I haven’t written a post in several weeks. One of the nice things about being semi-retired is the possibility of simply not working for a while and relax for a bit. I have been doing precisely that. But all the while I have been watching the markets, FOREX in particular, take a wild ride due to the US Election and various other world events.
I have even traded a few times on a longer term position (meaning I held a position overnight or longer). As any who read this blog knows already, I am predominantly a technical trader and loot to enter and exit all trades in a matter of hours, sometimes even minutes.
However, markets such as what we are currently experiencing require a close attention be paid to fundamentals – with an emphasis on near term events affecting the currency pair we are intending to trade. Many pairs have been making moves of more than a big point per day (usually a penny when the USD is the leading pair). That represents a very nice trade if you can catch a good portion of such a move.
We just closed a nice trade on the EURUSD pair this morning. We entered the trade yesterday, late in the day and went short. Technically is was a risky trade, but with ECB meeting scheduled to report this morning I had a very secure feeling that there was no way that the report would add much strength to the euro.
Conversely, with just about every good scenario possible already priced into the euro, I figured that the likelihood that the market would be disappointed with the ECB report and sell the euro. So we took a short position and went to bed. We actually entered the market near the 1.08000 handle and captured a very nice gain all the way down to 1.06166.
Because of current market volatility, we chose not to place hard stop on the position – and that was likely a good decision as well. The market took the pair all the way up to 1.8725 over night before diving down to 1.05968.
We almost exited at 1.06786 – where we saw two closely placed primary lines of support, but because price penetrated and closed below that value we waited and watched and sure enough price soon broke through the lower value (1.06055) and moved right on down to our exit value. See Figure 1 below.
Figure 1: EURUSD 120816 – 7500 TICKS PER BAR
Technically this was a pretty good trade as well. Note my entire trading system is on the above chart. The yellow and blue oscillators plotted over the price bars provide trading triggers – generally when they are above price it is bullish and when below price it is bearish. Generally when the yellow is below the blue it is bullish and when the blue is below the yellow it is bearish. Sudden reversals are usually a good entry point and/or exit point.
The MACD AND Stochastic are my version (settings) of the standard indicators. The blue and yellow oscillators’ are my proprietary indicators and are used as described above AND to place the horizontal lines a week before trading to give added support to entry and exit decisions.
The Green Dots are generally buy signals, except when the yellow oscillator is above the blue and both are below price.
If you would like to try my trading system, you can get a free trial of all the indicators used on the chart above at TradeStation.
We provide a free copy of our eBook, See the Music of the Market, to all new subscribers to the RMI after the free trial week.
If you are looking for a system that does not require you do little work and studying, you won’t like what I do. On the other hand if you love to understand your trading decisions, you just might like it.
Exchange rates table is provided by DailyForex.com - Forex Reviews and News
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Live commodities widget is provided by DailyForex.com - Forex Reviews and News
Author & Trader
I trade the US Bond Markets exclusively – amazed at the accuracy of the SRV’s !!George SNew York, NY
Great system – couldn’t trade without it !!Frank YDavid, Panama
Thanks for the method !! Very solid, very logical entry and exit and genius SRV’s !!Denis DRussia
“The SRV’s are amazingly accurate”.Tony Texas
the SRV’s are spot on !!Tom CUSA
….very impressed with the whole philosophy – both personal and trading, expressed in the book. I will read and revert !!Richard DUSA
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