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  • #3,381
  • Mar 9, 2011 2:37pm Mar 9, 2011 2:37pm
Quoting Majestic12
EC- Stopped out. This setup was either not good enough or a had my stop too low at 30 pips. Looks like it may work now though. Maybe i should stay away from the minors unless the setup is extra special?

ECHF - Had my order in for a while but when price finally hit it at 2894's it was not filled due to a margin mistake on one of my brokers. Worked well though.

Thinking maybe i should stick to the majors.
Remember the movements in pairs like ECAD, AUDCAD, EURAUD, GBPAUD etc are more prone to movements in majors than the PA-SR inthemselfs.

To illustrate,.. EURCAD will show you move's that are derivative of moves in EURUSD and USDCAD. Cause their is not enough money flowing (not much people trading it) into EURCAD to hold PA-SR without the order flow in USDCAD and EURUSD impacting it.

U can see LJ trading them but he would agree with me that trading minors is not as simple as trading majors cause of proper supply and demand factor that makes your SR and PA hold in majors like EU and UC but you dont get that comfort when trading 50 fibs on minors cause any change of dynamics in thier associated major pairs will take it out of the equation as there would be no real orders to hold it on its on against the derived move.

So for an example if u want to trade Ecad u better know what should happen to Ucad and Eu in order to make Ecad go in your way.

Another point, Yeah u can trade big PA bars on daily and above on Swing high lows and major monthly PPZ's but my point is that when u are taking 50 fibs on 1h (just an example not targeted at anyone) u better know what i am talking about above.

Its a little advance stuff so i'd advise to stick to majors in ur early days.

P.S: USDX is not tradable its just a basket of several other Ccy's.

http://en.wikipedia.org/wiki/U.S._Dollar_Index
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  • #3,382
  • Mar 9, 2011 2:51pm Mar 9, 2011 2:51pm
Nasir, Thanks for taking the time to post such a great explanation! That makes perfect sense. I will surly keep this in mind when looking at minor pairs from now on.
  • #3,383
  • Mar 10, 2011 4:40am Mar 10, 2011 4:40am
Quoting Majestic12
EC- Stopped out. This setup was either not good enough or a had my stop too low at 30 pips. Looks like it may work now though. Maybe i should stay away from the minors unless the setup is extra special?

ECHF - Had my order in for a while but when price finally hit it at 2894's it was not filled due to a margin mistake on one of my brokers. Worked well though.

Thinking maybe i should stick to the majors.
My thoughts on ECAD would be:

1. That PPZ is a minor one..look at my daily chart, 1.3500 is the nearerst major ppz for me.

2. So you've picked a minor ppz, TL + 61 fibs...a potential setup, but consider the following:

3. The swing is small...change your TF and see the setup you traded on the daily and you can see how minor that swing is....price is chopping around on the daily TF in a wedge.

4. It has no fundamental confluence...not a deal breaker but it would be for me when the fundies are STRONGLY opposing the setup. Look at a chart of UCAD and you can see how strong the CAD is across the board and there is no reason for this to change...also with EU forming a new intraday trend down there was little chance of seeing ECAD rise IMO.

5. As Nasir said the crosses are mostly made up of the their components i.e. looking at UCAD and EU will give you some decent clues about ECAD as not much money flows into ECAD directly. Thus looking for confluence with UCAD at strong support and EU at strong support for example would be good confluence.


So can you see that because there is no confluence on ucad / eu, fundamentals are directly opposing the setup, the daily chart is ranging and this is a minor swing within the range and the ppz is a minor one that this didn't have a great chance of working out?
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  • #3,384
  • Mar 10, 2011 4:41am Mar 10, 2011 4:41am
Quoting nasir.khan
Remember the movements in pairs like ECAD, AUDCAD, EURAUD, GBPAUD etc are more prone to movements in majors than the PA-SR inthemselfs.

To illustrate,.. EURCAD will show you move's that are derivative of moves in EURUSD and USDCAD. Cause their is not enough money flowing (not much people trading it) into EURCAD to hold PA-SR without the order flow in USDCAD and EURUSD impacting it.

U can see LJ trading them but he would agree with me that trading minors is not as simple as trading majors cause of proper supply and demand factor that makes your...
Nice answer.

P.S. Some brokers will offer you the ability to trade USDX
  • #3,385
  • Mar 10, 2011 9:59am Mar 10, 2011 9:59am
LoveJoy....

Is the 1.3700 (round about that area, maybe more like 1.3725) of the EURUSD and area you might look for a bounce to go long again?

I am just trying to get used to picking out these areas in advance.

Thanks!
  • #3,386
  • Mar 10, 2011 10:19am Mar 10, 2011 10:19am
Quoting unlv_tj
LoveJoy....

Is the 1.3700 (round about that area, maybe more like 1.3725) of the EURUSD and area you might look for a bounce to go long again?

I am just trying to get used to picking out these areas in advance.

Thanks!
hey unlv,
not LJ obviously but just wanted to chime in with a chart, ur price level is spot on if u ask me but dnt trade this way though, just watching
hope u dnt mind, sup LJ .... how're u doing buddie?
cheers
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Simplicity is the key to success
  • #3,387
  • Mar 10, 2011 11:07am Mar 10, 2011 11:07am
Quoting squeezy
hey unlv,
not LJ obviously but just wanted to chime in with a chart, ur price level is spot on if u ask me but dnt trade this way though, just watching
hope u dnt mind, sup LJ .... how're u doing buddie?
cheers
Thanks for the help squeezy.

You don't touch trade yourself? Do you just wait for Price Action at the right locations then trade based on it?
  • #3,388
  • Mar 10, 2011 11:46am Mar 10, 2011 11:46am
Quoting unlv_tj
Thanks for the help squeezy.

You don't touch trade yourself? Do you just wait for Price Action at the right locations then trade based on it?
i do actually but with a little bit of twist, my trading is backwards (long story, changed my thinking of the mkt)
this kind is one i bliv LJ takes, has confluence of tl, fib, ppz , maybe even mas.
i do a lot of anticipation trading
Simplicity is the key to success
  • #3,389
  • Mar 10, 2011 11:54am Mar 10, 2011 11:54am
Quoting unlv_tj
LoveJoy....

Is the 1.3700 (round about that area, maybe more like 1.3725) of the EURUSD and area you might look for a bounce to go long again?

I am just trying to get used to picking out these areas in advance.

Thanks!
As per Squeezy's post and charts I'd be looking for 1.3730-50 area for a potential touch trade...I'm actually looking at the broader market for confluence with other FX and non-FX pairs as things look as though they 'could' all line up at the same time which would potentially make for some very good trade setups.
  • #3,390
  • Mar 10, 2011 11:56am Mar 10, 2011 11:56am
Quoting squeezy
i do actually but with a little bit of twist, my trading is backwards (long story, changed my thinking of the mkt)
this kind is one i bliv LJ takes, has confluence of tl, fib, ppz , maybe even mas.
i do a lot of anticipation trading
Ha, yes you are mostly exiting where I am entering I reckon (in opposite directions)

How are things, well I hope.
  • #3,391
  • Mar 11, 2011 6:21am Mar 11, 2011 6:21am
An example of why, to be truly successfull at touch trading IMO you NEED to know what else is going on in the market and understand how 'we' react to certain events.

By itself this was a good technical setup (1st time back to a daily PPZ, BRN, 50% retracement confluence) and if I was only watching this one pair and making a decision whether to trade it on the technical setup on this pair alone I would have taken this trade...but there were signs from elsewhere on both FX pairs and other correlated assets and in the news (the unfortunate disaster in Japan) that this was actually a low probability trade i.e. there were so many signs from elsewhere indicating Yen strength that the probability of this setup working out decreased to a level where I considered it a no trade.
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  • #3,392
  • Mar 11, 2011 7:34am Mar 11, 2011 7:34am
Quoting lovejoy80
An example of why, to be truly successfull at touch trading IMO you NEED to know what else is going on in the market and understand how 'we' react to certain events.

By itself this was a good technical setup (1st time back to a daily PPZ, BRN, 50% retracement confluence) and if I was only watching this one pair and making a decision whether to trade it on the technical setup on this pair alone I would have taken this trade...but there were signs from elsewhere on both FX pairs and other correlated assets and in the news (the unfortunate disaster...
I was looking at that exact area to go long, great example of how it is about more than just looking for good locations.

I woke up with price getting right to that level, but the way price got there was just rough. A huge BEOB. I realized I had no idea which way price wanted to go, and something major happened to cause price to move so violently. Turned on the TV and there was the news of the earthquake.

I was thinking about going short instead, but decided it was best to stay out. I wonder if someone like Squeezy went short based on this.
  • #3,393
  • Mar 11, 2011 7:39am Mar 11, 2011 7:39am
Hi, Just finished writing a long response but firefox crashed arghh. this one will have to be a bit shorter.

First off thanks to Nasir and LJ for the insights into why the EC trade failed. I Think i'm a little more enlightened as to why it wasn't a strong setup.

Secondly i took the EJ setup above which i'm a little annoyed about after reading LJ's post of why there were such obvious reasons to avoid it.

LJ - To expand a little on the specifics of what you mean by this:

"but there were signs from elsewhere on both FX pairs and other correlated assets and in the news (the unfortunate disaster in Japan) that this was actually a low probability trade"

I would suggest that:

-UJ Was showing very bearish PA at the time of entry.
-EU was showing no real signs of reversing.
-EP and YM had broken very significant areas of support therefore indicating that more money maybe flowing into 'safer' currencies such as jpy.
-The earthquake in japan was causing what from my perspective i consider to be confusing market conditions.

The earthquake however did not really keep me out of the trade as i remembered the the kiwi weakened considerably straight after the NZ quake recently and i though the same might happen to the yen.

Could you explain if i am right here and whether there were any other signs i missed?

Thanks as always.
  • #3,394
  • Mar 11, 2011 7:45am Mar 11, 2011 7:45am
Quoting unlv_tj
I was looking at that exact area to go long, great example of how it is about more than just looking for good locations.

I woke up with price getting right to that level, but the way price got there was just rough....
Hey unlv, I don't really get why you would be thinking of going short EJ on the basis of the earthquake. If anything i thought i major disaster in a country would make its currency weaker not stronger!!!

Is it that the disaster contributes to traders moving money into safe haven currencies?

I'm also very confused by the huge drop in CHFJPY. My logic tells me that this should have gone in the opposite direction!
  • #3,395
  • Mar 11, 2011 7:54am Mar 11, 2011 7:54am
Quoting unlv_tj
I was looking at that exact area to go long, great example of how it is about more than just looking for good locations.

I woke up with price getting right to that level, but the way price got there was just rough....
yeah I pulled my order before the BEOB, but I would have pulled it after that BEOB too.

Dunno about squeezy but I was long some yen this morning (short aj and cj).
  • #3,396
  • Mar 11, 2011 7:56am Mar 11, 2011 7:56am
Quoting Majestic12
Hey unlv, I don't really get who you would be thinking of going short EJ on the basis of the earthquake. If anything i thought i major disaster in a country would make its currency weaker not stronger!!!

Is it that the disaster contributes to traders moving money into safe haven currencies?

I'm also very confused by the huge drop in CHFJPY. My logic tells me that this should have gone in the opposite direction!
Forex News channels spoke of the Yen weakening as the earthquake news came through, and if you look, there was a move up on yen pairs prior to the sell off. I think traders first reacted to news of an earthquake, then realised that it was a big one, and the risk aversion kicked in as big money moved to safe havens.
  • #3,397
  • Mar 11, 2011 7:58am Mar 11, 2011 7:58am
Quoting lovejoy80
yeah I pulled my order before the BEOB, but I would have pulled it after that BEOB too.

Dunno about squeezy but I was long some yen this morning (short aj and cj).
Retrace of the Daily PA bars?
  • #3,398
  • Mar 11, 2011 8:14am Mar 11, 2011 8:14am
Quoting Majestic12
Hi, Just finished writing a long response but firefox crashed arghh. this one will have to be a bit shorter.

First off thanks to Nasir and LJ for the insights into why the EC trade failed. I Think i'm a little more enlightened as to why it wasn't a strong setup.

Secondly i took the EJ setup above which i'm a little annoyed about after reading LJ's post of why there were such obvious reasons to avoid it.

LJ - To expand a little on the specifics of what you mean by this:

"but there were signs from elsewhere on both FX pairs and other...
The way I looked at it was:

- Daily BEOB's on AJ and CJ indicating broad JPY strength.
- As you said EP and YM closed below key support areas which indicated further risk aversion (this was a good spot).
- USD pairs have fallen much more than JPY pairs this week but EU, GU and AU were all nearing good confuence support areas so I was expecting JPY pairs to play catch up and to be the benefit of any risk aversion of the USD pairs.
- UJ was at daily resistance which supported the view above

Thus I was already in CJ and AJ shorts by this morning and added more when I heard about the earthquake.

The above is the technical reasoning.
  • #3,399
  • Mar 11, 2011 8:24am Mar 11, 2011 8:24am
Quoting lovejoy80
The way I looked at it was:

- Daily BEOB's on AJ and CJ indicating broad JPY strength.
- As you said EP and YM closed below key support areas which indicated further risk aversion (this was a good spot).
- USD pairs have fallen much more than JPY pairs this week but EU, GU and AU were all nearing good confuence support areas so I was expecting JPY pairs to play catch up and to be the benefit of any risk aversion of the USD pairs.
- UJ was at daily resistance which supported the view above

Thus I was already in CJ and AJ shorts by this morning...
Now for the fundamental reason:

1. JPY is arisk aversion currency - did you notice that in particular the last 2 years USD gained considerable strength even wehn there was bad news arising from the US...Lehman Brothers, really poor US economic data and outlook would often lead to a rally in the USD due to its safe haven and reserve currency status.

2. Japan exports capital, its interest rates are near zero and thus Japanese investors buy overseas assets that provide a higher return on their capital and thus when something like this disaster happens Japanese investors sell their higher yielding assets and bring their money back home..money will always flow from higher yielding assets into lower yielding 'safe' assets in times of risk aversion. Amongst some of the biggest Japanese investors are Japanese insurers who invest in overseas assets and thus need to bring home these funds to pay for the claims that will arise. The reverse happens for any overseas insurers and reinsurers who will have to pay claims for the damage etc they will have to buy JPY.

3. The cleanup will involve a large amount of domestic construction spend and job creation.

Thus from this can you see why the JPY rises when there is a disaster in Japan, both from a general risk aversion flow and the actual and expected inflows.

With regards the NZD, it is a higher yielding asset and thus when the earthquake happened again people will sell higher yielding assets and buy lower yielding safer assets. NZ is not a big exporter of captial like Japan is and also NZ has has room for interest rates to fall which is what they did and thus the NZD falls.

Probably not the exact answer and probably additional reasons to but this is the overal picture from my understanding.
  • #3,400
  • Mar 11, 2011 8:54am Mar 11, 2011 8:54am
Quoting lovejoy80
Ha, yes you are mostly exiting where I am entering I reckon (in opposite directions)

How are things, well I hope.
im good LJ, trading in a relaxed manner
nice yen trades, knew ull be in some of them....kudos

Quoting unlv_tj
I was looking at that exact area to go long,...
went short only cadjpy on break of beob as it was telling the best story imho
if u check, uj, cadj & chfj were at double tops but wasnt my style to short based on that alone but we all know what happens at double tops/bottoms...its either a bounce or break ( hmmm! isnt that the same concept of s/r?)
aside yen, been holding oil, anzd and some others for a while so just taking it easy (looking for ways too tighten my trades)
anyways
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Simplicity is the key to success
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