There's no magic wand or "tool". I take a whole bunch of information from level 2 to volume to charts from different time frames and compare them between different markets, mix that with fundamentals and create a hypothesis. I try to trade the shorter terms within larger time frames but sometimes I jump in prematurely and have to pay the price. For example today I decided to play the retail announcement and I was stopped out Euro at a tight loss. After momentum to the downside slowed down I jumped in again on the buy side. It moved against me a little. Then I thought. ."wtf Im on the wrong side of this Euro longer term". Meanwhile the ES was looking pretty resilient so I jumped in on some of that too. I set my stop loss at the euro and a profit target to break even, I just wanted out. The ES kept going. I cashed out the euro flat. It kept going after but I don't care. And, I took some profit off the ES. Net I was up a small profit for the day but overall I consider that my initial trading day hypothesis was wrong. Because had my initial hypothesis been right I would have made a good 70 pips to the downside of the euro. I'm ok with it though. You can't take them all.
All I can say about Gold and actually this applies to all of the metals: Once there appears to be even a remote end to QE3, all hell's gonna break loose on commodities in general. We are going south HUGELY and RAPIDLY.
I wonder if the math allows for QE to stop, I just don't see the benefit of stopping it. I guess a conspiracy theory of how unsecured etf's are being used to print "in god we trust" versions of gold wont have a hold here. Either way a bit off topic more of a chit chat thread. So it seems like your entry was not thought out enough to look at the long term chart, Almost like entering on gut. I imagine that things were screened before seen by you. I use MT4, Im curious of which plat forms allows for the down load of level 2. and if you just use excel. I've come across "pat" not sure of the cost, but I just don't like to depend on things blindly. I slowly find myself learning some excel and R while i decide on my direction. The DLL dont work so I am thinking to just spend some money, I don't know why this tends to be just as complicated. I guess I just have a way with things lol.
I was looking at some markets and did not want to correlate one with the other. In retrospect I should of done this with USD. My data was the previous 5 months, and it is not separated by month. that is to say month 5 includes all past 5 months and month 4 has all 4. month 1 is the most recent I gave each market a score of correlatability to all other markets. Since I have never seen such data I have no idea how they all act. But I could see that they really like to stay steady, With only 5 points of data that show change, I try to read things assuming that correlations do not change by all that much. My 5 month data is assumed to be the natural state of the world before the perceived "test" was done 4 months ago. Instead of using the word correlation I will view each market as a person and use words like got stronger (more correlated to things) It is possible that things that are said to have flipped actually are the ones that stayed the same. This is because all US markets. But not the USD The catalyst is not known. But in the data it was a test done by the USD (refereed to as a person) The world was balanced on month 5. Month 4 the USD wanted to stir things up move money around and at the same time test reactions (I assume markets can decide how they want to be scored) Being very stable, 4 months ago the USD decided to drop its score (corolation) this drop is bad, but its a test. It dropped by 30% which was not expected. Each market had to react to this. Every market dropped their score, but they feared that the USA may drop more. This fear caused markets to drop by over 30% scores. Many dropped by 50%. Some reacted fast and hard out of panic. Others were mature, but they all dropped. The next, month (month 3) the usd left its score at the same 30% discount. Each market in the same month realised they may had over reacted. Since USA's number stayed exactly the same they thought there may be trend. They decided that the over reaction was due to fear the us would continue its move. Now they see this was not the case, Each market begun brining up their score. Month 2 came and the usa again left its score untouched, other markets got comfortable and there was less fear so other markets raise a bit more. Month 1 this month (maybe last?), the usd brought it score back to normal levels and others again raised their scores to pre test levels. The test showed a few things. Japan stood out as not reacting. All markets reactions could be understood but the yen moved in a small range back and forth with no direction. It stayed close to 0 and since it did not show any pattern one may conclude it was lost or just doing its own thing. It showed how markets reacted, for instance most over reacted but and then assumed things would get better. The pound reacted but when it saw that US did not change it did not either. Though it over react, it decided not make a move as it may have to lower again. That is to say it only moved after the USA. (it could be that it was the pound that started it) Most other markets over reacted and the corrected even though the news was the same. While the test was going on and every one was busy looking at their scores and deciding what to do, The US begun play its game. It was the perfect time as things were changing so no one would see what is going on . It had told certain markets to inverse their relationships markets found that when all was settled markets looked around and saw that the balance of scores was off. All currencies were around where they begun, but the euro dollar was completely upside down ! T bills stayed solid the hole time. When everything reverted on month one tbills all of a sudden made a hug -.6 move. This was not as the biggest move but it was the only one that moved only after the test. but this was probably due to their nature. natural gas didn't over react, but it did not get better, it just got worse. Metals also reacted but they reverted very close to where they begun Gas reacted to test aggressively and cut its score hard. but it just got worse and worse and did not recover Oil ended up where it begun but brent now had crude's score and vice versa Since Americans eat sugar, sugar was hit hard too. It was one of the biggest reactors to the test. manipulated, it too like the euro was now its own inverse Corn was stronger Like yen, soy was weird Soy dropped at the test and did not recover. Soy meal did worse as it reacted too storngly to the test. It is now dead. Soy oil though just got stronger and stronger Though feed cattle was very weak to begin with , it found it was now with hog's who had doubled post test cattle was up 20% lumber took a hit and did not get back up. euro sugar soy meal and the yen stood out ( the yen mostly for its reaction, or lack there of, on month 4) Things seem to change too often. But if the dollar went down again, I would defiantly want to trade the euro and also the same direction on the pound as it seems solid In the span of 5 months things reversed. Actually so did all US markets (reverse). Maybe from the perspective of america, everything else changed.
Made it past one drop with a loose stop, yesterdays took me out though. stupid ! to think the guy that would of used traditional stop is still in. Its just seems like a lot to risk on a trade. but seems is seems. I sold my fear to them.