Great Opportunities In The Coming Days
As has been the case for
many months now, the FOMC meeting was more of a big sigh than a
worthy trading opportunity. However, the fact that the Fed indicated that rates
will likely remain on hold sent the dollar higher initially and from there
drifted off for the remainder of the session. It was the decision and reaction
that has me thinking that maybe, just maybe these wreckage that has taken place
in the EUR, GBP
and many other major currencies is coming to an end. Let’s look at the charts
to illustrate my thought process.
So while I have framed this idea using a weekly
chart, I will ultimately stalk and execute this trade by drilling down several
time frames. Just like HVT, trading FX (any
product for that matter) requires poking and prodding. When the time is right,
you will know when to strike. A similar trade took place yesterday in the
EUR/JPY. I had been stalking that short for
some time, and the moment my trigger was hit, I just reacted.
While this may sound obvious, look at it from
this angle. Do you execute trades because simply because of an arbitrary price
level? If so, is there a degree of conviction associated with the trade once
in? I am not saying there is a wrong or right answer, however, for me, the
“stalking” process builds a familiarity with the way the FX pair or stock is
trading. It offers a unique, almost guy level understanding and connection that
for me leaves no doubt about my decision. Simply saying, “oh, there is the 200
ema, let’s get short.” is not a real solid approach in the long run.
Enough of the ethereal descriptions, most traders
will likely relate to my above comments.
So, going forward, I believe that there will be
some great opportunities in the FX market in the days to come. I encourage you
to slice and dice your charts looking for levels, confluence points etc. Draw
these levels from multiple time frames on the one chart you mainly focus on so
that these “points” are never out of your sight. If you are new to FX you will
be quite surprised to see just how technical the market trades. It is ideally
suited for those that love charts. The levels below are a handful of those that
I feel will be key in the days ahead.
As always, feel free to send me your comments and
questions.