EJ is falling now…
I fell asleep yesterday and had taken my limit out… big mistake! instead of nailing 30 pips, I was stuck in the short until recently when I broke even on the pair and entered a pattern on the AJ. Looks like the GBP and the Ausi are making decent patterns; I will be waiting for the EJ to break out of the current sideways channel before entering the long or short. Think of the channel as a flag for a 100+ pip move that can give 30-60 pips easily once the break is confirmed.
-Edit-
PS. 100.627 is a .236 from the weekly and 100.263 a daily .382 fib, price is currently bouncing in between this zone, and a candle stick pattern breaking either or is what I am waiting for. In addition, patterns that develop for the buy or the sell in each respective top/bottom can be scalped for 15 pips.
It’s the same as measuring base price to wick, a technique I’ve explained thoroughly throughout the beginning of the thread.
TMB if you do not mind me asking when you build a hydra to the convergence zone or buy/sell zone what exactly do you look for when you initiate it.
Understood
The above quote was taken from Sweet Pips thread Strong vs Weak and can be accessed by clicking on the blue arrow within the quote.
After seeing this post a few months ago, I began to do some further analysis and decided to see if this technique can be implemented into harmonic trading. We found that when you take two strong or two weak currencies and traded the pairs, they where ideal for finding patterns on both ends of the spectrum (bull/bear) because the pairs are basically in a tug of war with each other for the most part. During the time the post was released, the weakest pairs where the GBP and CAD and when we traded the GBP/CAD the majority of the time patterns would develop every single day at the bottom or the top of the channels until one of the two gave way in strength and then ranged for a few days to develop the same “flow”. As a result, you are now “expanding” the trading edge and not simply limiting it to choosing the strongest pair for a secure market direction. Bellow are today’s currencies and their strength values, 7 being the highest and 0 the lowest:
How can I apply this to my trading style?
We suggest you pair up currencies with an equal or within 2 ranges of strength when looking for both bullish and bearish patterns. Keeping in mind that when ever the strength of the pair is 3-7 times stronger than another pair, you will want to look for major support breaks or patterns that develop in favor of the stronger pair. I suggest that you read up on the technique on sweet pips thread and the website she had found it on. In addition, try to see if you can add towards the discoveries I have made here. Note that I will be posting the currency strength chart every London session before NY open for our benefit, although this will save you the time of searching through 25+ pairs… doing it yourself is not as time consuming and would help with discipline.
Happy Trading!
Think outside the box 
Another tool in the toolbox… Thanks Sweet Pips & TMB!
Today was a bumpy road for me… a bit of a let down seeing price reach my targets for the EJ after letting the hydra go for an early buy on the AJ. In addition, we had removed the buy targets set for the EJ and missed an easy buy with the spike because of it. On the other hand, the Hydra buy for the AJ payed off (even though I closed it manually and didn’t let it reach its target lol…). Bellow are the results:
Major support/resistance converging in a 20-50 pip range with multiple patterns converging within the zone. In simple terms its a way of entering a trade in an “iffy” area but with defined support/resistance without going into the trade fully but “progressively”. For example, if with in a range I have 3 multiple convergence and my max lot size is 500 I will split the lots by 100/150/250 that way each time a higher entry triggers, the net long/short is closer to your exit. In effect making it easier to recover a possible failing trade if reversal signals develop within your converging zone that do not favor your trade and or making w/e loss at the break of your highest position less significant then if you where to place everything within the first convergence zone. If price hits your first entry and continues towards your target without triggering the other “heads” of the hydra, take the money and wait for a pull back and/or have another pair analyzed with a confirmation in direction where you can place those additional lots.
So, I see a good bearish pattern on the daily EUR\USD chart, which shows some convergence between 1.3020 and 1.3047…0.782 And 200.00 Fibs
I don’t know if this is it, but fundementally speaking, the FED has just announced QE with no end in sight, and the EU has made all the promises they can make, so I see the EURO taking a serious plunge if not now, inevitably, probably coinciding with the stock market crashing again, probably worse than end of 2008…there is just too much artificial bubble…again.
If that’s the case, let the big boys confirm the reversal for us and we’ll jump in along once it’s secured ;). In the mean time, scalp those major resistance zones and the flags, don’t let them chew you up by holding on until things are ready for continuations…
How exactly are you hedging? (in other words, buying and selling the same currency? I have been with atleast 2 or 3 platforms and they never allow this?)
Elephant,
Look at the open and close time of the positions. For the first example you gave, the AUD/JPY in the red box if you look at the close date and time (9/4/12 21:07). Then he opens another position on the AUD/JPY about 30 min later. Tell me if explained correctly or not.
Oh, I get it. Thanks. I should’ve examine this a little more!
You can hedge a pair by going in the other direction of a “brother pair”, of course the technique is limited and is not as accurate as hedging within the same pair; but when a thorough analysis is done, it is possible. The day that I hedged in favor of the EJ while on a short on the GJ the EJ was moving faster on the bull side then the GJ. Non the less, both pairs where moving in the same direction, in effect simulating a hedge.
Here’s a spreadsheet for those who may need one or may want to do some analysis while away from the forum. Hope its useful…Just wanted to contribute a small amount towards the progression of this forum.
Thanks again!
Here’s a little indicator I made to calculate the currency’s strength 
I didn’t make it to only calculate the strength at the beginning of each sesssion…it continously updates…next version maybe. So you’ll have to decide when the important time(s) to check the values are. It’s set to use the H4 timeframe, with the 200 SMA as per Richard Krivio of Dailyfx, but you can change them. You can also change the font type, color, & size.
Unzip it to the “indicators” folder within your MT4 platform folder on your harddrive. Let me know if there are any significant issues.
Strength_Table (3).zip (6.51 KB)
So essentially, with the brother pair, you would sell GJ if you sell EJ.
Also, I wanted to ask if you trade both perfect and imperfect patterns. I ask because I am having a hard time “estimating” where point D is. For example, finding the fib level of XA is easy but when you are pulling another fib from A to B to find point C, the fib levels can range from 50, 61.8 and 78.6. Do you trade patterns that have fib levels of (50, 61.8 and 78.6) from AB.
If you do or don’t, how do you find point D?
I simply make sure that the BC leg is a min of .382 and max 1.0 retracement of the AB leg. If C does not reach 50% of AB, the D point has an 80% chance of reaching 127% CD. I tend not to trade retracements of .236 unless its at the extreme 261% CD and major resistance/support.