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We have witnessed a day of massive downward move followed by the next day of massive upward move.
Now for week end EURO and GBP are expected to swing near low after forming initial high and low and firm up towards close of japanese session.
During European session a quick upward rise could be seen.Holding high and a slide before US trade deficit data and firm closing towards European session close is expected.
During US session from the dipped level further rise is expected with swings for week end close.
USD/YEN ,USD/CHF and commodity pairs are also expected to swing and rise alternatively during the day.
Regards
Dr.Sivaraman
Dear Dr.
I learned from your yesterday’s reply that gbp has the potency to reach 1.66.
After a false breakout on the upside and a similiar one on the downside, which direction do you think gbp can finally break successfully?
Many thanks!
Hi Doc,
Do you think GBP will go above 1.64 today. I have been holding out for a week to close out, looks like I should have closed out yesterday? Wont everyone be shorting GBP/USD after the huge rise yesterday ?
Hi Dr
Are the players still building shorts for a large drop before the next big rise? Is today is more rise overall? Many thanks.
Doc wrote “We have witnessed a day of massive downward move followed by the next day of massive upward move”
I think this is very deceptive and misleading. The “massive” downward move happened in Usd/Jpy on Jul 8, and the “massive” upward move happened in in Gbp/Usd on Jul 9, but not in Usd/Jpy which had the “massive” downward move.
The downward moves in Eur & Gbp happened over 2 days, and levels were recovered in 1 day to give a net change over 3 days in these 2 pairs to about 50~75 pips.
Net change over 3 days for Usd/Jpy was around -234 pips and Gbp/Jpy -315 pips - no recovery here!
On Jul 8, the range (i.e. high-low) for Gbp/Usd was 157 pips, Eur/Usd 106 pips, Usd/Jpy 309 pips, Gbp/Jpy 642 pips. While for Jul 9 for Gbp/Usd was 352 pips, Eur/Usd 214 pips, Usd/Jpy 122 pips, Gbp/Jpy 427 pips.
The “massive” moves happened in Gbp/Jpy and maybe other Yen crosses.
Have I misunderstood? Have I got it all wrong??
Hi Doc, good calls tks.think cap GBP 1.6450 today.
SU25,
I think Doc always made it clear that usdjpy is a denominator currency, so they are not expected to make moves at the same time or level. gbpjpy - i dont think there is as much liquidity at the level of GU or EU. In addition, this is a high risk/reward currency, so lots of traders dont bother. Kind regards..
Mohi
My point precisely - so where did the “massive” downward move followed by upward move” happen? Moves in Gbp & Eur were in “normal” daily/weekly ranges/limits.
Hi doc when you get up, would you bias buy to sell strategy today just to qualify.
Dear Doc,
Both the end of the Asian session and the gap time presented a drop. Does this change the overall forecast for the day? Should we expect the new high in EUR and GBP in the European or US sessions? Thank you very much!
Dear Doc,
Another question. I’ve noticed yesterday that Saxo’s live quotes roll over the net change at 21.00 GMT. Does this mean that the players are allowed to start consuming the new limit of 150 pips for EUR and 250 pips for GBP starting at the 21.00 GMT? Thanks again!
Dear Doctor,
I am curious as to the reason for the delay in the recovery of the usdjpy pair as opposed to the other pairs that experienced massive downwards moves this week. Should we still expect it to recover after the massive drop or is it expected to continue trending downwards.
Appreciate your response as I have some buy orders on this pair.
Good day Dr.Sivaraman,
do you think we will see some real USD demand in the rest of this month?
Summer low volumes could generate some profit taking in equities, do you agree that we should wait for next September/October to see new strenght in EUR and GBP?
Regards,
it would be more appropriate to say it has been 7 days of massive fall - with just one day of corrective rise - now continuing on with the down trend and the risk aversion sentiment- for the time being - what appears on the chart is true!
Ok So I notice is about an hour before CAD news- U/C is climbing- E/G is RISING, and G/J and GU are falling, U/J and E/J are holding…
My assumption is manipulation pre cad news and this is only for the players to buy more of these volatile pairs (GU/GJ) cheaper for the move up during US session above yesterdays high?
I’ve been using your net change concept for EU and GU mixed with my own reversal swing trade methods and it has increased my profits exponentially and reduced my draw downs. thank you thank you thank you!
Dear glen
Now both the downside move of day before yesterday and upside move of today appear as false breakouts.We will know today towards close which side they are heading.The players create sentiments and act against traders and when traders also quickly turn sentiments they give this sort of surpise.
They are expected to rise again as per my expectations.
Regards
Dr.Sivaraman
dear Joe
You have seen still lower levelsday before yesterday.Market rewards patience.still it is advisable to limit the risk using hedging or stop.
Regards
Dr.Sivaraman
Dear Nazali
it is week end.So they lighten their positions and then gain or lose levels.
Regards
Dr.Sivaraman
Dear su25
i am referring to EURO and GBP in this blog in relation to net changes in them.I am sorry it is not applicable to all pairs.
Regards
Dr.Sivaraman
Dear Chris
I watch the market for longer time and enter when safe trades are identified.I view both sell and buy trades and buy and sell trades with reference to their holding near high or holding near low for the day.
Regards
Dr.Sivaraman
dear George
normally week end moves are known to be very volatile.they have made the downward hunt ,nect they are expectred to make upward hunt.
Q2: yes the effective date start frm that time and will be taken as next date - they call it value date
Regards
Dr.Sivaraman
dear Francesco
I want to focus giving more details about intra-day trades.
Regards
Dr.sivaraman
Dear Doc,
I am still very patient about the USDJPY despite having longs from higher levels. But the pair seems to be very weak, hardly any recover happened until now. Should we wait for one sided move on the upside in the coming week, or players hold these low levels to liquidate long holders?
According to your forecast, when can we reach the 95.00-96.00 levels or higher?
thanks is advance
smith
dear smith
I was informing here that patient testing moves could be seen in usd/yen and one sided moves could happen.We need more patience to trade yen and yen crosses unlike EURO and GBP.Hence I recommend traders to take positions in EURO and GBP only if their equity is small.
i am expecting the one sided rise to happen soon by next week.
Regards
Dr.Sivaraman
FX Market is such a manipulated market by big players….there is no consistent logic….No single strategy works all the time…Big players keep changing their strategy all the time..so that no one get’s it right very consistently…
Agree with Dr….we could see high for EUR & GBP by Coming Monday…cheers
Doctor can you please give us the daily net pips we can watch for these pairs? EJ and GJ. I see your 150 pips on EU and 250-300 pips on GU are incredibly accurate thank you.
Doc is there any possibilty of UJ going over 94 today or Sunday? becasue ever analyst i am reading is saying a close below 94 would be a significant bearish scenario taking the pair down to 87
Respected Dr,
Yet another very precise call!
THANK YOU VERYYYYYYYYYYYYYYYYYY MUCH.
I am learning so much from you.
Have a nice weekend.
Regards
Dear vinesh
we could see the higher levels in USD/YEN next week after the downward move and buys made by the players.
Regards
Dr.Sivaraman
Dr I have just retired and now spend time on your webinars and your blog.Still an amateur but I think you are teaching a sound trading strategy.Thank you for imparting professional knowledge.I have the same question as Kevin at Q26 and also,
When price is close to max net change eg EU -150 pips or +150 pips it is a good point to enter after waiting 30 mts and it does not cut the low or the high as the case maybe.Please indicate whether my thinking is right?
This is my first post on your blog and I wish you and all fellow bloggers ,who are certainly making a positive contribution, good luck
Hi Dr
Do you much rise in eur & gbp for the last session? Many thanks.
Fair enough Dr.Sivaraman,
let us focus on shorter term.
Do you see some strenght coming back in AUD?
Also, I noticed that JPY crosses are all weak, do you expect the same weakness to continue next week also?
Thank you!
Dear Nazali
they are holding and buying and then slowly rise and trap short sellers. then monday they will make false dip and then rise .
Regards
Dr.Sivaraman
Dear Francesco
Sentiments are short lived in the market.
The players are now holding and buying usd/yen and yen crosses.We will see the hidden agenda becomes visible from Monday/Tuesday in coming week.
Regards
Dr.Sivaraman
Whoever is holding losing positions - I hope those positions are either hedged or you have a plan to prevent your account being blown away if they lose more. Doc has always recommended hedging. If you have not hedged, then you should ask Doc whether he can suggest some other strategy to protect your positions, instead of only asking whether the currecy pair will reach a certain level.
Dear Doc, do you think they will drop GU to 1.60 again? Thank you
Dear Doc
I wonder how this week is different to that of last 2 weeks for Eur & Gbp.
Week start Highest Net Change Closing Net Change
Date Eur Gbp Eur Gbp
Jun 22 +194 -290 +124 +26
Jun 29 -141 -223 -92 -200
Jul 06 -144 -342 -64 -141
And the net change over 3 weeks (open on Jun 22 Close on Jul 10 cutoff) for Gbp its -315 pips and Euro -32 pips.
All are within permissible limits. What is creating panic? Movements in JPY or other crosses? Movements in other markets? Holding losing positons? Media?
Dear SU25
I can understand your calculation of net change over 3 weeks -315 for GBP and -32 for EURO.How do you know the permissible limit for this period.Is it a static figure like the daily limit of 250 and 150 for GBP and EURO respectively?Or is there another way to calculate it.
Kind Regards
Dear Johnra
For Gbp daily net change is 250, weekly 600 and monthly 1200 (not sure). Since the 3 weeks figure is -315 and still within the weekly limit or monthly limit, logically it is within permissible limits. The net change figure would be an increasing figure i.e. monthly > weekly > daily.
Also, these net change limits are approximate figures, and can be breached. If the daily limit is breached, then I usually check the weekly limits to take a cue from there. Like yesterday, Gbp breached the daily limit, but was well within weekly limits, so no panic buttons! However, net change limits are an ADDITIONAL tool, and should be used with other indicators/rules.
Regards
Dear Doc
Is this thinking process correct?
USD/Jpy:
Highest Monthly Net Change:
July -454 (over 8 trading days)
June +358
May -469
Apr -325
Mar -254
Feb +873
Jan +390
Open/High/Low for 2009: 90.73/101.43/87.08
If one was to take a trading decision on Usd/Jpy direction for next week solely on Net Change figures, what would it be? Remember we have another 15 trading days left in this month. Also, once you decide on the direction, decide on what you would do to minimise risk.
Thanks and regards.
Dear su25
Thank you for the prompt response.I totally understand what you have explained.My endeavour is to get a good grasp of Dr’s trading strategy.I like the protection brought about by his cascading hedges.I also gathered some knowledge from your earlier post on strategy.Much Obliged.
Kind Regards
Dear su25 and all readers:
I am happy that you are creating the debate from visitors side for the readers to understand how limiting the risk is more important rather than hoping for the currency to move in our favor.
There can be only 2 possible moves in the market -either up or down.But many times the up/down moves drag for more days and the holding positions become more unfavorable.many lose the initial profit seen in the position out of greed and fail to keep stop at entry to eleminate the risk.Secondly envisaging the long term expected levels traders tend to hold positions when the market moves against them without any strategy to limit the erosion of usable margin in the account- unlimited risk is dangerous and players can induce margin call by making quick extreme moves.When traders tend to hold the positions the players knowingly give excessive push/pull to market - the massive moves.
So how to limit the risk?
traders need to focus on the trades rather than worrying about various economic conditions.
assess the risk bearing ability before taking position.
When we use stop it can limit risk but if hit the earning potency namely the position is closed.Instead if we use hedging order and if hit,we will hold both the buy and sell positions and any time we can watch the market action and close both the positions to accept the loss,or we can close the unfavorable position with loss and earn more from the favorable position based on market moves and trends any time of our convenience and mental acceptance of loss.since stop make us to lose the position and money,to avoid the stop being hit, many choose to keep wide stop or keep mental stop and that makes them to become panic and upset when the market moves against.market moving against our position may be initially unexpected but that is the postency.So expecting the unexpected and measures taken to limit the risk are very important in trading.Besides focusing on the expected moves before taking positions, if we also take steps to limit the risk using hedging could give mental comfort and thinking ability during violatile moves of the market.it is always wiser to relate the market level to our holding position rather than expecting too much from the market to move in our favor.
hence think of possibilities of various trading stratergies to limit the risk and maximize the profit.
Regards
Dr.Sivaraman
Dear Dr
I would like your views on the following variation to the hedging strategy you have taught us.
Supposing price is at a position somewhere close to maximum net change and a reversal is imminent but we still decide to enter a trade.We do so with a hedge.
In setting up the hedge we can use two parameters namely the lot size and secondly the selection of the hedging currency.
If we set up a lot size coupled with a higher profit yielding currency, when the hedge is activated it would make a bigger profit than the corresponding loss on the original trade.If we have to use multiple hedging with a trailing stop the way you recommend this would become even more effective.
Kind Regards
Dear 37 & 40 su25
An intersting analysis you have done just to find whether the levels created the panic or the media? - I think it is mental perception of the traders created the panicness - when traders focus more on long term projected levels then current market may appear dangerous to look at.When quick moves happen in market the assumptions also create more uncertanities and surprise.So as for as traders are concerned the market is the trigger and their perception is their threat.
To get rid off the extreme imagination traders need to releate the market levels from time to time with their holding positions and assess.Then plan before hand how to handle the positions if the market moves against us,the planning helps a lot besides trading strategies to win in the market- other wise we may be forced to feel that we are unlucky and only lucky people can make money from the market.
Your question about net change in usd/yen:
The monthly spread is within the permitted levels and slow moves and holding for long time in a narrow rnage makes us to develop that it may re-visit 87 area.But that was shown as multi year level and multiyear levels can be seen once after several years.Hence called multi year high or low.
So the downward stop hunt was done in USD/YEN as contrarian move a drop along with EURO/USD and GBP/USD.Such moves give great opportunities to trade using hedging and either way profit booking.
I am expecting the upward move could be more one sided in rest of the month and nect month.
I have given in the month beginning the forecast for the month - 2 weeks of drops and 2 weeks of rise in EURO,GBP and USD/YEN as contrarian moves.
Regards
Dr.Sivaraman
Dear johnra
There are many strategic trading techniques using hedging and stop and I teach them to the members,but here I am confining to basic hedging strategy to help the traders.
Regards
Dr.Sivaraman