{quote} Isn't the trend down based on 100 and 200 EMA? Why are you buying?
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My view is that a correction of the free fall of the oil and stock indices started. Yen is correlated with these markets and USDJPY could go up. It is a free trade now and I can afford to be wrong. When you trade with a tight stops you could afford to experiment when there is a good potential for the trade.
{quote} What do I think? I fail to see how you can take advantage of something you don't have access to.
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Actually even the bank dealers can not be sure whether a large order could appear and change the direction of the market. We can learn to read the order flow and expect some outcome. If we are wrong, the stop loss will do its job. In trading you should never be sure 100%.
{quote} My view is that a correction of the free fall of the oil and stock indices started. Yen is correlated with these markets and USDJPY could go up. It is a free trade now and I can afford to be wrong. When you trade with a tight stops you could afford to experiment when there is a good potential for the trade.
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This analysis sounds like something you would say if you were trading on the Daily or Weekly charts but you trade on the 1M, a little bit confused... especially since the oil and indecies have been in sideways motion for the past month or so from my reckoning.
{quote} Actually even the bank dealers can not be sure whether a large order could appear and change the direction of the market. We can learn to read the order flow and expect some outcome. If we are wrong, the stop loss will do its job. In trading you should never be sure 100%.
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That's fair enough... speaking of stop losses, have you read the thread "Technical analysis fallacy" at all?
The guy who started the thread worked as a dealer also and thinks trading should be done without stop losses and in fact he advocates the use of various progressions such as martingale to make sure that no losses are ever taken. Only rarely should a loss be accepted. What's your take on trading using averaging of losses etc?
...martingale to make sure that no losses are ever taken. Only rarely should a loss be accepted.
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The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.
{quote} That's fair enough... speaking of stop losses, have you read the thread "Technical analysis fallacy" at all? The guy who started the thread worked as a dealer also and thinks trading should be done without stop losses and in fact he advocates the use of various progressions such as martingale to make sure that no losses are ever taken. Only rarely should a loss be accepted. What's your take on trading using averaging of losses etc?
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I trade with 5-6 pips stop for FX pairs and 12-15 pts for DAX.
{quote} This analysis sounds like something you would say if you were trading on the Daily or Weekly charts but you trade on the 1M, a little bit confused... especially since the oil and indecies have been in sideways motion for the past month or so from my reckoning.
{quote} USDJPY should catch up with the indices and oil {image}
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I gather you mean the GER30 and USOUSD have bounced somewhat from their recent lows as per my attached images and you're basically predicting that they are leading the Yen?
Why is the Yen correlated to oil and totally confused why it's related to the German stock index. I thought CAD was an oil correlated currency pair... And the German index would be closer to the EUR? No?
{quote} I gather you mean the GER30 and USOUSD have bounced somewhat from their recent lows as per my attached images and you're basically predicting that they are leading the Yen? Why is the Yen correlated to oil and totally confused why it's related to the German stock index. I thought CAD was an oil correlated currency pair... And the German index would be closer to the EUR? No? {image} {image}
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The correlations are changing but for the last few weeks/months the answer to your question is FEAR.
It is interesting to note that this time the EUR had a positive correlation with the falling stock indices and commodities. The reason for this is that longs were funded by cheap euro which was hedged. When the bulls started to liquidate their longs in stock indexes they had to unwind the hedges and buy back the euro.
