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USDNOK trade ideas

USDNOK,USDPLN & AUDJPY correlation trade on D1 ChartGREETINGS This articles will be a follow up piece to the educational article I did on correlation trades in the forex market. Check out my article on CORRELATION-DIVERSIFYING-HEDGING-An-elementary-view Now in a previous article that I wrote I had strongly suggested that the AUDJPY had reached a key level of resistance on the daily and weekly chart and was suggesting a possible short sell. Interestingly this was about 2 weeks ago and the price action hasn't really come down at the magnitude expected, except for today (21/12/2020). As I concluded the previous article I promised to explore the idea of how correlated pairs can be used to confirm break outs and avoid fake outs, and this is what we are going to do with the above currency pairs. To start of we shall consider that pair that I had last made an analysis on, which was the AUD/JPY. This pair I had concluded had reached a crucial resistance level and therefore was ready for a sell. I realised at the time that currency pairs do not move in isolation so to avoid the risk associated with putting all my eggs in one "trade", I sought negatively correlated pairs to place a trade and potentially double up my profits while giving me the comfort of a diversified portfolio. I came across 2 pairs which had a -98% negative correlation and these pairs were the USD/NOK and USD/PLN. So how we use such correlated pairs to confirm a break out and not a fake out is to closely monitor both pairs when there is a sudden move in the opposite direction by one pair, you observe the other to see if there is a corresponding move. This I learnt the hard way last week as the prevailing trend on the AUD/JPY was somewhat bullish, whenever it would reverse I would quickly look to put an opposing entry on the USD/NOK. I would not wait for the confirmation on that pair and guess what the USD/NOK would rally further down. this showed that the reversal on the bullish AUD/JPY was a fake out. Sure enough the AUD/JPY would go back up. Now that both pairs seems to be correlating perfectly I think it might be an opportunity here. I have attached the chart which shows how these pairs look like a mirror image. Now I will be looking for long positions "only when price action confirms". This confirmation will be in the form of a pin bar or bullish engulfing candle on the daily (D!) chart. So possible a buy stop or just put an alert at the open of the last bearish candle. My outlook My outlook for the USD/NOK and USD?PLN is to go long This view is long term and could possibly look beyond Jan 2021 My possible entries could be: USD/NOK Buy Stop 8.7416 Take Profit around 9.1400 and maybe let it run to 9.51 USD/PLN Buy Stop 3.72 Take Profit around 3.88 As I said this could go beyond Jan 2021 Takunda Mudenge is a market analyst based in Zimbabwe, Africa. He writes in his personal capacity for educational and entertainment purposes. This should not be construed, assumed or viewed as investment advise. Please consul a professional for such.
Long
by takundamudenge
ridethepig | NOK for the Yearly Close📌 NOK for the Yearly Close Now comes the traditional complex NOK and SEK map complex. I have mentioned a number of times SEK was in a very good position for sellers, now NOK is joining the disco because it is unlikely that dollar can manage to force the defence. A very amusing chart, for those with a background in waves we are playing the breakdown on a 5 wave multi-decade flow ending. Here we are dealing with a remarkable position for sellers, a staggering -12% downside to go to the nearest support ....meaning the manoeuvre is intended to put pressure on our opponent as one might suppose with capitulation. Invalidation can be defined above the latent outside reversal. Thanks as usual for keeping the feedback coming 👍 or 👎
Short
by ridethepig
USDNOK READY FOR LAUNCH!Hello traders, I hope you are all doing great! The last week finished in deep green territory for us (The Greek Trader community) above 500 pips profit and we are doing the same on this one! The trade set up we are looking on is the USDNOK and let us tell you what our analysis is showing us: Technical Observations 1.We have price reaching a daily-weekly and a monthly zone at 8.78-8.80 level. 2.It's a psychological round number! 3.We have with bullish MACD divergence. 4.We have a double top pattern in the daily timeframe and we have reached the targets of the extensions. 5.We have a Fib extension of 2.618 from the last pullback. 6.We have also 5 waves completed on the 4Hour timeframe. Possible long Trade ENTRY at 8.8110 STOP LOSS at 8.7658 TP at 8.99340-9.0 LEVEL RISK/REWARD 4.03 THANK YOU ALL FOR SUPPORT!! KEEP FOLLOWING AND SUPPORTING MEANS A LOT TO OUR ME! Happy profits everyone!! THE GREEK TRADER
Long
by The_Greek_Trader