AUD/USD

Make that 3.

Not picking bottom but just loading responsibly according to trading plan.

Count me 4.

However, there's a clear bullish div at 4H, so I expect a bounce to ~9830. After that, maybe straight to hell, maybe several weeks of up-consolidation till the next leg down. We'll see...

Yep. Every Week.

not yet Long bro..trust me..it just a half journey...be patient

Yeah, I've got support at 0.9150/0.9200

I probably would have to add my name too... particularly with regards to the Aussie.

When I consider the cause for the Aussie shift in sentiment over the past few weeks... it's primarily been:

1. the threat of decreased CB interest rates (and RBA meets this week...)

2. The economic slowdown in China

3. The overall risk off sentiment (the catalyst for this was political greece instability, and now also spanish capitalization fears)

This past week, there has been possibly some reason to believe Item 1 on the list may not be as bad as previously believed. However, until this is known, I wouldn't want to speculate on it.

Item 2 is still very much a reality

item 3 is also, albeit probably slightly dulled only because of a potential QE3 that may weaken the US dollar, not because greece, or spain, are any better off than they were last monday. And if for some reason QE3 doesn't materialize, or, if the rumors of it coming to pass become rumors that it's not going to happen, then a continued move down is still pretty likely, IMO.

Over all... if euro zone problems, a slower china, and general risk off sentiment continue to remain in focus, then the ONLY thing that could sway this at all is a QE

so. watch rumors of QE, and know that until something more positive than Euro problems and slow China becomes the focus of the investment community, we will probably see an AUD continue to move down over the long haul for a significant amount.

Remember, in bull markets, prices often rise significantly more than the fundamentals often value them at.... and in bear markets, prices often fall significantly more than the fundamentals value them at. Humans over react, and inertia is a powerful force in the markets.

As for my own trading, I'll take a long around 9660, 30 stop and 40 target, stops to BE after 20.

and long again at 9610, 30 stop and 45 target, stops to BE at 30.

And if we hit 9850 - 9900... I'll be looking to get short somewhere around there.

I rarely hold anything for more than a few hours anyway.

X

I enjoy reading fundamental analysis (I studied economics) and think that there are some people here who do a great job of explaining it. However, the longer I have been trading the more I try to avoid it as part of my trading.

I see the market as just a place of buyers and sellers. If there are more sellers, the price goes down and more buyers, price goes up. It's very easy to see this on a chart and no explanation is necessary, all the information one needs is right in front of them.

For me, when trying to implement fundamentals into my thoughts on the current market, it becomes cloudy and a confusing picture. This is due to fundamentals pointing up but the price keeps falling. So what do I do? Trade the chart or trade what I think should be happening and derive my bias from pure speculation. The later leads to picking bottoms and tops. How many times have we heard in this very thread that the AUD should be rising for this reason or that reason, yet it has carried on dropping like a stone.

As I say, I enjoy reading everyones views, and I thought I would share my experience of trying to utilize it in my trading.

Trade safe all!

Relax, ma'am!

In my two previous posts, I did not call this morning star a reversal point. I have traded FX market full time both long and short everyday, 5 days a week for a long time. It doesn't matter to me whether or not a morning star is a reversal indicator. All I can see is that there will be more up days than down days next week. As to what is going to happen after that, I don't worry about that issue at this point.

"profit taking"? Were you sleeping during US session yesterday morning? This star had nothing to do with profit taking, period. It was a panic selling. Do you know what panic is?

"I would be nothing but a gambler with odds stacked against me."
Do you use stop loss? Because you are betting on market move, so that you need stop loss against ODDS. Can you say you are not a gambler?

You brand other people "gambler" when they have different trading methods which you don't like or understand at all. Have you ever seen gamblers discussing morning star, candlestick, charting in casinos? If you really saw this happened in casinos, you must be a gambler as well. How do you know I trade based on feelings and guts? Columbus sailed westward from Europe to China 520 years ago without any confirmations that he would be able to reach the destination. I see him as a courageous man. Based on your narrow-minded thinking, Columbus would be a big time gambler for sure.


I am a human being with a cool head and willing to take risks. In other words, I am a speculator. I made 145 pips during yesterday's volatile session. How is your trading performance yesterday? It does not matter who is a trader or who is a gambler. What matters is how much you take home at end of day and everyday.

One who always follows other people's thinking and rigid rules is a follower not a leader. A follower can be a so-so trader at best but can never be a successful trader. MHO.

Ya know Foz... I know exactly how you feel! I actually was always drawn to tech analysis, and in fact found my way to trading income via technical analysis... and it still is by far the most invaluable tool in my belt, particularly since I'm basically a day trader. And whenever I used to look at fundamentals I would find the same things you did... it seems the market goes up or down regardless of what the fundamental picture is.

However, as my trading has continued to evolve, I've put much more emphasis on what many refer to as "market sentiment" or as I refer to it, "sentiment analysis"

Now, I'm gonna go into this a bit more.... and really i'm directing this post to all folks reading, not you specifically. I know you seem to do well and are happy with your method, but I thought others might want to know more in order to "fill out" their approach to market analysis:

Sentiment analysis is a much more subjective art, moreso than even technical analysis.

It's really a combination of a particular few aspects of both technical analysis AND fundamental analysis.

for the purpose of explaining it better, one might best look it as"the subjective study of catalyst driven market movement weighted in terms of how it is able to affect the relative levels of fear and greed in the "aggregate body of marketplace participants"

This is easier to understand if I tell you how I use it on a day to day basis:

I ask myself"right now at this day and time, is the marketplace primarily being driven by fear, or greed?" The answer here is basic. it's either fear, greed, or what might be called "indecision". Indecision is how I sometimes feel about the market when a market is rangy, though even then there is usually an undertone of some fear or some greed

Once I have this answer, the next question is: "what happened most recently to cause a surge of this fear or greed that resulted in a move in the markets" In this question, I am usually looking for a specific catalyst.

Over the past few weeks for the euro (as an easy example), it really started first with the RUMOR that greece elections MIGHT fail to elect a party that was pro-austerity. (Yes, it's usually a rumor that starts it all...not the facts. This is part of what clearly separates sentiment analysis from fundamental analysis, as fundamental analysis doesn't look at rumors.)

Then, there were more such catalysts that kicked off new waves of fear in the marketplace, including - news of a possible greek run on banks, news that the ECB would deny access to funds of a few particular greek banks, the near bankruptcy of catalonia (spain) and how it may cripple spain as a whole, also emerging data reports from china indicating that it's economy is slowing, and rumors that it would not be able to experience the "soft landing" that many were hoping for.

These are just some examples of what world developments were contributing to an increased tone of fear that was having a very direct effect in moving the market.

This is MUCH DIFFERENT than just saying "bad news came out" or "good news came out" I ONLY care about what news is actually having an effect on the market.

It's also different than saying "the fundamentals are good, because it has a high interest rate" or "the fundamentals suck, the very low interest rates clearly show that"

The next question is "what could happen that would NEGATE this catalyst? or what could develop that would reduce the current fear or greed in the marketplace?"

For example, such a negative NFP as we just seemed to provide a boost to risk currencies like the Euro, and the Aussie. However, if one were to look at the U.S. and euro stock markets, one would see that they ended down pretty sharply.

That is because the crappy jobs report did not actually ease any underlying marketplace fear! But it DID increase the likleyhood of a possible QE, and a QE3 would devalue the dollar. So, all other currency pairs that trade against the dollar are likely to go up (and for the most part, they did)

SO, it's important to understand that "bad U.S. jobs data" = "good for the euro" is FALSE.

What really did it was "increased possibility devaluation of the U.S. dollar via QE3 = "bad for the dollar" = "good for currency pairs priced against the dollar"

Also...since we know this now, we can know coming into the next major Fed announcement...to watch very carefully for any sign that would further support the rumor of "QE3"... and for any sign that would kill the rumor. If ANYTHING comes out from the fed that QE3 is NOT gonna happen...then expect a strong risk sell off.

Finally, the last question is "Based on how extreme the current fear or greed is in the marketplace... just how sensitive is the marketplace likely to be in response to any new catalyst that may reinforce the current market tone, or that may negate the current market tone"

And this last question really brings this conceptual overview of sentiment analysis to completion. It is such an important question, and it often completes the picture for me.

When I say "how extreme current fear or greed is in the marketplace"...what i'm really saying is: how oversold or overbought is this market? But, I try to use a somewhat objective measure... primarily the COT report.

Coming into this previous week, the ratio of net euro short positions (total shorts of large and small speculators) : open interest (total number of contracts currently trading in the marketplace) was approx
238K net short : 444K open interest = 53% short

Now, lets contrast that with the GBP numbers -
16K net long : 190K open interst = 11.8% long

And... since this is the AUD/USD thread, lets look at the AUD numbers -
25K net short : 150K open interest = 16.6% short

Based on these numbers, it is NO SURPRISE that an increased speculation of QE3 is on the way would help all 3 markets in my example...but that it clear that it would help the euro the MOST, then next the AUD, and least of all, the GBP.

This is because when fear has driven the market for a sustained amount of time, and the vast majority of traders are short that market... everyone pretty much needs to buy to take profits, and very few are left who haven't already sold. In these situations, even a little bit of good news will affect such a market disproportionately.

Conversely, if a a market has an even mix of longs and shorts, good news will not as strongly affect the market either way.

Most interesting to note...is that coming into the week, traders were very heavy net short the euro, only slightly net short the aussie, and in fact net LONG the british pound.

AND.... the NFP news being bad for the dollar therefore good for all 3.... affected them equally in terms of percentage increase against the dollar after the announcement. GBP/USD moved the least (in terms of percent change), AUD/USD a bit more, and EUR/USD moved up the most.

So as it can be seen as EXTREME fear gripped the euro, it had the strongest positive reaction to a catalyst that would affect it in terms of how it's valued to the dollar. The aussie less so, and the worst performer to the catalyst was the GBP.

Why? because one market was highly oversold, one slightly oversold, and the other...not oversold at all but slightly overbought.

IN CONCLUSION:

As I hope some here can see... sentiment analysis is NEITHER totally fundamental, NOR is it totally technical.... but it attempts to determine the current driving forces behind market movements by doing three things:

1. Determining what catalyst(s) are driving current market movement

2. Determine what may develop that could counter the effect of these market driving catalysts

3. Determine how sensitive the market may be to a change, should such a change, or "new catalyst" develop.

I know this is basically the opening statement to a doctoral thesis, but I really wanted to explain the full concept and methodology behind my own personal sentiment analysis, as well as CLEARLY distinguish it as something other than fundamental analysis, or technical analysis. It is to me, a method of market analysis unto itself, and can be very valuable for either the fundamental or technical trader to consider.

Thanks for reading, feel free to comment

X

For a correction, 1 day trading does not mean a thing. The minimum period to test a performance is at least 3 months, 1 year, and 5 years, and audited. I will be setting up an account soon with an equity of $20,000 to $50,000 to prove technical analysis is the best method for the modern investor, this I will also connect to FF to audit the account. I'm able to double my equity daily or per trade. Boasting about 1 day trade is like a recruit pilot telling a veteran fighter jet pilot he can fly better than him/her.

peace.

Brilliant post, as we have come to expect from you.
It's always great to see how others play the market and there is always something to learn no matter how long or well you trade.

I was not bragging how much I made in one day. The discussing was related to Friday's morning star formation. You took my message out of the context. How do you know I am not making decent pips everyday?

"I'm able to double my equity daily or per trade."
I suggest that we conduct a survey to see how many members believe your statement. Talking is easier than proving. By the way, the casualty of fighter jet pilots is extremely high. I hope you are not the next one.

I always wonder about this type of post... I mean, putting this up only invites strong reactions, some good, mostly bad.

I have a suggestion. why don't you start the account, fund it, attach a trade explorer to it, and in three months, make a post that says:

"hey. look at me. check out my equity curve, and see that i built my equity every trading day for 3 months. CLICK HERE to visit my trade explorer for proof"

for whatever reason you would do this.... i'm sure you would fulfill that reason if you could make such a post.

No need to respond here. What response could one give other than simply proving they are correct by providing some form of independent 3rd party verification to the claim of being able to double ones money every day or every trade.

I'm pretty good too, and I'll make money MOST days, nearly every week, and have long periods of making it every month.

but every day/trade. ok. lets see it.

good luck, lets see that trade explorer link whenever you care to post it.

X

P.S. I really should have put this in the above post earlier, but I've had some periods of drawdown, and some extended (couple months) of basically break even performance. There are some that are much better... but none i've heard of could do what your stating you can do.

now i got few names that i will follow their post. as a newbie with long history of losing trades i believe i will be able to learn the art of forex trading. thank you for good information and discussion post.

Guys,
Whats was lowest point on friday. Strange my platform shows 0.9581 but other shows 0.9581. Why like that?

viewing the two post above only tells me.

1. You're still a new trader because the anecdote of all words posted only points you try to show those who care to know your experience viewing your explorer which in turn advises your performance!

2. Because I'm a veteran trader, I will ONLY fund my account and connect to the explorer when I want to; not posting it when I'm told to by a newbie or want to prove to others just for viewing purposes. Traders like us are quiet and anonymous. We respect our anonymity

good luck

You would not have mentioned particular amount of money you are about to fund, have you not had intention to(at some point, for particular reason) boast about, wouldn't you? Calling other newbies just because they have their views on such subjects is out of the line.

I find it unnecessary, but if it suits you, well, that's how you see it.

Thank you for taking the time to explain your process, I really appreciate the systematic aproach you take for sentiment

mentioning the amount don't interprets boasting because

1. I trade for no one but for myself.
2. My intention was only trying to discourage this statement made by DaddyBear
I think I said enough. Good luck to all.

being a veteran trading has absolutely no correlation to connecting an account to a trade explorer. Being a veteran trader does have something to do with humility and informed, insightful posting. or maybe that's maturity, not veteran trading. I don't know, as a new trader it's all so confusing to me :::::::

As for quiet, your post on the most public forum in the forex trading community that makes a gesture of how well you can trade would in fact be the opposite of "quiet"

with a trade explorer, or myfxbook account, or whatever... it's just about credibility man. If I had a dollar for everyone I saw on an internet forum make some claim like yours, I would be the richest man in the entire world.
We've all seen it too many times to count, but i'm yet to see anyone prove it.

And it does the opposite of impress... it is actually a bit disgusting. I roll my eyes when I hear it, i'm sure others do too. maybe your not here to make friends, that's cool. but are you here to put others off?

My point is these day's there's no reason to say it, because it can be proven. It's like trying to tell someone that pigs are flying. Well, if pigs really are flying, all you need to say is "go look in the sky!" And i'll be able to draw my own conclusions really really fast.

But if you feel you must tell others that pigs are flying on a forum... more... power? to, you.... i guess.

From your two posts above, you are neither quiet, nor very humble.

And you lack credibility.

You don't need any of these things to be a veteran or super star trader.

but you do need them if you want anyone to take you seriously on an anonymous forum.

At any rate, I'm not going to continue this conversation. It's off topic completely for this thread, and, well.... you say you will do so? then I'll believe it when I see it. it's that simple.

Good day

X