For trend trading, I like to see prices on the same side of both H4’s 200SMA and H1’s 200SMA.
So, take GBPJPY for example:
Prices are below the 2% requirement to short according to the 200SMA on the H4, but when I look at prices on the H1, prices have been hovering (bouncing above and below) around the 200SMA. That tells me to wait for trend trading.
You might find some nice quick range trades while prices are bouncing up and down, though.
Good day for the commodity currencies as they followed a mostly up day for stocks, the consolidation continues
Look how top trade NZDJPY* just hugged that 200ma on the 1hr chart, and today we got the breakdown
Denis good work done here!!
please can inform us on the relationship between stocks currency and commodities?
I love Friday break-downs and break-outs - they usually follow through into the next week.
Continuing good work Dennis.
As usual, I managed to find exactly the wrong time to get out of NZDJPY*. After it retracing and having done nothing for a while, I got out at a small profit because the swap in the ranging market was cancelling out the small profits. Literally a couple of hours later it takes a huge jump after China announced tariffs.
I should announce when I’m about to close a trade and everybody could then make a fortune when it finally does what I originally expected it to do…
yes please this^^^
After a week of consolidation current and long term Top Trade NZDJPY* hits a new low and new high in our pip total
I believe it was Warren Buffet who said " Markets were invented as a means to transfer money from the impatient to those with patients"
Well that spike down in NZDUSD this morning hit my take prifit and closed me out , but I got my 200+ pips, which was wort the wait for the pair to complete the consolidation. I got in late and just before the start of the consolidation but it was a long wait to get through it.
Shows it pay’s to be patient in this game. Now to deceide wether to get in again? any suggestion anyone?
Enjoy the day guy’s.
Why would you consider getting back in? That pair is nowhere close to being a top strong/weak contender.
My apologies, too much analysis on my brain, that should have been NZDJPY, now on my system although it’s No1 it does not look such a good entry & after 3 weeks of going nowhere I am reluctant to sit tight again, maybe better to see if it is entering consolidation again?
Right now, nothing in Forex is calling to me. In addition to the 2% rule for Dennis’ numbers, I like to see at least 1.25% from the SMA200 on H1, and nothing in the 28 pairs has this.
Some of the exotics look interesting. EURTRY and USDTRY, for example. Caveat emptor, though. While I made a tidy bunch of pips with the recent spike, the volatility can also go the other way. Huge spreads that can wipe out a SL in a flash. With that said, both appear to be trending up.
We had an early day dip in all Yen pairs only to see a full reversal across the board, before the reversal Top Trade NZDJPY* hit a new low.
A reversal like this would imply a move higher for Yen pairs but most of these pairs are still below their 200 ma on the 1hr chart, until they all clear this overhead resistance this is just a pullback
Tigranes,
CAD/JPY pass my great mentor Denis 2% rule, plus it is about $80 which is over the SMA200 of $79.85.
I think that is also true for AUD/JPY, EUR/JPY.
Let me know what are your thoughts?
Thx
Attached is the H1 chart for CADJPY.
Prices right now are close to the 200SMA, so I wouldn’t consider CADJPY for trend trading. I like prices to be outside 1.0 to 1.25% envelope. (designated in green) To me, CADJPY is just ranging. Look how level (horizontal) the 200SMA is.
Oh, by the way, I am just looking at this using the indicator for MT5 I posted a few days ago. The candles that are within the 1.25% envelope are dark because they don’t interest me for trend trading.
CADJPY may do better with range trading, but I am not as well versed in range trading.
You can do the same analysis for the other symbols you mentioned. Neither has prices beyond 1.0% on the H1 chart, so I am less comfortable with their “trendiness,” even though they are beyond 2% in Dennis’ numbers.
Oh, and just to add one further note, Dennis mentions pretty much the same thing above. He said, “. . . but most of these pairs are still below their 200 ma on the 1hr chart, until they all clear this overhead resistance this is just a pullback.”
That’s exactly my take on the current ForEx market.
Tigranes,
Thx so much for taking the time to answer my question in very clear way & I was able to duplicate your drawing on MT4 for CAD/JPY, AUD/JPY, EUR/JPY pairs to understand your point, Thank you.
I’m new to the Forex, and Denis thread was an eye opener for me(Very thankful to Denis). I tried to read this thread couple times to understand an entry for this simple but very effective strategy, and I thought He think an entry close to 200SMA on H1(also some time he mention H4 instead H1) is a kind of safe way so the price didn’t move way to far which may hit the SL.
I do like the your simple idea of an envelope between 1-1.25 from 200SMA,
Thx.
Tigranes, I’m wondering also If this envelope can help you to c if any reversal is taking place (since the pair is consolidating before a breakup or breakdown) ? if not how is it possible to avoid the reversal with this strategy?
For example, if only one currency pair meets the Dennis 2% rule and my 1.25% rule, I may not enter the trade. If several currency pairs meet both criteria, the “tide” is better, so I may initiate a trade.
The envelope is just two guidelines around a moving average. There is nothing magical about 1% or 1.25%. By that I mean that I didn’t test this on historical data or anything like that.
For a reversal, if prices go toward the 200SMA on H1, and don’t bounce, that’s probably your best indication that a reversal is happening.
I sometimes use the envelope around the 200SMA on H1 to set the stop loss. So, if prices are above the 200SMA on H1, I use the lower 1.25% envelope for the SL. This allows for noise during an H1 bounce.
