Uma vez eu identifiquei o par que eu sinto tem a tendência mais forte, com base no gráfico diário, Normalmente entrará em um 4 hour or a 1 hour chart – whichever time frame best optimizes my entry. Here’s I am looking for chart by chart…
The Daily Chart:
The trend on this historical Daily chart of the NZDJPY is down. This determination is made based on the pair making lower highs and lower lows, price action is below the 200 SMA and is pulling away from it and, at the time of the analysis, the NZD was the weakest currency and the JPY was the strongest. Também, looking at Slow Stochastics, I see that it is below 20 with angle and separation to the downside – a very bearish sign.
Given all of the above, I know I will only be looking for opportunities to sell the pair as they will have the greater likelihood of success.
Trading in the direction of the longer term trend offers us that edge.
O 4 Hour Chart:
Then I will look to the 4 hour chart and look for a retracement (a move contra the Daily trend) to be finishing and beginning a new move to the downside. Em outras palavras, a fresh move back in the direction of the Daily trend. Sometimes that fresh move will present itself straightaway or I may have to wait for the setup to take place.
In the case of this particular 4 hour chart I would need to wait for the pair to cycle back up as a new move to the downside has already taken place over the last five red candles on the far right of the chart.
I will also run through this same process on the one hour chart looking for the same set up. Once a “fresh move” begins on either the 4 hour or the 1 hour chart, an entry can be made with a stop placed above the highest level of the recent retracement. (Estocástico, MACD, RSI can be used to further time the entry.)
O 1 Hour Chart:
In the case of this 1 hour chart, I would be waiting for a pullback/retracement to take place to short the pair.
Since the pair has been in a strong, on-going downtrend on the Daily chart, I would have been able to successfully sell the pair at any of the points on the chart after the retracement (black arrows) tem lugar. The short position would be opened when momentum shifts back to the downside (Stochastics crossover within the black circles). In each instance the stop would go above the most recent high approximately at the black lines.
RKrivoFX 's personal trading process: http://t.co/vE1TI0Fc3M
— OneStepRemoved.com (_OneStepRemoved) Julho 13, 2015
Barra lateral: Some traders will become frustrated when they see price is moving opposite the direction of the Daily trend. Don’t worry about it. It is fine since that means a retracement is taking place and once that is complete, we will be looking at an opportunity to enter the trade in our direction of choice – the direction of the Daily trend.
Pierre diz
Thanks Richard, just out of interest how do you determine the relative strength of two currencies? Above you say that the JPY was the strongest and NZD the weakest.
Richard errada diz
Ótima pergunta…
Determining which currencies are strong and which are weak is one of the best trading “bordas” that I have found. By making that determination we can pair the currencies so that we have a strong versus a weak or a weak versus a strong. By doing that we are creating a “trading edge” for ourselves. If we trade a currency pair in which both currencies are fairly equal in strength, we give up the edge because either currency can “take control” since they are of equal strength.
By matching up a strong with a weak, contudo, we can have a bit more confidence in knowing the direction of the likely move. Em Seguida, if we match the direction of that potential move with the direction of the trend on the Daily chart, we have a clear trading edge.
Here’s what has worked for me…
I use a 4 hour chart with a 200 SMA on it. On a sheet of paper, a legal pad or an Excel spreadsheet, I list the currencies (not the pairs but the currencies themselves) in a vertical column. Por exemplo, EUR, USD, CHF, etc.
Agora, let’s say the pair in question on the 4 hour chart is the EURUSD. If it is trading above the 200 SMA that means that the EUR is stronger than the USD at that point in time. I make a note of that next to the EUR and the USD in the vertical column…EUR gets an up arrow and the USD gets a down arrow. Then I go to the next currency and go through the same process. (All in all I bring up about 28 pairs on the charts each day before the open of the New York session and it takes less than 15 minutes.)
When I am done with the above process, I tally all the “up arrows ” and “down arrows” (as you can tell, I am VERY high tech!) for the EUR against the other currencies and then I can tell where the EUR ranks strength-wise relative to each of them. Por exemplo, if the EUR has 5 up arrows and 2 down arrows and the JPY has 3 up arrows and 4 down arrows, that means that the EUR, global, is stronger than the JPY. (It doesn’t get much more simple than that!) When I have all the currencies in which I am interested evaluated in this way, I then have an overview of how they all relate to each other based on strength/weakness.
Próxima, I match the strongest with the weakest and go to the charts and look for a technical reason, such as a break of support or resistance, to enter the trade in the direction of the trend. A pair that has a strong currency paired against a weak currency would be a candidate for a buy in a Daily uptrend. Por outro lado, a weak paired against a strong would be a candidate for a sell in a Daily downtrend.
As far as the pairs that I personally look at, I run this analysis on all combinations of the following currencies: USD, EUR, LIBRAS ESTERLINAS, JPY, AUD, NZD, CHF and CAD.
The process is very basic, straightforward and quite boring – but it works.
As a side benefit, while I am going through the process of checking the 4 hour chart on each pair, I really get a sense for what is going on in the market at the time. And that information serves me well as the trading day progresses.
Barra lateral: If you are a shorter term trader, you can follow exactly the same process on a shorter time frame chart.
Pierre diz
Thanks for the comprehensive reply Richard! Really interesting approach and very simple too.
Richard errada diz
O prazer é meu…
William diz
Thanks Richard, Nicely detailed. Simples & lógico.
BTW. you can also get the currency strength from http://fxtrade.oanda.com/analysis/currency-heatmap
Shaun Overton diz
Obrigado pela dica!