No Brainer Trades

Would you care to elaborate how you use these yourself with S/R?

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BRV, given its NFP, will you look for the market to find resistance at that level before entering?

The market is very close to the level and often on NFP is moves significantly therefore I wouldn't want to leave an order in without seeing the data. Is that similar to the approach you would take?

This is going to be awesome, Steve. Thank you!! That type of analysis definitely will add to our understanding of what to look for when we are spending screen time. Thank you in advance. Will definitely be looking forward to your explanations and illustrations.

Kind regards.

Hi BRV and all.

I look forward to this too as although I understand now the concept of s& r I find it difficult to know when to fade and when to play the breakout it seems to happen opposite to what I do hehe.

Also I use tight stops around 20 pips and I get stopped out a lot when fading and inevitably the trade continues my way.

Have a fab weekend.

Vik

Hi verno and welcome! I actually stayed away from this volatility this morning pre and post NFP - as you can see there was an intentional run on the levels above right after the announcement - it happened so fast and unexpectedly, and with all of the erratic movement, I thought it was best to stay out and wait for solid setups next week. When things get very erratic like this you can usually find me sitting on the sidelines.

Thanks for the welcome and thanks for the insight.

I found this pic. on another thread - I thought you might like it ?



Have a great weekend everyone

Your not missing 'em, they're there. Under the charts menu again.
Ni_Cont
Ni_M_Cont
NKD_Cont

I think I have seen that pic before. Except last time on top it said: MAN and on bottom it said WOMAN. It had something to do with sex drive...

Another good place to see key markets at a glance (or dig deep if needed):

http://stockcharts.com/charts/summary/

Dear BRV,

My question is how do you determine fundamentals? Will you pass on a trade if the fundamentals don't agree if the market is in a two way market condition? How seriously do you take inter-market spreads? How much time to you spend keeping yourself abreast with the fundamentals?

Here's my opinion regarding fundamentals. I come from the supply demand paradigm of the markets. For example we are currently in a two way market which indicates to me that both supply and demand will be hitting the market. Thats means that I can be both long and short. This is clearly shown on a chart by short term (Hourly) support and resistance. Both are clearly evident on a chart. For example a few weeks ago it was a one way market there was no short term support only short term resistance. This indicates one should only be short.

I have a problem with news and forecasts to derive the fundamental condition. Much of the news is pure b.s. For example a few days back all day Blomberg reports that money managers are taking on more risk and the carries are well bid due to this. No new information takes place and the usual suspects undergo a massive sell-off with no new catalyst being released. All that happened was supply and demand. Price touched resistance and the rally got smoked. Was bloomberg lying? Unlikely, they are just forecasting what is happening. If Eur, Aud, Gbp are all up vs the Yen they forecast that fundamentally the market is well bid and risk is being accepted. However, the true condition was that the market was experiencing a dead cat bounce.

How does a supply demand trader get an upper hand on the fundamentalists on their turf? I think a good supply demand trader can do this. I personally believe that in the end the fundamental condition of the market is the most important thing. This kind of sounds like a paradox but its not. How do you determine the true fundamental condition? Its my opinion this is done through inter-market spreads. Any one who has traded currencies long enough knows that the market is driven by interest rates, growth, and risk. The answer is simple create spreads to determine which condition the market is currently in. Then with those spread charts apply the same principles of support and resistance. This way you know the true fundamental condition of the market without forecasting or relying on the news.

Some of the common spreads are Euribor/Eurodollar, Euribor/Short sterling, Eurodollar/ Short sterling, Bunds/ 10yr U.S. treas., Bobl/ 5yr U.S. treas. Schatz/ 2 yr treas, Gilts/ 10yr. U.S. treas., Schatz/Bunds, 10yr/2yr S&P/ BRIC 40, S&P/ MSCI emerging markets MSCI Japan/ MSCI Asia ex. Japan. That probably enough but the list is endless to asses the three main drivers of the currency markets. By using this approach you get the truth from the market if you know what to look for rather than reading the news all the time. Reading about the market is probably the biggest waste of time out there. The whole point of trading the market is for you to extract a good life from it. You shall be the master and the market your servant. However, it seems to be the other way around. I think this explains the failure rate. Its the preoccupation and anxiety one encounters when ever the markets are involved. News sources fuels this anxiety. Blogs and forums fuel this anxiety. So in reality most have a deep seeded belief that they need to know more information. If one has this belief they have become a slave to the market and most definitely not a master of. Therefore, they are doomed to failure due to self-valuation issues. Mark Douglas briefly mentions this in his books. However, I think he could of placed more emphasis on self-valuation. I think he didn't because that's one of the main benefits he offers to paying clients. The real truth self-valuation is a real difficult thing to master. Its easy to talk the talk but walking the walk is far more difficult. One traders sit down at their desk which personality will manifest itself? The servant or the master?

To put an end to this long winded banter. BRV, do you track intermarket spreads, if you do how serious do you take what they are telling you, and which ones do you like personally? Cheers, have a nice weekend and forget about the markets and get busy living.

Hi all, I just want to post this very good pdf about fibo retracements. I thought I knew it all, but reading actually it it refreshed a lot of my fibo concepts which were a bit in sleepy mode...
And a question for Steve:
in this file they discuss the levels around 70%. I already asked you about it and you confirmed that you has found the 72.4% level a very strong one.
In this pdf they are talking about 78.6% (38.2 x2) and 76.4%.
Any advice from your experience about this differences in the 70% area?
Regards
Max

Guerillawar

Thanks for the insight but can you elaborate please.Where do find the information you refer to and how best to interprete given you mention several spreads.Any advice is appreciated.

Thanks Gerard

Thanks kc8flq
I will look them up

Brilliant and thought-provoking post.

Wondering what happened to Iron-Man. His style was as equally as captivating.

I would appreciate any comments. A sell on usdcad at 1.1890, line has support and resistance across one hour chart, target 1.1766 first up, which is base of previous inverted bucket and lots of support and resistance further back, then 1.1670. I know Monday could be a deterent, but the chart looks good. I apologise that I have not posted chart but am yet to learn how to do that successfully. Certainly wouldnt mind some tips there if anyone can make the directions simple. Managed to save it to a document, but dont know how to put it into blog.

If you have metatrader4, right click the chart > save as chart, and then when you post: manage attachments > upload chart

Bloody Great evaluation and question GW.. deserves a B/G answer..BRV..

Above quote is not full reprint to GWs original post...why Im not sure.. but the original is worth re-reading in understnding my reason for this endorsement.

Smittens

Good morning from oz.Given the positive direction of equities on friday,does this create a + bias for you in todays FX direction?

Thanks Gerard