I’m going to leave that for now, I’m think of that as Part 2.
I think this enough for any newbie to get started with.
Where on Earth do I Start?
Start with these 5 key areas, get fluent in these first, then the rest will start falling into place, these tools in themselves should give you enough of an edge to see some real progress in your trading career.
Support and resistance on Daily Timeframe.
Study these carefully, you will be quite surprised at how often they are hit, if you think you don’t have the patience to wait for these areas, forget about trading and go onto something else.
Fibonacci/OTE.
Understand how to place your Fib correctly using the predominant moves, see how your entries are often beyond the classic 61.8%
Kill Zone.
Understand how important these times are, trading at these times improves your win rate dramatically, reduces your SL requirement and your trading stress.
Using USDX.
Understand the relationship between the USD Index and the pair you trade, I also use the EURX.
Double Tap.
This is a trading habit you must get into, it’s simply placing two identical trades on to the same value rather than the one trade, it makes it easy for you to effectively sell half your position at your initial target of 30 PIPS profit.
Asia.
Understand what goes on in the Asian session to prepare you for the London Open and then also the NY open, see how the Asian session High’s and Lows come into play throughout the day and sometimes throughout he week.
Even though I’ve been using the Dollar Index and Euro Index and understand their relation to the currency pairs they are part of, I don’t understand what the Dollar Index actually is.
“It is a weighted geometric mean of the dollar’s value compared only with
Euro (EUR), 57.6% weight
Japanese yen (JPY) 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight and
Swiss franc (CHF) 3.6% weight”
“The US Dollar Index (USDX) is a futures contract offered by the New York Board of Trade. It is a trade-weighted average of six foreign currencies against the dollar.”
How can something be both a weighted geometric mean and a futures contract?
that is exactly how I trade these concepts; use HTF to search for likely levels and then use 5 min to get a tight confirmation entry -GU gave a nice pin to confirm rejection
I also agree that market structure is important (essential actually)
and that it helps a lot to have some concept of where we are in the weekly cycle - tho probably not too relevant at this time of year
I second that, risk management is one of the most important things… And its a simple set of rules that if somebody applies, can help even a losing trader preserve capital…
And personally, i think preservation of capital is priority #1
Part 2, the whole point of it is to learn from the bottom not everything at once, a prerequisite if you like, risk management is no good to you if you don’t know how any of the ‘above’, see what I’m getting at? You have to limit a set of priorities.
Anything can be a futures contract - if its tradable people will take a view and place money on it! I think I know what you’re getting at though - in itself it has no fiat value and cannot be used to purchase anything or hedge against like real currencies. Re its weighted average - its like inflation figures, CPI and RPI - its mearly a method of showing realtive value. From a practical point of view the important thing to remeber is that the Euro makes up most of its ‘weight’ so when we see USDx going up or down we can be sure that normally the Euro is going to be inversely affected.
Haha Agreed.
Also when you also start thinking about what these price moves in forex actually mean in terms of the international value of a nations currency against others and how that value is moved by banks attempting to influence those changes it’s all a little scary.
The weighted geometric mean of the current prices of the currencies in the sample basket.
or
The current value of the futures contracts on what those traders believe the dollar’s value will be in the future.
The first is a number that reflects the dollars current strength compared to the basket of foreign currencies. The second is a prediction of what the first number will be in the future.
Haven’t dug into this but I’d say it has to be the former as it changes with the spot price changes of the included currencies. In fact maybe best to see ppf’s answer!
Mmm I did question that myself but it was within my own rules for my number 2 account. Apart from USDx support at 80, the GU tops at 16130ish and the LC counter trend trade (I know it wasnt exacvtly that) I had a horizontal trend line from the tops at 4/12 and 6/12 which hit exactly at 16120 plus I have a feeling we might be seeing a bit of buy the rumour sell the fact vis a vis FOMC tmtw evening. I know this is not a classic ICT set up / trade but close enough to comment on here - I do agree that we should stick here to ICT stuff. Anyway 80% off at +14 and stop to b/e so got paid on it.
could be damaging to your brain 