The reason the Yen got crazy!

Discussion in 'Forex' started by alex.samant, Jul 27, 2007.

  1. I don't actually care for the real reason volatility has increased, but i know this, when something like that happens, and we have been having that for a week or two now, it time to stop complaining the setups don't work, especially if you are buying dips and selling rallies.

    You need to get faster, so go with a lower timeframe you execute your trades.

    I usually use 60 minute charts for determining trend and 10 minute charts for executing my trades.

    However, when volatility picks up, i have to go lower, to 15 minute for trend and 3 minute for execution. A lot of money is missed if you don't adapt to the market.

    A simple tool that will help you to gauge if the market is hotter than usual is this

    Have a 22 ATR on the daily chart of the currency you trade intraday. Then apply a dual moving average system on your ATR study, an 11 EMA and a 22 EMA representing half a month and a full month of trading.

    Price action tends to stay sleepy most of the time, when the 11 EMA is below the 22 EMA of the ATR, and you can slow down your timeframe, but when the 11 EMA goes above the 22 EMA, it's time to get in sync with the market and make some money.

    Below is a chart that illustrates the heat and the coldness before that. And anyone who has been watching the yen knows how you traded it before and how you trade it this week and maybe two weeks after...

    Cheers

    PS: This is the only tip I am ever giving away on ET :))

    No. Really.