Guys I keep missing out on these heavy market spikes with some pairs during the day , mainly as a result of sudden news / announcement or whatever unknown reason. There’s no doubt that there’s lots of money to be made in those sudden moves.
Is there an app or indicator/ signal of some sorts that can detect those spikes and text you or alert you in any way as they’re taking place. Two reasons for my question, a) jump into the action b) at least avoid taking some sudden hits during my trade as I work all day and I’m not constantly on my computer .
Today I got lucky on GBP dip in the day but it could easily have gone the other way round.
Any recommendations?
Dennis has frequently pointed out that a narrow range between the SW % ratings of two currencies indicates a weak trend. Example: If currency A is rated at 1.00% and currency B is rated at -1.00%, then A minus B is 2.00%, and this indicates a very weak upward bias in currency pair A/B.
If those two currencies happen to occupy the #1 and #8 positions in the Strong/Weak Ranking, a careless glance at the Ranking might lead someone to conclude that LONG A/B is a high-probability trade (assuming, of course, a prudent choice of entry point and position size) – whereas, the fact is that there are no high-probability trend-trading opportunities in that particular Ranking.
We don’t have an explicit rule regarding how large the range between ratings should be, in order to generate a “signal” to trade. But, it would be a simple matter to write such a rule.
One possibility would be –
If you think the percentage ranges listed above should be changed, please post your suggestions.
If you have studied this thread carefully, you know that the range in SW % ratings between the #1-ranked currency and the #8-ranked currency can vary widely. Almost 2 years ago, just after the Brexit vote, when the GBP was tanking, the JPY (ranked #1) was 0.00%, and the GBP (ranked #8) was -14.93%. And even larger ranges are theoretically possible, when fundamentals disrupt the market.
Compared to that -14.93% GBP/JPY range, Tuesday’s -2.34% EUR/AUD range was a weak short, at best, using the table above as a guide.
Here’s how the signals generated over the past 6 weeks would be classified using the table above –
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Clint, Thanks so much for your input. Obviously you have more history with this than I. I would conclude then that my logic was right, but the parameters I was/am using was too shortsighted (not enough history/experience with this approach) and not wide enough. I am glad I brought this up and hope it was insightful for others as well. And this very well may be why Dennis is stressing to us to stay out for now and gives the market the “resetting” term; makes more sense now.
Whether ABS 3-3.99% and above is the “right” value to start trading considerations or not is yet to be determined, but from your ranking suggestion and the history data you’ve provided (thanks for that also), I can now go back and see how each of these played out.
This was very helpful. Anyone else want to chime in?
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As Clint pointed out when the gap between #1 & #8 is less than 2% it is not a good trend to trade and that is clearly what we have today. Now I don’t cherry pick my data so even the weak trends will be counted as I tally how well my rankings are doing,
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Is it any wonder you miss intraday moves while using an end of day calculation? Think about it
In fact, go back a few posts, find the day when GBPCHF is the Sell signal, yes, there is a trend
But look at the daily chart, by this time, most people had already traded the double top, the lower lows and lower highs, the trend line breaks, the MA crossovers, the bearish engulfing candles, the inside days…
So, if even the daily signal is so late in the trend, how can it even begin to warn you of an intraday spike?
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If you are looking to day trade news events then this is not the thread to follow, I do the exact opposite here, I total ignore news as it is not possible to know how the market will react but it is possible to trade the price action following the news, that daily candle will tell you everything you need to know about the news without having your mind poisoned by the opinion of some talking head on CNBC ,
If catching these news spikes is your thing and you want to do while at work, Try place a stop sell order( when long) this way you might catch a spike, but you will also have days where you took a quick 50 pips but then missed the 150 pip move by days end, there is no easy way to take money out of this market
Biggest gap I have seen was on Jan 15 , 2015, when the Swiss central bank reprice the Franc, by days end CHF was at 12.34% and EUR was -7.54%, but then over the course of three years the market completely retraced that move. Either way there is lots of risk following a huge news event move, It is a fun ride if you are on the correct side of the trade but if you are wrong it could wipe out your account.
Thank you Dennis and I appreciate your comment.
I’ve been following your thread for a while and have read it all from start to finish. Nevertheless I’m still a newbie and unfortunately I keep getting caught by these sudden spikes that come out of nowhere as a result of news flash or comment made by a politician.
It happened yesterday and today and sent the GBP crashing down. I was hoping if there’s a way to avoid these spikes but thanks for the advice.
GBP is one of the more volatile currencies, and with all the news around Brexit it just makes the swings that much bigger, You may want to think about avoiding GBP and get your feet wet with some slower movers , I prefer EURUSD, AUDUSD and EURAUD as my prime trading pairs
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This is a nontrending sideways moving market, be patient, this period will pass
Hi dennis, how far apart should the values be in order for the market to be trending. Could you please mention what a strong trend would be and what wouldn’t be a strong trend please?
Thank you
Just see a couple of posts above.
Thank you Dennis, your advice is much appreciated
Yen was weakest on the day but not by much,
we want to see a 2% gap and growing,
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Did you mean GBP? If not, what did you mean by “Yen was weakest…”? I basically had the same #'s as you. Annnnddd, I basically watched from the sideline based on this spread. Frustrating that at the end of the day, GA & UJ had a good move today.
This is what forexlive reported…is this what you meant?
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I have no idea what you are talking about, if you look at my SW rankings from Friday to end of today, every currency gained against the Yen. I can’t make it any more simpler than that
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chart of the day
Most traded currency pair EURUSD is being squeezed by the 200 ma on the 4hr chart and the 200 ma on the 1 hr chart. nothing to do here until we break this consolidation
over the last two hours EURUSD has been testing the 200 ma on the 1hr Chart, if this gives way then a test of of May’s low near 1.1500 is in play, I will be watching for an entry but this could be a bouncy ride as both currencies are in the news a lot right now.
Note; this is not one of my regular SW trades,
GBP had a little bounce today leaving CAD as our new #8 and a new Trade signal CADCHF*, This is the third time this year for the CADCHF pair, we have already seen runs of +200 and +300 pips, market is much weaker so we will see what happens this time around
Bonus rankings, these are the 7 pairs I do most of my personal trading in, and as you can see not one pair has a spread of over 1% let alone 2%
