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  • #11,581
  • Aug 31, 2012 9:04pm Aug 31, 2012 9:04pm
Quoting 4rexx
Zusch your analysis on the direction of these pairs posted on the 1st Aug did not materialise, due to the fact that the market has a mind of its own.
Thank you 4rexx for bringing back this post. I intended to do so myself when I post my Monthly candle reads on Sunday. Yes its disappointing to see that these trends reversed strongly and all of my predictions were wrong, but that happens in trading and I was able to minimize my losses so I'm not hurting at all. Market does as it pleases and all I can do is follow.

Quote
So I went back to the charts to see if there were any early warning signs of the moves that were made this month. Using currency indexes (which measures each currency against a basket of other currencies) there were some signs. When looking for continuing or turning trends the Stochastic, RSI and MACD can be used as leading indicators (I never use them for buy or sell signals), if 2 of the 3, or all 3 are in agreement (converging or diverging) it is a pretty strong sign of the health of the trend....
I've never really understood Stochastics or other indicators and I believe them to be lagging indicators, but I know a lot of traders use them to great success. Divergence makes sense to me, convergence not so much. I think your chart of the AUD divergence makes the most sense to me. Do you find that by using 3 different indicators you have too many conflicting signals to make sense of them? I always want to soak up new knowledge and see different points of view so I hope you post more often.

Quote
Its good to carry out this analysis on multiple timeframes in the calm of the weekend to get a bias for the following week.
Yes I agree. Using multiple timeframes is essential. I review all pairs on a weekly and monthly basis and there were definitely signals on the Weekly chart signaling reversals in the pairs I mentioned. I don't expect you to have gone through my Tweets, but I had a nice calls on GBPNZD and AUDUSD you may find interesting.
https://twitter.com/zusch_fx/status/234751376369000448
https://twitter.com/zusch_fx/status/239800748798525440

Turn it around Michigan State Spartans! What a sloppy 1st half.
Twitter: @zusch_ -- Preselecting trending pairs, stocks on a weekly basis.
  • #11,582
  • Sep 1, 2012 9:35am Sep 1, 2012 9:35am
AUD/CHF 4H
Attached Image (click to enlarge)
Click to Enlarge Name: audchf 08.31.gif Size: 32 KB
Even a blind squirrel finds a nut sometime.
  • #11,583
  • Sep 1, 2012 1:35pm Sep 1, 2012 1:35pm
Quoting 4rexx
Zusch your analysis on the direction of these pairs posted on the 1st Aug did not materialise, due to the fact that the market has a mind of its own.

1) EURAUD went up 500+pips
2) EURNZD went up 500+pips
[i][font=Verdana][color=black]3)...


4rexx and zusch,
excellent.

DISCLAIMER: ZUCH we are not trying to attack you here. once again. let me repeat: we are not trying to attack you.
and obviously, you did well with them:as shown by your twitter account.

4rexx provided an indicator based analysis of the situation. he went straight to the poignant question: how do we an anticipate the deterioration before it happens? 4rexx used indicators. My approach is fundamental based.

that said, here is my take on the list of pairs and crosses listed above by zusch. with the exception of eurgbp...all the ones listed above are commodity related(EURAUD EURNZD GBPAUD GBPNZDAUDUSD .) every last one of them. why is that fact important?

why is this relevant? well, fundamentally, when china starts to slow down...comm dolls starts to deteriorate too. all that needs to be done is wait till the news of china economic slowdown starts to percolate through the MASSES and look for technical deterioration in the commdolls and short it with the strongest currency.

SHOMARI and I had already discussed this strategy ad nauseaum. We've talked about china slowing down....numerous times weve discussed what it means to the commodity dollars.....now, everybody sees china as slowing down...the comm dollars get beaten.

to refresh memory
here is an excerpt:
Quoting shomari
It's not tha difficult. .......
Cow, when you know the fundamentals, it doesn't mean that you trad on it right away. Read all th China stuff again. We KNOW, it's going to crash, we just don't know when, because we have to wait fir the rest of the HERD to figure it out and trade "ACCORDINGLY".......
...... For instance when global manufacturing is down, comm dolls fall. the global market got kicked i it's manufacturing nuts causing the AUD, NZD, and CAD to scream in pain......
THIS IS AN EXAMPLE OF HOW we use fundamentals to analyze a situation and wait for technicals to align and then go in. I was short the commodity dollars...i used XAG. (silver) to short nzd, cad, aud, hkd, sgd. . Before i started posting charts of that, let me reference another excerpt from the past:

here is more from SHOMARI:
Quoting shomari
.......
You're right about comms not showing weakness yet. Like I said before, we make money with the "herd" now, but we are poised to POUNCE, once reality/life/fundamentals, BECOME TRULY REALIZED.

GET READY TO AMBUSH THE MARKETS EVERYONE !! I GIVE SHORT TO MEDIUM TERM BEFORE RECOGNITION SETS IN; 3 - 6 MTHS, AND COMMS WILL FALL !!!

THAT prediction was made on july 10th in the middle of a strong uptrend in comm dollars(check chart directly below). By august 10 you start to see deterioriation in the bullishness of the comm dolls...and asian currencies that have exposure to china: aud, nzd, cad, sgd, hkd. i have a attached a chart below of a aud to illustrate my point:

http://www.forexfactory.com/attachme...9&d=1346519151



SHOMARI wasnt done, here is even more :
Quoting shomari
......oh yeah, so I guess I thought everyone would have seen this China situation already, that's why I thought major movements this week. Guess I was to optimistic about the markets perceprions about facing REALITY, TRADING LIFE, oh well. But I don't think they can hide from the truth FOREVER. ......
and no, shomari is not done...he has been beating this drum of CHINA downturn = COMM DOLLARS downturn.

more quote:

Quoting shomari
......Yeah, the China thing is more of an overall, macro event, which will kick off a downturn in comms (eventually). I'll be waiting to take advantage, once the "herd" realizes the implications of a massive downturn in manufacturing in China, and what that means for the countries dependent on commodity sales, to "the worlds manufacturer". George Soros style, LOL.

DECOUPLING WASA PIPE DREAM !!!

EVRYONE, GOOGLE: "DECOUPLING" AND "ASIAN MARKETS AND DECOUPLING", TO UNDERSTAND WHAT I'M TALKING ABOUT....
EVEN MORE SHOMARI:
Quoting shomari
.....BTW, guys, JPY LOOKS STRONG THIS WEEK. The reality of fake Chinese GDP is beginning to set in. This thing could blow up real soon!!......
that was a couple of days before we start seeing the wide spread deterioration in the comm dolls all across the board starting in august.


and here is my say on the matter where i outline my strategy: I outlined a fundamental and technical strategy.

first the fundamental strategy:
Quoting Skynet
For example:...........(b)When the AUD was kicking every other currencies...and the AUD performance is based on CHINA solid numbers...and soon as i started reading about empty apartment houses in china and over-heated contruction works, etc....i started looking for currencies that showed the strongest strength against AUD(that was the USD).....a currency that i can used to short the AUD...of course, i waited patiently, since the perception is that china is a beast and all is well...i didnt short aud until the china economic miracle...
second the technical strategy:
Quoting Skynet
......
ON CHINA. yes, i am with you...however, unless i am trading a solid daily/weekly trendline break and retest/bounce...i will wait for clear technical deterioration in the AUD, NZD, SGD, HKD. If you will...throw in some commodities like copper, aluminium, coal....to top it off...i will keep my eye on some of the stock indexes of the far east.
......

since june when the comm dolls were rising furiously, the strongest currency against them was the XAG and the XAU....below is a the currency strength map indicating what i mean: [ I HAVE WRITTEN SOME COMMENTARIES ON THE CHART]

http://www.forexfactory.com/attachme...7&d=1346519120
here is more
http://www.forexfactory.com/attachme...0&d=1346519182
and more
http://www.forexfactory.com/attachme...1&d=1346519182

THIS IS WHEN SOMETHING LIKE CURRENCY HEAT MAP comes in handy. Holy cow asked this question here. This is an example of how i use it.

I determine the fundamental direction and try to trade the strongest against the weakest...by looking at it from 2months....1month...2weeks...1week. I also use it to determine market misalignment trades....like i wrote about here.

having determined that the XAG and XAU are the strongest against the commodity dollars during the time that those comm dollars were rising fast and furious using the currency strength heatmap.(read notes on chart). ALL i have to do is wait for deterioration and then use the xag and xau TO SHORT the comm dollars when china starts to slow down before everybody.

PART II is below.
" It may mean something. It may mean nothing at all "
  • #11,584
  • Sep 1, 2012 1:38pm Sep 1, 2012 1:38pm
Quoting Skynet
........PART II is below.
HERE IS PART II. As you can see from the notes on the chart.....the behaviour of the comm dollars ...and how xag and xau held their own against them.

http://www.forexfactory.com/attachme...9&d=1346519151

and also, having determined that china numbers are crap, and soon enough, the truth will become self evident...(shomari and i talked about this...especially, shomari, who talked about this extensively)....the next thing to do is to wait for deterioration on the technical forms of the comm dolls and china dependent nations: aud, nzd, cad, sgd, hkd, and then go short them using the strongest pairing: which is the xag and xau(both were rising against these currencies when everybody else was falling before them). ESPECIALLY the XAG.

TO ME A TECHNICAL DETERIORATION on the daily IS A : 1,2,3 REVERSAL PATTERN

below are all the trades that i am currently in. I ENTERED AT bpc completion either on h4 or daily. sINCE this is a fundamentally propelled trade...i am adding to it until i see a technical deterioration on the daily.

XAG/aud:
http://www.forexfactory.com/attachme...2&d=1346519216
xag/nzd
http://www.forexfactory.com/attachme...6&d=1346519482

here is the XAG/NZD h4 bpc formation entry:
http://www.forexfactory.com/attachme...7&d=1346519522


xag/cad
http://www.forexfactory.com/attachme...4&d=1346519408


PART 3 is below:
" It may mean something. It may mean nothing at all "
  • #11,585
  • Sep 1, 2012 1:39pm Sep 1, 2012 1:39pm
Quoting Skynet
4rexx and zusch,
excellent.

DISCLAIMER: ZUCH we are not trying to attack you here. once again. let me repeat: we are not trying to attack you.
and obviously, you did well with them:as shown by your twitter account.

4rexx provided an indicator based analysis of the situation. he went straight to the poignant question: how do we an anticipate the deterioration before it happens? 4rexx used indicators. My approach is fundamental based.

that said, here is my take on the list of pairs and crosses listed above by zusch. with the exception...
Its been a longtime Sky,where r u going man ? Miss u
If there was easy money lying around,no one would be forcing it into your
  • #11,586
  • Sep 1, 2012 1:41pm Sep 1, 2012 1:41pm
Quoting Skynet
.....
PART 3 is below:
IS is part 3: WITH THE CHARTS.

xag/sgd
http://www.forexfactory.com/attachme...8&d=1346519522
xag/hkd

http://www.forexfactory.com/attachme...5&d=1346519482


that is it.

I HOPE I WAS CLEAR enough.....

in a nutshell:

#1. determine fundamental direction
#2. wait for technicals to confirm fundamental bias.
#3. Wait for technical confirmation and enter trade.

THESE KINDS OF TRADES i tend to ride till the very end...i am not getting off until the trend throw me off. only and only when i see a 1,2,3 reversal formation on the daily do i get off. i am pyramiding all the way. this week i added position to my xagcad.

SHOMARI approach was to trade the short AUD, CAD, NZD using the gbp, usd, jpy and eur. as YOU CAN see what would have netted hundred of pips too. I opted for the weakest vs the strongest with the use of XAG....
" It may mean something. It may mean nothing at all "
  • #11,587
  • Sep 1, 2012 1:46pm Sep 1, 2012 1:46pm
Quoting FXMindset
Its been a longtime Sky,where r u going man ? Miss u
thanks, fxmindset. i miss everybody too...i had to leave on july 23rd. for a month.
" It may mean something. It may mean nothing at all "
  • #11,588
  • Sep 1, 2012 1:52pm Sep 1, 2012 1:52pm
Quoting Skynet
thanks, fxmindset. i miss everybody too...i had to leave on july 23rd. for a month.
I tot u dont want me anymore
Nice to know u r back again
If there was easy money lying around,no one would be forcing it into your
  • #11,589
  • Edited 3:17pm Sep 1, 2012 2:58pm | Edited 3:17pm
Quoting zusch
I've never really understood Stochastics or other indicators and I believe them to be lagging indicators, but I know a lot of traders use them to great success. Divergence makes sense to me, convergence not so much.
Zusch you will find a good explantion on the stochastic here on youtube, you are correct that it is a lagging indicator in that when the %K line and %D lines cross each other some traders use this as a signal to buy or sell. However, when they do cross price has already made its move so the %K line and %D lines crossing is only telling you what reading price action would have told you earlier.

However, it becomes a leading indicator when it is used for divergence or convergence. You will see divergence explained in the link above also as well as the examples in my earlier post. Convergence is really just the indicators agreeing with price action. If you want to enter a trade short but price is diverging from the indicators you use it might not be a good trade to enter as the trend may be weakening. If the indicators and price are agreeing (convergence) though it is telling you that there is probably (not definitely) still some strength or momentum in that move.

You will see below the latest EURNZD 4H chart so I dont look for a perfect old chart, and you can see we have convergence (agreement) with the swing lows (on a down trend do it with swing highs) on all 3 indicators and price itself which suggests that there is still momentum in the current trend which has gone into a sideways channei right now, it will be interesting to see if price continues long next week. I believe it will.

I dont put the indicators on the chart until I have carried out all the other tech analysis which tells me it is a high probability trade, then I will drop on the indicators for further confirmation. Some people use one indicator, and some two or three, the problem with just one in my view is that one indicator will miss something (as you saw on charts in my last post) that another will pick up. Two out of three or all three like we see below gives extra confidence in the trade. Some traders who use two will not enter a trade unless both indicators agree. Its very important to use indicator convergence with your other analysis. Hope this helps Zusch.

Persistence overcomes resistance!
Attached Image (click to enlarge)
Click to Enlarge Name: EURNZD Convergence.gif Size: 27 KB
  • #11,590
  • Sep 1, 2012 5:32pm Sep 1, 2012 5:32pm
Quoting Skynet
My approach is fundamental based
Sky, good to see back strong as ever and taking no prisoners with your analysis as usual. When AUD and NZD hit the top of their range and entered into this bearish momentum, shomari’s and your comments on china’s influence on the comms dolls health quickly sprung to mind. I have been shorting nzdusd, audcad, audusd and have gone long eurnzd, euraud and gbpaud the past fortnight and moving my stops to the confirmed swing highs and lows respectively to lock in pips.

Your strategy of using fundies to seek out the weakest and pit them against the strongest currencies I am aware of and we spoke of it in equities before but I am not organised enough to bring it into my fx trading arsenal yet. I am just using current parallel inverse analysis to find the weak and strong currencies.

The heatmap also is something new to me although I have seen people selling the software so I largely ignored it. Just a quick look at the heatmap though flagged up the audchf pair which I was in a week ago, my stop got hit and I did not re-enter and it has made plenty pips since then. Using indicator convergence on that pair (see below) it seems there is more strength in that down trend. Its good to see people (like nightmoves, holycow, zusch, kamifx, pipnut) bringing brain food to the table again and educating rather than just criticising.

Persistence overcomes resistance!
Attached Image (click to enlarge)
Click to Enlarge Name: AUDCHF Convergence.gif Size: 67 KB
  • #11,591
  • Sep 1, 2012 6:30pm Sep 1, 2012 6:30pm
Quoting zusch
Divergence makes sense to me, convergence not so much.
Zusch check out this youtube clip on stochastic divergence.

Persistence overcomes resistance!
  • #11,592
  • Edited Sep 2, 2012 1:26am Sep 1, 2012 7:21pm | Edited Sep 2, 2012 1:26am
Quoting 4rexx
Sky, good to see back strong as ever and taking no prisoners with your analysis as usual. When AUD and NZD hit the top of their range and entered into this bearish momentum, shomari’s and your comments on china’s influence on the comms dolls health quickly sprung to mind.
Thanks for the compliment. Shomari was quite insistence on the china situation. He has been beating that drum soo loudly and for so long....it couldnt come early enough. Now, you have the news showing up on CNN.

http://www.forexfactory.com/attachme...6&d=1346544902


Quoting 4rexx
I have been shorting nzdusd, audcad, audusd and have gone long eurnzd, euraud and gbpaud the past fortnight and moving my stops to the confirmed swing highs and lows respectively to lock in pips.
Nicely done. Very nice. I have been doing the same here, In this specific situation...going against SGD, AUD, NZD, HKD....using risk averse currencies, like chf, xag, etc...i am not even using price targets....if you remember, i asked these questions right before i left for a month. I like both of your replies...the way i play it is to use TP on situation where the fundamental is murky or reverse of the technical directions.....that constitutes most of the trade you see me post here. So, yeah, HOLY COW was right when he wrote this about me being a medium term trader.

However, in a situation where and when the fundamentals are aligned with the technicals, i throw TP to the wind....i might liquidate a little bit when running into strong weekly levels....but i let it ride as long as possible(which shows predilection for big R/R.). basically, two strategies: good WL and respectable R/R when fundies is murky or anti-technical trend....and second strategy:couldnt care less about WL just big arse R/R since technicals and fundies are aligned to the heavens.


Quoting 4rexx
.....Your strategy of using fundies to seek out the weakest and pit them against the strongest currencies I am aware of and we spoke of it in equities before but I am not organised enough to bring it into my fx trading arsenal yet. I am just using current parallel inverse analysis to find the weak and strong currencies.

I remember that post. You wrote this. I replied with this post(scroll down)

You also referenced micardo thread. Solid lad.

Quoting 4rexx
.....
The heatmap also is something new to me although I have seen people selling the software so I largely ignored it. Just a quick look at the heatmap though flagged up the audchf pair which I was in a week ago, my stop got hit and I did not re-enter and it has made plenty pips since then. Using indicator convergence on that pair (see below) it seems there is more strength in that down trend. Its good to see people (like nightmoves, holycow, zusch, kamifx, pipnut) bringing brain food to the table again and educating rather than just criticising....
sorry about the AUDCHF trade....i was in a CHF trade against AUD and SGD...(see charts below for notes and commentaries). It was a basic hector trade...after a 1,2,3 deterioration/reversal on the daily time frame..and a bpc....however, i didnt set TP because this trade is aligned with fundies. I am letting it run for as long as possible...if i am lucky...my short AUD, NZD, SGD, HKD will last me till the end of the year. (i dont have a lot of faith in my short CAD). Anyways, all i need to these kinds of fundies aligned with techie type of trade is just one home run.

AUDCHF
http://www.forexfactory.com/attachme...4&d=1346544868

SGDCHF
http://www.forexfactory.com/attachme...7&d=1346544902
Part of what reinforces my faith in my trade is the currency strength heatmap from oanda.

Below you will see how CHF is beating the crap out of the china dependent currencies.
http://www.forexfactory.com/attachme...5&d=1346544868

Quoting 4rexx
S....... I am just using current parallel inverse analysis to find the weak and strong currencies......!
CORRELATION ANALYSIS is good method too. I wrote about how i use it here. In fact, in this case, correlation analysis solidly called the top for the AUDs....in my view, a top/bottom is when we have the 1,2,3 formation and a bpc on the daily. I have attached below two charts of the AUD index with commentaries showing how the AUD index solidly indicated the top in the AUD rallies....the AUD index indicated the top of the rallies with a 1,2,3 formation and a bpc on the 17th of august...while the spot forex AUDs(usd, eur, gbp, chf, etc) showed the same signs either on the 21st or the 23rd. Basically, 4 days to 6 days after the AUD index pointed the way. The AUD index was a leading indicator.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 2012-09-01_21-27_AUD Bloomberg.jpg Size: 60 KB
Click to Enlarge Name: 2012-09-01_21-21_AUD Bloomberg.jpg Size: 49 KB
Click to Enlarge Name: 2012-09-01_21-44_OANDA.jpg Size: 86 KB
" It may mean something. It may mean nothing at all "
  • #11,593
  • Edited 10:19pm Sep 1, 2012 9:47pm | Edited 10:19pm
Quoting Skynet
DISCLAIMER: ZUCH we are not trying to attack you here. once again. let me repeat: we are not trying to attack you.
I did not take it that way. I know we having an intelligent discussion of ideas.

Lots of great material here that I've reviewed a few times over.

Quoting Skynet
I determine the fundamental direction and try to trade the strongest against the weakest...by looking at it from 2months....1month...2weeks...1week. I also use it to determine market misalignment trades....like i wrote about here.
From the link in this post I couldn't agree more with your wording, "the market can remain irrational longer than you can remain solvent." No truer words in trading and why I believe the technicals are just as critical as fundamentals because technicals are what allows you to define risk.

Quoting Skynet
THIS IS WHEN SOMETHING LIKE CURRENCY HEAT MAP comes in handy.
I like the visualization the heat map provides, but this information is reflected in the charts and is essentially the shape of the weekly/monthly candles.

Quoting shomari
Cow, when you know the fundamentals, it doesn't mean that you trade on it right away. Read all the China stuff again. We KNOW, it's going to crash, we just don't know when, because we have to wait for the rest of the HERD to figure it out and trade "ACCORDINGLY"
Skynet, this is my only concern with fundamental analysis. You can't enter a trade because the fundamentals say so like Shomari says. Trades are entered when technicals offer a low risk opportunity. What if your fundamental analysis is ultimately wrong and you miss a great move b/c of your incorrect analysis?

I believe many investors have a stigma against technical analysis and they feel it is only a pathetic way to avoid the hard lifting of fundamental analysis. I'm not saying that you do because you mentioned yourself the importance of waiting for technical confirmation. I'm all for trading along with the fundamentals, but in my experience they are a self-fulfilling prophecy more often than not.

Quoting Skynet
However, in a situation where and when the fundamentals are aligned with the technicals, i throw TP to the wind....i might liquidate a little bit when running into strong weekly levels....but i let it ride as long as possible(which shows predilection for big R/R.). basically, two strategies: good WL and respectable R/R when fundies is murky or anti-technical trend....and second strategy:couldnt care less about WL just big arse R/R since technicals and fundies are aligned to the heavens.
As a trader who purposely ignores fundamentals, I always throw profit targets to the wind. Eventually the market moves enormous amounts. Think of it like flipping a coin 100 times. There periods where its back and forth, heads and tails. However there are also periods where you will flip 8, 9, 10, etc heads or tails in a row. This is the law of uneven distribution. The difference between flipping coins and trading is this...between all the currency pairs, some are primed to move more than others and can be spotted in the chart. When a pair is ready to move I make sure I'm in with as little risk possible. I would describe my trading as picking and prodding at momentum hoping for it to continue until it inevitably does.
Twitter: @zusch_ -- Preselecting trending pairs, stocks on a weekly basis.
  • #11,594
  • Sep 1, 2012 10:58pm Sep 1, 2012 10:58pm
Quoting 4rexx
Zusch you will find a good explantion on the stochastic here on youtube, you are correct that it is a lagging indicator in that when the %K line and %D lines cross each other some traders use this as a signal to buy or sell. However, when they do cross price has already made its move so the %K line and %D lines crossing is only telling you what reading price action would have told you earlier.

However, it becomes a leading indicator when it is used for divergence or convergence....
Thank you for sharing the videos; I watched them both. Divergence still looks much more clear than convergence as far as giving signals. However, you also mention that convergence is more for confirmation that the trend still has power. This is the beauty of trading! We are essentially looking for the same action, but have different methods of analyzing it. What I look for to give me confidence that a trend is continuing is with Fibonacci retracements. I only watch 3 Fibs, 38.2%, 50%, and 61.8%. More retrace means less power while less retrace means more power. So what do I want to see happen? I want to watch price action at these Fibs of previous week/month's range. Then I can define risk and place stop below 61.8% because the best momentum will not go past 61.8%, if it does then something is wrong and the pair may be ready to stall or even reverse.
Twitter: @zusch_ -- Preselecting trending pairs, stocks on a weekly basis.
  • #11,595
  • Sep 2, 2012 1:32am Sep 2, 2012 1:32am
Quoting zusch
What I look for to give me confidence that a trend is continuing is with Fibonacci retracements. Then I can define risk and place stop .....
Zusch I totally agree that bounces of those fibbo levels can help you gauge the strength of a continuation swing and that is also characteristic of hector’s style. Then when those levels become valid S&R points within an overall trend it make sense to place your stops behind those levels, then it is the trend that is protecting your trade, so if the level is breached i.e. making a HH or LL against the direction you want you don’t want to be in that trade anyway.
That second video was a good analysis on divergence it is just another tool to put in your toolbox, and if you use more than 1 indicator they can give you a good heads-up on continuing momentum. Zusch do you use fundamentals in your analysis, because as we just seen it can also be a major leading indicator?
Persistence overcomes resistance!
  • #11,596
  • Sep 2, 2012 1:44am Sep 2, 2012 1:44am
To add a bit to this fundamental analysis discussion, here is a good thread about how another person used it to spot good opportunities:
http://www.forexfactory.com/showthread.php?t=216097

cheers
  • #11,597
  • Sep 2, 2012 2:00am Sep 2, 2012 2:00am
Quoting Skynet
However, in a situation where and when the fundamentals are aligned with the technicals, i throw TP to the wind....i might liquidate a little bit when running into strong weekly levels....but i let it ride as long as possible(which shows predilection for big R/R.). basically, two strategies: good WL and respectable R/R when fundies is murky or anti-technical trend....and second strategy:couldnt care less about WL just big arse R/R since technicals and fundies are aligned to the heavens.
Nicely put sky when fundies are on your side it is good to let trades run. If you check the weekly/monthly AUD and NZD ranges there is potentially a lot of pips to be made, but as you said when price is approaching S&R levels on the higher TF's be careful, either TP, tighten your stops or leave enough room (if you have the testicular fortitude) for price to retrace against you before it continues again. Another small piece of fundies on the side of the weakening AUD is seasonality "Early August to late-August is typically a bearish time for the AUD." page 14.

Persistence overcomes resistance!
  • #11,598
  • Edited 3:58am Sep 2, 2012 3:39am | Edited 3:58am
i agree with most of your posts....the one that i want to raise a question or comment about are isolated for replies. (of yeah, i throw in a vouch for you..)

Quoting zusch
.......Skynet, this is my only concern with fundamental analysis. You can't enter a trade because the fundamentals say so like Shomari says.
Some can enter based purely on funnymentals...in the market wizard books you will see a bunch of people that trade based purely on funnymentals. jim rogers and micheal steindhart are very good examples. these two dont even know what a chart looks like.....however, i always wait for technical confirmation before i enter. I blend the two. Of course, there is sentiment analysis thrown in....yeah, i was watching the COT report on the AUDs and NZDs too, and how they handle negative and positive news during their rallies...basically, i observe fundamentals, technicals, and sentiment analysis.(i am guessing HOLY COW will probably claim all these is too much...for some weird reason these three branches all make sense to my brain.). In my humble opinion, observing all three is important inoder to get in at market turning point. Otherwise, how would you know that the market turning point you are looking at is robust with a real reason behind it or just a technical fake?


Quoting zusch
Trades are entered when technicals offer a low risk opportunity. What if your fundamental analysis is ultimately wrong and you miss a great move b/c of your incorrect analysis?
What if my fundamental is wrong? not a problem...i will still trade in the direction of the technical trend....USING strictly defined TP.....until the technicals starts to match up with fundamentals...then, i switch from long to bearish and trade until i am kicked out by the trend. basically, no TP at all until i am kicked out.)
For example, shomari and i have been talking about the china economic potholes since MAY....we also discussed the effect on comm/asian dollars(hkd, nzd, cad, aud, sgd)...however, during that time...i was playing the LONG on the comm/asian dollars with a strict TP because that is the technical trend while waiting for the technicals reality to catch up with the fundamental reality. e.g

1st example, i was short EUR/SGD...on july 10th...that is Long SGD against the EUR...that is against the fundamental reality of CHINESE economy.

2nd example, i was short EUR/HKD...on july 16th...that is HKD long position...obviously, HKD has heavy exposure to china.....

3rd example, i was LONG cad against the xag. IN THIS TRADE. short XAG/CAD. that was on july 10th.

4th example, i was SHORT gbp/cad...july 12th....that is, long CAD IN THIS TRADE.

SO, the combinations are these:
#1. fundamental + technicals = trade till the trend ends.
#2. fundamental - technicals = trade technical trend with a strict TP.

Quoting zusch
I believe many investors have a stigma against technical analysis and they feel it is only a pathetic way to avoid the hard lifting of fundamental analysis.
Fuck them. If they think that way they can go fuck themselves. Market wizard books is filled with pure technical players that are multimillionaires.


Quoting zusch
.....I'm not saying that you do because you mentioned yourself the importance of waiting for technical confirmation. I'm all for trading along with the fundamentals, but in my experience they are a self-fulfilling prophecy more often than not.

I completely disagree with you. I think the fuzzy nature of technicals...the "more art than science" nature of technicals make it more self-fulfilling prophecy....you see what you want to see on the chart...that is why my major breakthrough came when it dawned on me that all technicals(including candles) can be reduced to TL and S/R or either one of them. At the end of the day, it is whatever works for you. I need my fundamentals for believing that a market turning points is actually real rather than a technical fake....the most/best money are made by entering and pyramiding from market turning point...also, i need fundamentals to hold my trades millipede-style for a long time. i cannot do that without fundamentals.

Quoting zusch
As a trader who purposely ignores fundamentals,......
when i was trading penny stocks, i purposefully ignore fundamentals. however, i cannot trade futures, forex, and regular stocks without fundamentals.
" It may mean something. It may mean nothing at all "
  • #11,599
  • Sep 2, 2012 6:10am Sep 2, 2012 6:10am
Great thread.. just what i am looking for.. Thanks.. look forward to browsing
  • #11,600
  • Sep 2, 2012 6:12am Sep 2, 2012 6:12am
Quoting Skynet
i agree with most of your posts....the one that i want to raise a question or comment about are isolated for replies. (of yeah, i throw in a vouch for you..)



Some can enter based purely on funnymentals...in the market wizard books you will see a bunch of people that trade based purely on funnymentals. jim rogers and micheal steindhart are very good examples. these two dont even know what a chart looks like.....however, i always wait for technical confirmation before i enter. I blend the two. Of course, there is sentiment analysis thrown...
Great no bull SHT Stuff..
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