We start the session with a detailed review of the Commitment of Traders Report. We focus on the large institutional positions that are reported to the CFTC as "non-hedging" which means they placed billions of dollars into the forex market for the purpose of making a profit.
We review this report weekly and look for a change in trends for these currencies. The data may help use understand if our technical changes are just pull backs or indeed new trends. For example, if price is rising, short positions are falling but long positions are flat, then I will assume that the we are seeing a techncial pull back in the currencies markets based on profit taking and not a technical reversal in forex.
Why does that matter? Well in that case, the Commitment of Traders data will give me the courage to short at the next major level of resistance.
We also review the major forex news events this weeks. There are some fantastic risk events, such a UK GDP, Chinese PMI, FOMC Interest rate decision. There is also some great CAD and NZD trading opporunities.
Lastly, we also had a great conversation about inter/intra forex market correlation to setup currency trading portfolios and entering into each individual trade based on relative strength. It is all formed by a technical bias used by comparing several currency charts at the same time.
For example, look at AUD/JPY, CAD/JPY, GBP/JPY, EUR/JPY, and USD/JPY. If they are all going up, look to sell the JPY for that day. However, if some are up, some are down and some are sideways...then do not trade the JPY today. Then start to compare all the USD forex pairs and see if there is better correlation there and setup trades for them... strongest first and work you're way from there.
Live Forex Strategy Sessions
Monday - Thursdays
730 - 815am EST (London Lunch Break)