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Posts posted by Caseynotes

  1. The dollar index for the average retail trader can only be a gauge as to the relative strength or weakness of the USD, which is of an importance to anyone trading any of the USD pairs. For actual trading it is best left to the big institutions who are looking for generalised moves over large time scales. 

    Given that the US economy is the strongest any big move of the USD is like a freight train and must be important information to anyone trading a USD pair over the intermediate or longer time frame.

    Sometimes you sit and wonder why your trade is going sideways when one of the pair has had good data and should be moving only to find the other pair is going just as strongly in the same direction.


    I a good overview is helpful, such as;






    All lines drawn on a chart are subjective and are never exactly the same on anyone else's chart. All lines get redrawn after new information is added. All momentum indicators are lagging and change after new information is added. No one else is looking at exactly the same information as you. The only view that is going to be 100% accurate is hindsight. 





  2. Hi  Futex just recently (days) did this series of interviews with their traders but chopped them up into themed mini interviews and I haven't seen the whole thing. But I know from a Tom Dante webinar (it might be the one I linked to in the 'some auction market theory' thread) where he talks about having his trading history examined in fine detail when applying for a position with them, so I don't doubt it's all genuine.

  3. Continued poor data out of the US at 13:30 (tier 2) personal spending flat, personal consumption expenditure near flat. There are just no signs of any kind of meaningful growth in the US economy. Chances of a rate rise in our life-time, decreasing.

  4. Auction Market Theory Basics 

    order flow, ranges, value areas, shake outs, break outs, no buy zones, profiles, volume profile, probability, etc.


    short slide series of basics.



    Videos; Basics.

    Auction Market Theory, taught with a crayon. (10 min)



    More advanced video;

    Reading The Mind of the Market, Trading Process. (1hr 50min. two presentations, usual Dante parental guidance needed)

    Tom Dante and Kam Dhadwar





    • Like 1

  5. Waiting for the Fed to do something for a long time now but they seem to be out of ammunition, same for the ECB. Yellon reminds me of a rabbit caught in the headlights, can't go forward, can't go back. Would like to raise rates and convince everyone everything is ok but a continuous stream of lackluster data proves it is not. Both DX and EUR/USD tell the same story on the weekly chart, essentially in a range, waiting for a push. Until a push from comes somewhere you have to assume the overall pattern will continue and look for likely set-ups intra-range.

    However, as  suggests, if the likelyhood of the long expected rate hike grows strong there will be a range breakout and trend continuation.





  6. Your overall rationale is sound, most must be expecting a rate hike rather than a rate cut, and therefore dollar up and euro down. But  and myself have be talking about this for weeks now and it still hasn't happened. mostly due to a string of poor data out of the US.

    The DX opening hourly bar was a nice bullish Pinocchio bar though certainly no major stop run bar.

    EUR/USD still hasn't made up it's mind but seems to have rejected  daily resistance at 11410.

    You are right to wait and watch. Another attack on 11410 or re-test 11320 daily support via some minor support levels on the way?


  7. That's right, the wick down between Aug and Sept on the daily chart, Something forced that move through all those stops, job done for a real bear. As a bull, if your big stop had just been taken out would you immediately re-enter? unlikely. Something had a plan. See the video link a few posts down where the ex JP Morgan trader states quiet clearly that as an institutional trader he had the power to move markets, or hold them up if needs be (trading 400 - 500 lots *^*$$**).

    Remember though, the DX is best used as an indicator rather that to actually trade (in fact I am sure I've read that it is usually only large players who actually use it), so it's a guide to what could or should be happening to the other USD pairs. Remember also that no indicator can actually give entry or exit signals, only the price action on your chart can do that. That is what is happening now, indicators (and levels for that matter) are based on the past and as I'm sure you've heard before 'past performance is not a ? (something about the future)'.

  8. Dollar Index hits the bottom of the range and is squeezed by a descending triangle formation, interesting times.

    Points to remember, fundamentals, Fed rate hike sometime soon? more likely than a rate rate cut?


    Also remember all horizontal and oblique support and resistance lines are subjective, they are also zones rather than lines.

    Also, there can be overspill as new shorts are swallowed up by the inevitable limit orders placed in the zone, even computers take some time to process data.


    Going back to yesterdays discussion on a possible stop run (if institutions expect a rate hike), look at the run on the 24 of August, over 60 pip, that was no over spill.


    Limit orders on the line had their stops taken out, long term longs with more breathing space had their stops taken out. New shorts getting in on the breakout found bids. So the bulls were taken out then bulls started buying, they were different bulls.


    Await the 8am bar with interest.

    Daily and Hourly chart.






  9. So, yesterdays FOMC policy statement was considered hawkish in that the statement left out the usual paragraph about 'global risk alert' and said 'sees gradual rate hikes as appropriate' raising expectations of a June rate hike, but now, with GDP slipping (to 0.5%) back to square one. I think central bankers are running out of bullets.

  10. That's right, and that's the main reason I am very wary of late Friday afternoons and especially end of month Friday afternoons because you often see position covering then as a matter of routine. That's the time the boss comes around and declares 'right guys, time to close your losing positions'. Try again next week (if we let you back in the door).

  11. A good suggestion when starting out is to drop your position size right down with a view to building it up as your confidence grows. 3% is considered aggressive for an experienced trader, in fact I know some people been trading for 10 years and still only use 0.5%.


    Trading is a probability game and the first rule is to preserve your account. At the start your risk of a run of successive losers is high, most new traders die because they risk too much too soon and simply run out of resources.



  12. Re; stop runs, they definitely do happen, exactly who they are trying to shake out does't really matter. It is a question of liquidity, if you need to get your orders filled and the contracts just aren't there, and you are big enough to do something about it you do.


    You see it all the time and on different time scales. You see a level being respected, then a move that smashes through all the limit orders placed there, breakout job done? no, you then snap all those contracts and reverse the price again with you on board instead of on the sidelines. Ya.

  13. Yes, I agree fully about different types and amounts of information, you need and can use to help make decisions. Getting the right kind and not too much makes a big difference to making basic direction bias decisions, which every trader must have in the back of their mind when they are thinking of placing a trade. And yes, the fundamentals won't really give entry and exit points, more a guide to likely direction and potential turning levels. Also, yes, different information is needed for different trading styles and time frames. I want'ted to make the case that the information is out there and to sort through and use what is relevant.


    As you say the big boys are fallible, and they are not totally confident in there own decision making either. They know, as we all should that this is a numbers game (probability) nothing is certain, and only time will tell if our 'edge' or system has merit.


    Your point about the commodities is good and I was minded of the article I posted about the recent Chinese "frenzy" buying, not even knowing what they where buying, priceless.


    Thanks, that was a good and useful reply.

  14. Good points, especially trading an Asian currency (JPY, AUD) there is always a risk of being taken out over night, it just takes a few words from a central banker or politician, avoid overnight Asian positions.

    The key to the longer time frame charts is having a large stop, which by money management rules (very important) means necessarily having a small position size (relative to your account). In placing your stop you need to consider support/resistance levels but equally need to consider the Average True Range (ATR) to get some idea of the recent volatility range of the pair. In fact some traders use ATR alone in determining their stop position, but either or both, your stops are going to have to be big to ride out the intraday (American, Asian and Euro session) ups and downs. If you look back you will see that support/resistance levels relative to your time frame are respected more often than not. This is a probability game.


    Always have a stop in place or one day you will wake up with an account that's negative (not just zero).


    I did use to play the European pairs on a 4 hour chart with minimal success as I found I was always getting impatient and wanting to fiddle about instead of waiting for the set target (next major level) and simply manually trailing the stop to next high/low. I would change the target, tighten the stop too early, I was not comfortable.


    The idea of playing the long game with minimal intervention is a good aspiration but will take time (and money) to learn. You might want to consider starting on a smaller scale with a view to building up. Ask  how many years he's been learning but don't be disheartened by the answer.




  15. Timing is always a difficult thing to judge and even the big players can't necessarily go it alone but must wait for suitable momentum. Having said that, watching the DX, that is looking like a very strong 8am opening bear bar straight down to the bottom of the range which would suggest a determined effort to break it. 


    All of the above are reasons why I prefer to just trade reactionary rather than predictive and on an intraday basis, but everyone is different and more or less comfortable in different scenarios.