Simple Probability approach

From Experience as we witness so many logical or illogical things happen in fx market we conclude "anything is possible in currency trading" (reminds me my friend hunters quote while in South Africa, "anything is possible in Africa")

While this is true there is still a room for trading based on probability.

I am trying to develop my new approach to trade without any indicator whatsoever. It is completely discretionary and cannot be programmed.

Here is Example,

Supposedly in comparison with other currency pairs NZDJPY has the biggest probability to plunge next week or so.
My Assuming is based on the current market situation. AUDNZD is in oversold position and there might be medium or short term reversal, at least no further NZD gains are expected in AUDNZD. USDJPY is overbought and trend seems to be exhausted and there might be short term or medium term reversal in USDJPY. NZDUSD on technical charts looks like it is initiating downside trend. NZDJPY itself is in overbought position and looks like Week closed on bearish candle, also major support was broken already on daily chart.

Also AUDUSD is in downside trend. AU economy is getting in recession. NZD economy seems to be in better state but AU is major driver of the region so currency markets are characterized by spillover effect. If economy in major country worsens it will trigger recession in neighboring countries. NZD as currency is in overbought position and not desired by NZ central bank.

So no one knows, but based on everything I provided I am assuming that NZDJPY has bigger probability of slump.

Well to emphisize what I am saying from different angle. Let's take you want to trade EURUSD, you think it is entering in downside trend. Take EURUSD pair and tell me if you have so many arguments as you do have for NZDJPY.

So with the same approach here is second example

take EURCAD currency pair.

EURUSD seems to have initiated bearish trend. USDCAD seems in overbought situation.

EURCAD itself has touched major resistance on daily charts and has retreated and week closed on bearish candle.

CAD economy is not in good shape to trigger CAD appreciation, seems commodity currencies have bad season.

But technically EURCAD should slide down at least 300 pips in next two weeks.


Again we have nothing to be guaranteed, but as stated above we trade probability and it is common for all currency pairs.

talking about past cases doesn't mean anything, but this approached helped me to identify that yesterday AUDCAD was going to collapse most almost guaranteed. Also there was high probability that NZDUSD would follow AUD.

Now important question is where to enter and how to test as it is impossible to code.

I like your Ideas I think it is great
but how do you determine your facts
I can see where you might get those Ideas for sure

cheers

FX a guy named Rap who frequents the Predictability thread is well into that you speak of. I do not advise going into that room as it is like a wild west saloon.but hope I helped.

Well that's what I am trying to develop, but it is just an idea right now, without knowing entry/exit I cannot claim I have a system.

Anyway after watching market for 8 years I (I was doing many other things but I was keeping an eye on market) I am sure there cannot be indicator lagged that could provide consistent profits in a long run. I don't believe guys who made millions with indicator systems, even if someone did doesn't guarantee that others will do, forget guarantees, nothing is guaranteed here, from exactly the same strategy one can ruin account and one can make profit at the same time.

Circumstances always change. The strategy what I am developing if you noticed adapts itself to new circumstances. Probabilities always increase or decrease, pick up trade when it increases. This is the simplest explanation.

Did you believe my statement that circumstances always change? Well I think there is no many argument left over to think otherwise.

So if it is so what can we say? All skyrocketing systems we know up to date may turn into crap anytime starting now.


It mightn't mean anything but NZDJPY and EURCAD just started trading day to prove probability approach