Kores, “…strength of the dollar, because it’s good for the world”
I’ve just booked my holiday to Florida for next year, personally I’d like to see the dollar go to about 10 to the pound, that would be good for my world LOL !!
Anyway, here is a question for the more experienced boys. I’m currently reading “The Forex Trading Course” by Abe Confas. First chapter deals with fundamental analysis and Mr Confas assures us that in order to truly know the Forex market, one must understand the fundamental drivers of various economies.
First thing he tells us is that a countries housing stats will be a clue as to future movement of the currency.
Basically just wanted to ask, how much of the fundamentals do you keep an eye on and what weight do you give them. I know the NFP is one to watch, or at least, stay out of the road of, but how much fundamental analysis do you take into consideration?
OR, at the risk of starting the old fundamental v’s technical argument, are you strictly technical?
EDIT: Also meant to ask, bond yields, significance of and how, if at all, do you use them?
I just meant dollar against Cad. dunno why, but I have a view, that if it doesn’t strenghtens, we all could pay high prize for the oil. that’s not good for holidays either.
My two cents Hog: I think if your trading the weekly and up then its definately worth knowing what the fundies are doing in ragard to the currencies involved. For us intraday traders say trading h1, h4 and even daily, I don’t think fundies have a huge effect on PA. On these lower tf’s I prefer to concentrate on pure tech’s. On that note, I’m long EU from 2793. 1h has been positive for the last six hours and I’ve just got the green light on the 4h. From my perspective, trading h4 on tech’s with an eye on the daily and weekly is the way to go. Fundi’s tend to play out over much longer periods… interest rate changes and carry trade as an example.
I have been reading your advice regarding the 4 hour chart, and entered long on the eurusd around 1.2773, based on a new strategy I’m looking into.
However I closed out early because my rules specify that I close out first thing in the morning (it’s morning here now).
But now that I have changed my entries, I may have to re visit that rule. i’m probably going to kick myself if this thing moves up 100 pips.
So all that banging on about the longer time frames hasn’t fallen on deaf ears
Re: The Forex Trading Course book I mentioned above RC. Can you give any info on a “three line break chart”?. Is it any use, are they readily available on trading platforms or are they an out dated thing?
I would imagine that you’d need to download a custom file Hog for MT4. For FXCM go to fxcodebase.com … lots there to ‘tickle your fancy’.
Three Line Break charts are similar to Kagi and Renko Hog, but I’ve never tried them. Those that I’ve spoken to who have consider them to be of value. Personally, I prefer HA.
To Florida? What in the world did I ever do to you? Where in FL are you heading Miami or Orlando (disney world) and when. Time of year makes a big difference on where I would recommend someone to go. In the summer go to Miami as there are a lot of beaches to relax on with half naked women running around
If the cooler winter time (if cooler is even a word to you lol) I would head over to disney world as most of the parks are empty so there are no lines and cheap hotels. Just food for though from someone from there.
Going to a place called Jacksonville bobmaninc…nah, only kidding LOL!!
Going to do the Disney thing. We get there 1st of July and leave again 22nd of July. The Hogettes are planning to do Disney, Harry Potter thing, world or planet and there is apparently a dolphin swim thing they want to do. I’m just the driver LOL.
I’ll suggest to Mrs HoG that we go see the half naked women on Miami beach, that should be an interesting conversation !!
COOLER ??? We don’t do cooler in Glasgow. We do cold, freezing, baltic or dead, but not cooler LOL !! I’ll remind you nearer the time in case you want to sound the evacuation siren. Having said that, we’re hiring a 4 bedroom villa and there is only 4 of us, so if you and the rest of the bobmaninc gang fancied a free weekend in Orlando, you’d be more than welcome.
Daughter spent the Summer holidays in Miami with family this year Hog. She recommends ‘Gator hunting’ Not the pump action shotgun kind… more a camera and airboat trip through the everglades. Oh, and the crab and cheesecake! LOL I would have liked to have done the epcot centre and a space shuttle launch but never got around to it. Not keen on the Disney thing… did Disneyland Paris and spent most of the time in… err… Paris rather than Disney.
I’m not overly keen on the Disney thing myself RC, but what say do us dad’s have anyway mate ???
I’ve done Epcot before for roughly 8 minutes until the kids got bored and we moved to Typhoon Lagoon. Taking the golf clubs though as our villa is on a golf course. So something for everyone then. Might even take the laptop and become an international jet-setting trader.
Wow, how cool does that sound…taking the golf clubs I mean LOL !!!
haha yeah Disney has been built up a lot in the last couple years. I will be planning a trip there soon myself to turn bobmaninc jr loose on them. Seeing as how I am only a couple hours a way if you bring the clubs I might join ya
Sorry to have been away - it was the kids’ half term holiday, during which Mrs Templar also took the week off, so with Claire and the kids at home trading took a back seat. We spent ten days doing all the regular holiday things, plus I ended up doing a fair bit of work on the house. Anyway, I didn’t do much real work other than placing a few trades around the edges. So apologies for the absence.
I realize that I am hilariously late responding to the above posts, but I need to pick somewhere to dive back in, I don’t like to leave a fair question unanswered, and there seems to be no overriding theme emerging since, so it seems as good a place as anywhere. So - bias.
Well to be honest, I like to keep my trading simple, I don’t feel the need to overthink it, as simple has worked for me so far, and continues to work, so I feel a little as though my answer here might disappoint, but that notwithstanding here it is.
My trading is split into two parts - End Of Day and Intraday. I trade a broadly similar approach to both, but with a few tweaks to take account of the necessary differences in Stop, TP sizes etc., and the higher relative volatility in lower timeframe trading. However my underlying approach is similar for both - I seek to identify trend (even when trading countertrend I need to know the trend in order that I do so knowingly!), throw some strong S&R levels on there, and then trade the retracements/level rejections/continuations.
I do a weekly scan, generally on a Sunday, across all the pairs I look at. I am looking to pick my half dozen or so pairs for the week, the ones that I think will offer up some opportunities. I am looking to establish a direction for each of those pairs, and then that direction will establish my trading bias for the week.
For my EOD trading I almost always enter off the Daily chart - that is to say, I enter through orders and place have the specific placement of the orders for Entry, TP and SL informed by the bar opens/closes/midpoints on the Daily chart. So I want to get to a point where I have a clear understanding of what is going on on the Daily chart. To get there, I start with the Monthly chart, then move to the Weekly, then finish with the Daily. On each timeframe, I am looking for a trend direction, higher highs/lows for an uptrend, lower highs/lows for a downtrend. I want to understand, when I overlay those three TFs, which is in an uptrend, which is in a downtrend, and which (if any) is ranging. Obviously, we can have a prevailing downtrend on, say, both the Monthly and the Weekly, but they could be in a retracement which would present as an uptrend on the Daily. At that point, my bias would be long, until Price hits a level which would mark the end of the retracement on those higher TFs. At that point, I am out of the market until the higher timeframe tells me either that the trend has broken, or that phase one has resumed, the retracement is over, and then my bias would reverse. In this way I sometimes find myself long on the Daily chart for the first part of the week, then short on the same chart for the rest of the week. So I have to keep my Sunday analysis ‘topped up’. I use a lot of horizontal levels to reduce the chance of surprises - if Price hits a level, I wait for some confirmation before being in the market. If I have an open trade then the Stop will be trailed up.
It is a cautious, steady approach, but it gives me a very high win rate, and my return is very consistent. I use EMAs, as I find that once Price has extended a long way from the EMAs then it will return - so I will happily take countertrend trades back towards the EMA. I use PA as well as reversal patterns on the lower TFs to refine Entries: a high test on the Daily is much nicer when it is a double top out of Resistance on the 240, Hourly or whatever.
Anyway, a couple of charts to illustrate a little of what I am talking about, or at least they show recent trades I took:
The fist is NZD/USD Daily from this summer (okay, sorry, not that recent!). It was a clear double bottom on the Daily, price was overextended away from the EMAs, particularly the 50, there was RSI divergence, looking at the different timeframes it appeared that we were due for a Daily reversal. We duly got it, entered off the second low test in off the horizontal level at the bottom of the screen shot (hope it comes out okay!).
The second one is a EUR/CAD Short off the Daily from the last week of October, I entered off the second high test forming the double top on 31st October. Again, the uptrend was due for a reversal, Price was overextended away from the EMAs on the Daily, there was RSI divergence and timeframe correlation, I just sold it back into the 50.
With both of those trades, I looked at the Monthly, Weekly and Daily for a sense of overall position, I looked at the lower timeframes for further signs of a reversal, it all lined up with the clear PA signal on the Daily, I entered via an order and made a few percentage points on my account with minimal risk, fuss and drama - purely because I had scanned the market in detail at the weekend and had a clear idea of what I was looking for, so when I looked in each evening I knew what I would need to see to have me enter a trade. When I saw it, placing the orders etc took me ten minutes or so, and then it is just a case of managing the trade.
Anyway, at risk of this becoming a ramble I’ll stop there - I’m not sure whether I have answered the question at all, but that is my simplistic take on bias, for what it is worth - hopefully someone finds something of interest in there.
No matter you answered the question or not, ST. Great explanation. It helped me a lot. Trading is not hard as it seems. I see here your simplicity to trading the market.
Thank you. In my view, trading is complicated but it is not hard. The work to get there is hard, but once the smoke clears, the knowledge is in place and you have your focus, it just isn’t hard. It’s not easy, either - but the mechanics of it are not hard.
Thank you for your post ST. Learned quite a bit from that. Looking back at the N/U trade you took on my chart that looks like a solid trade to me. Good support level, Divergence and price action supports an up move. Thanks for sharing that. I like your way of thinking regarding EOD trading as this is something I wish to implement for myself once I’m ready. So you scan through your charts and then pick pairs which may present opportunities during the week ahead. Do you then set orders once certain pairs actually present that opportunity to you during the week?
I look at stochs for divergence now and then. Just out of interest what RSI settings are good for the daily or is default fine?
Sorry for picking your brains but I’ve learnt a great deal from your contribution so far!
No problem picking my brains at all, I’m very glad that you found the post of use.
Yes, that was a bread and butter trade for me, I’d take those sort of setups every time as I find that they pay out more often than not. As I keep my risk consistent, it’s like a double gain: the setups win more often than they lose, and then the R:R is generally better than 1:1.
I hit the same pair again a little later, the double top on the Daily of 14th and 28th September. I shorted the double top of 14-21 September, but was stopped out for a small loss. Then I entered again on 28th September, which ran better and made me some pips (although not as nice as the double bottom trade in my longer post). Mechanical execution of a proven strategy is, for me, the absolute key to this stuff. The Pair put over 5% on my account just off those two trades, and I monitor over twenty pairs…
To answer your questions:
Yes, I scan on a Sunday, select that week’s pairs, and then do a smaller scan late each evening once the Daily bars are closing. For my EOD trading I will then place an order for Entry, SL and TP that evening, hoping that they trigger off the following day’s PA. On that Kiwi double bottom trade, you can see that the following day gave us a sort of extended doji, which triggered me in but kind of stalled, then the following day gave us a second doji, which was not even an inside bar, so pretty unsatisfactory but okay. The trade was bouncing in and out of profit but not really doing much for those two days. My SL was safe so I left the trade on the table, then on day three Price moved with me. Price struggled a touch to breach the Monthly Pivot (at 0.7726 at that time) (although by that point I had a small profit locked in) but then did, and was away. My trailed Stop was eventually taken out around the 100ema, around 0.7910, as Price had bounced off what turned out to be the top of a new rising channel on the Daily. It gave a decent return, and getting to the 100ema was better than the 50ema I had expected. The beauty of trailed rather than fixed Stops/TP!
I can’t remember what the RSI default is, but my Daily setting is RSI (6,C). That might be the default or I might have changed it - it’s been a while! Either way, I find that that setting gives me what I want.
My evening scan is generally some time between 10pm and midnight, UK. I trade the chart, I don’t particularly worry about sessions - I will happily hold these trades for as long as they are moving with me, that’s days or weeks - so the trades are lasting through the opening and closing of many sessions. I am looking for the close of the UK’s Daily bar. But yes, the time I am scanning does coincide broadly with the NY close.
First of all let me make my grovelling apologies for being MIA recently. Things are just a tad busy this end right now and I am struggling a wee bit to get on to the forum, or trading in general in fact.
That said I am short the bobmaninc right from 1-0425, targeting down around 1-0360 ish, might just let it run until it hits 0-0001 and retire LOL!.
Anyway, here is a quick question for y’all, be interested to here the answers and/or opinions.
Question is; Bond Yields.
How do they affect (just had a thought, is it ‘effect’ or ‘affect’ ?) currencies, how do they do it and is it necessary to watch them?
Could’ve just shortened that by writing “What’s the story with bond yields?”
Anyway, must dash again. Will try to catch up via my phone. Talk soon guys
