USDJPY ran up from 107.312 to 114.728 with only a minor retrace. Setting it up for a bigger correction - which it is now doing and screams sell, sell, sell on any break of support.
I’m currently short EURJPY, looking to pick up about 10 pips profit provided that the pair continues its southbound trajectory after what I am hoping is only a temporary pullback. But rest assured that I will be looking to go long big time as soon as I get confirmation that the overall trend has reversed to the north, seeing as what happened when price reached this level four times in the recent past!
I'm long gold with an average price of 1276. Looking for this three week consolidation to resolve to the upside. We may retest 1280ish before we get more upside I think.
Here I am, back where I was 15 hours ago... Unfortunately, in light of ongoing analysis, I don’t think there is a valid way for me to confirm (at this time—using my personal methodology) that entering a long position was the right decision. Any verification, if and when it does present itself (per the strategies and techniques I employ) is likely to be several hours away, meaning that I might have, once again, jumped the gun by executing this trade. (And the same is true of buying EURJPY). At 8:00 p.m. GMT I'm beginning to get confirmation signals that buying USDJPY was the right decision. That only took 40 minutes rather than hours.
My eyes see eight days of climbing following ten days of falling. If I were trading gold, I'd have to wait for an upward rehearsal happening somewhere between 1270.43 and 1278.24 to enter a long position.
I'm satisfied now that my new insights are valid, so I plan to write up my approach to identifying “key price levels to trade” when I have time later tonight (as an exercise for my own clarification) and that will probably my last post to this thread. Are these pairs embarking on a fresh push in the indicated directions?
My approach to determining key levels was inspired by the reading of Scripture, where Yeshua took the Sadducees and Pharisees to task for not being able to interpret the signs of the times, and where He admonished a crowd for not knowing how to judge the times in which they were living. My goal was to identify such "signs" in the Forex market. In applying the principle of "testing everything and holding fast to that which is good," I ultimately "let go" of such strategies as Elliott waves, Fibonacci ratios, harmonic patterns and the like in favor of three or so basic premises based solely on statistical probability. My first premise is that, generally speaking, the market makers will typically push the exchange rates on the foreign currency pairs only so far within a given 24-hour market cycle. If this premise is valid and a trader is able to quantify it, he or she will then know in advance when and where to anticipate reversals to the north or to the south relative to each day’s open. My second premise is that there are much better moving averages for determining the direction of the trend than the standard 10-, 20-, 50-, 100-, and 200-period simple moving averages and they make identifying price direction a lot simpler than watching for "higher highs and higher lows" or vice versa. My third and final premise is that, once again, generally speaking, the market makers will typically push the exchange rates of the foreign currency pairs only so far above or below these key moving averages before bringing them back within the more common deviation levels wherein they spend the majority of their time—something already well established in my system, so I never did anything with it in any of the entries I posted here, which were essentially for the purpose of experimentation. (I call these levels of maximum deviation “statistical support and resistance.”) In summary: I identify key price levels to trade by using statistical probability to: (1) quantify the maximum distance foreign exchange rates are likely to rise or fall within any given 24-hour market cycle based on the open, (2) quantify the maximum distance foreign exchange rates are likely to rise or fall above or below specific, carefully selected simple moving averages, and (3) identify the precise moving averages whose reversals reflect a genuine reversal in the exchange rates on an intra-day and day-to-day basis. For example, according to my system, EURJPY was officially designated as bullish when it last crossed above 131.71, and was re-designated as having once again turned bearish only a couple of hours ago when it crossed back below the region of 132.10 to 132.15. Moreover, I was not surprised when USDJPY climbed no higher than approximately 114.05 because that is exactly where my system drew statistical resistance.