Hi Zondervan. Interesting system you have here. Is there any reason you dont have jpy and chf in your calculations? Would you like to elaborate on how you do your predictions? You take your trade usually 1-2 hours into London open, when do you not? Do you take your trade on the hourly chart or on lower charts, or maybe a combination? //Thomas
Ignored
Hi Thomas,
Thanks for your interest- the reason I don't include JPY is because to put it in the mix complicates everything. It simply behaves differently from the other currencies against the USD and therefore the correlation becomes less clear to me. I have never traded CHF, and so don't really understand it or need it in the mix.
I predict each currency pair by utilizing every bit of knowledge I have learnt over the years.
-I look at the Calendar, what news is about to be released? What effect could this have? (I find in a light news week my predictions are better)
-I try to get a gauge on overall risk appetite (I look at other markets too). This helps in making decisions on currencies such as NZD and AUD
-I open a Daily chart and ask myself "Is the current Daily candle likely to continue in it's current direction or reverse?" and "why?"
-I might draw a couple of Support/Resistance lines on the Daily chart, and perhaps look at current price and those Support/Resistance lines on an hourly chart. Is price near Support or Resistance and how is it behaving near those levels.
-Also EUR and GBP; USD and CAD; AUD and NZD; will often behave in a similar way. (I think of them as cousins) This helps in correlation.
e.g if the market is Risk adverse- I would expect NZDUSD and AUDUSD to be bearish, EURNZD, EURAUD, GBPNZD, GBPAUD to be bullish.
So then AUDNZD and EURGBP become the pairs to decide what to trade.
You asked when I don't trade? This system doesn't work during the Asian session unless it has an unusual amount of volatility. Also I wouldn't trade a live account on a day that has major news e.g NFP, central bank decision etc
You asked if I take the trade on lower timeframe charts- no I take the trade based on the excel spreadsheet. Once I have chosen the direction of each pair I simply look at the excel spreadsheet to see which currency scores 5 and which currency scores -5. I then open the chosen chart and pretty much immediately enter the trade.
I see that you have made some substantial effort in trying to make the predictions.
Interesting to see how other traders think, as the masses of retail trading or more stand alone thinking.
I believe you are of the latter.
The edge in your system is the calculation of strength in currencies that regular strength indicators cant see or by just looking
at the pair you trade. As you said, all currencies are correlated.
I see that you shoot for 10-30 pips a trade, depending on the nearest s/r. Any reason for being that low, the daily movement is
often bigger in all the pairs you have shosen to be in the prediction.
If I could suggest something I would add initial balance, price o/u daily open along with regular currency strength in the calculation to make the predictions even better. But this is just my thought.
Would be nice if you would give some simple explanation pair by pair, why you trade the pair for the day along with the screenshot.
