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EURUSD-2

📚 Understanding Price Action - Impulsive & Corrective Moves 📚For every currency pair, all the price action can be broken down into 2 different waves. Impulse waves and corrective waves. Both of these waves have the same patterns within them such as flags, ascending/descending corrections, channels etc. The tip to finding out what phase we're in is to zoom out to a bigger timeframe and look at price action as a whole and ask yourself "is this impulsive or is this corrective". Once you understand that, you can more often than not understand where price will be going next. For CADJPY, we are in a flat ABC triangle and we are approaching the upper limits of the triangle. We also are in an ABC correction. On the smaller timeframe, if things line up, we can get in at the very top of the impulse and ride this back down! Try spotting corrections and impulses and watch how your chart game levels up!
Education
by WicktatorFX
11
📚 Impulsive & Corrective Breaks - How To Identify & Trade Them 📚What is an Impulse? An impulse is defined as a strong move whereby the market moves quite strongly or heavily in one direction, covering a great distance in a short period of time. Typically, when there's a trend reversal occurring, we require an impulse in the opposite direction of the trend, indicating to us that there's a possible trend reversal. The question we face now is "What does an impulse need to look like for there to be a trend reversal?". Throughout my years in trading, I've found that if a significant level is broken during the impulse, we can expect a follow through of that impulse after a brief correction or a retest. In the Impulse diagrams, you can see that I've marked out a recent significant level where price reacted. When there was an impulse, I kept an eye on the level to see if it breaks. If it did not break, I can assume that the impulse wasn't strong enough to create a trend reversal and it is merely a bigger more aggressive correction. However, if the level did break along with the trendline, we can assume that there is a trend reversal taking place and we should keep our focus on the key level and price action for corrections such as flags, pennants , channels etc. Please see chart updates for examples of Impulsive Breaks and how to trade them. What is a Correction? A correction is defined as a relatively short-term movement of the market in the direction opposite to the main trend. To identify whether a break of a trendline is an impulsive break of corrective break, we must also identify the key level by looking at a significant level where price reacts. If the impulse that breaks the trendline does NOT break the level, we can assume that the trend isn't ready to reverse yet and it is a corrective break. Often a corrective break ends up with an impulse breaking the significant level, at which time we can look for a correction to take our trade. See chart updates below for examples of corrective breaks and how to trade them. Please leave a like and comment what you think! As always, Goodluck and trade safe! Mr Wick.
Education
by WicktatorFX
140
📚 Impulsive & Corrective Breaks - How To Identify & Trade Them 📚What is an Impulse? An impulse is defined as a strong move whereby the market moves quite strongly or heavily in one direction, covering a great distance in a short period of time. Typically, when there's a trend reversal occurring, we require an impulse in the opposite direction of the trend, indicating to us that there's a possible trend reversal. The question we face now is "What does an impulse need to look like for there to be a trend reversal?". Throughout my years in trading, I've found that if a significant level is broken during the impulse, we can expect a follow through of that impulse after a brief correction or a retest. In the Impulse diagrams, you can see that I've marked out a recent significant level where price reacted. When there was an impulse, I kept an eye on the level to see if it breaks. If it did not break , I can assume that the impulse wasn't strong enough to create a trend reversal and it is merely a bigger more aggressive correction. However, if the level did break along with the trendline, we can assume that there is a trend reversal taking place and we should keep our focus on the key level and price action for corrections such as flags, pennants, channels etc. Please see chart updates for examples of Impulsive Breaks and how to trade them. What is a Correction? A correction is defined as a relatively short-term movement of the market in the direction opposite to the main trend. To identify whether a break of a trendline is an impulsive break of corrective break, we must also identify the key level by looking at a significant level where price reacts. If the impulse that breaks the trendline does NOT break the level, we can assume that the trend isn't ready to reverse yet and it is a corrective break. Often a corrective break ends up with an impulse breaking the significant level, at which time we can look for a correction to take our trade. See chart updates below for examples of corrective breaks and how to trade them. Please leave a like and comment what you think! As always, Goodluck and trade safe! Mr Wick.
Education
by WicktatorFX
56
Stop Loss Hunting – Are You The Hunter 🤠 Or The Prey 🍖 ? Hello guys, In today’s article, I am not going to tell you which type of order to use, because that was the main message of the previous one. Today, I will focus on another interesting phenomenon related to this topic – Stop Loss Hunting. “My Broker Is Hunting My Stop Loss” A typical thing beginner traders say: “My broker is hunting my SL, he knows exactly where it is and he always makes the price go exactly there.” Or “I am the most unlucky person ever – the price always hits my SL and then turns the way I predicted.” Sure, having a reliable broker is crucial but in this case, it’s very often the fault of the beginner trader. Well, in fact this is not just beginners. Even advanced traders have such problems… Let’s now talk about what is the reason of this “SL hunting” and let’s use a recent example. Heavy Volume Zones On DAX A couple of days ago I wrote an analysis on DAX. In this analysis, I showed a strong volume-based swing Support around 14.600. As a reaction to this I received a couple of emails from people asking me why not the higher area, around 15.250? Both are heavy volume zones , so why not trade both? Lets talk about the 15.250 zone now. Those heavy volumes you see there were accumulated in a rotation area around 15.250 (marked in red). That rotation area though, had a very “weak low“. The Weak Low There were so many little reactions to the low of the price channel, but not a single big and strong rejection. What many traders do is that they have their SL orders below the rotation channel. This is usually traders who trade breakout strategies, or traders who are trailing the trend. The picture below shows this rotation zone more in detail and it shows all those small and weak rejections. Below such rejections, many people place their SL orders. I call the areas where people place a lot of their SL orders “SL Clusters“. What usually happens is that the price goes there and “consumes”all those SL orders there. Who is doing this? Not the “evil broker”. It’s the BIG trading institutions who manipulate the price to go there. Then they take all that free liquidity there (liquidity from those SL orders). Big guys need liquidity. They need it to enter their trades. They actively manipulate the price and look for places with liquidity like the one I showed you. BOOM! – Everybody Out! A phenomenon worth noticing with such “SL hunting” is that the price usually shoots rapidly through such zones. BOOM! Everybody is out 🙂 Often with slippage. Why does the price shoot so fast through such areas? Because STOP LOSS order is a MARKET ORDER. This is important! Stop Loss Order = Market Order If you read the previous part of this article then you know that a Market Order means that you are able to quit (or enter) your trader NOW. The downside is that you may get a slippage, because NOW there might not be a big enough counter-party (exactly at your desired price level) to Buy what you Sell, or to Sell what you Buy. Stop Loss Hunting When there is a SL run, then all those people whose SL get hit enter a Market Order to quit their position. Market Orders are sort of catalyst that move the market. Those are aggressive orders. This is the reason the price shoots fast past SL Cluster areas. SL clusters are catalysts and people often get slippage when their SL gets hit there. Now, lets get back to that 15.250 level on DAX. Stop Loss Hunting On DAX – EXAMPLE Below this heavy volume area, there was a SL cluster. For this reason it was not a good idea to go Long from 15.250, because the SL cluster was right below it. As you can see, the institutions recognized this SL cluster and they moved the price towards it. When the price hit this area it was quick. Whoosh! All those SL orders got hit. The fact that SL orders are Market Orders helped the price to shoot past this area fast. Remember – Market Order means – I want in (or out) NOW! So, that’s exactly why I don’t like trading Longs when there is such SL cluster below the potential Long entry level – when there is the “weak low“ You guys liked this article? I hope you did! Let me know your thoughts in the comments below. Have a GREAT weekend and happy trading! -Dale
EUREX:FDAX1!Education
by Trader_Dale
2
How to trade wedge patterns? An example based on EURUSD chartWedge Patterns are a type of chart pattern that is formed by converging two trend lines. Wedge patterns can indicate both continuation of the trend as well as reversal. Rising Wedge- On the left upper side of the chart, you can see a rising wedge. Rising wedges usually form during an uptrend and it is denoted by the formation higher highs(HHs) and Higher Lows(HLs). This pattern gives traders the opportunity to take short positions in the market. When price breaks out of the lower Trend Line(TL) of the wedge, a trader can execute a short position. Falling Wedge - On the left lower side of the chart, you can see a falling wedge. Falling wedges when formed during a downtrend is a reversal pattern and it denoted by the formation of lower lows(LLs) and lower highs(LHs). If you notice this pattern during a downtrend, it usually indicates that the downtrend is losing momentum and buyers are stepping into the market gradually. When price breaks out of the upper TL, one can execute a buy trade. On the right side, you can see the recent EUR/USD chart. The wedge pattern in this particular chart is the Broadening Wedge Traders can trade this pattern by taking short positions whenever bearish price action takes place in the upper TL of the wedge. On the other hand, buy trades can be executed on the lower trend line of the wedge.
Education
by MarcellusLUX
36
🎓 EDU 5 of 20: FUNDAMENTALS ARE THE HOLY GRAIL OF TRADINGHello traders! In the previous Educational Post (4 of 20) we learned what FIST (Fundamentals, Intermarket, Sentiment, Technicals) is about and why you need to use this trading framework in your trading. I strongly believe that incorporating a range of analytical disciplines returns better trading results than focusing only on one tool. This is how big players play the market, and this is how you should trade too - if you want to become a consistently profitable trader. Most retail traders put too much emphasis on technical analysis. The majority of traders even trade solely with technical tools. In an earlier post, we have covered why you shouldn't trade only on technicals , so this might be a good time to revisit that lesson and read it if you haven't already. Most retail traders will wait for a signal like a pullback, MA crossover, overbought/oversold RSI conditions, MACD, and follow candlestick patterns and chart patterns to enter into a trade. Guess what? That's an easy way to blow your trading account! If you look at your broker's homepage, you'll see a sentence stating how many retail traders lose money. I have yet to find a retail broker where less than 20-30% of traders are profitable. The rest, 70-80% of clients, lose money on a consistent basis. I bet that, of those who lose money, the majority use technical strategies and/or have poor risk management skills. Institutional traders don't open a trade based on MA crossovers or extreme RSI levels. They follow a range of fundamental signals, analyze correlations between different asset classes, and follow the general market sentiment. Technical analysis accounts for 5% of their work. Technical levels are only used to determine entry and exit points - ONLY after they already know in which direction they want to trade. Fundamental Analysis Unlike technical analysis which is based on the premise that history repeats itself, markets like to trend, and all available news is instantly discounted in the price, the fundamental analysis aims to explore the underlying factors of why a market is going up or down. Technical analysis is all about charts. Technicians are not interested in the reasons behind price movements, which often creates an environment where technicals alone produce fake signals. I bet many of you have seen that: a failed triangle breakout, a failed trendline breakout, or the RSI remaining in oversold conditions as the price continues to trade lower. Fundamental analysis can be grouped into two groups: macro fundamentals, and micro fundamentals. In trading, macro fundamentals refer to the bigger picture fundamentals: interest rates, economic growth, inflation rates, and labor market conditions. Micro fundamentals are more subtle, but can also have a large influence on the price. Those are comments by central bankers, news, market indicators (PMIs, CPIs...), political developments in a country, etc. Central Bank Meetings My students often ask me whether they should follow central bank meetings and press conferences. My answer: If you want to make money trading, then yes! Nothing has such a large impact on prices as central bank meetings and interest rate decisions. And if you do your homework, you can profit from those meetings most of the time. Follow press conferences that are scheduled shortly after the meeting and listen to the Q&A session, and read the entire meeting report once it's out. You'll find it astonishing how much you can learn from those reports - and how easy it can be to make money in the markets. There are eight major central banks in FX: US Federal Reserve (Fed), Bank of Canada (BoC), Bank of England (BoE), European Central Bank (ECB), Bank of Japan (BoJ), Reserve Bank of Australia (RBA), and Reserve Bank of New Zealand (RBNZ). Create a bookmark for each of those central bank websites, and read their reports and articles at least once a week. I like to do it on weekends. You can even have very profitable trades after the Central Bank meeting is over and the market has already reacted to the news. Commercial banks and other sell-side institutions will often drain liquidity in the markets to purchase a currency at discount after a major news report or interest rate decision. If you know how to identify this liquidity drain, you'll be able to catch amazing trades in the future. Thanks for reading and stay tuned for Part 6: What Market Indicators do I Need to Follow?
Education
by MujkanovicFX
Stochastic OscillatorA stochastic oscillator is a momentum indicator. Trading Strategy: ✔ Recognise the trend: 👉 In a trendy market only open position in the direction of trend. 👉In a range market you can use both buy and sell signals. ✔ Upper band and lower band indicating different things in different market conditions: 👉In a trendy market upper and lower bands show the momentum in the market for example in an uptrend if the indicator is above 80 it means that buyers have the momentum. 👉In a range market, however upper and lower bands showing the overbought and over-sold areas. So, we may go long if we see oversold in a range market and go short if we see a over-bought situation. ✔ Divergence is another important strategy to adopt when using stochastic indicator as a divergence may indicate a trend reversal.
Education
by apadanaforex
Market Vs. Limit Orders – Which One To Use? 😲Hello guys, this article will be about Market Orders and Limit Orders. I will break down how retail traders use them (that’s us) and how BIG trading institutions use them. One could think that such info is useful only for day traders and for people trading with Order Flow. This is, however very far from the truth! Understanding how Market and Limit Orders work and how to use them will help you to understand how the markets work overall. Not just on the faster time frames! Market VS. Limit Orders - The Main Differences MARKET ORDERS Market orders are used by “aggressive market participants”. An aggressive market participant is anybody (you, me, an institution,…) who wants to enter their trade NOW. A problem is that if you want to enter (or quit) your trade now, there may not be a counter party to your trading order (=when you Buy, somebody needs to Sell). EXAMPLE: Imagine you want to Buy 10 Lots of EUR at 1.1900 but currently, there are not enough people willing to Sell for this price. Let’s say that for 1.1900 there are only 5 Lots available. Other 5 Lots are available, but only for a higher price – 1.1901. If you enter with a Market Order, then you want to enter your whole trading position NOW. No matter what the price is! So, in this case, you Buy 5 Lots for 1.1900 and automatically 5 lots for 1.1901. Pros & Cons Of Market Orders The upside of Market Order: You enter your whole trade NOW. The downside of Market Order: If there is not enough liquidity, then you will get a slippage = you will enter (or quit) your trade (or a part of it) for a worse price. Btw. this is also why it is so important to have a good broker with good liquidity! LIMIT ORDERS Limit orders are used by “passive market participants”. Again, this can be everybody – you, me, Goldman Sachs,… Everybody who enters their trade with a Limit (pending) order. A Limit Order is considered passive because you place it and you wait until the price reaches it. You are passive. You don’t need to enter your trade now. You wait until the price comes to you – to a trading level where you are willing to Buy/Sell. This is the exact opposite of Market Orders, see? EXAMPLE: You want to Buy 10 Lots of EUR. It is important for you that you buy it for 1.1900. You enter a Buy Limit Order for 10 Lots at 1.1900. Then you wait = you are passive. When the price makes it to 1.1900 and there are enough people willing to sell for 1.1900, you will get filled and you buy 10 Lots of EUR for 1.1900 – that’s the good scenario. What can happen with a Limit Order is that when the price makes it to 1.1900, the Sellers will only be willing to sell 5 Lots. In this case, you will buy 5 lots and that will be it. You will need to wait again for the price to go to 1.1900 in order to get matched with some more sellers who will sell you the remaining 5 Lots. See the difference? With Limit Orders, you don’t chase the market. You are only willing to trade for 1.1900. The risk here is that you will get filled only partly. Don’t think this happens only with big trading positions. This can happen also with smaller ones (even below 1 lot). Pros & Cons Of Limit Orders The upside of Limit Order: You will get filled EXACTLY for the price you choose. No slippage. The downside of Limit Order: There may not be enough liquidity (counter party to your trade) at your price level and your trade will get filled only partly. Should I Use Market Or Limit Orders? Is Market Order better than Limit Order? Or is this the other way around? Which one to use in your trading? As usual, there is no a simple answer 🙂 If you need to enter your trade NOW, then you should use a Market Order. Those are also good if the trading instrument you trade is not too liquid. I personally prefer Limit Orders. The reason is that I have a complete control over the exact price where my trade gets filled. An important thing is that I have a good broker with deep liquidity pool. This means that I don’t have problems finding Sellers when I want to Buy and Buyers when I want to Sell. Not even when I use Limit Orders to trade some less popular trading instruments. So, all in all, having a good broker helps because you can trade with Limit Orders without limits (pun intended:)) Do BIG Trading Institutions Use Market Or Limit Orders? Hedge funds, banks, pension funds… All those BIG institutions don’t use Market and Limit Orders exactly like us. Yes, the rules are the same for them but because they have enormous amounts of capital to allocate, they play the game a bit differently. To put this very simply – institutions do two things: 1. BIG Institutions Accumulate Their Trading Positions Trade accumulation means that institutions are entering their huge trades slowly. They need time to enter their huge positions. It’s not a one-click situation for them (like it is for us). They need time because their capital and trading positions are too big. They are entering their trades slowly in areas where the price goes sideways (a rotation). In areas, where the price doesn’t move too much. Why? Because they need to enter their trades secretly. Goldman Sachs doesn’t want anybody to know that they are buying crazy amounts of EUR, right? This would start a trend and they wouldn’t be able to fully enter their trades before that. So they need to enter their trades unnoticed – in a rotation. How do they do it? They have algorithms that are entering both Market Orders and Limit Orders automatically. Very often by just small 1-2 Lot amounts, but super fast (such orders are called the “Iceberg Orders”). In a rotation it doesn’t really matter if they use Market or Limit Orders. The reason is that the price doesn’t move too much there. Why they use both type of orders then? To mask their intentions! A Little Extra ***WARNING: Only read this last part if you are ready for a headache. Otherwise, you can skip it :)*** When they enter a Limit Buy, then it gets filled for the price on Bid. When they enter Market Buy, then it gets filled for the Ask price. So, if they Buy 1 Lot with Limit Buy, and then 1 Lot with Market Buy, then 1 Lot will show on Bid, 1 Lot on Ask (you can see this for example with Order Flow software). The funny thing is that the institution has just bought 2 Lots. Confusing? Good. It should be confusing! Because they do this to confuse and hide their intentions 🙂 2. Big Institutions Manipulate The Price After they have entered their huge trading positions, the institutions need to move the price in order to make some money with those positions. If they had been accumulating a huge Long position on EUR, then they need to push the EUR upwards – into an uptrend. This will make those positions profitable. How do they start an uptrend? This is where Market Orders come into play! They will start placing a lot of Market Long Orders. This will start to move the price higher. You can imagine this as if they started to shout “We are Buying all there is, we want it now!” Something like this will definitely bring the attention of others. Other market participants will see this – all those aggressive Long orders and they will start to join in the party – a snowball effect. This is how the manipulation works – through Market Orders. A good time for this is during significant Macro news releases because during macro news this does not look like a market manipulation but only as a reaction to macro news. I hope you guys liked this article. There is a bit more to this topic so let me know if you found this interesting and if you want me to do a 2nd part 🙂 Happy trading, -Dale
Education
by Trader_Dale
8
How To Trade A Trending Market With Volume Profile 🧐 Hello guys, in today’s post, I would like to talk about trading a market that is in a strong trend. A nice example is a current uptrend on AUD/USD. This pair has made over 150 pip move in the last three days. This is something quite extraordinary for a less volatile Forex pair like the AUD/USD. When it comes to trading a trending market I am not a huge fan of breakout strategies and even less a fan of just jumping in at the high/low of the trend. Pullbacks To Volume Clusters What I prefer is to wait for a pullback and then enter the trade. Pullback to where? To areas with significant volumes. In an uptrend, those significant volumes show us places where strong Buyers were entering or adding to their Long positions. Those “Volume Clusters” work as strong Supports because the strong Buyers who placed their Longs there are likely to defend them. Here is an example of two such Supports on AUD/USD. Those two Supports are trading levels I published yesterday in my Member area. Step-by-step Guide In the picture above, you can see two Support levels: 0.7688 and 0.7646. Those are both based on the same logic. Here is how I do it: First, I look for an uptrend. Then I use my Flexible Volume Profile to look at the volume distribution within the trend area. What I want to see are significant “Volume Clusters“ Those should work as strong Supports (in uptrend) and I expect the price to react to both of them. Wait for a pullback and then enter a Long trade from each of them. The Buyers who were active in those “Volume Clusters” in the past should become active again and they should try to push the price upwards from those areas again. This Volume Profile setup is called the “ Trend Setup “. I personally prefer to trade only the 1st test of each trading level. When the price hits the level again I don’t trade it. I consider it already spent. Trading The Trend With VWAP Another cool way how to trade a trending market is using VWAP. If you want to learn more about trend trading with VWAP then you can check this webinar recording: VWAP Treding Setups (WEBINAR) I hope you guys liked today’s post. Let me know what you think in the comments below! Happy trading, -Dale
Education
by Trader_Dale
Order box trading This is educational :) You can see that the price is a bit "blurry" at the first order box. Why is this? Financial institutes never invest their whole money at the same time to get "stopped out" or "margin called". They do this to check how the price is reacting to their orders. For example, if they want to invest 100 million euros in a long position; firstly 20m, then 30, and then 50. This "blurr" will form what we call the order box. Now, what happens? All of the orders will not go to reality. maybe only 70% will. Then, when the price touches this order box area, the price will bump again as a consequence of all the underlying orders. This is what you see at the "support order box". Same thing at the top. Steps to spot these: 1, find the "blurr" 2, watch for confirmation (aka = second time it touches) 3, trade the 3rd, or 2nd if u are brave, it touches this box. 4, place stop loss just above the box But what for take profit? Place it in either the other side of the box, or eventually, at 0,618 of Fibonacci. I use this to trade with the trend and not against it. Questions? Ask them in the comment area :D
Education
by Spketss
4
TradingPit Scalping Strategy - EUR/USD 15MThe strategy uses a short (30) and long period (200) exponential moving average which you can both change in the settings. The strategy is trend following and designed to only trade in the direction of the trend. It looks for pullbacks against the direction of the trend to buy and sell into the trend. Long Entry Conditions: - Short EMA above long EMA and price above short EMA - Pullback below short EMA - Entry on close above short EMA Short Entry Conditions: - Short EMA below long EMA and price below short EMA - Pullback above short EMA - Entry on close below short EMA
Education
by TradingPit
RSI (Relative Strength Index)RSI = Relative Strength Index Is fluctuates between 0 and 100 • A momentum Oscillator • Increasing RSI when: Average gains are greater than average losses = Bullish • Decreasing RSI when: Average gains are less than average losses = Bearish How to use: 1. Trend recognition: trading in the direction of the trend 1.1 Above 50: Uptrend 1.2 Below 50: Downtrend 2 Overbought and oversold entry signals. 2.1 In an uptrend look for oversold areas and open a long trade after the pullback above 30. 2.2 In a downtrend look for overbought areas and open a short trade after the pullback below 70.
BITSTAMP:BTCUSDEducation
by apadanaforex
(Review) Definition trend and change of trend ( Trend reversal)(Review) Definition trend and change of trend ( Trend reversal) EX: Discussion: Downtrend - Definition A downtrend comprises a repeating sequence of: 1) A downward extension 2) A swing low 3) An upward pullback 4) A swing high A downtrend ends when price breaks the swing high which leads to the lowest swing low of the trend Uptrend - Definition An uptrend comprises a repeating sequence of: 1) An upward extension 2) A swing high 3) A downward pullback 4) A swing low An uptrend ends when price breaks the swing low which leads to the highest swing high of the trend EX: Prior analysis ( Downtrend) - Countertrend - Reversal trend: - Downtrend forming=> Sell - Continuous downtrend Please support the setup with your likes, comments and by following on TradingView. Thanks
Education
by DatTong
11
(Review) Definition trend and change of trend ( Trend reversal) (Review) Definition trend and change of trend ( Trend reversal) EX: Discussion: Downtrend - Definition A downtrend comprises a repeating sequence of: 1) A downward extension 2) A swing low 3) An upward pullback 4) A swing high A downtrend ends when price breaks the swing high which leads to the lowest swing low of the trend Uptrend - Definition An uptrend comprises a repeating sequence of: 1) An upward extension 2) A swing high 3) A downward pullback 4) A swing low An uptrend ends when price breaks the swing low which leads to the highest swing high of the trend EX: Prior analysis ( Downtrend) - Countertrend - Reversal trend: - Downtrend forming=> Sell - Continuous downtrend Please support the setup with your likes, comments and by following on TradingView. Thanks
Education
by DatTong
25
How To Pair Currencies Like A Champ | Quick & Accurate🔵 As a forex trader, some of us stick to a pair or two, some of us trade several, and some just scan all of them for the exact setup that they trade in their strategy. Regardless, it’s a forex trader’s duty to have an awareness of how each currency is performing. If GBPJPY is going to rise, it will most likely be due to a combination of the pound gaining strength and the yen getting weaker. Have you ever had the same setup on several EUR pairs, but the one you traded didn’t perform as well as others? It’s most likely because you chose the pair out of the bunch that wasn’t diverging in strength. Before I analyze anything, I assess the strength of each currency first, then I select the best matchups to increase my probability by default. Common techniques I’ve seen traders use to filter pairs: Currency strength indicator Currency heatwave mobile app Looking at DXY, EXY, BXY, CXY, etc. Manually scanning each pair to get a feel for each currency strength None of these are right or wrong, but there is another method that I use, and I will share it in this post. The issues I faced: I use to manually scan each currency pair, but it was too exhausting, by the time I started analyzing charts, my brainpower was weakened. As for the indicator & heatwave, I never personally liked them because I felt like they were too slow, I was always a step behind the big moves. The issue with looking at DXY vs. BXY is the BXY has too much weight related to the dollar, if you look at it you’ll probably see it moves just like GBPUSD. Solution: We need a way to not only analyze each currency but make sure they are equally weighted. I created custom formulas on tradingview to help me read currency strengths faster, and more accurately. How To Do It: If you open a chart on tradingivew, and you go to the top left of your chart where you can search an asset. Not only can you search assets but you can create formulas here, you should be able to see the math symbols. So if we want to create a formula to find the USD strength this is what we can type in: (USDEUR+USDGBP+USDJPY+USDCHF+USDCAD+USDNZD+USDAUD) / 7 *Note: Use the same broker for all of them when you add them to the formula, and make sure they are consistent. The USD is the first one listed on all of them, we need this consistency because we are comparing everything to the USD. At the end of the formula, I divide it by 7 because that will divide the entire formula and show us the average. When you press enter you will now see a chart displayed on your screen, this is displaying how the USD is performing across the board. I have done this for all the top 8 currencies, I have also created one for XAU versus the top 8 so I can see its performance as well. Now let’s say you are a harmonic style trader. This is how you can use it to find the higher probability harmonics (you can do this for other signals too) Example #1: GBPNZD Here’s what the formulas say: Based on this, they are both strong, so there should be some range behavior. Let’s see how GBPNZD actually behaved: Example #2: GBPNZD Let’s say you are a trend trader, here’s what the formula said: Based on this, GBPNZD should rise with strength because of the divergence. How I use this: I use these formulas to find when trends or sentiment switches are occurring. I spend probably 65% of my time analyzing on these 8 charts. It allows you to be one step ahead of everyone else, and to increase your probability. I’ve used it on 5-minute charts, H1, H4, Daily, and Weekly. I’ve had no issues with it for over two years. Of course, I’m not saying throw away the DXY or anything like that, this is simply another tool you can put in your box. I hope you found this valuable, feel free to backtest or tweak it to your liking, if you watched my Sunday outlooks, I go through this process before the week begins, then I do it before each of my trading sessions during the week. Let’s Elevate, Gio P.S. Every week I share a market outlook, educational content and trade ideas, right here on tradingview. Make sure to follow so you don’t miss them! Comment your thoughts below, or if you need help setting it up! Also, if you want to sharpen your psychology check this post I shared monday -> 5 Ways To Enhance Your Trading Psychology
Education
by elevatedinvestor
9