Ex Professional Trader, Model Trading Account Project & Analysis

[Andrew_Keane]

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[system]

Good Luck with the thread… nice introduction Andrew. :57:

[system]

Welcome Andrew

[Andrew_Keane]

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[thekillerpt]

welcome and looking forward to see your next post

[Andrew_Keane]

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[RobertC]

Wow, this is a pleasant surprise.

Really looking forward to your posts.

[A_CLEAR_HORIZON]

Good evening all, and thanks for the welcome so far.

The techniques and analysis that I’m going to provide here on this thread over time is to help inspiring traders learn how to analyze the charts. I’m not really a fan of mechanical trading systems as the markets are far to dynamic to be caged into a few set rules. Plus mechanical systems take no notice of evolving fundamentals or market profiling.

Of course there may very well be mechanical systems that do turn some sort of profit, but in my honest opinion, and it is just my opinion, mechanical systems lose over time.

The way I approach the market is to break down the time frames and get a feel or understanding of the sentiment on each time frame. I work from the daily chart down to the 4 hour, then the 1 hour and then the 15 minute chart. I often also look at the the weekly chart.

Breaking down the charts one by one will help any trader feel the vibe of the current market sentiment, may that be bullish, bearish or flat. Don’t misunderstand me here, I’m not saying that you have to spend countless time and effort on each time frame, but just having a quick look and getting the feel will go a long way when it comes to decision making.

One of the main things I do when trading the Spot USD Pairs, is look at the USD-Dollar Index, if I get a feel for what the mighty buck is doing on the index, then I can make better decisions when it comes to trading the USD pairs.

Lets take a look at a trade I took today.

Looking at the 15 minute US-Dollar Index, the 60 EMA had crossed down below the 100 SMA at 06:00 GMT, price was also trading under the 200 SMA which was painting an early negative outlook for the USD$. During this time the Momentum Percentage was falling rapidly with high selling volume, the Momentum oscillator was also finding resistance. To me this is a crystal clear bearish picture for the USD-Index. Later on around 09:00 early in London, the Index performed a 100-200 SMA cross over adding more weight to the bearish outlook for the buck.

US-Dollar Index 15 Minute Chart

<img src=“301 Moved Permanently”/>

With a few USD based chart possibilities on my radar, I decided to go with the NZD/USD.

There was a few reasons for this,

A: The US-Dollar Index looking bearish

B: The NZD/USD had recently bounced off its 200 Daily SMA to the upside

C: The NZD/USD was holding the 1 hour 100 SMA as support

D: The NZD/USD was forming a triangle on the 15 minute chart, with the momentum Percentage rising sharply as well as increasing volume.

Daily And 1 Hour NZD/USD Chart

<img src=“301 Moved Permanently”/>

15 Minute NZD/USD Chart

<img src=“301 Moved Permanently”/>

Having a good understanding of what the US-Dollar Index was doing and being able to spot some bullish signs on the NZD/USD on multiple time frames provided as safe a trade as a trader can get. Of course it does not mean the trade was guaranteed to turn a profit or even become a winner. But the top down NZD analysis on the back of the US-Dollar bearish outlook provided a low risk opportunity to try and take advantage of. Fortunately in this case the trade did work out and turned a profit of 52 pips with the target being the near term resistance at 0.8200.

This post is for educational purpose only, more educational material will be posted in coming days.

Welcome.

Sounds interesting, hopefully it’s all genuine.

Some nice predictions/analysis/trades, before the price action moves would be good, as its always pretty easy to look back and make claims.

Hope that doesn’t sound rude, but I’m sure you understand that forums like these are full of time wasters.

I look forward to your future posts and once again, welcome.

[A_CLEAR_HORIZON]

Also, just out of interest, are you FSA regulated for the small fund you manage?

[Andrew_Keane]

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[Andrew_Keane]

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[Andrew_Keane]

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[RobertC]

Something I don’t understand about the relationship of the US-Dollar Index and the USD pair prices is that the dollar index is such a simple and unambiguous piece of data that everyone in the market has access to.

U.S. Dollar Index - Wikipedia, the free encyclopedia

I’ve only been studying the Forex market for a couple of weeks here on babypips and don’t want to sound like I am questioning your methods. I don’t understand how the big/smart money isn’t using the very same info and reacting to it almost instantaneously leaving no room to profit off the temporary divergence between the dollar index and pair price.

[Andrew_Keane]

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[RobertC]

Thank you for your reply.

So would it be accurate to characterize your use of the dollar index in relation to the various dollar pairs as:

1. Yes, everyone in the market has access to the same information
2. The market players all react immediately to the movement of the dollar index
3. However, there is enough lag before the price reflects the new information for you to be ahead of the price move and enter trades anticipating the price move
4. Trends longer than the intraday range are long enough that the gap between the new information and its reflection in the market price is too short

[Andrew_Keane]

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[Andrew_Keane]

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[Andrew_Keane]

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[alusman]

welcome andrew,

really a good intro. i am totally new to this market and trade wish you can show how to use those analysis you mentioned.

best regards

[555shoe]

I have placed a pending order to BUY a breakout to the upside on the GBP/USD on the thread model account should price follow through on the current chart readings.

The pending order details are: BUY Stop @ 1.5923.5, Stop Loss @ 1.5895.0, Target @ 1.5960 (may move to 1.5980 if momentum is strong).

The 1.5900 level remains pivotal and important today, if the GBP falls below and stays below, then this will lead me to cancelling the pending BUY order and standing aside on the GBP/USD. There is support at 1.5880, I want to give the GBP a decent chance, so if price can hold there (1.5880) on any dips below 1.5900 and immediately come back above 1.5900 this will keep the bullish focus. But if the GBP screws around under 1.5900 then all bets are off.

Hi Andrew,

nice introduction so far. I am following.

One question: Why did you chose 1.5960 as Target?

Cheers