The GBP was very strong today, much more so than I anticipated and USD weaker. So taking COUNTER TREND trades at my area was harder and I had to wait for the strength to end. Around 8am you can see GBP stronger than ALL other currencies and USD weakest so I waited until the FX Power Index lessoned and the FX Multimap intensity was cut in half. It didn't fall as much as I hoped, I expected a big and FAST drop but still made 48 pips.
GBPJPY was a tough one as the GBP was so strong and JPY so weak. I do have other methods which I trade WITH the trend but for this journal am just discussing the levels and methods I explain BEFORE hand. I took some trades long today as the trend was way stronger than I anticipated yesterday but thats another story. Here's my projected trades and levels which showup as red on chart. I shorted at my zone at trendline break and had small profit. It was so strong so I anticipated it would go to my next level so waited. It also happened to line up with intraday 1.382 fib target. Now the trend was soooo strong I didn't just short that level waited for it to show it wasn't going higher and shoted the breakdown of the consolidation. I exited at the trendline break for a small profit. Counter trend trading STRONG trends like this sort of like wrestling with an alligator, you need to be careful and wait for the market to calm down before going short.
I use many platforms. TopGun Software for their Auto Fib tool and FX Multimap, FX Power Index, Containment Bands and Range Projection. Trade Station for some of my longer systems and for all the hundreds of hours of easy language coding I've done and haven't yet switched over to TopGun's VB code language. Just not worth the time and many of them I don't use much. Same goes for Investor RT for some of their tools I can't get elsewhere. Those are my 3 favorite charting apps. I use TopGun for both real time trading and overnight analysis and the other 2 for weekend and longer term analysis. I've used all 3 for years but if I had to pick two now and haven't spent so much time coding for Trade Station I'd pick TopGun and InvestorRT as my favorites.
A trader asked me which platforms I use. To come up with support/resistance zones you can use any platform that plots Previous Day's, Week's, Month's Highs and Lows and Weekly and Monthly Pivots along with longer term Fibonacci Retracement's and Profit Targets. To come up with these buy/sell areas AFTER I do my overall analysis which I use excel for I use TopGun but again any platform that has the above will work equally as well. BUYS - Likely to go UP GBP/JPY Buy 139.67 to 139.50 and breakout of todays high USD/JPY Possible support at 98.00, Buy 97.23 to 97.00 EUR/JPY Bullish over 125.00, buy 124.25 CAD/JPY Buy 78.00 to 77.82 AUD/JPY Buy 63.15 GBP/CAD NZD/JPY Buy 49.50 USD/CAD GBP/USD Sell 1.4476, careful buying 1.4175 EUR/CAD SELLS - Likely to go DOWN EUR/USD Sell 1.2800 and 1.2875 to 1.2900 USD/CHF Sell Breakdown of 1.1625 swing low AUD/USD If breaks .6450 sell and sell .6550 today's high! EUR/GBP Sell .8950 to .8975 NZD/USD Sell breakdown of today's low and if .5061 is broken SELL BIG !!
I've had a few people ask me how I come up with my levels. Part of this I can't share but once my analysis gives me the odds of a pair likely going up the next day (STRONG strength today as is so clearly seen on the FX Power Index) I will look for a SUPPORT area to buy next day. In this case I believe the 50% fib level down to the half number 139.50 will be support UNLESS the GBP gets weak and JPY gets super strong tomorrow which I feel isn't likely. Here's the chart and you can see the 50% support is about where I'm going to be buying this tomorrow! I hope this helps.
Sounds similar to what I used to do. Establish trading ranges and buy/sell zones. http://img440.imageshack.us/img440/4863/pts0104a17hf.gif Kept a journal for a little while here: http://www.elitetrader.com/vb/showthread.php?s=&threadid=54508&perpage=40&pagenumber=1 The whole thing stopped working when I upgraded to MS Office 2003 a few years ago. I managed to get the charting elements into Metatrader, but by that time I had been seduced by the "dark side". Hope you didn't take too much damage looking long gbp/jpy unless you got in near or below 137.00.
I think one of the biggest reasons for my success in trading is I'm a chicken. I don't just buy/sell and do not have a gambler's mentality. So while I make predictions the next day I'll only jump in if I'm buying a currency that WAS strong and on pullback is not statistically too weak. Conversely on my sells I won't consider selling the strongest currency vs the weakest. I'm mainly a trend trader but also take trades at my predicted levels. The other way I'm trading and those trades are in 2 strongest pairs and 2 weakest but not a part of this journal. Here's my currency map for today so as you can see the aUD was weak for a large part of the day and the USD was super strong. It was the strongest pair from 1:30 till 3:30 and still stronger than 84% of other pairs virtually all day! So I'm going to be very careful in any counter trend trades against the USD. That would be moronic to sell the strongest pair. Also the JPY was very strong and #1 strongest from 3:30 till about 6:30 and again from 7:30 almost till 9am. It would be stupid to sell any JPY pairs as well.