And isn't that what it's all about?. I didn't respond to SunTrader's last post because, first of all, what Brooks says about trends and trading ranges is NOT what I'm saying about trends being dependent on time frames; and second, because it's always a good idea to define your terms before getting into a debate. And at this point, it is clear to me that SunTrader and I define the term "trend" differently, and I'm okay with that. I'm not saying he's wrong. I'm just saying that when he talks about a trend and when I talk about a trend, we are not talking about the same thing, and I'm fine with just leaving it there.
I know people are technical traders in this sub but what exactly is going on with the Yen fundamentally? Seems like technicals don't work on a currency that is being decimated by the political leaders of Japan. Seems like it keeps on going higher and higher regardless of RSI >85.
Rate differentials driving a carry trade. Yields on the US tens vs JGB tens will cause liquidation of JGB and then Kuroda vowing to protect the rate just encourages the carry. This trade is levered to the moon right now. I really wonder what happens to markets if this thing comes unhinged.
I really thought the BOJ would have intervened by now to stem the slide. When are they going to do something? Or will they just let it go to 200+? I heard some dire predictions of the Euro going to 0.75 & Yen going to 250.
It's not just yen. Check PHP, THB, KRW. The PBOC yuan fix came in just under the 7 handle (Bloomberg said 450 BIPS ... lol) I have models that can trade FX but its touch and go, minute by minute stuff. Yen futures are crazy bearish. (white line is futures VWAP)
I trade based on technicals, but the system I use was developed by relying on five principles, the first of which was to "test everything and hold fast only to that which proves to be valid and reliable." This led me to reject the use of almost all common indicators, such as MACD, RSI, CCI, stochastic oscillators and the like; along with any approaches involving harmonic patterns, Elliot waves, pivot points, Fibonacci ratios and whatnot. As it turned out, I found the absolute best "atmospheric barometer" for predicting the direction in which exchange rates might ultimately be headed was nothing more than simple moving averages, with a handful of key measures evidencing superior usefulness in this role, which I (and others) call "baselines." However, to trade with the clarity and precision I desired required me to assign specific temporal values to each individual baseline. This enabled me to answer the questions: What moving average best conveys in which direction and by how much price moves every five minutes? Or every 30 minutes? Or every four hours? Etc. So, in the same way a pilot is aware that a Boeing 747 will lift off the ground by angling upward at two to three degrees per second with a maximum angle of 10 to 15 degrees; I as a retail trader know the parameters dictating whether an asset is rising or falling from the perspective of a day, swing, or position trader. This works, even if it seems like an asset keeps going higher and higher, and continues to work so long as up remains up and down remains down.
You were expecting a trend reversal when RSI is > 85. simply remove the RSI. That fix some of the technical problems. I am 100% sure you will never remove the RSI. yen will go higher and higher and there is no way to predict how high it will go. So you need to fine-tune your trade plan to factor in these.