WINNING IDEAS FOR 2017

WINNING IDEAS FOR 2017

DOING MORE OF WHAT WORKS AND LESS OF WHAT DOESN'T WORK

AUDIT YOUR PERFORMANCE

In your trading, make an annual ritual of conducting an audit of the trades made during the past year, focusing on the winners as well as the losers. If you not trading, substitute ' trading' for whatever you are doing.

From the audit of the winners, try to identify what you did right: what was working for you during this year ie 'Your success profile.' These become the basis for “trading solutions” that you consciously attempt to implement in the coming 2017.

The idea is to create your own model of trading success, but also to build the model from your own experience rather than borrow it from a trading guru.

Before each trading day, rehearse elements of this model in your trading diary. This consistent rehearsal helps you to internalize the trading solutions so that they become an automatic part of the trading arsenal. 

 The 'doing of more that works and less that doesn't work' method appears to work for much the same reason that evolution works. When there are random mutations within a gene pool, some of these prove highly adaptive and improve a species’ survival rate. Over time, this selective pressure increases the representation of the mutation within the gene pool, until it becomes dominant. 

Similarly, we can view our trades as a set of mutations within the total pool of our trading behaviors. By emphasizing the successful trades and paying particular attention to these—constructing them as solutions—we exercise our own selective pressure and increase the representation of those behaviors in our repertoires.

Conversely, when we are problem focused—paying more attention to our deficient behaviors than our successful ones—we unwittingly reinforce these and create a kind of devolution. 

Auditing worst trades can also be useful, especially in eliminating those few trades that often create a large share of one’s annual losses. 

The doing of more that works and less of what doesn't work approach, is unique in its ability to help you become your own coach. By requiring you to find your own successes and create models built on these. Empowering you to become your own trading guru rather than fostering an unhealthy depedance on others.

GOLD 4-HOUR

TECHNICAL ANALYSIS

Gold is back into the indecision zone after failing to break the 1400 resistance zone on the monthly chart and still showing a bearish bias. The price is now in large monthly support which may give some bounces on the daily and lower time frames.

The 4-hour timeframe is already showing some exhaustion in the sellers with 3 complete waves (1,2,3) of selling as it hits into the large monthly support marked M around 1159.87. The major con in this exhaustion is the weakness in the corrective moves (highlighted gray ellipses). The momentum in the buyers in the corrective moves is very weak compared to the sell offs (waves labeled 1,2,3) which shows a less conviction in the buyers.

But a close above pink trendline R may lead price back into resistance zone around 1211.22 marked T. Close below M disqualifies the setup

AUDCAD,

TECHNICAL ANALYSIS

MONTHLY CHART

The price is now in a congestion marked by K and G horizontal line (highlighted zone). You can clearly see the 2 waves up and down, a typical characteristic of a congestion. 

Price is now at the top end of the congestion zone at K and has already completed the 2 waves in the congestion making the K resistance zone a strong halt zone. The next likely movement is another two wave until we will see either the bulls or bears succumb.

The period between green and pink arrows indicate averagely how long the price takes to reach the end of the congestion which is averagely 28 months. 

WEEKLY CHART

The weekly chart shows more inside action. The highlighted K-G zone is the same as the one above on the monthly chart. The 2 waves in the congestion can be seen here prominently.

You can see the strong reactions off the ends of the congestion zone like the strong pin bar, that triggered that strong sell of.

USDCAD Hourly 

SHORT TERM TECHNICAL ANALYSIS

Price is now reacting to a small trendline support and 21 Simple Moving Average. Close below B can lead price into support one C around 1.34485. Close above A disqualifies the setup

ADVANCED TECHNICAL ANALYSIS

AUDJPY, MONTHLY 

PURE PRICE  ACTION ANALYSIS

In-depth price pattern action analysis includes majorly the following as we had discussed in the prevvious article. 

• Analysis of the major swing moves and how long they have been lasting
• Analysis of the corrective moves and how long they have been lasting
• The current probable status
• General conclusion on the pair 

Analysis of major swing moves.

The major swing moves are indicated by the green arrows have been averagely lasting for about 13 months and moving over 2400 pips. As i had mentioned in the previous article, understanding of the price action of these major swings enables you not to get out of the trades too early or too late. It also enables you not to make entries into an ended/exhausted swing since you now know how long they averagely last

Analysis of corrective moves 

The corrective moves have been lasting averagely 2 years, atleast twice the period of major swings. I have marked the corrective moves with gray ellipses. Observing how long these congestion zones helps not to enter the major swing trades too early or too late and the timeframes to trade on during different market phases

 Probable status.

The price is now in the congestion phase. The congestion limits are marked by horizontal lines A and C with B being the major pivotal zone. Close above A or below C will confirm the next major swing in the respective directions only when the congestion period has lasted on average as the previous congestions.

General conclusion

Understanding pure price action helps you to know what phase the price is in apparently. Congestion on the larger times like this monthly chart give great swings on the weekly and daily charts with trading mainly limited within the pink rectangle. Just like how those up and down swings on that monthly chart indicate congestion on the yearly time frame

GBPJPY, 30MINUTES

DAY TRADE SHORT TERM TECHNICAL ANALYSIS

The price is now reacting to small trendline support T. Close below T can lead price into support zone around 136.956 marked A. Strong close below A can lead price into B. Close above R disqualifies the setup.

EURAUD,MONTHLY

TECHNICAL ANALYSIS

The monthly chart has a cup and handle formation. Continuation to the upside will be confirmed by a close above R. The price momentum up L should preferably be strong just as the previous swing K for price to reach the 1.81747 resistance zone marked T.  If the L swing is weak, the R resistance zone is likely to hold the price. Close below S disqualifies the setup.