I’m having a lot more of a relaxed time of things since adopting the 123 & momentum triggers into my shorter term trade plan & for that I once again thank you guys.
Although I’m more than happy with the results so far, I’ve missed out on a couple very good moves by focusing on the wrong pair or pairs.
Do you guys have any suggestions for how I might better gauge the sentiment or focus either at the end/beginning of a trading week, or as the week is progressing?
I have now included an end of day summary log via Reuters & Bloomberg to keep abreast of the generic developments, as well as the regular morning check over the current days releases & that helps, but I still sometimes feel like I’m missing out on the more favourable pairing when placing my bet.
That’s good to know, glad you can find a home for them.
Have you tried lining up the legs & cross to get a better feel for any particular currency dominance showing up?
Kind of like an ongoing strength v/s weakness reference.
I think either Jos or Sean referenced it back on the Tech Templates 2 thread last year if I’m not mistaken. Anyhow, if you’re not already doing so you could try matching your pairs up & check for any obvious strength or weakness in the relationships.
So if your favorite pairs are eur/usd & gbp/usd for instance, then group your 2 legs & the cross together to assist in focusing any clear dominant driver or clearer odds opportunity in relation to your set up & technical geography.
Risk aversion usually spooks & chases bets into Yen & the $US, vice versa when the confidence returns to the market.
So, you could build up a block of your corresponding pairs as a quick check on the state of play:
eur/usd & usd/jpy are the legs for the eur/jpy cross
gbp/usd & usd/jpy are the legs for the gbp/jpy cross
You might also want to include eur/gbp into the equation to confirm either a flat or dominant bias on those 2. That will give you a technical heads up as to any weak/strong individual currency story.
You should be able to configure your platform to grid them up together on one of your chart profiles. Most packages cover that option.
4X eur/usd…usd/jpy…eur/jpy…eur/gbp
4X gbp/usd…usd/jpy…gbp/jpy…eur/gbp
You’ll get a snapshot of where (if) the weakness is at & which pairs you might want to take a shot at.
For instance, if you got a weak Pound story entering the market via the data and/or newswires, you want to start matching it up with the technicals to try narrow down a likely higher odds/better value bet.
Best way to go about that would be to start checking out support & resistance levels on the gbp/usd…gbp/jpy & for a confirmatory check, the eur/gbp.
The former two represent the superior average daily range coverage if you’re sniffing out an intraday bet.
Preferably you want to see gbp/usd and-or gbp/jpy at resistance levels, or exhibiting lower high failure (reluctance to print new highs) & maybe eur/gbp at support.
If gbp/jpy is nudging a clear resistance zone & it looks more attractive than the gbp/usd level, & its offering you an entry via one of your favored triggers, then go get it.
Likewise, if the Cable leg is offering potentially better odds, then as long as you can compute acceptable risk, fire your bullets.
It doesn’t do any harm to keep more than a keen eye on the relationships between the related pairs to get a read on relative strength/weakness ratios in the market. You can more easily match up the fundamental drivers & current market influences as they key off the supply-demand imbalances that regularly play out in the market.
No, I haven’t looked at it from that angle before. But I can begin to see how it might offer another slant on proceedings.
I do scroll through the individual charts of my favourite 3 pairs, & have the key levels marked up, but I can see now after you’ve explained it, that all it really tells me is what they’re doing on a stand alone basis. It doesn’t tell me if a dominant bias exists for one particular currency.
I’m going to need to set my charts up & get to grips with the various permutations for a while in order to get my head around the concept.
I already like the idea of being able to possibly filter out stronger potential trades based around the cleaner technical set ups.
I’m noticing each way opportunities setting up on this 123 & momentum trigger on a consistent basis & although I’ve yet to trade them back & forth on my live account during the same session, I can see the potential with trading it.
I’m not talking no-mans land signals like when I first began using it, but on & around common levels such as the extreme of the average range or a previous day or week high & low.
Am I getting distracted by the greed monster, or is that type of dual opportunity a viable option with this kind of set up & trigger action?
Also, how do you guys play the Yen story that is high on the newswire agenda at the moment? Do you trade it back & forth off the round number levels over a longer time period, because it’s average range isn’t exactly top league material, particularly if I’m considering trading it from an intraday angle.
Well, like we constantly remind – it all comes right back to objectives.
Yours might be focused on the next 1-5 hours. Mine could well involve the next 1-5 days.
However, the common denominator (on this thread anyhow) will always spin around [B][U]where[/U][/B] you leg in, manage & leg out, rather than [B]how often [/B] you place your bets.
Providing you can identify acceptable risk & you’re happy playing the levels back & forth off visible supply-demand zones, then you’re ok to bounce your bets off these lines.
Placing long bets yesterday morning on Cable offered both stances an excellent bargain. Just look left at that swing pivot from July 27/28 & the revisit at the end of last week. It sure confirmed the bids building around there, yeah?
You got a 1-2-3 yesterday morning off that 550, which also represents last weeks low.
So, if you’re legging in via an intra-day stance, you can manage the deal by tracking your peak-trough markers on your primary or the next lower timeframe chart…or via your average range percentage coverage…or maybe yesterdays high-low markers….or a combination of them all, as long as they represent & measure your personal value marker.
I can also use any combo of those options & scale out/& back in again as price confirms it’s intent if I’m looking at it from a slightly longer time zone angle.
A prior pivot like that 5550 zone that also harbours either a prior day or week high-low reaction level usually offers good value.
Market bounces off these springboards on a pretty regular basis.
And if you’re fortunate enough to receive an above average risk lay, like that 1-2-3 & you get the opportunity to hold onto part of your bet & run it across several days, that really offers you excellent risk to value odds.
Regards Yen, you’ll receive better value on your bets using usd/jpy as your yardstick & betting via the larger range coverage crosses such as eur/jpy, gbp/jpy & aud/jpy.
Offers are clearly stacked up at 86.30-50 & you got BoJ & their cohorts laying in wait at 84.50-75 on usd/jpy.
The mere threat of intervention will generally cool the speculator ardour as they begin sniffing the lower end of that range. They won’t want to get caught on a right hook from a BoJ punch.
What will generally happen on those occasions is the Bank will become noticeably “active” as prices begin threatening the years lows at 84.50-75 again by stepping up their visibility to the dealing desks.
If they’re genuinely looking to defend a level, rather than bluff it, they’ll also give corporates the opportunity to pull offers off the table before stepping in.
You’ll certainly see that reflected on your charts as it begins unfolding by either aggressive kick backs (sharp price spikes) and/or lots of indecision candles such as dojis, hammers & inside bar prints showing up, signifying short orders being booked & trimmed & bids getting fired off.
If the defense is weak or just a bluff, players will gun for stops below the level & seek out next layers of bids to check the strength.
So watch those levels (especially the lower edge) for trigger opportunities on the crosses via your lower timeframe charts if you’re chasing a value (intra-day or intra-week) seat v/s Yen.
I got that one loud & clear, & that’s only thanks to you guys with your repetitive prompters about seeking out these zones that offer confluence signals.
I was also waiting for an entry into audusd around lunchtime London yesterday as it moved back over last weeks low, but it didn’t really offer me a confident entry via either of the triggers, so I left it.
Those 2 were the only ones that looked like offering reasonable entries yesterday according to my view [I’m actually more pleased that I’m now spotting these set ups so clearly as they appear].
My comments in the previous post were mainly directed at scenarios such as the price action yesterday on gbpusd as it began cooling off around Fridays high at 1.5675-80.
I’d exited my trade earlier, but was watching it move around that level. Obviously the time of day wasn’t great, & that would influence any entry decision + there was no real driver other than maybe end of session profit taking?
It had covered approx 75% of its average days range too, so on reflection it wasn’t really ticking any of you guys priority boxes was it.
But sometimes when price covers it’s average range as New York is active & before London closes, the opportunities can be very tempting to trade it back against it’s current day directional move. But I do take your point about where price is setting up [aka the location] as opposed to simply punting blind on the back of a potentially viable signal. That is what used to frustrate me when I was trading the set up during the past couple of years.
That 84.50 – 84.75 level would reflect 109.0–109.20 on eurjpy & 132.80–133.0 on gbpjpy at the bottom & the zones around 114.0 + 137.0 at the top on both crosses I assume?
The only thing you have to be wary of in those types of circumstances is the fact price might simply be easing off due to profit taking, especially if no visible supply or demand level exists at the point of exhaustion.
You’ll find the better opportunities related to the scenario you’ve presented will generally set up when prices are over extended or stretched beyond their normal average range limits.
Price rarely stretches beyond range limits & holds without deflating on the back of profit taking or fresh reverse order flow.
That’s the time to start looking out for your reversal or pullback opportunity behavior.
You’ll tend to obtain keener risk placement via your micro timeframe templates too in those situations.
As you’re obviously discovering, the higher odds plays will tend to reveal themselves when the London/Frankfurt desks are up & dealing. And certainly if that timezone also coincides with market sensitive levels & zones.
Just finished leafing through this + your Templates 2 thread.
Nice job.
Quality material succinctly presented. Makes a pleasant change to the war & peace fluff that usually clogs up these places.
How comes you guys live here? You kind of stand out a little.
We don’t really, as you’ve probably surmised by the post counts.
Our main home is elsewhere.
The girls were invited to look in here & expand on some of the template structure back in 07 & when other commitments took over Tess asked a couple of us to help support the material as long as the interest continued.
Hence the sporadic appearances.
Plenty of stops getting burnt under the weeks lows on the popular rides this morning. Feels awfully like liquidity issues on a typical “risk off friday”
it’s dire on the eurusd today. even the BIS have stayed in bed this morning.
lets see if they got enough whoop to give eurjpy a haircut back to the years lows!
Not much for fundamentals here, but if Iran gets their nuclear reactor on line this weekend, there could be some massive fundamental changes over the next couple days…
It’s purported they are just hours away from firing it up.
I handed it over to a colleague to manage. He booked & cashed further down when it failed to engage 3rd gear in sync with negative stock sentiment.
To be honest it was asking rather a lot to cover full range mileage into the end of week squaring, but it tagged 65-70% yet again, so the risk was justified.
It didn’t help that eur/usd covered it’s daily range so early into NY.
We’ll see what the circus brings to town next week.
I figure these things can just as easily amount to a ‘damp squib’ as easily as they can generate panic & fear.
Whatever happens, they’ll be plenty of reactive opportunity to get your teeth into if your stall is all set out & you wait for the chickens to start running around in their headless costumes.
jjay wanted to add this into the mix Kevan, & until he reaches 50 posts & is able to upload hosted charts, I’ll be the conduit:-
[I]Don’t neglect the Dollar Index either when tick boxing your important upper & lower reaction potential. The key levels are consistently reliable markers, especially as they marry up with the big figure spotlight zones on the more actively traded currency pairs.
1.33 & 1.60 weren’t exactly difficult to tag as potential stalling points given the accompanying technical & fundamental weighting, but you might have got a warmer glow knowing the Index was also flirting with a key support level.
You can prepare your mirror levels on the euro, pound, swissy etc way ahead of time & simply fine tune your favored set ups & triggers via the fundamentals & event drivers as the zones come into view on the radar.
The more pertinent info you got on your crib sheet, the better informed you are.
Ensure you do the simple things well. [/I]
Thank you jjay (& Jocelyn). Actually that post more or less addresses an additional query I had following on from the information Tess kindly delivered in post #423, so it killed 2 birds with one stone.
This yen story is getting very talked up lately. I read an article a few days ago that BOJ would need the help of western CB’s to intervene successfully, which simply won’t happen because none of these countries needs a deflated currency at the moment. This is getting interesting, especially that to my knowledge it is the only relevant fundamental factor on the market at the moment and as it attracts more and more attention, those monthly/yearly lows on the YEN crosses will rapidly come into play.
As long as you can leg into the dominant bias via one of your set up/triggers then you can play the technicals as they key off the (fundamental) current drivers quitter.
Speculative (& a few lazy swing) shorts had to cover late last week in a bit of a hurry, but I guess it didn’t take too much of an effort to re-engage bets in line with the bias once month end deals got shuffled.
As you say, the big levels will be on the radar of everyone from hereon in. Sooner or later someone’s bluff will get called & hopefully it’ll get real ugly!
Were I to hazard a guess, I would say sooner rather than later, someone’s gonna kick those BOJ crutches out from under the dollar.
Ugly ain’t the word!
The whole market seems to be almost in a stalemate. At first I thought it was the time of the year, but lately it seems to be building an inordinate amount of tension…
It will be interesting to see what straw it is that breaks the camel’s back.
That’s what happens when the view gets obscured by low cloud Master Tang.
Traders will continue to do what traders do in times of uncertainty & simply grab a hold of the sexiest looking news/data/sentiment & kick the ball around a little until it deflates. And if all else fails, get long Swiss & Gold until the next ball bounces into the kicking zone.
Whilst most of the worlds major economies are still flopping around attempting to gain traction, these multi week charts will look dirty. There simply isn’t enough positive consecutive data to get your teeth into.
We’ve recorded daily range extremes stalling & dropping short by as much as 30% during large chunks of 2nd & 3rd quarter, which is the most we’ve seen it in a good while.
Obviously that means you simply adjust your sights on shorter visits to the market & dial bets in & out as conditions dictate. But these conditions sure do test the resolve of the longer-range players.
A right royal pain in the ass indeed.
