Monday, October 24, 2011

Trading week 24/10/11

Friday 28/10/11 (6am)

What a FANTASTIC 24 hrs for my TradeSpotting system! They say you need to control your emotions when trading but it's very hard when you're on a winner! I've locked in 450 pips worth of trades! there were another 770 pips on offer though!

Positive Eurozone sentiment has continued the 'risk on' approach to trading. The USDX not only broke the 76 barrier but the 75 psychological level as well.

Many other signals kicked in overnight for me, that is, during the US trading session. Well, one can't be everywhere now can they! I will not jump into any of these trades. I will list them below for the sake of completeness though. I have a full day here with private commitments so will not enter any new trades for this week. I am still wondering if this 'risk on' sentiment will last!

Trades Closed:
Long NZD/USD: stopped out for 100 pips

Open Trades:
Long AUD/USD: stopped move to lock in 200 pips
Short GBP/AUD: stop moved to lock in 150 pips

Total Pips Locked in: 450 pips!!

Other signals from last 24 hrs:
Long E/U: up 200 pips
Long A/J: up 200 pips
Short USD/SGD: up 220 pips
Short EUR/AUD: went 150 pips before reversing

Total of extra signals: 770 pips!

Thursday 27/10/11 (7.30pm)
It never pours.

I took the LONG AUD/USD. Locked in 50 pips. Rest to b/e. Currently up 100 + pips.
The long AUD/JPY is currently up 75 pips since the signal came through.
I also took:
SHORT GBP/AUD. Locked in 100 pips. Rest to b/e.
LONG NZD/USD. Locked in 40 pips. Rest to b/e.

There were signals to SHORT the USD/SGD and EUR/AUD too. I'm late with these though so not jumping in on them...They're correlated to the other trades though..essentially 'risk on' trades. I'll keep track of them though from the point of view of validating my TradeSpotting system.

The above results go to show how patience has paid off; waiting for the clear break on the USDX to confirm trend direction...for the time being at least. I've moved STOPS to b/e on these trades a bit earlier than usual because, as we've seen, trends can reverse in a heartbeat at the moment given all the EUR uncertainty.

Woo hoo though. Trends back and TS working again!!!!!!!

Thursday 27/10/11 (3.30pm)

The outcome of the EU meeting, so far, has been greeted with a 'risk on' reaction. That is, USD down and the likes of EUR and AUD back up. I wonder how long this sentiment will last?

The USDX has finally broken down, closed and held below the major S/R level of 76. (see chart below). The EURX is working its way higher too. Not explosive moves on the indices or any of the pairs.

The only TS signals received so far are for LONG on the A/U and A/J. I would expect more signals to evolve if the current sentiment holds.

The EU news announcement earlier reversed the short trend that had started on the AUD/CAD. It did yield 50 pips before reversing though.

Thursday 27/10/11 (6am)
It's Thurs am here but Wed evening in Euro zone land where they are still thrashing out details of the EU bailout plans at the EU summit. I had expected to see some clear break out from the narrow trading ranges on both the EURX and USDX. This has not happened yet.

The only TS trade signal I received overnight was to short the AUD/CAD. This signal came through over 4 hrs ago and is currently up 35 pips. I will not be jumping in late on this trade.

I am still waiting, patiently, for a break out on both the EURX ( 108 - 106.5) and USDX (76 - 76.5 level) to garner some clear direction of any new trend before trading. See charts below.

Wednesday 26/10/11 (5pm)

Very little has changed today with many of the pairs. The EURX and USDX are still trading in a very narrow range. There is now some doubt whether there will be any clear outcome from the EU meeting to be held later today. That fear was what caused the spike in gold and silver last night. I suspect that I will wake tomorrow though to see some major moves and, hopefully, some new clear trends.

Wednesday 26/10/11 (6am)

Not much has changed overnight. The USDX is still just drifting sideways and hanging in there just above the 76 level. The EURX is also drifting along in a narrow range around the weekly pivot.

Gold and Silver did move sharply higher though, probably in anticipation of Wednesday's EU summit meeting outcome.

There was also a lot of wild moves in the CAD pairs. It seems that this CAD weakness was due to an announcement of cuts to official growth rates. It is very difficult to catch news related spikes, especially when you're not at your computer.

I will continue to wait until there is a clear break out of the narrow trading ranges on the USD and EUR pairs. This probably won't come until after the EU summit.

Tuesday 25/10/11

I have just woke to see that the USDX is still hanging in there above the 76 level...but just by the skin of its teeth. Thus , I will still wait to see how this reacts around this level before being confident with future trends. The EURX is still trading within its range bound area of 108 – 106.5 too so, no more clarification is available there either.

The AUD/USD long signal identified by TS yesterday did evolve to deliver 70 pips. There were also signals overnight to :


SHORT: EUR/AUD (gave 100 pips!) , USD/SGD and GBP/AUD.

These trades are essentially all correlated though to read as SHORT the USD. So, until I’m more confident with the direction of the USD from the USDX, I will stand aside.

I am finding that some TS signals are coming in but my indicators are aligning over a range of candles. I'm beginning to see this a sign of continued volatility or swinging of price within range bound areas.

Monday 24/10/11 (5 pm)
I had a signal after the 5 pm candle to LONG the AUD/USD. I have not taken this trade though because of the price action on the USD index (USDX). The USDX is trading just above a very strong S/R level of 76. I said I would wait to take trades until after there was clearer direction on this index: either a break, close and hold below 76 or, a bounce up. USDX is currently trying to pull back up so, I will continue to wait. I may miss a good trade by waiting but, at least I won't lose! Patience and discipline being tested again!

Monday 24/10/11 (10.30am)
I am taking a cautious approach to my technical TS trading this week given the potential of significant fundamental impact by way of EU summit news due out on Wednesday, to name just one event. I also explained in my Indices update posting for this week why I would be waiting; I'm waiting for a clear break out of range bound areas before being confident of future trends. Please check this post out for more details.

Looking at the indices just now and they are still bouncing around within the narrow ranges of the last week and a half. The EURX currently bouncing down and the USDX bouncing up.

The exciting thing for me though is the position of the ADX on all charts. The ADX is down below the waterline level of 20 on all the pairs that I watch with the exception of silver, gold and EUR/CAD. This makes new trends much easier to pick. I will also be more disciplined this week and wait for all of my indicators to align before taking any trade...something I did not do last week!

I am keeping an eye on the ADX level of 25 this week to see if this works better on the TS system than the 20 level.

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