South Winds, Red Skies & Clouds in the West

[expiated]

I will no longer be making such forecasts, and in fact, this might be my last addition to this thread in that the development of my approach to reading the Forex market is more than likely already produced its finished product (a set system).

It’s been about 20 days since I posted the above entry, but In viewing my 15-minute chart setup last week, I felt I was seeing price repeat a certain behavior that was not represented by any moving average I was using previously, which resulted in my adding a moving average that, while not changing any of the longer-term trend lines I was already using, seemed to do a better job than they of accurately representing the direction price was disposed to go.

Independent of this, I created three indicators that, when compared to the above moving average, seemed to be doing the same thing, but with smoother lines, and a cleaner demarcation of where price’s inclination to go one way or the other was showing signs of transition, with short-term fluctuations in price tending toward the opposite direction they were favoring previously.

If these lines are valid, it looks like they ought to enable me to reap gains of 30 to 50 pips per trade as opposed to merely 5 to 10, so I’m recording my interpretation of them here so I can come back later to see whether or not they might truly be of value…

I will be watching AUDUSD for confirmation that it is genuinely turning south.

In the case in CADJPY, that question is already answered. So I’m curious to see if the rate drops as low as 82.00.

CHFJPY appears to be turning north, so I want to see if it follows through. But even if it really is rising, it has been relatively range bound for the last three days, so it might not continue to do so. It is now at 111.29.

I need to see if EURAUD continues turning north (and goes on to at least reach 1.6062).

EURGBP is northbound, making it a prime candidate for entering a long position following the first pullback. At Friday’s close it was at 0.8789.

EURJPY looks like it’s pivoting north, so I want to see if it follows through, and goes on to climb above 131.00.

EURUSD is essentially doing the same thing, so I will be watching to see if it follows through and climbs as high as 1.1350.

USDCAD has been relatively range bound for more than week. Nonetheless, it too is pivoting north, so I will be watching for follow through, and to see if a climbs at least as high as 1.2922

 

[expiated]

Both USDCAD and USDCHF seem to be laying the groundwork for pivoting north, especially the former...

 

[expiated]

The level at which I purchased USDCAD was arguably quite sensible. However, it rose for about 90 minutes and then fell for about another 90 minutes without ever hitting my target. I therefore exited the position about 2 hours later when it was climbing again to lock in some amount of profit.

It therefore took a total of 5 hours and 19 minutes to reap a 6-pip return, which could have been accomplished in the first 90 minutes had I originally been seeking a more modest yield.

The level at which I bought EURAUD was far, far from ideal. I sold it less than an hour later (54 minutes) for about an 11 ½ pip gain. Had I been around to purchase it 60 to 90 minutes earlier (when it was located near statistical support) the potential yield could have been as much as 20 to 30 pips.

With respect to my plans to explore the feasibility of actually realizing profitability via binary options with my European partner, it would appear that the ideal timeframe for choosing expiry after entering positions near statistical support or resistance is approximately 90 minutes.

I also entered a short position with respect to AUDUSD, but I was stopped out of the trade, so I am increasing my standard stop loss from 10 to 15 pips. At the time of this writing, I was in profitable territory after re-shorting the pair, which was at statistical support, so I was able to recoup a significant percentage of my loss.

Given that I believe this is the ground floor of an initial pivot south, I am re-shorting the pair again now in pursuit of another 20 pips. Ideally, I would have liked to have done this when the pair pulled back to statistical resistance, but I might not be around when that happens, and indeed, there is no guaranty it will happen at all, so I am totally dependent on the structure of the trade being such that the exchange rate will eventually reach my target, God willing.

(Thus far, it would appear that the three new indicators I referred to in a recent post and on which all of the above trades were based are indeed valid.)

 

[expiated]

I am now long USDJPY from 106.36 and CHFJPY from 111.38.

 

[expiated]

Here is where I should have liked to have re-shorted AUDUSD ideally—somewhere in the neighborhood of 0.7685—which occurred some 2 ½ hours later as I was sleeping (at 2:00 a.m. here in Los Angeles). In this case, a return to recent lows would yield about 10 pips worth of profit.

CHFJPY has hit my take-profit target, taking about 3½ hours to yield 8 pips, but USDJPY has lost ground.

 

[expiated]

Given that there seems to be a serious shortage of liquidity so far this week (not to mention on Good Friday as well) and that rates have a way of retreating immediately after forming long candlesticks, I went ahead and locked in some more profit at 0.7669 so that I’m now ahead of the game in terms of net gains today.

I’ll re-enter the position following the next pullback, if and when that occurs, and if it doesn’t—then so be it. That’s just "the way the cookie crumbles," and I’m okay with practicing patience and waiting for the next opportunity.

 

[expiated]

In my demo account, where I can enter multiple positions simultaneously, today’s trading has yielded a 100% success rate.

But rather than enabling me to reap gains of 30 to 50 pips per trade, as I had hoped, my new indicators have instead simply empowered me to trade the typically 5 to 10 pip oscillations between the peaks and troughs of price waves with amazing precision and efficiency, as the one-minute chart pictured below illustrates. (Only one moving average is pictured because the indicators are quiet “labor intensive” on one-minute charts, so I need to conserve as much memory as possible.)

Needless to say, this is the setup I will be using going forward, so once again, there is nothing more to add to this thread, at least not for the time being. I’m confident that this constitutes an improvement on what was already a winning system (if traded properly), so further comment would simply be redundant.

 

[expiated]

Within the last week or so (or the last two weeks for sure) my latest system evolved into what I’m calling my Numerical Price Prediction Forex Day Trading Strategy—an approach whose benefits I believe I just figured out how to maximize…

.Numerical Price Prediction Forex Day Trading Strategy

…so I’m noting here which foreign currency pairs were bullish and which were bearish as of Friday’s close according to this new forecast model so I can come back later and evaluate how well the system enabled me to take advantage of pullbacks in the general overall direction of price, which I believe to be the main strength of this particular methodology.

Bullish Markets: AUDJPY, AUDUSD, CADJPY, CHFJPY (possibly), EURGBP, EURJPY, EURUSD
Bearish Markets: EURAUD, GBPJPY, GBPUSD, NZDJPY, NZDUSD, USDCAD, USDCHF, USDJPY

 

[expiated]

Bearish Markets: EURAUD, GBPJPY, GBPUSD, NZDJPY, NZDUSD, USDCAD, USDCHF, USDJPY

NZDJPY and NZDUSD were categorized incorrectly! They are bullish—not bearish.

 

[expiated]

I think it’s highly probable that I was able, with these final 13 trades executed on this first day of May, 2018, to work out the last of the more nuanced facets of my “Numerical Price Prediction Forex Day Trading Strategy.”

The system is extremely dynamic, so market forecasts made in advance of each 24-hour trading cycle would serve almost no purpose. As with any good strategy, the system is designed to “tell a story,” making it “clear is day” as to why price (a given exchange rate) is doing whatever it is observed to do. I find that the chart setup that I’m now using (pictured below from a bird’s-eye-view, which makes it too small to actually “read” the details supplied by its various components/elements) describes everything that is going on with a given exchange rate via simple, rational, easy-to-understand explanations.

Consequently, from my viewpoint, going forward I no longer have any excuse whatsoever for ever making a losing trade—other than when the intermediate trend is initiating/executing a reversal.

However, it shouldn’t take me too long to realize when this is happening, so I ought to be able to minimize my losses in such situations, and perhaps even sometimes exit the trade with a small profit.

I might also experience a loss or two if I put on any trades before retiring for the night, but engaging in such behavior would be HIGHLY ill advised! So I must therefore do my utmost to resist such a temptation, no matter HOW promising a trade setup might look. The markets are simply too fluid and I really DO need to be present to react to whatever “the story” is telling me is about to happen next.

Oh yeah, there is one more exception, which is when there are developments somewhere in the world that are impossible for me to anticipate, but that kind of goes without saying.

So anyway, I’m hoping I’m completely done with research and development at this point (FINALLY!) and can simply concentrate on trading this system (and nothing else) starting tomorrow.