Where in the cycle are the major currencies?

This is a discussion on Where in the cycle are the major currencies? within the Forex forums, part of the Markets category; Originally Posted by Nowler Yes, I was talking in a macro sense. While it may not be enough on its ...

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Old Jan 3, 2018, 10:04pm   #46
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Yes, I was talking in a macro sense. While it may not be enough on its own to execute a trade, it does give an indication which can better inform trade decisions. No?

I am just trying to understand how global economies work, on their own and in relation to each other. I wasn't messing when I said that prior to starting to trade 7 months ago, I knew next to nothing about business and economies.

The way I see it, if I was to ignore the "Macro-scale" stuff and just focus on the shorter, more recent-term stuff, then in a sense it would be the same as me trading with TA, not knowing a single thing about how fundamentals work. Which is dangerous.

Perhaps I am making naive assumptions, or drawing naive conclusions. Forgive me.
I am just trying to develop a solid understanding of the overall machine in the hopes that it helps me better understand the moving parts
The problem with your approach is that you have a certain view of how fundamentals are used and then frame the issues in terms of how you think it is used in trading. If you don't know about a subject then I suggest you ask questions based on what others are saying and not framing questions based on your worldview on how it is meant to operate.
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Old Jan 4, 2018, 5:28pm   #47
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This has been quite educational!
Third time watching it now...how could I have hoped to trade FX if I didn't even understand this! Which makes me wonder...what other simple little nuggets am I not after copping yet!

Cheers!
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Old Jan 6, 2018, 12:17pm   #48
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I don't have an economist so your guess is as good as mine. What I can tell you though is every professional forex trader I have engaged with at investment banks and hedge funds trade fundamentally and they all own multiple properties globally and regularly switch between high powered sports cars. Show me a single trader playing with only charts that replicates that success! Doubt you can.
You can be successful using a TA, FA or a combination of both, ultimately its down to the individual and what works for them
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Old Jan 6, 2018, 2:54pm   #49
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You can be successful using a TA, FA or a combination of both, ultimately its down to the individual and what works for them

I have yet to see someone show me success using only TA. Hoping someone can show me otherwise.
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Old Jan 6, 2018, 3:07pm   #50
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I have yet to see someone show me success using only TA. Hoping someone can show me otherwise.

I've posted my long-term trend-following methodology here and on other forums. I can dig it out again if necessary.

Admittedly, I sometimes take an exit which the TA doesn't absolutely demand - such as when unrealised profit reaches a certain level that I can take some time off, or like yesterday in anticipation of NFPR's.
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Old Jan 6, 2018, 4:03pm   #51
 
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I think the important factor to consider is where is the price of money heading and who are the biggest holders of this debt, particularly what changes are their economies experiencing in the mid to long term.

You really want to be looking at the dollar, dollar denominated assets, debt and demand.

It is the ideal to find something at the bottom of it's value, or even lower, and hope for the right catalysts to be coming into play so that it shoots upwards. This is not how things work.

With all that said, the answer is emerging markets, particularly Eastern Europe, Africa and Asia. Australia and New Zealand may have hot years.

Best of luck..
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Old Jan 6, 2018, 4:22pm   #52
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I've posted my long-term trend-following methodology here and on other forums. I can dig it out again if necessary.

Admittedly, I sometimes take an exit which the TA doesn't absolutely demand - such as when unrealised profit reaches a certain level that I can take some time off, or like yesterday in anticipation of NFPR's.
I'd appreciate a look at that if it's not too much hassle digging it out
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Old Jan 6, 2018, 5:16pm   #53
 
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I have yet to see someone show me success using only TA. Hoping someone can show me otherwise.

Depends on your TF. I burn those banks on the 15min, wanna trade weeklys or monthlys, ya gotta know smthg about fundies
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Old Jan 6, 2018, 6:20pm   #54
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I'd appreciate a look at that if it's not too much hassle digging it out

Will do.
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Old Jan 6, 2018, 6:31pm   #55
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Long-term trend-following -
I use 3 mandatory criteria and a range of secondaries. The mandatory criteria must be present. Each criterion that is present earns the trend "score" 1 point, either Bullish or Bearish. The trend with the highest score is the best, but its only the best for my strategy - another strategy might demand different criteria and you could allocate more than 1 point to some of them if your strategy responds better that way.

Mandatory criteria -
is 20EMA above or below 50EMA? (above = 1 Bullish point, below = 1 Bearish point)
is 50EMA sloping upwards (Bullish) or downwards (Bearish)
is 50EMA above or below 200EMA?

Secondary criteria -
is price above/below 200EMA?
are at least 80% of the weekly Closes, Highs and Lows in the last 3mths above/below 50EMA?
are last 4 or more weekly bars unbroken by and above/below 50EMA?
are last 8 or more weekly bars unbroken by and above/below 50EMA?
are last 4 or more weekly Closes above/below 50EMA?
are last 8 or more weekly Closes above/below 50EMA?
does last weekly bar overlap fewer than 5 immediately previous weekly bars?
are clear majority of other pairs based on same base currency bullish or bearish according to 20/50EMA sequence?

Simple stuff really. Idea is each criterion should be objective: it is either bullish or it is bearish, no in-betweens.

These criteria are not unique or magic, any strategy would identify its own most appropriate criteria. The aim is to allow trends to be ranked from best to worst in a more meaningful way than simply by % price change.

Once a buy / sell target is identified, absolutely any entry trigger will do for a really high scoring forex pair or index, as long as not a new high or low closing price respectively. It really does not need to be a highly specific or rare candlestick pattern with an exotic Japanese folk art name.

Once in the trend, pyramid the trade when unrealised profit equals the original initial capital risk but move the stop on the original trade to entry, use the same capital risk for the second trade. Keep pyramiding and keep moving stops with price ad infinitum. If the initial trade drops to a loss of 50% of the initial capital risk, cut 80% of the position but otherwise carry on as above.

Then sit back and watch it all happen.
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Old Jan 6, 2018, 7:17pm   #56
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Thanks for sharing. I can't bring myself to it though knowing what I know with the effects news has on fx and being able to make money using that knowledge. I do use technical setups but nothing outside of breakouts from zones that's off the back of news. I have spent some time looking at technicals on its own but found it very inconsistent. I looked at all areas of this including trend lines, support resistance plays including fading, fibs, moving averages, and some indicators. In all cases the setups seemed to be inconsistent and very rarely align with news.

For me technicals are just a way to frame a trade after a news driven event and this nearly always includes a breakout of a zone that's built up in wait for the news. My friend has spent several years trying to backtest strategies and he never made it past break even. He is now following what I do and starting to make profit. Maybe someone would be up for sharing an account statement covering a year to give me a genuine glimpse of a pure TA approach working. The institutional traders I have learned from laugh at retail traders only using TA.

I am not convinced its all jokes and keeping an open mind for now until I see some actual evidence of it. I don't want to give it any more time myself because what I do works for me. I made pips yesterday on usdcad for example off the back of their employment report and ongoing usd weakness. I can't see how I could have caught this if I wasn't using the news. I would for example not know what pair might react and it would be a case of having to watch everything which I am not prepared to do. My time is valuable and I am able to participate in the market off a predefined schedule which works well while I work.
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Old Jan 7, 2018, 4:31pm   #57
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Thanks for sharing. I can't bring myself to it though knowing what I know with the effects news has on fx and being able to make money using that knowledge. I do use technical setups but nothing outside of breakouts from zones that's off the back of news. I have spent some time looking at technicals on its own but found it very inconsistent. I looked at all areas of this including trend lines, support resistance plays including fading, fibs, moving averages, and some indicators. In all cases the setups seemed to be inconsistent and very rarely align with news.

For me technicals are just a way to frame a trade after a news driven event and this nearly always includes a breakout of a zone that's built up in wait for the news. My friend has spent several years trying to backtest strategies and he never made it past break even. He is now following what I do and starting to make profit. Maybe someone would be up for sharing an account statement covering a year to give me a genuine glimpse of a pure TA approach working. The institutional traders I have learned from laugh at retail traders only using TA.

I am not convinced its all jokes and keeping an open mind for now until I see some actual evidence of it. I don't want to give it any more time myself because what I do works for me. I made pips yesterday on usdcad for example off the back of their employment report and ongoing usd weakness. I can't see how I could have caught this if I wasn't using the news. I would for example not know what pair might react and it would be a case of having to watch everything which I am not prepared to do. My time is valuable and I am able to participate in the market off a predefined schedule which works well while I work.
Ok so you were not able to make it work for you and gave up easily for whatever reason, it doesn't matter. And your mates cat got run over so he bought a hamster, and the institution next door likes a laugh. You are fortunate in that you are good at FA and the news tickles your pickle, so have that to focus on instead. You are left with an opinion about "TA only" which is fine but that's all it is, not a fact.
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Old Jan 7, 2018, 4:51pm   #58
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Ok so you were not able to make it work for you and gave up easily for whatever reason, it doesn't matter. And your mates cat got run over so he bought a hamster, and the institution next door likes a laugh. You are fortunate in that you are good at FA and the news tickles your pickle, so have that to focus on instead. You are left with an opinion about "TA only" which is fine but that's all it is, not a fact.
Gave up easily? What do you know about the effort I put in so why do you assume to know? Cat, hamster, what on earth are you talking about or have you been drinking? I didn't say it was fact which is why I was asking for someone to show me an account that can provide the evidence that it does indeed work on its own. You fancy providing that evidence or are you going to just tell me it works and that you don't need to provide evidence of it and I should believe a stranger on their word. My institutional trader friends told me this would happen and said that nobody could show me evidence of it working in fx. Happy to be shown evidence to prove them wrong. I am curious if someone can. I am being open minded about this so not biased.
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Old Jan 7, 2018, 5:09pm   #59
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Thanks for sharing. I can't bring myself to it though knowing what I know with the effects news has on fx and being able to make money using that knowledge. I do use technical setups but nothing outside of breakouts from zones that's off the back of news. I have spent some time looking at technicals on its own but found it very inconsistent. I looked at all areas of this including trend lines, support resistance plays including fading, fibs, moving averages, and some indicators. In all cases the setups seemed to be inconsistent and very rarely align with news.

For me technicals are just a way to frame a trade after a news driven event and this nearly always includes a breakout of a zone that's built up in wait for the news. My friend has spent several years trying to backtest strategies and he never made it past break even. He is now following what I do and starting to make profit. Maybe someone would be up for sharing an account statement covering a year to give me a genuine glimpse of a pure TA approach working. The institutional traders I have learned from laugh at retail traders only using TA.

I am not convinced its all jokes and keeping an open mind for now until I see some actual evidence of it. I don't want to give it any more time myself because what I do works for me. I made pips yesterday on usdcad for example off the back of their employment report and ongoing usd weakness. I can't see how I could have caught this if I wasn't using the news. I would for example not know what pair might react and it would be a case of having to watch everything which I am not prepared to do. My time is valuable and I am able to participate in the market off a predefined schedule which works well while I work.

We must all do what is most profitable for each of us.

I prefer to have made money on the trend before the news comes out. Its something of a cliche but it still amazes me how news reinforces a trend, rather than reversing it.

As for the NFPRs etc. on Friday, I had already made my money on on-going trends and closed all open positions Friday am BEFORE the news: simply because while there was a low probability of suddenly making dramatically more money, there was a (low) probability of losing a lot of unrealised gains.

Your friend doing years of backtesting is on the wrong track(s). Don't do what he does - let him do what you do or what I do.
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Old Jan 7, 2018, 5:10pm   #60
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We must all do what is most profitable for each of us.

I prefer to have made money on the trend before the news comes out. Its something of a cliche but it still amazes me how news reinforces a trend, rather than reversing it.

As for the NFPRs etc. on Friday, I had already made my money on on-going trends and closed all open positions Friday am BEFORE the news: simply because while there was a low probability of suddenly making dramatically more money, there was a (low) probability of losing a lot of unrealised gains.

Your friend doing years of backtesting is on the wrong track(s). Don't do what he does - let him do what you do or what I do.
Do you have a thread you actively update?
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