Learn:Forex Exclusive Analysis

Learn::Forex provides exclusive content for members of FXCM.  I find that out of all Guest Trading Ideas they have "keeping it simple" analysis that you have to respect.  Others have analysis that from day to day is not consistent and analysis that also can be contrued as more of an art.  (easily interpreted differently from 1 person to another)

Here is Learn::Forex's Analysis today.  See for yourself.

AUD/JPY April 12th, 2006

The pairing that has caught our attention this week is the AUD/JPY.

First lets take a look at the Daily. Two things that stand out.First, notice that we have TWO different fib pulls that are coming together and have for resistance. And second, look at the momentum.it is appearing to weaken.

Then on the 240 minute chart we find confirmation of the price action losing momentum and we also get a nice trend line to use. In SHORT there seems to be an opportunity here.anywhere from current market price all the way back to re-test the trend line and resistance zone of 87.00

We have some support at the 85.50 area with more major support coming in at 85.00 which also happens to line up with a .382 retracement fib. 

 

 

 

 

 

 

 

 

Popularity: 3%

TTM Squeeze Indicator Update

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I've received many requests for my version of the TTM Squeeze Indicator. I can't technically call it the TTM Squeeze Indicator because it doesn't have the exact functionality as the indicator that costs $300+.  Specifically, the difference isn't with the actual squeeze indication because that is exact.  The difference is with the corresponding momentum histogram.  While my momentum histogram provides the same trading direction as the TTM proprietary Squeeze indicator (bullish or bearish), it may not provide the smoothing characteristics that seem inherent in their momentum histogram.   So my indicator will provide you with the exact functionality as the TTM Squeeze Indicator for SQUEEZE indication and entry direction.  What it won't provide exactly is momentum change for exit.  They recommend that you exit when the momentum oscillator starts weakening.  I would recommend the same but I cannot say for sure that their momentum oscillator is any better than using the MACD or Momentum indicators for exit.  From my experience, it is best whether your using the TTM or my squeeze indicator to get additional confirmation for exit.  

Either way I find this indicator to be great for showing an "explosion" of volatility and even though you can create this indicator yourself using Bollinger Bands, Keltner or Donchian channels, and a momentum indicator, it just doesn't compare to having a nicely formatted custom indicator with colored dots. 

The real reason for this post was to let everyone interested in this indicator to give me a little more time to release the newest version of it.  Right now I'm providing the FP Squeeze Indicator (Forex Project Squeeze Indicator) version 0.1.  After I've completed version 1.0, it will more closely emulate the TTM indicator, most likely as close as it possibly could.  The only way I can see it emulating the TTM indicator closer is if John or Hubert from TTM reveal more about their momentum oscillator.  

Currently I only provide a version for esignal but I'm thinking about providing it for MetaTrader also.  I've received requests for Tradestation but unfortunately I don't use Tradestation so I don't have any way of programming it on this platform.  

Look for the newest version next week.  If you want me to notify you when it's complete, drop me an email and I'll add you to the list.

Popularity: 7%

Steve Shenker’s Trading Corner

It's actually Sam Shenker's Trading Corner and it can be found here:

http://www.forexproject.com/Blog/Investing_and_Trading/Original_Traders_Corner/

Popularity: 2%

USD/CHF 2006-02-21

TRADE

Date: Tuesday, February 21st

Entry: Short USD/CHF at 1.3082

Reason for trade/setup: Using the 240-minute chart, there was the presence of a downward trend line above.  In addition, a momentum indicator that I created and am currently testing indicated a short opportunity.  Furthur confirmation was obtained from the 3-period, 5-period Price oscillator using EMA and the continued downward movement of the 8-period, 21-period Price oscillator.  Stochastic crossover and a decreasing rate of change since early February provided double-secret confirmation.

Initial Stop:  1.3121, the high of the entry day.

Initial Target:  1.3050 then 1.2950 which are horizontal support lines.

RESULT 

Exit: 1.3121

Reason for Exit:  Stop Loss triggered

Profit/loss:  -38 pips

Trade executed according to plan? yes

Outcome: After trade entry, the pair had remained close with the downward trend line.  Volatility was non-existent during Asian session.  The USD was bullish going into the European session and the pair went as high as 1.3153 stopping me out of the position between 3 am and 7 am.  This trade never moved in my favor by more than a couple of pips.

Thoughts:  All the indicators in the world can’t predict the future.  I seemed to have multiple confirmation, felt great about the trade, yet it didn’t turn out well.  I feel good about executing the trade though because I didn’t go against my plan.  I saw a possible setup and pulled the trigger.  If I could do it all over again I would make the trade again but may have waited for an increase in volatility.  In addition, I probably set my profit targets too high considering the lack of price action this week.

Popularity: 4%

Weekend Reading - Keeping an eye on Momentum

Keep An Eye On Momentum

http://www.investopedia.com/articles/forex/05/MomentumMACD.asp

This article states the obvious yet brings up a simple setup that I never thought about.  The basic premise is that momentum precedes price.  Any momentum indicator can be used but this article uses MACD as an example.

1.    Define a MACD segment.  Segment #1 below.

 

 

 

 

2.    Measure the highest bar of segment #1.  In the above case, the highest bar was .004.

3.    Wait until the next segment forms; segment #2 above.  If a bar from segment #2 falls below -.004, downward momentum has exceeded previous upward momentum.
Segment #2 consists of 10 bars.  The values are in order from left to right (-.001, -.004, -.006, -.007, -.008, -.008, -.008, -.006, -.002, -.0008)

The third bar from the left is -.006, showing greater momentum than during anytime in segment #1. Sell at the close of this bar (price=1.7579.)  Exit the position at your discretion but a good time to do so might be when momentum slows.  Momentum stalls 2 consecutive bars at bar #7.  MACD value is -.008.  Exit at the close of this bar (price=1.7381)

The profit is close to 200 pips.  Like every other setup, this will not always be successful and should be used in conjunction with other confirmation tools. 

What I like most about this setup is its simplicity.

Popularity: 3%