Hey everyone! New to the subreddit, I've been lurking for a couple of weeks and picking up some good stuff, so thank you all for your contributions. submitted by
A little background on me. I've been trading on and off for over 20 years. Made and lost several hundred thousand dollars while trading futures and equity options. I've never really gotten into forex before other than to do a little research and testing. I personally don't like to take pure directional bets so with futures I traded spreads and with options I was a premium seller.
But I'm giving it a try now and my first month (January) I'm up 6% on my demo account. So I thought I'd start a fresh account for February and share how things go. I've set up a myfxbook too if you're interested. If things go well I'll probably go live in March or April with a small account.
As indicated in the title I'm swing trading the daily charts, mostly holding trades for a few days although backtesting there are multi-week trends that I may have caught too, although I put much stock in backtesting.
For trade entries I keep things very simple with just Support/Resistance and using Heikin Ashi to identify strength or weakness. I'll then check IG and Oanda open positions to confirm I'm taking a position opposite most retail traders.
For TP I'm experimenting with multiples of ATR to take up to 2/3's off and allowing the remainder to ride with a trailing stop.
For initial SL I've been using the high/low of the previous bar but I'm also experimenting with ATR there too since I've noticed that my trades tend to either go quickly right or quickly wrong and when they go wrong they don't come back and when they go right they don't retrace back to entry, so a tighter SL may be wise.
Finally, I'm risking 1% of my account per trade.
Tomorrow I'll post the pairs that I'll be looking to get into Monday.
I think that's about it. If you have any questions or suggestions please feel free!
Hey guys. I don't usually do GBP/USD, but it's suddenly become one of the most interesting pairs in my opinion, because I believe some very big moves are afoot. I'm going to mostly be looking at the long term view in the context of market positioning, so this might not be all that helpful for scalpers ;)
I want to start with the Daily FX SSI (Speculative Sentiment Index) reading for GBP/USD, which is quite something: http://i.imgur.com/pFcbIij.png
(© 2014 DailyFX)
There are 9 traders short for every one long. Basically the entire retail crowd is betting against the trend. This means that the majority of orders in the market will be stop losses near current levels.
Also worth a watch is John Kicklighter's video for the week, focusing on the S&P and GBP/USD: http://www.dailyfx.com/forex/video/daily_news_report/2014/02/14/Forex_Weighing_Reversals_for_SP_500_USDollar_GBPUSD.html
For those new to this kind of thing, sentiment analysis is just analysis using what you can know about market positioning, and how the market generally "feels" about a currency pair. Usually SSI gives quite reliable indications of when a trend will continue, because the majority of retail traders will start betting against it. Their stops add fuel to the fire when it continues. (This is also why I'm short AUD/USD - 2 traders long to every 1 short. Not extreme yet, but it means there are lots of stops below).
Before I get into too much detail there, here's the weekly chart: http://i.imgur.com/Ef4VRQf.png
(Yes I'm long)
I've put some tentative levels there, but I'll do more precise ones in a minute. As you can see, price is breaking out of a long term wedge. It hasn't quite cleared the range yet, and 1.700 is a massive wall to get over. There will be enormous interest at this level, not to mention some extremely large option barriers.
But I think it will break it eventually. Why I think it will go higher? Well, market positioning for one, but also this: http://www.cityindex.co.uk/market-analysis/market-news/24551832014/sterling-at-fresh-3-year-highs-eyes-more-gains/?cid=0000215115
Good analysis piece pointing out that GBP/USD is only about 6% away from the 200WMA. Deviations from this average have historically been much larger. Since price is clearly moving away from this level, I believe we can expect quite a large move as the market unwinds its short positioning.
A look at Oanda's orderbook (or the order boards posted at ForexLive) can give us a more precise view of where these orders are sitting: http://i.imgur.com/FEn4h3O.png Current Positioning & Open Orders
As you can see the market is severely short, mostly from the last 100 pips or so. 1.6600 is an area where a lot of positions, both long and short, were established.
There are clusters of buy stops above 1.6700 (small), 1.6750 (bigger) and then above 1.6900 there are two large clusters of buy stops.
Further, there are more buy stops above current price than there are sell orders, meaning that there is ample room for price to continue higher. They're mixed in with some mid-weight sell orders around 1.6800, so this is a level that should provide resistance.
Going a bit lower, we find that bids (both those wanting to initiate new positions and those wanting to take profits on short positions) should provide extreme levels of support.
These are in at about every 10-15 pips between 1.6600 and 1.6500, with the largest cluster being at 1.6500. Going on this alone, buying any dips below 1.66 looks really good. Beware the retracement
Bear in mind that there are sell stops
below 1.6700 - these are the weaker longs or those wishing to enter short on a break below the figure. These could accelerate a correction down to 1.6650 quite quickly.
Here's the 4hr chart, with the largest bids and offers put in. You'll notice that they line up quite nicely with just about any other method of calculating S&R. Dashed lines are larger orders, dotted ones smaller. The big box is where there are too many orders to make lines for :P http://i.imgur.com/C1htngr.png
Hopefully that's helpful.
Now, there's also a fundamental component to consider. The UK's recovery is looking fairly solid, while the market is very quickly losing its patience with the greenback. Over the last quarter my bullish USD bias has evaporated, as it was predicated on the market not having priced in the full effects of the taper. Now that it appears this is not the case, I have no choice but to change my USD bias to neutral/bearish. The recent soft data also indicates that the recovery is lagging that of the UK's quite badly. The market's reaction to positive US data is generally muted, and when something can't rally on good news, it's usually bad news.
Another thing to note is that the DJ FXCM Dollar Index declined throughout the last dip and recovery in the S&P - one of the longest sustained bearish moves in history. It was only half the magnitude of the other declines of this length, but most other 6-7 day consecutive declines in the dollar have preceded much greater bear waves, not recoveries. The logical thing to do is to look for a USD bounce and sell it.
We need look no further than the S&P to see what's happening here: http://i.imgur.com/YrCT8tA.png
(4hr chart with GBP/USD overlaid in white)
Sterling not quite a safe-haven yet. If 1850 goes in S&P, expect GBP/USD to continue higher. However, Daily RSI on both is currently showing bearish divergence (shown on charts - it's a daily RSI despite it being a 4hr chart)
This means that we might head slightly lower before bouncing. Trend line support for the S&P comes in at around 1775, which would imply quite a serious fall in Cable before buyers really step in. The level I really like? 1.6475
There is a large cluster of buy orders just below 1.6500, which I believe is where the smart money is looking to enter. This move would flush out a lot of weak longs, leaving plenty of space for new positions. Sellers will also be taking a lot of profits off here, giving us a very good chance of a bounce. From there all it will take is a move back above 1.660 to really get moving.
So longer term I would look to start long positions between 1.6600 and 1.6475, with stops below 1.6250 or the 100DMA
Targets would be completely open. I will look to exit the position if and when speculative sentiment drops back to more natural levels, or perhaps even reverses. Stops will be trailed to lock in profit, but not aggressively.
FOREX.com provides traders 91 currency pairs (e.g., EUR/USD) compared to OANDA's 70 available pairs. Forex pairs aside, FOREX.com offers traders access to 4500 CFDs while OANDA has 55 available CFDs, a difference of 4,445. It also lets you set trading alarms for forex currency pairs based on observables like trading activity, market performance, oscillators, trend indicators, volatility and more — or any ... The Commodity Futures Trading Commission (CFTC) limits leverage available to retail forex traders in the United States to 50:1 on major currency pairs and 20:1 for all others. OANDA Asia Pacific offers maximum leverage of 50:1 on FX products and limits to leverage offered on CFDs apply. Maximum leverage for OANDA Canada clients is determined by IIROC and is subject to change. For more ... But before you jump in head first to the fast-paced world of forex, you'll need to know the currency pairs that trade trade most often. Here's a look at six of the most tradable currency pairs in ... OANDA offers MetaTrader 4 (MT4), while Plus500 does not. How many forex pairs and CFDs are available to trade? OANDA provides traders 70 currency pairs (e.g., EUR/USD) compared to Plus500's 50 available pairs. Forex pairs aside, Plus500 offers traders access to 2033 CFDs while OANDA has 55 available CFDs, a difference of 1,978. We offer competitive spreads on 70 forex pairs, including all the majors and minors. Our range of platforms include the award-winning OANDA Trade platform, as well as MetaTrader 4 - the preferred platform for forex traders globally. Create account Demo account. Standard and premium accounts. Opt for our spread-only pricing account, or find out if you qualify for core pricing plus commission ... The Commodity Futures Trading Commission (CFTC) limits leverage available to retail forex traders in the United States to 50:1 on major currency pairs and 20:1 for all others. OANDA Asia Pacific offers maximum leverage of 50:1 on FX products and limits to leverage offered on CFDs apply. Maximum leverage for OANDA Canada clients is determined by IIROC and is subject to change. For more ...
#forex #forexmarketmaker #forextrading In this video we break down trade opportunities that where traded and what to look for when trying to find forex trade setups with our strategy. Join Our ... The ONLY Forex Trading Video You Will EVER NeedTHIS QUICK TEST WILL HELP YOU BECOME FINANCIALLY FREETake it HERE: https://discover.tiersoffreedom.comTo join my ... Finding trend indicators is easy. Finding GOOD trend indicators is not. In this video, I show you how to narrow this search down to make it much, much easier.... What are the most profitable ways to trade the forex markets? What are some of the most profitable Forex Trading Strategies In this video, Adam Khoo shows yo... Learn our Other Scalping Strategy: https://bit.ly/2xol8aS In this video, I will walk you through a simple forex scalping strategy I've been using successfull... CONTACT: EMAIL: [email protected] WEBSITE: www.teamtakeprofits.net FACEBOOK: Jay Wayne INSTAGRAM: JayTakeProfits Joe Giunta Youtube Channel: https://w... How I Mastered Forex In 1 Year In this video Jay Wayne shows you what it takes to be successful in trading forex. In 1 year he was able to make 15K from a $3... Long vs short positions for forex trading for trend analysis by Bryan Downing. 3:05 . Early forex #trading analysis shows 94 percent win ratio with this one pair by Bryan Downing. 4:31. Where to ... #forex #forexlifestyle #forextrader Want to join the A1 Trading Team? See trades taken by our top trading analysts, join our live trading chatroom, and acces...