USD, GDP: Levels, Ranges, Targets

 

Almost 30 days into last month’s trades, the end result was 46 trades for about 1225 pips. The overall portfolio increased by 30%. The Win rate was about upper 80%. The average Stop loss was 70 pips. Many trades could’ve run for many more pips but I chose 50 pips as targets then exited for profit. The first month was complete with “Impressive Results”. This from those who scored the trades. A small loss occurred on the 3 GBP trades when USD CPI reported far higher than expected. I had to allow the trades run to the end so the overall stats reported weren’t severely skewed. Overall, the Scorers were impressed so now I graduate to the next level.  I highly recommend Pepperstone in Australia because of the many impressive Stats provided on trades.

Now month 2 just began on Thursday OCT 20. The goal for this month is to tighten stops and bring down the average from 70 pips. My goal is 20 ish pip Stops and this requires perfect entries. Then I will allow minimum 50 pip targets but I will also allow good trades to run. Secondly, the focus and goal is Money Management. What I want, what I need is a good Risk/ Reward Ratio in relation to how well money is managed. Then the Scorers apply further Stats to issue an average number. The overall objective is I’m going to work with these guys.

Thursday began with 3 trades, GBP/JPY and GBP/NZD. Those trades were exited with profits at 17 pips, 18 pips and 27 pips. I’m using a different system this month so wanted to get acclimated to the new buttons. Friday I profited 68 pips on GBP/JPY. So far 4 trades are + 130 pips. I will post my trades before as time allows. I’m currently short USD/CAD. I’m interested in trading this month, GBP/USD, USD/CAD, GBP/JPY, GBP/CAD, GBP/NZD and EUR/GBP. I like AUD/CHF as well but haven’t jumped yet this month.

 
Why low GDP readings from a technical perspective is because a significant cross over occurred in the averages. Averages 3, 4 and 5 year crossed below the 1 and 2 year. More importantly, 3, 4 and 5 year averages are now located below all averages from 1 to 10 years.
GDP Averages at 3, 4 and 5 year from 1.30, 1.76 and 1.80 must cross higher in order for GDP to rise further. Only then does GDP target 2.08, 2.12 and 2.15. Then begins the upper targets from 2.22, 2.30, 2.43, 2.45 and 2.55. The entire GDP range runs from 1.30 to the 10 year average at 2.55. GDP 1.30 is the first point to cross to begin entrance into averages from 1 to 10 years. Current GDP for the past 2 quarters traded below every average from 1 to 10 years.
Consensus estimates reveals 1.30 and a further indication the averages will continue a further drop for the upcoming 4th quarter. Low GDP is hardly US dollar positive. What is revealed in GDP is more of the same low, low readings year over year. As GDP averages continue to drop and as GDP fails to rise then the averages will take GDP lower over coming quarters. What is reported is Real GDP yet its the slow increase as a percent change quarter to quarter contributes to low Real GDP drops.
What drove GDP last quarter was higher PCE, Non Residential Fixed Investments and exports. More importantly is the drop in Private Inventory Investments as goods sold failed to see a replenishment in supplies.
The best GDP targets for the averages are highs at 1.68 and 1.72 and lows from 0.3 to 0.93.

 

Brian Twomey, Inside the Currency Market, btwomey.com

 

 

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