Somebody moaned about me putting too many trading charts in Pailin's thread so I thought I'd start a thread to put most of them in and just link to them from there for anyone interested.
Im day and swing trading via Forex on whatever has a pulse really, and am often doing analysis which:
a) (some of which) I don't really see anybody else doing much of, publicly anyway
b) might sometimes look a bit abstract to specifically gold/silver focused types
c) ends up scattered up all over my desktop, so having it all in one place to look back on thoughts with hindsight will also be good.
Please understand that charts are just thoughts - snapshots in time and I am in no way advising or trying to persuade anybody to make any decisions from anything I post. In fact, until the last 2 or 3 months you would have made good money doing and taking the exact opposite of everything I did, its a *bit* more even now, but far from a sure thing. ever. :)
These will mostly be for swing type trading ideas, but there might be some shorter timeframe day trading stuff too, hopefully some people might be interested in what I'm looking at from time to time, but if not feel free to tell me what I'm doing wrong too.
With commodities, or PMs or equities, where I have a macro overview or opinion on which way I think it should be going overall, I try only to take trades in the direction I like, so if I think crude is heading upwards overall, I'm only looking for bounces and momentum longs, I wont short it, even when all the technicals say that's the play.
When that's the case I move to shorting equities instead, because I think their overall direction is still downwards, and one day when the floor opens up (or the Iranians kick off) I want to be positioned in the direction of what I hope are the surprise big moves. With currencies I'm neutral really, there its just red and green/blue lines and momentum/ trend.
I've been looking at currencies and correlations between them and various markets in depth for a few months now and have noticed a few interesting things people might not have thought about, and ways this can possibly help alongside normal trading decisions.
For example, courtesy of the Swiss National Bank currency peg, some currency pairs have become quite predictable with regards to their movement with each other, and all the time the peg holds, this has to last. So looking at 2 pairs that are locked together in the middle by the EUR/CHF bond, like say the 2 GBP pairs, EUR/GBP and GBP/CHF
Obviously this is not failsafe, and it can just blow right on through there, (Netdania just adjusts the scale to suit) but more often than not, on the first touch it will reverse, at least temporarily. (Long may this last :) )
I don't trade from it alone, but it influences other trading decisions, ie if we are approaching the top of the "Reversometer" range that would invalidate any momentum long signals I might still have at the top of the run, whereas if we're in the middle of the range it would be valid. Usually these points will match up with support or resistance on trading charts, and again if you are thinking of shorting from resistance, this can give more confidence.
And so what I noticed is that the USDCHF is actually quite an important indicator, because it trades exactly inverse to EUR/USD. Why is this important? Because most "risk assets" and commodities tend to correlate quite well with EURUSD, so USDCHF gives us the potential to apply "Reversometer" thinking to almost everything else, for example, the Dow..
..you can not be certain which direction, (or even which one) of the pairs will move, but if you look at EURUSD overlaid with USDCHF and it's getting towards the potential reversal point there....?
..so what I've been looking at this morning.
Gold (USD) looking surprisingly strong yesterday in the face of a bleeding Euro, clearly broken out of the directional correlation on 4hr frame.
The Dow did this a while back and seems to be floating on air to me, when you consider that European and global stock markets have been smashed, and some European stocks have been lower than 2008 crisis lows recently.
and below makes me think long Euro / short Dow? with the idea that you don't really care which way they both move, the profit is just in the spread closing? it's important to get position sizes and comparative ranges right though. I've had some spectacular success on the demo account with these types of thing, and some catastrophic failures too, I need to isolate just the first
and these have got to be due for a swap-around again at some point