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Posts Tagged ‘Idea’

Classic case of “You snooze you lose”

May 3, 2011 Leave a comment

Interesting how things unfold so fast.

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Class is in session!

April 26, 2011 Leave a comment

First up, trades which I’ve eyeballed but decided to sit out of due to high spreads and low liquidity (Pre-Asian):

Both pretty good trades with potential 30 pips profits (if I had taken them).

Both look the same, then again, why wouldn’t they.

Like I said, staying out is harder than jumping in. Since markets are in session, time to let loose!

We’ll probably see the market unwind and adjust their positions, pricing in the long weekend blah blah.

Relatively quiet day with couple of news to look out for.

Next up, Swiss trade balance and US consumer confidence to spearhead the week.

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AUDJPY out of control!

April 21, 2011 Leave a comment

Woah woah woah.. That’s why I say, be patient when you miss your chance, there’s ALWAYS another opportunity to make pips! Check this out!

Deja vu man! AUDUSD @ 1.0717 as we speak! US greenback has achieved “Toilet paper” status!

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On Pivot Points…

April 20, 2011 Leave a comment

Interesting how the price movement looks around the pivot levels after 1 day. I think this is a day of extreme movements, even R3 was reached. Right now I can’t really use this in my trading except for a FYI only purpose. But I would really want to incorporate or create some Pivot strategy someday.

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AUDJPY the sequel – 15 mins (+28 pips)

April 20, 2011 Leave a comment

Here goes AUDJPY again. USDJPY is currently @ weekly support of about 82.35 region. Probably will bolster a the rebounce of the AUDJPY.

Here’s how it looks:

Entry signals for 15 mins chart is simple. Just enter @ the EMA and set trail stop of 25 pips. Target’s previous swing high, 88.40! That’s like a whooping 60 pips away. Making the potential R:R for this trade 1: 2++! Will the market garner enough momentum to retest the high again? We’ll see. In any case, I have my trail stop in place. 🙂

Subsequent Update

Well I manually closed out for 28 pips gain.

Why? I guess I’m gonna give myself excuses again. But couple of reasons come to mind.

1) Its been a pretty tough week, so it certainly helps that I close a good trade that brings me 1 step closer to my weekly target;

2) AUDUSD seems to be topping @ 1.0670 – 1.0680-ish.. USDJPY 5 mins is trading below the SMA200. Seems to me that it might cap the upside gain. ON the other hand if I took the AUDUSD 5 mins signal, I would have made a perfect trade, target @ swing high:

AUDUSD 5 mins trade signal (Not taken but 35 pips potential)

Textbook EMA 62 trade (If taken)

Anyways the trade I took was a win which was slightly above 1:1 (R:R), but actually at that point in time my trail stop had already locked in a couple of pips. So actually R:R is more than 1:1 if you factor in the time variable (Market exposure risk).

Just like a fund manager, I need to manage my P&L first. After all this is my pilot month.

Flow Trade Scalping Strategy

April 13, 2011 Leave a comment

The creator of the above Flow Trade Scalping strategy has been spamming twitter for the past few days about his Flow Scalping.

Being curious I had to try demo it as his videos did look pretty good. (My innate scalping nature has surfaced again).

This is my result scalping the cable in just under 40 minutes:

Flow Scalping - how to make 40 pips in under an hour

For more details, please refer to Boris Schlossberg’s FAQ on Flow trading..

http://www.bkforexadvisors.com/session-breakout-strategy/

Let da man do the talking~

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Yen crosses.. Pips for thought..

April 12, 2011 Leave a comment

Why are JPY pairs so volatile historically?

FX 101. What are the Foreign exchange majors?

The majors are USD, EUR, JPY, CHF and GBP.

As they are traded against the USD, major pairs are therefore the EURUSD, USDJPY, USDCHF and GBPUSD.

That brings us to today’s topic, the major crosses: EURJPY, GBPJPY and even the AUDJPY.

From a simple point of view, cross values are derived from the following formula:

EUR/ USD x USD/ JPY = EUR/ JPY

(A)          x         (B)       =   (C)

(A): Multiplier pair

(B): Base pair

From the above equation, the EUR and GBP crosses will typically be 1.45 times and 1.63 times more volatile than USDJPY, i.e. Assuming USDJPY is constant, 1 pip movement results in 1.45 and 1.63 pip movement in EURJPY and GBPJPY.

Of course in an ideal world the JPY will be constant. In the real world, both are variables and due to trade flows, prices fluctuate constantly.

Fundamentally, to effectively trade the EUR and GBP yen crosses, one could place more emphasis on the USDJPY pair instead of the EURUSD or GBPUSD.

According to the veterans, yen crosses are not as profitable statistically and not for the faint hearted. I agree with that to a large extent in the sense that stop losses have to be greater, risk is higher etc.

With this in mind, one might also infer that round number Support/Resistance levels (i.e. 1.00 and 0.50 price levels) for cross pairs are not as effective (as the USDJPY’s) since the price of the yen cross is a derivative of the USDJPY .

Point forward, to better utilise stop loss and profit target areas, one should consider consulting the USDJPY charts to identify potential reversal/support/resistance points in order to set informed and realistic stop loss and target profit levels.

And yes, going by the above train of thought, that is why the EURGBP is less volatile by nature.