the best thing to do would to be hold these long term but at this point the pairs have already moved a lot to the downside so for now I will be waiting to reenter on a nice retracement or pullback.

You can see every week I post the pairs that I am watching and that has included these two since I started this thread. I am not sure exactly what kind of analysis you are requesting? You always have to start with a higher time frame such as the daily chart to see where the pair is at and then go down to a lower tf for your entries.

At the moment I am currently watching all the pairs I posted but I am most interested in OIL, and some cryptos. OIL seems to have the best entry right now when compared to some Forex pairs. I was in OIL last week and unfortunately I closed it on Friday. Of course market had a gap down 200 pips on Sundays market open. A lot of times the easiest way to make money is just to hold your trade and I need to work on that part, I tend to close my trades too early sometimes and that is why most of the time I am not in any trades as the entries are not good if you already missed the move.

Right now I am still in some crypto trades but I did not go heavy on them since they are quite unpredictable. The only one that seems very low risk is RIPPLE. BTC looks nice too but the downside is huge so there is much more risk on that trade. RIPPLE is currently imo the best bang for your buck at the moment and if you can find a good short on OIL that still is on the table too.

This week is looking pretty dry so far as the moves all pretty much already happened last week and this week may be low volatility/choppy markets.

I can post analysis on a pair if you like but you need to specify which one you are looking at.

Cheers.

Dear,
as you have said in your post that USD is the most strong currency as compare to the NZD and AUD. i have a question regarding to that how you analyse which currency is more strong. Is it depends on fundamentals or you also get this idea from charts?

This is a good question. I use my own way of creating an economical bias, and I recommend you do your own research to build your own bias as I am not always correct. Basically the way I build my bias is in a few steps.

1. Pay attention to the global economy and big events.

This is the first thing I do to build my bias. Right now we can see the effect that the corona virus is having across many markets. There is always usually a driving factor behind big moves in at least one currency. For example Brexit, Trump, the fires in Australia, and now more recently the corona virus. Understanding how these events effect the Forex market, or commodities can be very helpful in forming a bias. The issue becomes when you are too late in the move aka the news has already moved the market and it is no longer going to continue to effect the market. That is also something that you need to use your own discretion for.

2. Interest rates.

To make things short, there are many different major news announcements that may or may not move a particular currency, depending on what the current price of that currency is in comparison to another, aka value. Sometimes this can be difficult to discern. Just because a country cuts rates does not necessarily mean it will negatively effect the currency when compared to any other currency. This is why it is very important to build a bias on BOTH currencies in a pair before making a trade in order to pick the best trades. Interest rates are probably the most important driving factor behind the value of a particular currency. What I do is I pay attention to the current interest rate, and the previous interest rate, and I see whether any changes have been made that may drive a currency up or down. Here is my current outlook on all major currencies. (You can also do this with exotic pairs if you like)

CURRENCY CURRENT INTEREST RATE PREVIOUS INTEREST RATE OUTLOOK
AUD 0.75% 0.75% NEUTRAL
GBP 0.75% 0.75% NEUTRAL
CAD 1.75% 1.75% NEUTRAL
EUR 0.00% 0.00% NEUTRAL
JPY -0.10% -0.10% NEUTRAL
CHF -0.75% -0.75% NEUTRAL
USD 1.75% 1.75% NEUTRAL
NZD 1.00% 1.00% NEUTRAL

As you can see in the table above we currently do not have any changes in the major interest rate releases recently. They are all neutral, meaning they remain the same when compared to the previous report. I'm sure you can do this differently but for me I only look at the last 2 reports including the current rate. It is also important to understand that currencies in general are losing value overtime. This is why I usually tend to look more for selling opportunities as they tend to be more profitable for me, but that is more of a long term bias that I personally have. There are experts and major analysts who believe that eventually all rates will go to zero, and that this exponential decrease in interest rates will in the long term devalue all currencies due to many factors such as inflation, and debt. So, if a currency has a higher interest rate than another, it has more VALUE to an investor, that is not enough information to base a trade off but it is part of my bias. If for example USD increases their interest rate I will only look for buy opportunities, and if NZD lowers interest rates I will only look for sell etc. This is a complicated system but if you have any other questions I will try and answer to my best ability.

3. COT Data

This data I use for more of a short term bias, and I add it to my long term bias. I will not go into too much detail into how I use this data as it is debatable, everyone seems to use it slightly differently. For me though, I look only at the institutional funds/asset managers, and I try to see where they are currently holding their positions. It almost always lines up with my long term bias. Again, used by itself this data can be very confusing and lead to some bad trading decisions, but if you understand how to use it it can be very useful to building a bias. This data also changes weekly so it is something I check more frequently than interest rates which come out 3-4 times per year per currency on average.

Once my bias is build that is when I look at the charts and try and find entries. This is the part that gets the most tricky, since there are many small moves up and down before a big move, (if you have not already missed it) and, you may need to hold your position for a while before entering profit. If done correctly though, you can get some very nice setups when combining a long term bias with a top down analysis on your charts, including market structure, volume, and recent areas of s/r.