When the daily time
frame has a Directional Bias it helps better define the overall psychology of
the pair and that’s exactly what the AUD/CAD going for it. The bullish
Directional Bias determines how I will define the dominant trend (up) and what
a counter-trend position would be (short) therefore the daily is important in
time frame and trade selection.
Here’s how I do it.
I start my analysis with the daily
chart to determine what the dominant trend is and for most pairs right now it’s
sideways chop. A few exceptions like the AUD/USD (which I wrote about
yesterday) and the AUD/CAD have a Directional Bias that indicates that the
bulls are running the show. The Australian dollar strength echoes through both
these pairs and my approach to both is very similar. But while yesterday I
focused on the daily AUD/USD swing buy there is a swing buy also on the AUD/CAD
which takes advantage of that same “twelve to two o’clock” angle on the daily.
The pullback on the AUD/CAD triggered an aggressive (“aggro”) buy as prices hit
not only the 20DMA but also the 200DMA.
Past performance is not indicative of
future results
The daily uptrend on the AUD/CAD opens the door to swing buy opportunities are price correct lower into the support of the 20 period Simple Moving Average and the 34 period Exponential Moving Average.
Past performance is not indicative of
future results
When
there is a clear, established trend on the daily, I will set up trend following
trades if and when I can and limit counter-trend trades to only the five, 15,
and 30-minute frames to stay nimble because the entry is fighting the larger
trend.
On the 30-minute chart I have the
benefit of staying nimble (not a bad idea thus far during the summer trading months)
and also of a trend following, swing buy entry. The pullback to the 20 period
SMA close and the 34 period EMA high has triggered both the “aggro” and
conservative entries and allowed for a full position. My typical approach will
be to enter 1/4 to 1/3 of my overall position size at the “aggro” entry just to
get some “skin in the game” which gives me a small position in case the
correction of the trend doesn’t go any further.
For traders who are expecting a more
pronounced correction of the AUD/CAD or at least some aussie weakness, look to
the 15-minute time frame which is setting up a potential intraday trend
breakdown entry short as prices sink through the 34 period EMA low. Look for at
least a negative 100 reading on the Commodity Channel Index (alternatively a
negative MACD Histogram) to confirm the momentum of the break lower through
34EMA Wave support.
As an
active forex trader and Chief Currency Analyst for InterbankFX.com I do write
for a number of sites all over the web and I am happy to say that I will be
posting updates atwww.IBFXconnect.com. MyActivity Boardwill feature the trades from my trading account as well as
intraday commentary.
Start the discussion! Questions?
Comments. Leave it here at the Daily Forex Trading Edge for Raghee to
personally answer. Using the icons at the top of the article to forward this
update to a friend via email, post it on Google or Facebook or simply print it
out for reading later.
Forex trading is one of
the riskiest forms of investment available in the financial markets and
suitable for sophisticated individuals and institutions. The possibility exists
that you could sustain a substantial loss of funds and therefore you should not
invest money that you cannot afford to lose.
Posted By:
Raghee Horner
Raghee Horner, chief currency analyst for IBFX, provides her personal daily trading tips and insights through Dailyforextradingedge.com. An experienced trader with over fifteen years in the markets, Raghee is the co-founder of EZ2Trade Software and has taught her brand of technical analysis and charting strategies to students all over the world. She is an international author and has taught currencies, futures, and equities trading for over a decade.
When the daily time frame has a Directional Bias it helps better define the overall psychology of the pair and that’s exactly what the AUD/CAD going for it. The bullish Directional Bias determines how I will define the dominant trend (up) and what a counter-trend position would be (short) therefore the daily is important in time frame and trade selection.
Here’s how I do it.
I start my analysis with the daily chart to determine what the dominant trend is and for most pairs right now it’s sideways chop. A few exceptions like the AUD/USD (which I wrote about yesterday) and the AUD/CAD have a Directional Bias that indicates that the bulls are running the show. The Australian dollar strength echoes through both these pairs and my approach to both is very similar. But while yesterday I focused on the daily AUD/USD swing buy there is a swing buy also on the AUD/CAD which takes advantage of that same “twelve to two o’clock” angle on the daily. The pullback on the AUD/CAD triggered an aggressive (“aggro”) buy as prices hit not only the 20DMA but also the 200DMA.
Past performance is not indicative of future results
The daily uptrend on the AUD/CAD opens the door to swing buy opportunities are price correct lower into the support of the 20 period Simple Moving Average and the 34 period Exponential Moving Average.
Past performance is not indicative of future results
When there is a clear, established trend on the daily, I will set up trend following trades if and when I can and limit counter-trend trades to only the five, 15, and 30-minute frames to stay nimble because the entry is fighting the larger trend.
On the 30-minute chart I have the benefit of staying nimble (not a bad idea thus far during the summer trading months) and also of a trend following, swing buy entry. The pullback to the 20 period SMA close and the 34 period EMA high has triggered both the “aggro” and conservative entries and allowed for a full position. My typical approach will be to enter 1/4 to 1/3 of my overall position size at the “aggro” entry just to get some “skin in the game” which gives me a small position in case the correction of the trend doesn’t go any further.
For traders who are expecting a more pronounced correction of the AUD/CAD or at least some aussie weakness, look to the 15-minute time frame which is setting up a potential intraday trend breakdown entry short as prices sink through the 34 period EMA low. Look for at least a negative 100 reading on the Commodity Channel Index (alternatively a negative MACD Histogram) to confirm the momentum of the break lower through 34EMA Wave support.
As an active forex trader and Chief Currency Analyst for InterbankFX.com I do write for a number of sites all over the web and I am happy to say that I will be posting updates at www.IBFXconnect.com. My Activity Board will feature the trades from my trading account as well as intraday commentary.
Start the discussion! Questions? Comments. Leave it here at the Daily Forex Trading Edge for Raghee to personally answer. Using the icons at the top of the article to forward this update to a friend via email, post it on Google or Facebook or simply print it out for reading later.
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
Raghee Horner