Starting Out In Forex....

[Anna-Maria]

Hi Soultrader

yeah, basically they're my initial support/resistance guides - with the NY close being the fulcrum. They work & react best when price is cosseted inside a range zone.

Their effectiveness is diluted a tad when price breaks out & prints consecutive "Big Day's" - which it often does on the majors when they go on a run. But then, each trading behavioural shift has to be traded with very differing tools anyhow! Soon as you get a heads up as to which phase we're entering, it's merely a case of swapping toolboxes

Fib ratio's are a common them for sure, & on that score I really like the 78.6% number!!

If you like your Fib barriers, keep an eye on that calc.....it's led to 2x2c pay-day's on Cable with relative ease the past six weeks (on the 60 & 240m frames).

the 78.6 can be even be played on the 5m (not usually a timeframe I'd use ANY speficic technical observations on) pretty consistantly.

I hasten to point out: these tools & their observations are taken from the FX instruments, how they pan out on other instrument classes is unbeknown to me as I rarely trade outside this arena.

[Soultrader]

Hello texxas,

Thank you for the input I currently do not trade currencies but have been interested for quite some time. I just recently started studying a bit about them ( I trade eminis mainly). In the index futures, the S3 and R3 pivots are often a favorite pivot for fades by professionals. This is because price tends to stay within these two pivots 80%+ of the time.

Im curious to see if there are pivots or fib ratios that are usually faded by the professionals. You mentioned the 78.6% being a key fib number in the FX instruments. Do you think prices tend to stay within certain fib extension ratios such as 161.8% above/below the previous days high/low?

Im personally not too crazy about fibs... more into market profile and pivots. But just a little curious to see how the FX markets work

[Anna-Maria]

I used to mark them religiously a few years back & used the 38 & 62% (on the 240m+ frames) as either paring or compound levels, according to the flow of the trend.

But since the influx of more & more retailers into the fray, specially during the past 3 or 4 yrs, the majors have changed their behaviour around the Big Fib levels. Well, certainly the way I traded them.

I don't really pay them too much mind, other than when they marry a hard s&r confluence zone. Like I said, the 78.6 is a favored observation if it happens to hit on a Round Number/prev swing point.

I focus on the mid-term momentum plays quite a bit these day's, utilizing the 240-5m combo. That Fib point often gets me in with decent r/r - or gets me out at a keen pare level.

I'll haul up a couple attachments to better explain the reasonings. It's merely something I've gotten used to consulting on the Euro/Cable....like most things, it can be eyeballed pretty easily once you hone certain elements down to a consistant play.

I don't tend to complicate matters when executing via the technicals. I leave all the mumbo jumbo systems baloney to the grail chasers!! Let them chase their tails all over the park - I'd rather clip the price bars as & when they show me a favored set-up

[Anna-Maria]

Here are the 2 attachments I referred to in prev post:

1st snag is a 240m run of the higher low back off the Daily ceiling kick @ c9050

2nd from the 60m run back from a second attempt to attack the months highs above 1.91 - the 78.6 forming a higher low at a pretty decent Big Number support.

[Anna-Maria]

Here's one such example currently playing out on the micro timeframe (5m).

I'll certainly be eyeballing this present scenario as Tokyo wakes up later. Price is bobbing along in a pretty crucial zone up here, & if the Cable Bulls are intent on keeping hold of the rope, they'll wanna contain this push to new yearly highs.

Plenty of space below to pick it back up should Friday's close continue a southbound tack, with 9050 & 8970 likely support camps to re-engage longs - see if the UK PPI can exert a little influence.

Just thought I'd sling this up, as it appeared on the radar anyway

[torero]

Excellent charts, tex.

I'm a newbie in forex so I have never made a big deal with different openings in London, Tokyo and New York. Wanted to get your insight on how they relate to each other in influencing prices. Do these openings counter-act each other as new opening begin?

[Soultrader]

Thank you for the charts Texxas. Alot clearer now

[Anna-Maria]

	Quote:	torero
	Wanted to get your insight on how they relate to each other in influencing prices. Do these openings counter-act each other as new opening begin?

Hey torero,

London is the big dog where volumes are concerned, & that translates across most of the high liquidity products.

Approx 60% of New York activity is transacted during the London morning shift & the overlap from Tokyo (thru till around 9.30am GMT) affects the early doors activity - hence a lot of talk around the bulletin boards re: Asian breakout trade entries?

The London-New York overlap is the main focus after late a.m London trade has settled down, & volumes then dry up noticeably as London shuts for the day.

Wellington/Sydney is of little relevance to the main European pairs, so I wouldn't waste your energy even observing that open tick activity.

Much of Tokyo trade (certainly on the Cable & Euro) is confined to position management via the tier 1 & 2 shops - you'll often notice volumes starting to uptick as Tokyo emerges from their lunch break (5.00am GMT), particularly if price has been edged back from prev session highs-lows in late NY trade.

Whenever price has printed a Big Day or broken out of a niggly range containment, I'll start to get interested in the following Tokyo shift - other than that, I'll merely monitor prices (if already positioned) & engage or pare off as London comes to the table.

[Anna-Maria]

	Quote:	Soultrader
	Thank you for the charts Texxas. Alot clearer now

no problem!

[Anna-Maria]

	Quote:	texxas
	....Like I said, the 78.6 is a favored observation if it happens to hit on a Round Number/prev swing point. I focus on the mid-term momentum plays quite a bit these day's, utilizing the 240-5m combo. That Fib point often gets me in with decent r/r - or gets me out at a keen pare level.

Soultrader:

The 35/50% s&r levels played out again today!

Printed a neutral bar at the high of the Tokyo shift (50% resistance level), & cont'd down thru the Asian low as London came on board - triggering on the break of the Asian low (London Open) signalled good momentum today

the lower 2 support lines only briefly tested before bottoming out into the London close @ the Big Number/78.6% (from recent swing move)......

Briefly glancing at Raul's "Breeze" Strat, looks like he executes a similar simple, yet effective momentum based trigger.....I'll have a more in-depth read of it later!