Quite an upsurge in the USD Index today, and frankly i’m a bit taken back by the late day continued upsurge. While this may be a dead cat bounce in the making, the cat is not yet dead. Also this bounce comes at the wrong place. Because of that i’m not chasing anything today. Forex or Stocks.
Comments »Monthly Archives: October 2011
Analysis of 6 Major Currency Pairs
EURUSD
I generally work off of weekly charts, but at times the need to find a viable trade requires a lower time frame. That time usually comes when things are more volatile than normal and we get stuck in a range with no real definable long term supply or demand levels coming into sight in the near future. However, considering the USD Index and what’s happening there, the highest supply level shown here may make for a nice trade.
GBPUSD
The GBPUSD is rocket shipping its way into supply. I was long this pair until I did something stupid, erasing half of the gains I had prior to this trip up in my trading. Yes, I am still beating myself up over this. The perfectionist in me demands that I do so. Provided we get some nice price action, I will short this pair when we arrive at supply.
USDJPY
There’s absolutely nothing I like about this pair, therefore it earns the “Calvin Award”.
USDCHF
This one has some potential, while it’s a rather large demand zone, if price action gives the go ahead i’ll go long here.
AUDUSD
This one is tricky. Demand has sent us straight back into supply twice now. Short term short positions if they look good. I’d be hesitant to hold anything long term.
USDCAD
Another Calvin Award winner. Absolutely nothing I like about this pair.
Bulls May Be In For An Unwelcome Surprise Next Week
Looking at the USD index, we are rapidly approaching a level of demand. As long as we don’t see consolidation start to set in just above this demand, the odd’s of a reversal are fairly high if we plunge right into it.
Weekly Chart
Daily Chart With Weekly Levels Shown
UPDATE
Should this level fail we also have another potential reversal point just below it. Often times a level will be broken through unexpectedly and still hold. This is one of those potential cases.
UPDATE 2
Another case for the Bear. Dow futures appear to be a run away freight train into the above supply level.
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Supply & Demand Trading Revealed Part 1
Maybe you’ve watched the webinars mentioned in this blog post, maybe you haven’t. The good news is you don’t have to. I’m going to lay it out for you in a relatively easy way to understand as it relates to trading the Spot Foreign Exchange Market. I prefer to get straight to the point. A lot of the jibber jabber about politics, economics, and opinions about how much the EU blows circus clowns while swinging on a trapeze fitted above a pit full of hungry alligators, or is using magic money , will all be left out of this.
We will use price and nothing more. Fuck your moving averages, RSI, Stochastic’s, and any other voodoo indicator created as far back as the fucking Egyptians. There are in fact people out there that use these indicators against you because they make you predictable and vulnerable. They already know what it is you will be doing and when you will do it. I know some of them, and they take advantage of you on a scale Bonnie and Clyde would envy.
Everything I present in this series of posts can be carried over into any market you wish to apply it to. I personally use it within FX and Stocks. However you can use it in bonds, deciding to buy put or call options, futures, you name it. The concept applies to all of it.
What is trading supply and demand?
– It is about as high probability as you can get, when you apply it in a certain way. You CAN fuck this up, but i’ll try to show you how not to, like I did recently.
– It can be used for anything from scalping to short and mid-term trading, and even long term investing.
– It is surprisingly very easy if you do not over think/analyze it.
What trading supply and demand is not?
– It is not the holy grail. Supply and demand changes just as much as the market itself does. Price, at all times, is a product of the ever changing supply and demand of a stock, currency, or anything you can think of.
In part deux I will go into the 4 types of levels and identifying and qualifying a supply and demand level. Have a good weekend!
Comments »The News Is Full of Attention Whores
It’s a slow FX day so how about a random thought?
The News
Seriously, I don’t know how many of you do it. Watching all these clowns on T.V. spewing their opinions. It seems who talks the loudest get’s the most attention.
Look at me! Listen to me! That guy is a jackass! He’s wrong! No, you’re wrong! How does anyone devise any understanding of anything listening to bull and bear argue with each other day in and day out? It makes me want to sit in my garage, door closed, with the car running.
What you’re watching on the “news” really isn’t news at all. It’s opinion and counter opinion. As a trader the best thing you can do, in my opinion (pun intended), is to close your eyes and your ears and remain as objective as possible. people lie, quite a bit more often than price.
A timeless classic. Enjoy.
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GBPUSD: The Reason For My Loss
I was driving home tonight and as I did so my losing GBPUSD trade was still haunting me. It’s been haunting me all day. Why? Why did I lose? I mean, yeah, we all lose sometimes, but losing is particularly something that never sits well with me.
You may or may not have heard of or know the art deemed “trading supply and demand”. If you’re interested you can find many recorded webinars here to watch. The webinars are a good start, but they are not the whole picture when it comes to using supply and demand successfully. I’ve never taken a course on supply and demand analysis. Better yet I should say I’ve never paid for a course on supply and demand analysis. I have seen the course material, exactly where it came from will remain my secret. There are plenty of threads on the subject at ForexFactory, but many of them over complicate the entire thing to the point that it’s just flat out difficult for anyone to understand.
There are certain rules to determining areas of supply and demand. With my GBPUSD trade I in fact broke one of the fundamental rules. The minute I realized this I felt the immediate need to get out of my car and lay on some train tracks as punishment for forgetting this golden rule. What caused me to completely erase this rule from memory? More or less the answer to that question is GREED. I saw a potential opportunity to hop on a long term, seemingly very profitable trade, in the beginning stages of it. Needless to say those beginning stages never materialized and I was punished with a 103 pip loss today.
Supply and demand trading takes patience, and it is about as accurate as an Army sniper if you follow the rules. All of them.
Comments »Calling All Rally Haters
While we may pull back a bit from here, know that there is still room to move higher. Note the USD Index. Also take note of the EURUSD, which tends to move with the DJIA at times, often leading or lagging by a number of days.
The supply level I was leery of earlier has been smashed to pieces . Our next potential turning point is 1.4380-ish as stated here, however, have a look…
USD Index – Going Down, But For How Long?
$74.75-ish looks to be our level of demand. Supply, which it’s coming off of now has been eaten away roughly by 35-45 percent. We may be approaching a bottom in the USD, or at least it appears that way as of now. As you know, things change all the time. If the dollar continues it’s forceful decline into demand there’s a very good chance it will be met with an equally or more forceful rise out of demand.
Ideology Is Idiocy In Trading
“Some call it idiocy, I call it innovation.” – Unknown
I see many calling for how stupid the market is for going up and how stupid the EU bailout plan is, even calling for it’s eventual grand and splendor demise in the future. What most of these people are doing, in my opinion, is fighting the tape. Not that I’ve never fought the tape myself, I have. We all do from time to time.
What’s important is that you realize you are in fact fighting the tape. Maybe even more important than this is realizing you’re not going to win that fight. Your opponent is bigger, tougher, and believe it or not, smarter than you. If you were all of those things you’d be the one on the winning side, wouldn’t you? Saying “The market is retarded” and then justifying your statement weeks later when the market has swung back in your favor is well, retarded. The market didn’t swing back into your favor because everyone realized how stupid they were and just how smart you are.
Do yourself and your bottom line a favor. Try not to fight the tape, no matter how insane it may seem at the time….
Comments »Dow Futures 400 Points From Potential Down Turn
Supply & Demand of Dow Futures. The previous down swing was forceful, taking out the fractal low before it, making this a good short opportunity as long as we do not get new demand right below our supply side.
