No Brainer Trades

Buying a small long position on EUR/USD at 1.47, if it hits that level.

whew. broke back through 1.8600. Taking some profit (aka liability) off the table and letting the rest run. I sold again near the highs cause I just couldn't believe that Cable and EUR would go up today. Last night Gold sunk like a rock, and oil doesn't usually deviate much. It's now following suit. I think if it gets through the lows here we'll see $110 today, or darn close.

Obviously did NOT

Well, it went under 1.47; why not short it for another 100 pips...?

Rafa.

hopefully you were able to get out at BE when it came up to retest the 4715 lows.

No I never went long. I shorted more at 47

Excellent call Cindy!

True definition of no brainer. . . To all those who are just finding this thread. . . . want to know what to look for in order to hit bounces like this? Take a look at the GU on the daily If you had drawn your S&R lines you would see that 1.8511 serves as STRONG S&R for numerous times that are spaced weeks/months apart. . . .

Textbook

Nice work Cindy!!

So thanks to the one and only IronMan he sent me to www.northfinance.com which has oil/gold/s&p futures on a familiar MT4 platform. . . makes it so awesome to see them in a pin bar graph rather than just the number I see on bloomberg. plus to see how all of these are interlinked in regards to the dollar is eye opening

Not to mention gold is a great tool for learning S&R

Oil headed towards 110 (112.80 becoming a level of R that seems to be very firm), gold flirted with 772 (Has rebounded since but looks good for another sell at 789)... The USD looks like the one to be with ......

[My next move is to look to USD/[email protected] and if it slips through that buying again at 1.0830]

+Lemming

Iron Man, have a drink on me - thanks for your help

I've recently learnt about the correlation of Oil and Gold and their effect on the dollar... Gold goes up - dollar goes down that's all well and good but it seems to happen at the same time so how can this be used as an edge for forex.

To me it's like saying well the USD/JPY is going up but the USD/CHF is going down - time to look at the CHF/JPY cause the swiss must be CAINING the yen - oh well too late the moves already over!

What I'm saying is it all seems to happen at the same time so how is this useful>?

Am I missing something here like maybe you gauge where Gold might be headed based on S/R and then decide to look at trading the Forex in that direction? I dunno.

All I know is when Oil (puppa bear) starts to break out and starts bossing gold (mumma bear) around in the same direction say long - Then you sure as hell don't want to be long on the USD/CHF (baby bear) or short on the EUR/USD (baby bear) etc.

Anyway still trying to get my head around how to use this info as an effective edge.

I have just noticed that when gold/oil breaks an S&R level in this case S. . . It shows that its general direction will be down, so this gives me a general idea that the dollar will grow stronger

thats all, no edge just a part of the puzzle for me

That's how I use it as well. Confirmation of direction.
That said, I'm still dying for oil to test $120. It's such a no brainer there (in regards to shorting EUR). I was convinced that it would happen this week.

I see...

Pretty obvious answer to a stupid question I guess!

Do you guys trade Gold or Oil? Pretty crazy stuff!

Cheers

Don't feel bad. I had the exact same question as you for quite some time.

It's not a stupid question and I'm not sure if there is an obvious answer. The question raised was 'how can we use this?'. In order to do so we need to know which one of the instruments is in the driving seat, who's on the horse and who behind in the cart.

I have oil on screen all the time alongside various pairs, the Dow and FTSE and if you look at these on low TF's it is very difficult to determine which one is driving the others. In recent days it has looked like oil driving $/dow around with the others following suit, but although I trade them I wouldn't put money on which one is the driver. Anyone care to nominate??

From what I've been taught Crude is the grand master but it isn't always as simple as 1 thing driving the other.

It's just when you start to SEE Crude driving gold (correlation) that you know the majors are likely to react.

Sometimes Gold and Crude do their own thing though. And as with everything it isn't always perfect.

The Dollar follows Gold and Gold Follows Oil but for Gold to tell the dollar which way to go, it first need directions form Oil if that makes sense! Maybe someone with more experience on the issue could enlighten us further!

At this point i would be looking for oil to fall further...

Hey thread,

I am not sure betting against the buck is a no brainer nowadays but things are looking good for a rebound in the kiwi.


I decided to leave this thread for a while after things got a bit heated with somebody a couple of weeks ago.

I attach my very 1st Beta version of simple spreadsheet to help spot potentially good S+R levels.

This little piece of technology I have put together in line with classic BRV principles in identifying target S+R zones.

All levels are based on Monthly Highs and Lows, dating back from 1978 to the present day.

How it works

Here's how it works:

1. I downloaded from my MT4 broker, ODL Securities, all the OHLC numbers for each month for the last 30 years or so, in this case for Cable (GBP/USD).

2. I labelled High as "Res" for Resistance, and Low as "Sup" for Support, shown in the "Sup / Res" column.

3. I sorted these in descending sequence of level, in column "Level".

4. I calculated the Delta number of PIPs between succeeding levels, ie the number of PIPS between any given level and the one immediately below it - shown in column "Delta".

5. In the yellow highlighted cell at the top right hand of the spreadsheet, you can put in a number which represents the closeness / tolerance of the cluster of levels that you want, for example "Less than 6 PIPs" means to look for levels that are within 5 or fewer PIPs of each other.

6. A column shows "S+R Candidate" where a level and the level below it are within the given tolerance of PIPs, eg within 5 or fewer PIPs.

How to use it

To use the S+R level calculator spreadsheet, just enter your chosen number of PIPs in the yellow box, then go look for clusters of S+R Candidate levels in the spreadsheet.

This is a very crude prototype of what we could do with this sort of calculator but it is already useful. For example, it spotted the neat cluster of levels between 1.8503 - 1.8523 where price action bounced 100+ PIPs today. Please note that this is a mixture of Resistance-turned-Support and Support-turned-Resistance levels.

Example picture of this attached - I show this as a Weekly chart, for clarity, but remember that it is calculated on Monthly High / Low numbers.

If you get too many S+R Candidates, just reduce your number of PIPs in the yellow box.

Caveats

Caveats are, of course:

(a) Nothing is a substitute for the Mark I Eyeball when spotting good S+R levels, so continue to apply all normal BRV S+R principles.

(b) The calculator won't tell you if a given zone has previously been used and abused, so use your own common sense on that question.

(c) As always, apply your own judgement when choosing S+R levels.

(d) Where the spreadsheet shows "S+R Candidate", it's not just that row, it also includes the row beneath that, so if there are 4 x S+R Candidate rows shown, there are actually 5 levels. This is a bit basic, I know, but it is V1.

Good news

The good news is that this simple little spreadsheet will help you apply 30 years worth of Monthly Support + Resistance levels very quickly - have you tried finding great historical S+R levels when price reaches a new level ?!? I find myself getting dizzy going from right to left on my screen trying to find S+R levels from years past.

We also know that Resistance-turned-Support and Support-turned-Resistance levels are the most powerful, so the spreadsheet will help you spot which levels have been both Resistance and Support, and how many times, and how recently.

Could I use this approach for any pair or timeframe ?

MT4 lets you download OHLC data from any time period of chart, so it would be easy to generate the Sup+Res numbers for any pair.

In terms of timeframe, I've tried different timeframes, but so far Monthly seems to work best.

If this approach is of interest, I plan to try adding firstly Weekly, then Daily levels in the same manner -perhaps as 3 Excel worksheets in the same workbook, shown side by side.

Then, just like you do visually, you could firstly check out the Monthly chart for potential S+R zones, then go on to use the Weekly, then Daily levels within the zone to pinpoint the best recent S+R zone within this target area.

This should enable you to identify accurately a tight S+R zone pretty much spot on the best current levels, in line with long-term historical numbers in the same general area.

No reason in principle why you couldn't then go on extend it to include 4-hour charts, as we do visually already.

Spreadsheet S+R levels versus classic BRV visual S+R level spotting

Again, please let me make it crystal clear - I am not attempting to substitute use of a spreadsheet for classic S+R level spotting visually, as Billy Ray has so successfully taught us.

What I am suggesting that there is perhaps a role for the spotter spreadsheet to play to give us a very fast and efficient way to narrow down potential S+R zones, which we can then inspect visually.

One key advantage of the numeric approach is that it benefits from the whole 30-year history, which is much more difficult to scan visually for simple practical reasons of screen size, resolution, etc.

What next ?

The spreadsheet is very unsophisticated at this stage.

All I wanted to do was to post this up here to see if you folks thought it might be useful to help find S+R levels.

If I come up with any interesting results from my own further experiments with this, I'll post them for you guys to share.

If you see any potential to use this sort of approach in your S+R trading, do let me know.

Also, any whizzy Excel types who know the Excel array analysis functions inside out.. please get in touch ! I am sure there are great built-in Excel functions that can do much more sophisticated level clustering analysis.

Right now I'm trying to stay totally focused on having just enough technology to enable me to meet my main objectives, ie to trade successfully, profitably, using the most efficient techniques to spot the best S+R zones.

Best wishes, Loudoniii