Monday, August 31, 2015

Price Action As A Trading Strategy



Meet Al Brooks, the trader and author.


Al Brooks having experienced trading for many years has taken the time to author three excellent books which are aimed at teaching Price Action Trading.

He does an excellent job of defining trends, breakouts, reversals and relates those to his favourite charts the ES 5 minute with some references to 15 minute charts.

Many traders base their complete approach on Al Brooks methodology as it has been proven excellent over many years.

Some readers of his books become frustrated with his writing style, however, what he teaches is pertinent to trading and that is what is important.

Here are the three titles and links to the Amazon site for your perusal.

Trading Price Action Trends

Trading Price Action Reversals

Trading Price Action Trading Ranges

USDCAD Trading Strategy as At August 31, 2015




How will talk of Recession Affect the Loonie?


The USDCAD pair is trading at 1,3253, down a little from the recent high of 1.3271 an hour or so ago.

Here is a current chart.


DaveM-0081


With an election happening in Canada and a recession about to be declared, there is a lot of uncertainty hanging over the Loonie.
As long as the price of Oil and Gold remains weak, Canada’s economy is spinning its wheels.

Here are some recent opinions as to the Canadian dollar.

USD/CAD Forecast Aug. 31-Sep. 4 - Forex Crunch
 Sun, 30 Aug 2015 18:15:00 GMT
Forex CrunchUSD/CAD Forecast Aug. 31-Sep. 4Forex CrunchUSD/CAD gained strength early in the week but then retracted and was almost unchanged on the week, as the pair closed just under the 1.32 line. There are six events this week, highlighted by GDP ...

Read more ...



USD/CAD Halts Weakness, Risk Turns To 1.3352 Level - Investing.com
 Sun, 30 Aug 2015 07:04:03 GMT
USD/CAD Halts Weakness, Risk Turns To 1.3352 LevelInvesting.comUSD/CAD: With USD/CAD seen halting its corrective weakness and turning higher during Friday trading session, risk of more strength is likely. This development leaves the pair targeting it ...

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USD/CAD Daily Outlook - Action Forex
Mon, 31 Aug 2015 03:37:19 GMT
USD/CAD Daily OutlookAction ForexIntraday bias in USD/CAD remains neutral for the moment for some consolidation. Further rise is still expected as long as 1.2951 support holds. Above 1.3353 will target next long term retracement level at 1.3469. Howe ...

Read more ...



USD/CAD Loonie Faces Big Week as Recession Looms - MarketPulse (blog)
Fri, 28 Aug 2015 20:13:56 GMT
MarketPulse (blog)USD/CAD Loonie Faces Big Week as Recession LoomsMarketPulse (blog)The CAD had a rough week as the Chinese stock market rout grabbed headlines and spread panic around the world. Canada was under attack from two fronts. Lower demand f ...

Read more ...

Here is a Point and Figure Chart (daily)






Good Trading!










TMA Bands Scalping Strategy



The idea of using the TMA Bands as a Scalping Strategy can be quite simple. One the price bar has touched or crossed the upper or lower band, it is due to retrace.
For the trader, he has to confirm trend and his entry point.

I favour using the Stochastic Momentum Index and like to wait until I see %K cross over %D. That is my own preference, each trader has to find his own method.

The important thing is to ensure that the chart ‘talks’ to the trader.

Some traders like to observe a higher time frame chart  for signals and then enter on a lower time frame such as a one minute chart.

Here are three 15 minute charts from this morning which seem to be valid entries. You will notice that the price has approached or crossed the TMA Bands and the Stochastic Momentum Index is crossing.

Enjoy!!












Saturday, August 29, 2015

CCI Divergence Trading Strategy As At August 28, 2015

Using CCI Divergence as a trading strategy can be quite effective, once the trend change is confirmed by price action.

I have assembled a couple charts to show current divergences which may be useful signals in coming days.
















These are just a few of many that are available to observe on many time frames. I choose the higher time frames as those are the ones that I trade most frequently.

Here are some articles that describe CCI divergence and give some examples. Do note that some of these articles are a few years old.

CCI Divergence 5mn @ Forex Factory
http://www.forexfactory.com/ Wed, 28 Jan 2009 11:23:29 -0800
Bonjour à tous. I'd like to share another simple method with you and based on CCI divergence. CCI 10 (Typical price HLC/3) TF 5mn. The CCI divergence must be beyond of 100/-100. You sell the divergence when the closed ...

Read more ...



CCI Divergence indicator for Thinkorswim TOS - Patternsmart
http://www.patternsmart.com/cart/ Tue, 23 Jun 2015 13:52:33 -0700
Commodity Channel Index (CCI) is an oscillator which can help traders to identify over-sold and over-bought level. VIP price is: $69. CCI Divergence indicator gives possible reversal signals when there are discrepancies between CCI and ...

Read more ...



Urban Forex CCI Divergence Breakout Strategy Testing Setup
http://www.tradingheroes.com/ Thu, 13 Nov 2014 19:19:01 -0800
How to backtest and forward test the CCI Divergence Breakout Strategy. It will give you the complete testing plan and software tutorials.

Read more ...



CCI Divergence Breakout Strategy for Binary Options Trading
http://www.binaryoptionsthatsuck.com/ Tue, 01 Jul 2014 03:00:01 -0700
Well… here comes the tricky part, we have to spot divergence between price movement and CCI, if you are not familiar with this concept don't drop down your weapons, BOTS is giving a helping hand just click here and find ...

Read more ...

Here is a video showing one use of CCI Divergence

And here are a couple more posts on Divergence

boutique trading strategies: Can We use CCI Divergences to ...

boutique trading strategies: Divergent Opportunities for ...

boutique trading strategies: Renko Trading Strategies (1)

Enjoy!

Gold Analysis As At August 28, 2015

This past week has seen the metal rise a few dollars, perhaps we can analyze gold to a certain extent and see what may be occurring.

I have several charts in this post, each one has its own story to tell.

This first chart shows the Ichimoku Cloud, interesting is that price went up to the resistance of the cloud and then retraced, and then repeated. The cloud has strong resistance to price moving higher.








This next chart , a 240 minute chart shows a Fibonacci pattern, a bearish AB = CD which could mean that price will go south. These patterns are not always accurate, this is merely an indication which would have to be confirmed by price action.




This next daily chart illustrates the current price channel in which price is contained, often price will move from one side to the other of the channel, the channel indicator is designed to contain the price. It seems, from the two prior charts, that the middle line of the channel is where there is significant resistance to an advance at this time.






 This chart is also a 240 minute showing the Camarilla indicator, price action often takes place between these lines which have been set up to measure potential moves, and it is not always accurate, just an indication that has to be verified by price action.





This last chart is a monthly chart, the indicator in the lower chart is the Commodity Channel Index. I wanted to post this chart so as to point out the bullish divergence. The period of divergence on this chart is just over two years long which indicates that it is a powerful signal. Again, divergences do not always result in a price move, they have to be confirmed by price action, In this case I tend to believe that there will be a bullish move as months pass.





Have a great weekend!


Friday, August 28, 2015

Renko Trading Strategy EURUSD August 28, 2015


EURUSD is sliding on this Renko Chart


This morning the EURUSD pair is down considerably after rising earlier.

You can see on this Renko chart that price has fallen from a high of 1.1309 to 1.1258.


Renko Trading Strategy Eurusd August 28, 2015





The fall in the EURUSD today may be related to a softening rate of inflation in Europe as well as today’s meeting of the European Central Bank. There is some feeling that there will be Quantitative Easing proposed which may have considerable effect on the EURUSD.

Her are a couple current articles on EURUSD.


Slowing German CPI to Hit EUR/USD Ahead of ECB Meeting? - DailyFX
http://news.google.com Fri, 28 Aug 2015 08:00:26 GMT
Slowing German CPI to Hit EUR/USD Ahead of ECB Meeting?DailyFXSigns of slowing inflation in Europe's largest economy may drag on EUR/USD and push the European Central Bank (ECB) to broaden its quantitative easing (QE) program as it undermines the Gov ...
Read more ...
 
 
EUR/USD Technical Analysis: Aiming Below 1.12 Figure - DailyFX
http://news.google.com Fri, 28 Aug 2015 03:45:45 GMT
DailyFXEUR/USD Technical Analysis: Aiming Below 1.12 FigureDailyFXThe Euro declined for a third consecutive day against the US Dollar, with prices now aiming at support below the 1.12 figure. A daily close below the 61.8% Fibonacci retracement at 1.1 ...
Read more ...
 
 
Trade Idea: EUR/USD - Sell at 1.1370 - Action Forex
http://news.google.com Fri, 28 Aug 2015 08:30:56 GMT
Trade Idea: EUR/USD - Sell at 1.1370Action ForexAs the single currency has recovered after falling to 1.1203 yesterday, suggesting consolidation above this level would be seen and corrective bounce to resistance at 1.1364 cannot be ruled out, however ...
Read more ...














Monday, August 17, 2015

7 Ways to Optimize Your Trading Strategy


Using this tool can greatly enhance your Trading Strategy


I want to share with you today one specific feature of the FSBPro software, the optimizer. I believe that you will be amazed at the capabilities of this tool, I will attempt to demonstrate.

We will start with a randomly generated strategy which uses the Macd and a close and reverse option, meaning that each time the Mac crosses zero, the trade is closed and another entered going the opposite direction. No special reason for this strategy, I just wanted to have something to work with.

Here is the strategy as it is after generating for a few minutes
imageimageimage

You can see that the balance is shown as 87,442. I am going to use the optimizer and see what happens when I optimize for a higher net.

image

This result may be entirely unsatisfactory based on other metrics, such as Win/Loss or Sharpe Ratio or….  Once this run is finished we will have a look at other metrics to see what can be improved..
Here is some results from optimizing for Net Profit

image

There was a gain in the net profit, but looking at some other metrics, this result is horrible. Notice the win loss and consecutive losses.

I will optimize the win loss, you can see the setting in the diagram.
image

I was able to improve the Win/Loss as well as the Net Profit, also the consecutive losses was reduced considerably
image

I do have a concern that the losses are awkward to deal with, I will now attempt to improve the Sharpe Ratio. I can see that I am going to have a problem with the equity curve, it is just not going to end up satisfactory.

After playing with the controls and attempting different things, I could see that the equity curve was not going to be satisfactory and I have discarded the strategy.

Here are the metrics on which the optimizer will work.

image

As you can see this optimizer is quite powerful.

I will work with a new strategy and post developments, hopefully better results than this.

Here are a couple more posts referring to Forex Strategy Builder.

http://boutiquetradingstrategies.blogspot.ca/2014/08/is-macd-worthwhile-for-strategy.html
http://boutiquetradingstrategies.blogspot.ca/2014/04/trading-strategy-based-on-bill-williams.html
http://boutiquetradingstrategies.blogspot.ca/2014/08/bill-williams-trading-strategy-part-4.html

Awesome Oscillator Renko Divergence Trade from August 17, 2015



Using Divergence as a trading strategy can be rewarding and using the awesome oscillator with Renko bars can be quite simple.

Here is an example from today’s trading on the EURUSD currency pair.

AweSome Oscillator Divergence  Renko August 17, 2015

Sunday, August 16, 2015

Renko Awesome Oscillator Divergence Trading Strategy



A trader usually wants to know when the end of a trend is about appear so that he can adjust his trading strategy to take advantage of the next trend.

Of course, divergence between price and oscillator is one way to be prepared.

One of the indicators that will point out divergence is the Awesome Oscillator which is found in most charting packages.

Using Renko bars together with an oscillator is a great way to eliminate the chop and see clearly when there is a divergence appearing.

I have attached three charts on which I have marked divergences, just to give an idea as to how simple it is to spot them.

Divergences are not to be traded blindly as the market does not always change trend with a divergence. Therefore we have to observe price action before making any entry.

Screen time and practice is required to hone the skills in trading and divergence is not a shortcut to any success, the hours have to be put in to learning how to use divergence, the same as any other tool.





Awesome Oscillator Divergence Renko_Trading_Strategy 1




Awesome Oscillator Divergence Renkp_Trading_Strategy




Awesome Oscillator Divergence Renko_Trading_Strategy 2

For a detailed explanation as to the use of the Awesome Oscillator please see this page



Enjoy!

Saturday, August 15, 2015

US Dollar Index Trading Strategy As At August 15, 2015


The US Dollar Index will certainly affect the trading strategies of the several currency pairs that make up this basket.

There is much discussion in the United States and elsewhere as to when interest rates may start to move higher and that will certainly affect all of the currencies.

Lets have a look at several charts and see what clues we can discover as to what may be a future direction.

This first chart has the Macd and a quick glance shows a bearish divergence. You will see that there is quite an amount of Bearish influence showing as you glance at these charts.




This next chart, a daily chart shows a bearish Fibonacci Pattern which seems to confirm the bearish divergence on the Macd.



Now we have the Ichimoku Kinko Hyo chart showing that price is above the cloud. It may be that the cloud is going to provide support and prevent much of a movement south, perhaps a few ranging days are ahead.



Another Bearish Fibonacci Pattern on the monthly chart.




We can see on this chart that price is below the pivot and has been fluctuating above support, directionless, so far.



Price has moved below the weekly pivot and also below the monthly pivot.




Here is more discussion by several authors. You will see a variance in expectations as to direction.

US Dollar Index Forecast August 17, 2015, Technical Analysis - FX Empire
http://news.google.com Sat, 15 Aug 2015 04:53:00 GMT
FX EmpireUS Dollar Index Forecast August 17, 2015, Technical AnalysisFX EmpireThe US Dollar Index went back and forth during the course of the session on Friday, bouncing off the 96 level for support. With that being the case, the market looks as if ...
Read more ...
US Dollar Index (DX) Futures Technical Analysis – August 14, 2015 Forecast - FX Empire
http://news.google.com Fri, 14 Aug 2015 11:22:28 GMT
FX EmpireUS Dollar Index (DX) Futures Technical Analysis – August 14, 2015 ForecastFX EmpireSeptember U.S. Dollar Index futures are trading slightly lower shortly before the cash market opening. For the second consecutive day, the market is trading i ...
Read more ...
Dollar Slips This Week on Blurred Picture for US Rates - Wall Street Journal
http://news.google.com Fri, 14 Aug 2015 20:18:39 GMT
USA TODAYDollar Slips This Week on Blurred Picture for US RatesWall Street JournalThe dollar edged broadly lower this week as uncertainty over China and depressed global inflation pressures clouded investors' view on U.S. interest rates and limited t ...
Read more ...
The Week Ahead: How Important Is China or The Dollar To Your Portfolio? - Forbes
http://news.google.com Sat, 15 Aug 2015 12:49:44 GMT
ForbesThe Week Ahead: How Important Is China or The Dollar To Your Portfolio?ForbesI began analyzing the financial markets in 1982 when I became the research director for a financial advisory firm and provided regular market analysis on stocks, commo ...
Read more ...
China hoarding gold in move to challenge dollar - WND.com
http://news.google.com Sat, 15 Aug 2015 01:25:38 GMT
WND.comChina hoarding gold in move to challenge dollarWND.comBorneman noted the IMF is scheduled to meet in October, and on the agenda is whether to allow China's currency into the SDR pool, a basket of currencies that includes the U.S. dollar, the e ...
Read more ...
Pound to Dollar Rate Forecast to Decline from Here - Pound Sterling Live
http://news.google.com Sat, 15 Aug 2015 10:58:00 GMT
Exchange Rates UKPound to Dollar Rate Forecast to Decline from HerePound Sterling Live“Sterling outperformance though largely stemmed from euro strength against the dollar. Underlying sentiment for the pound suffered in data this week that showed the ...
Read more ...
Dollar Looks for Fed Move as Major Counterparts Gain Ground - DailyFX
http://news.google.com Sat, 15 Aug 2015 03:34:00 GMT
DailyFXDollar Looks for Fed Move as Major Counterparts Gain GroundDailyFXThe 'Summer Lull' doesn't do the US Dollar any favors. As a favored haven currency, the reduced volatility - and thereby risk - curbs its innate demand. Further, as market depth ...
Read more ...


























Chinese Yuan – What Has Happened?


The July Trade Numbers

The Chinese government saw a drop of 8.9 percent in exports for July and reacted swiftly with a devaluation of the Yuan. Being the world’s largest goods trader, China has set up for many changes to happen around the world.

(Xinhua)
Zhang Xiaohui, assistant governor of China's central bank, said the value of the yuan has gradually returned to market levels as the discrepancy between the central parity rate and the actual trading rate has been largely corrected after declines early this week.
"There are no grounds for persistent and substantial depreciation as sound economic fundamentals determine that the yuan will re-enter a rising streak," said Zhang.
 
Here is a one year chart of the USDCNY from Bloomberg
image

 
To understand what is happening with the Yuan will take a significant amount of research and consideration of a lot of opinions. Our weekend will be filled with studying the effects of the recent moves in the Yuan. Many currency pairs will be affected by this move and that will develop in coming days.
I have gathered several articles below, and, as well, Bloomberg has quite a collection of articles on their site at this link.

China's Yuan Could Fall 10% or More - Barron's
http://news.google.com Sat, 15 Aug 2015 05:40:31 GMT
Barron'sChina's Yuan Could Fall 10% or MoreBarron'sOn a sultry mid-August evening last week, world currency markets were rocked by what amounted to nothing short of a regime change: China announced a devaluation and freer float of its currency, the y ...
Read more ...
China Gambles with the Yuan - The New Yorker
http://news.google.com Fri, 14 Aug 2015 12:08:45 GMT
The New YorkerChina Gambles with the YuanThe New YorkerIf you're confused by what's been happening to China's currency over the past few days, don't feel bad. The wild ride that the yuan has taken has left plenty of people perplexed, including, perha ...
Read more ...
IMF Calls China's Yuan Moves Welcome Step to More Flexible Rate - Bloomberg
http://news.google.com Sat, 15 Aug 2015 00:15:48 GMT
Wall Street JournalIMF Calls China's Yuan Moves Welcome Step to More Flexible RateBloombergThe International Monetary Fund said China's move to link the yuan's value to market forces is an encouraging step toward what may become a freely floated curr ...
Read more ...
Many factors at play in the devaluation of yuan - Marketplace.org
http://news.google.com Fri, 14 Aug 2015 21:29:51 GMT
Marketplace.orgMany factors at play in the devaluation of yuanMarketplace.orgA man changes foreign currency into Chinese yuan in Hongqiao airport in Shanghai on Friday. China's central bank raised the value of the yuan against the U.S. dollar by 0.05 ...
Read more ...
Stocks end week lower, bruised by China yuan weakness - Reuters
http://news.google.com Fri, 14 Aug 2015 20:59:00 GMT
ReutersStocks end week lower, bruised by China yuan weaknessReutersFor the week, the MSCI All World Index fell 0.4 percent, its second consecutive weekly decline. China's modest devaluation of its currency dominated market activity, as the yuan lost ...
Read more ...
China policymakers may lose control of yuan: Trader - CNBC
http://news.google.com Fri, 14 Aug 2015 12:15:51 GMT
CNBCChina policymakers may lose control of yuan: TraderCNBCThe next GDP print let's say misses and the market really tries to push the yuan lower. Will the Chinese government simply let the yuan float or will they come back and try to put the genie b ...
Read more ...
Wall St settles after yuan shock week - The Australian Financial Review
http://news.google.com Fri, 14 Aug 2015 21:08:58 GMT
The Australian Financial ReviewWall St settles after yuan shock weekThe Australian Financial ReviewWall Street markets were composed at the end of a tumultuous trading week, as China's plunging currency stabilised and positive American economic data ...
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US stocks make slight gains as yuan and oil stabilize - WRAL.com
http://news.google.com Fri, 14 Aug 2015 14:26:15 GMT
WRAL.comUS stocks make slight gains as yuan and oil stabilizeWRAL.comCHINA CALM: China's currency, the yuan, was stable after falling sharply earlier this week. On Friday, the dollar was buying 6.3901 yuan, little changed from the previous day when Z ...
Read more ...
How China's yuan devaluation could affect your food costs - Moneycontrol.com
http://news.google.com Sat, 15 Aug 2015 08:04:24 GMT
Moneycontrol.comHow China's yuan devaluation could affect your food costsMoneycontrol.comChina is one of the world's biggest importers of what are known as "soft" commodities – including key ingredients such as soybeans. China's imports have become m ...
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Impact on rupee from China's yuan move to be temporary: Economic adviser ... - Times of India
http://news.google.com Sat, 15 Aug 2015 09:09:00 GMT
NDTVImpact on rupee from China's yuan move to be temporary: Economic adviser ...Times of IndiaNEW DELHI: The impact of the devaluation of the Chinese yuan on the rupee will only be "temporary", given "adequate" foreign exchange reserves, the country' ...
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