Professional Currency Trading: Position Sizing

Amendments to last post. The goal for the past 7 weeks and 80 trades was a stop from 10 to 25 pips with a 50 pip profit target. Most trades had profit factors far greater than 50 pips but I didn’t run trades to full term for the sake of scores and for purposes of precision as I wanted a high Risk Reward Ratio. Roughly 60 or so trades were just so perfectly executed with 10 to 25 pip stops and 50 pip targets. This month’s trades were 31 for 1184 pips and my goal was 30 trades for 1500. The idea this month was less trades for more pips than last month. I chose about 8 currency pairs and followed those prices methodically up and down and I hit highs for longs then followed down for shorts.  I didn’t trade election returns cause it was to easy to earn pips and I felt it was cheating the professional score. Each trade had a goal. For example, multiple longs and shorts were taken in one currency pair. The 6 duds I traded were misses on multiple longs and shorts yet initial targets hit perfectly.

Position sizing is another must know concept to FX professionals and includes

1. Risk Size 2. Value Per Pip, 3. Stop Placement  4. Value of Pip moves. 5. # lots.

Risk Size. Question is what is the risk of an account or better stated how many pips to trade.  Answer: Currency denomination X 0.01 = 1% of account. The basics:

USD $5,000 X 0.01 = 50 pips to trade  at 1%. $5,000 X 2% or 0.02 = 100 pips to trade. $5,000 X 0.03 = 150 pips to trade. $5,000 X 0.04 or 4% = 200 pips to trade. Suppose 10%. $5,000 X 0.10 or 10% = 500 pips to trade. 20%, $5,000 X 0.20 = 1000 pips to trade.

Note percentages. Its the secret to currency trading profits. How much will a $5,000 account grow at 1% and 50 traded pips and how many overall trades. For beginner’s, its perfect. For skilled, not good. I’m deviating a bit from the overall theme of this post to add advice.

2. Value Per Pip.  USD 1% at 50 pips for a 200 pip trade = 0.25 by 50 Divide 200. USD 1% at 50 pips for 150 pip trade = 0.33, 50 divide by 150. 50 divide 100 pip trade = 0.50. USD 1% at 50 pips for 20 pip trade = 2.5

USD 2% at 100 pips for 250 pip trade = 0.40. USD 2% at 100 pips for 200 pip trade = 0.50. USD 2% at 100 pips for 150 pip trade = 0.66. 100 Divide 100 = 1.0.  USD 2% at 100 pips for 50 pip trade = 2.0.

Pip Moves. For EUR/USD 1 divide by 10,000 = 0.0001. Every currency pair has a different pip value. EUR/USD is always offered in examples because its easy. What 0.0001 equates to is 1 pip or 10,000 x 0.0001.  USD/JPY I believe trades at pip values at 0.88 so 1 divide by 100 = 0.01.

Lot Sizes. Per Pip X 10,000 then divide by 1. Assume $5,000 at 1% = 50 pips. A 200 pip trade = 50 divide 200 = 0.25. Lot size = 0.25 X 10,000 divide by USD 1 = 2.5 lots.

Stop Placement. The risk is 50 pips therefore stop is placed at 50 pips or 50 pips from entry.  An imperative is know entry and exit before the trade.

I will expand on the above rules and principles in next post to offer advice and more examples. Also, stops and stop placement will post.

 

Brian Twomey, Inside the Currency Market, btwomey.com,

 

 

 

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Professional Currency Trading: Expectancy

From introductions 7 weeks ago to serious FX professional currency traders and 7 weeks of 80 + scored trades under intense statistical and FX rigor, my scores were not only good and high but I entered the rankings and qualifications  of a professional currency trader. Humbly speaking, I knew I was good but the question how good was answered. I’m astounded, elated and thrilled. More thrilling is I was accepted to become a professional trader and I will be trading for “others”. More details as time progresses. Long time friends and followers would know special thanks to my sincere friend with 43 consecutive years of FX trading and experience at high levels of corporate and bank treasury Depts.  As I’m able, scores, trades, results and deep trade details will post here soon.  From the Forex Gods, James 4;2 V James 4:3.

Part of professional trade scores fall under the concept of Expectancy. Expectancy answers 1. What is the mean of trade results, above = profit, below = loss. 2. Most important is how reliable is the trade strategy. 3. Expectancy provides profit forecasts.

4 Data Points to Expectancy. 1. Number of winning trades. 2. Number of losses. 3. Amount of money won. 4. Amount of money lost.

Net Profit = Amount of money won minus amount of money lost. My Net Profit was very high each month and overall.

Win Rate = Number of winning trades divide Total Trades. Win Rate at 75 % – 80% for 1st month dropped to about 70% ish as more trades were taken. First month = 43 winner trades. Second month = 31 winner Trades. 6 Duds trades. 1 trade was ongoing as results were tabulated. These numbers are considered very high by Fx Professionals.

Loss Rate = 1 minus win rate.

Average Winner = Money won divide Total Trades Won.

Average loser = Money lost divide by total losses.

Average Reward Divide by Risk = Average Winner Divide by Average loser.

Expectancy Forecasts.

Expectancy Per Trade = Win Rate X Average Winner Minus Loss Rate X Average Loser.

Or

Expectancy Per Trade = Net Profit divide by Total Trades.

Expectancy Per Month ( Forecast Profits) = Expectancy Per Trade  X Average number Trades per month.

Expectancy Per Amount of Money Risked =  Net Profit divide Average loss. Answer = Answer divide by Total number of Trades.

Next Articles:  Position sizing, money management, Risk Reward, Pip Values, Pip Values Per Currency, Pip Values USD V EUR V GBP. Equity and % Risk per Trade. Here answers how to trade professionally by money management standards.

 

Brian Twomey, Inside the Currency Market, btwomey.com

 

 

 

 

Fed Funds Changes: 1990 to 2016

The Fed since 1990, changed the Fed Funds rate 79 times since 1990. Overall, 47 times were decreases V 32 increases. From 1990 to 2002, Fed Funds was lowered 36 times and increased 14 times for 50 Fed Funds rate changes. From 2003 to present day, Fed Funds was decreased 11 times V 18 increases for a total of 29 changes.
Why demarcate the time periods is because year 2000 under Euro introduction in 1999, Central banks adopted meetings in 6 week intervals and a policy holds to current day.
From 1990 to 2002, Fed Funds was decreased 24 times at 25 basis points and 12 times lowered at 50. Increases account for 9 times at 25, 4 times at 50 and 1 at 75.
From 2002 to 2015, increases account for 18 at 25, and 4 decreases at 25, 4 declines at 50. Two reductions were done at 75.

From 1990 to 2002, December was the winning month with 11 Fed Funds rate changes V 9 amendments for November followed by March at 8 and 7 for September and October. July was the least favored month at 3 adjustments.
From 2002 to 2015, December wins again as most popular month with 6 changes, followed by June, January and March at 5 each.
The commonality in Fed changes from 1990 to 2015 is September to December are most popular months while summer months June, July and August are least favored. The noted point is December was changed twice in one month in 1990 and 1991 as well as January 2 times in 2001 and 2008.
Fed funds began August 1954 at 1.22, rose to 12.92 in July 1974 and peaked at 19.10 in June 1981. At current 0.25 and on the 61 year historic floor, the mid point is located at 10.16 to offer context to current rates.
Why the activist Fed and many Fed Funds changes is due to the rise in Repurchase Agreements and changes to Reserve Requirements as both affect not only open market operations by banks and the Fed but borrow and lend rates between banks. The greatest factor to influence Fed funds changes is demand and supply of money and the cost involved.
Brian Twomey, Inside the Currency Market, btwomey.com

USD V Europe Interest Rates: Before and After Trump

Posted Nov 6th in the DXY V EUR/USD monthly view was stated DXY was on the verge of a major break higher and would remain for years in the future. Trump was the impetus as DXY broke higher. What remains for EUR/USD downsides are levels, 1.0597, 1.0585, 1.0545, 1.0508 then far lower 1.0375. The main question to DXY is how are many markets before and after Trump.

USD money markets up to the 1 year rate before the election:
Mean: 1.51, Median: 1.47, Range: 57 basis points, SD: 0.1815. Skew: 0.27, Kurtosis: 1.70. Signal to Noise Ratio: 8.36, Coefficient of Variation: 0.11. Actual basis point channel : 40. The Statistics of extraordinarily high concern is Noise at 8.36 and Variation at 0.11. USD is now at the high fo highs and zero explanations inside current prices.
After Trump.
Mean: 1.66, Median: 1.62, Range: 63 pips, Actual Basis Point channel: 48, SD: 0.1996, Skew: 0.44, Kurtosis: 1.88, Signal to Noise Ratio: 8.31, Coefficient of Variation: 0.12.
While the mean rose 15 basis points, not only is Noise far to high and in dire need of correction but Kurtosis begins a concern above 2.0.
What skews money markets is Fed funds inability to trade. Before Trump, Fed Funds closed at 41 while after Trump closed at 0.41. Yields 1 month to 3 year trade below 1.66 while yields 5 to 30 trade above. A 15 basis pointy move in money markets rates allowed a green light to the 10 year to rise.
Why USD money markets are vitally important is because its the building blocks to higher yields, commodities, stocks and all financial instruments associated with USD. USD money markets trade below all financial instruments. The corresponding difference by design is Europe as German yields 3 month to 20 year trade far below European interest rates.

EUROPE before Trump: Mean 1.71, Median: 1.66.
After Trump Mean: 1.71, Median: 1.66.
Eonia before Trump 0.64, After Trump 0.65. Europe’s interest rate channel remained stasis at 0.31. Before and after Trump, Europe remained stasis as USD was fully responsible for current market moves.
USD On OCT 9th, yield spreads 10’s to 2 year traded 0.88, Friday 1.28, and 1.24 today. !0 year to 3 month Oct 9 traded 1.32, Friday 1.91 and 1.87 today. Oct 9th, 10 to 30 year traded 0.73 and dropped today to 0.67.
August 24th in “Fed Funds and the Natural Rate of Interest”, Knut Wicksell’s Natural Rate of Interest then was 1.64. Yellen in August warned markets to the Natural Rate Indicator as today’s Natural Rate based on recent Inflation at 1.6 is now 0.84 and 0.34 factored to Core. The extraordinary and highly bullish development is Fed Funds at 0.41 now trades above the Natural Rate of Interest.
Despite bullish for DXY and the US economy moving forward into the far distant future, two aspects of concern remain. Fed Funds from averages 1 to 10 years remain in stratospheric overbought yet averages from 10 to 20 are fine and normal. Inflation at 1.6 matches the interest rate curve and trades below the 10 and 5 year yields yet for the first time since 1960, trades far above Fed Funds. A Fed Funds rise, reveals Inflation remains at exorbitant levels and an unwanted development if USD economic expansion is underway particularly if Trump is able to extricate the Keynesians on the Fed Board and institute once again the normalized Supply Side Price system.
Brian Twomey, Inside the Currency Market, btwomey.com

CAD/JPY: Levels, Ranges, Targets

 

CAD/JPY no way  take this pair long. Current price 82.12. Averages 5 to 100 day overbought, particularly 100 day. Next, JPY/CAD is severely oversold. Supports are strong below at 80.00, 79.64 and 78.23. Above big line break located at 89.16.

At 80.00 is not only a support but its the support for JPY/CAD then CAD/JPY at 79.64. This area is solid and a great location to re load longs yet longs at current levels is not the way to go. Does this forecast sound and resemble AUD/JPY. There ya go. Same pair, same trade, same overbought at current levels.

Consider CAD/JPY correlates to USD/CAD at minus 0.05% and its a trend just underway. A higher USD/CAD will see a lower CAD/JPY.

 

Brian Twomey, Inside the Currency Market, btwomey.com

AUD/USD and Cross Pairs: Nov 20

 

Best Correlations to AUD/USD are AUD/CAD at +34% and AUD/CHF at + 29%. AUD/JPY and AUD/NZD are negative at minus 44% and minus 19%. AUD/EUR lacks association at +0.05%.

AUD/USD. Among major non USD pairs, AUD/USD is most oversold, more oversold than EUR, GBP and NZD. Two big lines falling on AUD are 0.7558 and 0.7610. Top of the channel and breaks to challenge 0.7558 are 0.7520 and 0.7549. Good targets near term  to relieve severely overbought conditions are 0.7508 to 0.7518.

AUD/CHF. Trading the AUD/USD and AUD/CHF combo as in past weeks won’t work this week. AUD/CHF just broke major supports at 0.7447 and 0.7451. At 0.7391 close, oversold is seen from the 10, 20 and 50 day averages, otherwise AUD/CHF has ability to travel lower. What changes a lower trajectory is a break higher at 0.7447 and 0.7451. Oversold and buy points begin from 0.7334 to 0.7328.

AUD/CAD. From 0.9882 close, nearest and strongest support is located at 0.9626 while break points above are found at 0.9957, 1.0015 and 1.0040. AUD/CAD is a traditional risk pair barometer to overall currency markets. The big drop from 1.0300’s to current 0.9800’s is a testament to a risk off market environment since Trump’s election. Yet a 500 pip drop in AUD/CAD so far and so fast is a rare day as AUD/CAD as a risk barometer is a traditional range currency pair and rarely moves 500 pips in any period.  Any AUD/USD recovery will see AUD/CAD travel higher. Points 0.9917 and 0.9946 are targets and must break points to challenge 0.9957. Oversold buy points begin at 0.9830’s.

AUD/JPY. Strong supports are located at 79.94 and 78.35. Vital break above 85.20. To see 79.94 then 80.70 and 80.24 must break. Above and overbought begins from 81.56 to 81.79.

AUD/NZD. Vital break points above from close at 1.0458 are 1.0528 and 1.0580. AUD/NZD is severely oversold and will find its most comfortable position from 1.0531 ro 1.0540.

 

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/NZD, EUR/AUD and EUR/GBP: Levels, Ranges, Targets

 

EUR/GBP  From the close at 0.8569, and last reported at 0.8592, EUR/GBP just broke vitals at 0.8621 and 0.8682. Below both then EUR/GBP’s trend lower is just beginning. The larger trend is found from below at 0.8090 to above at 0.8621. Targets lower are found at downtrend lines at 0.8544 and 0.8490. Break of 0.8544 and 0.8490 begins a new downtrend in EUR/GBP. Next downside points are found at 0.8613, 0.8578, 0.8555 and 0.8522. Most important is 0.8613 to 0.8610 because supports in GBP/EUR are found at 0.8610 from current 1.1669 which translates to current EUR/GBP at 0.8569. What this means is the downtrend in EUR/GBP resumes.

EUR/NZD. From close at 1.5093, big break points are located at 1.5368 and 1.5372. EUR/NZD fails to join the ranks of severe oversold as other EUR pairs yet correlations to EUR/USD runs +85%. Targets on corrections are uptrend lines at 1.5200 and 1.5257. Both must break to target 1.5368 and 1.5372. Levels higher are found at 1.5107, 1.5119, 1.5130, 1.5157, 1.5193 and 1.5196 then 1.5200.  Long points are found at 1.5044 and 1.5046.

EUR/AUD. From close at 1.4427, big break points are 1.4528 and 1.4598. All week, 1.4500’s and 1.4600 will remain tough breaks for EUR/AUD. Why is because AUD/EUR breaks are located at 1.4524 and 1.4596. Massive hurdles for EUR/AUD and because AUD/EUR is oversold. EUR/AUD will be a volatile pair this week and as usual I will trade this pair all week. Next point higher for EUR/AUD is 1.4458 while below points are 1.4416, 1.4391 and 1.4389. Oversold begins from 1.4332 to 1.4264.

 

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD and Cross Pairs Nov 20

 

Within the EUR/USD universe, problem pairs are EUR/JPY, EUR/GBP and EUR/CAD due to non uniform correlations. EUR/JPY correlations just turned minus 0.01 to EUR/USD which means EUR/JPY becomes a USD/JPY currency pair. EUR/GBP remains negative 51% to EUR/USD while GBP/EUR at + 93% aligns solidly to GBP/USD. Typical EUR/CAD’s  balanced position in currency markets holds its equivalent alignment at +45% to EUR/USD. Currency pairs EUR/AUD, EUR/CHF and EUR/NZD align perfectly at + 90%.

EUR/USD.  A  EUR/USD price at extreme oversold balances short term from 1.0810 to 1.0954. Most vital line in order for a higher EUR/USD is currently 1.0980. Must breaks to challenge 1.0980 are located at 1.0860, top channel at 1.0870 then on to 1.0909 and 1.0947 to 1.0954. EUR/USD bottoms are located at 1.0558, 1.0545, 1.0508.

EUR/JPY. Two vital points holding EUR/JPY are 116.13 and 114.35. EUR/JPY tests 116.13 on a break lower at 116.90. Overall range is 116.90 to 118.01 and 118.36. Overbought begins from 118.01 to 118.36. From 116.13, EUR/JPY remains oversold. If EUR/JPY holds USD/JPY alignments then EUR/JPY has ability to travel to 119.00’s. Currently USD/JPY is overbought.

EUR/CHF. From 1.0715 close, higher for EUR/CHF must break 1.0825 and 1.0872. Bottoms and extreme oversold are located at 1.0714 to 1.0693.  To see 1.0825 then vital points are found at 1.0756, 1.0780, 1.0789 and 1.0804. Most important break is 1.0780.

EUR/CAD. Why balanced correlations is because EUR/CAD inside its price contains big problems. From close at 1.4301, next big break  is located at 1.4366, 1.4585 and 1.4648. Below 1.3994. EUR/CAD is massively oversold and must travel higher. High 1.4400’s is a good target on break of 1.4366. Watch 1.4366 as long / short point. As I review further, higher in EUR/CAD despite oversold only adds to current price pressures. Better pairs exist than EUR/CAD and recommended to stay away.

 

Remaining EUR pairs will post today as well as AUD and NZD after church. A USD V EUR interest rate article will also post today for interested. Long ago was recommended to learn interest rates when I saw interest rate changes coming.

 

Brian Twomey, Inside the Currency Market, btwomey.com

 

 

 

GBP/USD and Cross Pairs: Nov 20

 

GBP/USD drivers this week are found  in GBP cross pairs as current close prices reside just below most vital break points.  The exclusion is GBP/EUR as it sits just above vital supports. GBP/USD correlates in the high + 90’s to its cross pairs to include GBP/EUR at + 93%.  A break higher in GBP cross pairs will see GBP/USD higher. As mentioned last week, GBP/USD price is extremely low overall and more oversold intraday than overbought. As a strategy, due to severe oversold in EUR, AUD and NZD, long and buy dips is the way.

GBP/USD.  Big most vital breaks overall to travel far higher are found at 1.2756 and 1.2809. To see 1.2756 then 1.2607 must cross higher. The path above lies at 1.2384, 1.2458, 1.2494, 1.2530, 1.2607. How to handle above is watch 1.2530 to 1.2607 as a failure to break higher will see a sharp reversal lower back to 1.2458 and lower upon a break of 1.2458.

Below points 1.2317, 1.2296, 1.2282, 1.2217 and 1.2190. Should 1.2200’s be seen then long. I don’t see GBP heading lower than 1.2200’s.

GBP/CHF. Vital break points above are located at 1.2528 and 1.2574 from close at 1.2470. Below points 1.2412, 1.2334 and 1.2313.  Most important is 1.2334 and 1.2313 as both are downtrend lines.

GBP/JPY. Most vital range is 137.97 to 1.34.98, both vital break points. A break lower at 134.98 would target 131.78. A break of 137.97 next targets 138.71, 139.39 and 139.59. Above 134.98, GBP/JPY is oversold and has plenty of room to run.

GBP/EUR. From close at 1.1638, vital supports reside at 1.1613 and 1.1523. Above 1.1613, GBP/EUR is highly oversold. Next points above 1.1636, 1.1659 and 1.1706. The overall target to begin a further uptrend is 1.1800. Downtrend points are located at 1.1425 and 1.1341.

GBP/CAD. From close 1.6658, vital break points above are located at 1.6845 and 1.6936. Why wide distance from close to break is because GBP/CAD’s wide ranges and 80 + daily pip allowable movements. GBP/CAD is a terrific currency to trade.  Next above points include 1.6677, 1.6709, 1.6777 and 1.6806. The sharp reversal points come at 1.6777 and 1.6806 if faulure to break higher. Below points 1.6612, 1.6573, 1.6553 and 1.6492.

CAD/GBP. From GBP/CAD 1.6658, CAD/GBP translate to 0.6003. Tops in CAD/GBP are located at 0.5939 and 0.5912 and translates to GBP/CAD 1.6837 and 1.6914.

GBP/NZD. From close 1.7609, next break points 1.7710 and 1.7867. The road higher begins at 1.7610, 1.7632 and 1.7671. Below 1.7554, 1.7476 and 1.7398. GBP/NZD is another great currency pair to trade and its the granddaddy of movements  because it travels far and wide on any given day. Best way to view such a far mover currency pair is to view opposites.

NZD/GBP  from GBP/NZD 1.7609 is actually 0.5678. Major points for NZD/GBP to travel higher is 0.5650 and 0.5616. Both translate to GBP/NZD at 1.7699 and 1.7806. Watch GBP/NZD reversal or higher at 1.7699.

GBP/AUD from close at 1.6825, next above 1.6826 and 1.6884. GBP/AUD is in a crucial position. Above 1.6884 targets 1.6921 and 1.7016. Below points 1.6635 and 1.6520. Downtrend lines begin at 1.6462 and 1.6445.

AUD/GBP. 1.6825 in GBP/AUD translates to AUD/GBP at 0.5943. Most vital breaks in AUD/GBP are located at 0.5949 and 0.5940. Both translate to GBP/AUD at 1.6835 and 1.6809. GBP/AUD break at 1.6809 should see a decent downside move while 1.6826 and 1.6835 must break higher to target 1.6884.

 

Brian Twomey, Inside the Currency Market, btwomey.com

 

Currency Pair HUH?

Here’s central bankers view their currency pairs, they know every pip traded and location. Talk of central bank intervention as I heard in USD/JPY  is pablum.  If one currency pair is middle range, all are middle range.

1.4969

1.3663

1.4897

1.3729

1.4850

1.3773

1.4064

1.4544

Here’s currency Pair location today. Dead center. Available trade able pips today =72. Daily average = 1.4536. Must cross 1.4421 and 1.4436. Vital point for higher = 1.4357. See daylight? 1.4357 won’t break. Central banks don’t allow daylight, its to easy a trade.

Today’s bottom, 1.4222 to 1.4230. From 1.4357, trade able points = 1.4316, 1.4314, 1.4313, 1.4311, 1.4277, Bottom, 1.4222. Range 6 am or close was 1.4311 to 1.4277, average 1.4294. Well 1.4294 broke so new range 1.4294 to 1.4277, Average 1.4285. Well 1.4285 broke and 1.4277.  New range  1.4277 to 1.4222, average 1.4249. Break 1.4249 then 1.4249 to 1.4222, average 1.4235.  Long from down here.  But short from 1.4357. How do I know shorts work today, AUD/EUR going higher to 0.7024 to 0.7030. Big moves here cause both sides of currency pair assisted the fall.

1.3512

1.5138

1.1767

1.7382

1.0685

1.9142

0.9985

2.0484

 

Brian Twomey

EUR/USD V CAD/ZAR

 

The best currency market barometer is the CAD/ZAR V EUR/USD relationship, here’s chart comparison since Nov 1.

CAD/ZAR vital breaks are located at 10.57, 10.52 and 9.63.

http://fxtop.com/en/historical-exchange-rates-comparison-graph-zoom.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=&C3b=&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&C7a=&C7b=&C8a=&C8b=&C9a=&C9b=&C10a=&C10b=&DD1=01&MM1=11&YYYY1=2016&DD2=11&MM2=11&YYYY2=2016&LARGE=1&M=1&LANG=en

AUG 1 to Nov 11,

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=&C3b=&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=01&MM1=08&YYYY1=2016&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=11&MM2=11&YYYY2=2016&M=1&btnOK=Go%21

May 1 to Nov 11

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=&C3b=&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=01&MM1=05&YYYY1=2016&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=11&MM2=11&YYYY2=2016&M=1&btnOK=Go%21

 

Brian Twomey, Inside the Currency Market, btwomey.com

 

 

 

NZD Pairs, Vital Levels: Nov 14

 

As mentioned in previous posts, levels are perfectly calculated,  take the breaks as they occur and the trade will be just fine. Vital levels, downtrend and uptrend lines are breaks where price takes off quickly to establish itself within the trend. Prices in between downtrend and uptrend lines range until break times.

 

NZD/USD. Above vital levels: 0.7454, 0.7226, 0.7191 and 0.7164. Below 0.6625.

Downtrend lines 0.7161 and 0.7144. Uptrend lines 0.7239 and 0.7290.  Currently oversold 5 to 100 day averages, 10 day most oversold.  Oversold long points  0.7054 to 0.7064 to target 0.7144

NZD/JPY. Supports, 74.22, 73.88, 73.48. Further down 69.36. Above 75.06. Downtrend lines begin 74.52 and 73.52. Uptrend lines begin 74.92 and 75.60.

NZD/CAD. Supports, 0.9531 and 0.9495. Downtrend lines begin 0.9401 and 0.9396. Uptrend remains as long as 0.9589 and 0.9667 holds.

NZD/CHF. Vital points above 0.7276, 0.7065 and 0.7046. Uptrend begins at 0.7102 and 0.7115. Downtrend lines begin 0.7015, 0.6989 and 0.6958.

 

Brian Twomey, Inside the Currency Market, btwomey.com and insidethecurrencymarket.com. Contact: brian@btwomey.com

 

AUD Pairs, Vital Levels: Nov 14

Vital and important levels are perfectly calculated moving average points that govern a currency pair price. Vital levels solidly support a price or act as solid resistance. Breaks at vital levels above or below trend anywhere from 100 to 200 pips but depends on the currency pair. EUR/JPY for example would easily travel 200 pips and it will travel quickly while AUD pairs reaches the destination but much more slowly. Vital levels are dynamic and move with prices. Why outline this scenario is to inform the perfect calculations and accuracy in vital levels. Never in writings will I post a chart. Not only do I not know how to post a chart but charts are deceptive because nothing is found. Charts are wrong, time frames are wrong, candles. The entire structure and orientation of charts are far off the mark to render valid trade decisions.

Correct in the AUD lineup is to see overbought in AUD/JPY and oversold in AUD/USD and AUD/CHF. The two outlier pairs are AUD/CAD and AUD/NZD because they hold revolving correlations to AUD/USD. Currently AUD/CAD price is well balanced, not oversold nor overbought while AUD/NZD is oversold and supported at current prices. Oversold AUD/NZD should inform its running with AUD/USD and reveals AUD pairs are pretty much running on all correlation cylinders.

AUD/USD. Two vital points, 0.7609 and 0.7611. AUD is currently oversold most especially 10, 20 and 50 day averages yet oversold is uniform throughout all averages. Bottom and extreme prices  in AUD are located from 0.7506 to 0.7501. To see 0.7609 and 0.7611 break then 0.7568 and 0.7577 must clear. Targets are uptrend lines at 0.7642 and 0.7655.

AUD/JPY. Supports are located at 79.42 and  78.19. Vital level above: 85.11. Currently AUD/JPY is overbought. Uptrend is valid as long as 79.02 and 79.95 holds. Extreme overbought occurs at 81.76 to 81.89. Good sell points located at 80.71 and 80.61. Overbought AUD/JPY and Oversold AUD/USD is correct.

AUD/CHF. Support 0.7442 V 0.7453 above. Currently oversold. Break at 0.7442 targets downtrend lines at 0.7409 and 0.7387. Above 0.7453 targets uptrend line at 0.7497. AUD/CHF will travel lock step with AUD/USD.

AUD/CAD. Supports 1.0082, 1.0002 and 0.9958. Current price is well balanced. Uptrend remains as 1.0098, 1.0201 and 1.0206 holds. Overbought begins at 1.0261. Sell points 1.0283 to 1.0346.

AUD/NZD. Supports 1.0581 and 1.0534. Averages 5 and 10 day are main price drivers. Above supports targets uptrend lines at 1.0616 and 1.0624. Targets on breaks becomes 1.0683 to 1.0705.

 

Brian Twomey, Inside the Currency Market, btwomey.com

 

 

GBP Pairs, Vital Levels: Nov 14

 

GBP/USD. From close 1.2593, vital break points above 1.2775 and 1.2846. A run to both levels must see further point breaks at 1.2615, 1.2642 and 1.2710. A reversal if seen will occur in the area at 1.2615 and 1.2642.

Below points 1.2574, 1.2535, 1.2495, 1.2493 and 1.2456. Downtrend begins at 1.2574 and 1.2456.  Averages 5 day, 10 and 20 all participate in the driver to short term GBP moves.

Why GBP far higher is due to not just oversold but oversold at extremes. GBP reached bottoms from the 1.5400 Brexit Break. GBP remains deeply oversold. In the larger picture, GBP/USD dropped from 1.8000’s in 2008 and broke every long term average on the way down to recent 1.1900 lows. The Brexit break at 1.5400’s was just another average in the overall downtrend.  In terms of the longer averages, GBP reached its extremes at 1.1900. Despite a 700 pip run to 1.2593, GBP remains extremely oversold from the 5 year average at 1.5442, the 10 year at 1.6339, the 14 year at 1.6730 and 17 year at 1.6394. Next break points at 1.2775 and 1.2846 are minuscule to the higher potential. But the economics must follow, its key to higher GBP. Best strategy is buy dips.

GBP/JPY. From close 134.38, GBP/JPY most vital breaks occurred at 131.93 and 133.42. Both are vital breaks on the way down. Both levels currently provide solid supports. In the larger picture, GBP/JPY is on a trend just underway although current 134.38 is far overbought short term from averages 5 to 50 days. The 100 day average becomes a good sell point in the middle 135’s. Next break points above 134.29, 135.01 then 136.60. Below 133.70 is big break to see 133.42.

GBP/CHF. From close 1.2449, vital break points are located at 1.2511 and 1.2559. Those breaks achieve by 1.2474, 1.2492 and 1.2502. If reversal due to current overbought 5 to 50 day averages then watch sell at 1.2474 and 1.2492. On break of 1.2511 and 1.2559 then targets become 1.2784 and 1.2802.  levels 1.2784 and 1.2802 achieves by 1.2656, 1.2671, 1.2715, 1.2727 and 1.2758.

Below. Vital supports begin at 1.2446, 1.2438,  1.2336 and 1.2333.  Short term, GBP/CHF is overbought but its price is extremely low. Buy dips is the way.

GBP/CAD. From close 1.7048, vital supports are located at 1.6916 and 1.6876. Next big break point is 1.7511. GBP/CAD is in a trend just underway. Yet to remain trending then uptrend lines must break at 1.7157 and 1.7208. Next point breaks are 1.7062, and 1.7135. GBP/CAD 10 and 20 day averages drive current prices and both are far overbought. GBP/CAD is a wide ranging currency pair and accounts for about 75 pips per day.

Below points 1.7016 and 1.6946. Again best strategy is buy drops.

GBP/NZD. From close 1.7706, next break points 1.7777 and 1.7779. Those levels break by 1.7742 and 1.7743. If a reversal or correction is seen then 1.7742 and 1.7743 is the  perfect short location. Below points begin at 1.7707, 1.7690, 1.7636 and 1.7603. Above 1.7777 and 1.7779 then next big points are 1.8124 and 1.8348 and sees those levels by 1.7820, 1.7863 and 1.7950. GBP/NZD is the granddaddy currency pair because of its wide wide ranges and overall daily movements.

GBP/AUD. From close 1.6685, next breaks are 1.6797 and 1.6879. Next vital points are 1.6740 and 1.6780. On the downside 1.6682, 1.6672 and 1.6548.

 

Brian Twomey, Inside the Currency Market, btwomey.com and insidethecurrencymarket.com

EUR Pairs, Trading Levels: Week Nov 14

 

EUR/USD.  Two points are driving EUR and those two levels will drive EUR all week,  1.1073 and 1.1128.  Longs must clear both points. Failure to clear will see both lines continue to drop.  EUR/USD is oversold and shorts aren’t recommended. The top of the channel is 1.1016. Above 1.1016 then EUR/USD has a shot to challenge 1.1073.  Major points 1.1044, 1.1058 then 1.1065.

EUR/JPY.  Strong supports are located at 114.30 and 115.58. Above 115.58 challenges the uptrend line at 116.49. Break of 116.49 would see the uptrend gain speed.  How EUR/JPY travels higher is by breaks at 115.80, 116.03 and 116.26. Below at the 114.30 point is dangerous because the downtrend line must first clear below at 114.66. Look for 114.66 and 114.30 to offer supports and reload longs. EUR/JPY has every ability to fly higher but also at the mercy of USD/JPY.

EUR/CHF.  From close at 1.0720, EUR/CHF is wildly oversold from all perspectives. Good long ahead. Vital levels to travel higher are 1.0845 and 1.0880. Until both levels break then any rallies in EUR/CHF are corrective. Good targets long are 1.0788 to 1.0806.  EUR/CHF challenges 1.0845 and 1.0880 by breaks at 1.0806 and 1.0832.

EUR/CAD. From 1.4703 close, EUR/CAD many and strong supports are located at 1.4669, 1.4650 and 1.4622. All points solid. EUR/CAD isn’t overbought but way oversold. EUR/CAD drivers are USD/CAD predominantly. Overbought and sell points begins from mid to high 1.4700’s.

EUR/AUD. From close at 1.4393, the big break line as of Friday was 1.4566, 1.4554 and 1.4621. These points won’t change much over days ahead. What drives EUR/AUD specifically is an overbought or oversold AUD/EUR. Bottom break 1.4081. EUR/AUD will continue to range yet ranges and movements are wide swinging. EUR/AUD if its known how to trade it pays well and pays quickly because of its quick movements.

EUR/NZD. Nothing is oversold or overbought in EUR/NZD from close at 1.5254. Big line breaks above are located at 1.5400 and 1.5401. I plan more work on this pair from an interest rate perspective to determine the inner workings, what drives this pair and how far from a daily view. GBP/NZD as well because GBP/NZD is truly the granddaddy currency pair mover.

EUR/GBP. From close at 0.8628, two big break points above are located at 0.8669 and 0.8686. Below break points 0.8087 and 0.8023.

 

Brian Twomey, Inside the Currency Market, btwomey.com and insidethecurrencymarket.com

Currency Pair Line Ups November 16

AUD V Counterpart Pairs Monthly Nov 1 to Nov 11

AUD  http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=AUD&C1b=USD&C2a=AUD&C2b=EUR&C3a=AUD&C3b=CHF&C4a=AUD&C4b=CAD&C5a=AUD&C5b=NZD&C6a=AUD&C6b=JPY&DD1=01&MM1=11&YYYY1=2016&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=11&MM2=11&YYYY2=2016&M=1&btnOK=Go%21

 

AUD Paits from above reversed

 

http://fxtop.com/en/historical-exchange-rates-comparison-graph-zoom.php?C1a=USD&C1b=AUD&C2a=EUR&C2b=AUD&C3a=CHF&C3b=AUD&C4a=CAD&C4b=AUD&C5a=NZD&C5b=AUD&C6a=JPY&C6b=AUD&C7a=&C7b=&C8a=&C8b=&C9a=&C9b=&C10a=&C10b=&DD1=01&MM1=11&YYYY1=2016&DD2=11&MM2=11&YYYY2=2016&LARGE=1&M=1&LANG=en

 

EUR

 

http://fxtop.com/en/historical-exchange-rates-comparison-graph-zoom.php?C1a=EUR&C1b=USD&C2a=EUR&C2b=JPY&C3a=EUR&C3b=CHF&C4a=EUR&C4b=CAD&C5a=EUR&C5b=NZD&C6a=EUR&C6b=AUD&C7a=&C7b=&C8a=&C8b=&C9a=&C9b=&C10a=&C10b=&DD1=01&MM1=11&YYYY1=2016&DD2=11&MM2=11&YYYY2=2016&LARGE=1&M=1&LANG=en

 

EUR/GBP  excluded EUR/CHF

 

http://fxtop.com/en/historical-exchange-rates-comparison-graph-zoom.php?C1a=EUR&C1b=USD&C2a=EUR&C2b=JPY&C3a=EUR&C3b=CHF&C4a=EUR&C4b=CAD&C5a=EUR&C5b=NZD&C6a=EUR&C6b=AUD&C7a=&C7b=&C8a=&C8b=&C9a=&C9b=&C10a=&C10b=&DD1=01&MM1=11&YYYY1=2016&DD2=11&MM2=11&YYYY2=2016&LARGE=1&M=1&LANG=en

 

GBP What a picture

 

 

http://fxtop.com/en/historical-exchange-rates-comparison-graph-zoom.php?C1a=GBP&C1b=USD&C2a=GBP&C2b=JPY&C3a=GBP&C3b=CHF&C4a=GBP&C4b=CAD&C5a=GBP&C5b=NZD&C6a=GBP&C6b=AUD&C7a=&C7b=&C8a=&C8b=&C9a=&C9b=&C10a=&C10b=&DD1=01&MM1=11&YYYY1=2016&DD2=11&MM2=11&YYYY2=2016&LARGE=1&M=1&LANG=en

 

GBP/EUR exclude GBP/CHF

 

http://fxtop.com/en/historical-exchange-rates-comparison-graph-zoom.php?C1a=GBP&C1b=USD&C2a=GBP&C2b=JPY&C3a=GBP&C3b=EUR&C4a=GBP&C4b=CAD&C5a=GBP&C5b=NZD&C6a=GBP&C6b=AUD&C7a=&C7b=&C8a=&C8b=&C9a=&C9b=&C10a=&C10b=&DD1=01&MM1=11&YYYY1=2016&DD2=11&MM2=11&YYYY2=2016&LARGE=1&M=1&LANG=en

 

NZD

 

http://fxtop.com/en/historical-exchange-rates-comparison-graph-zoom.php?C1a=NZD&C1b=USD&C2a=NZD&C2b=JPY&C3a=NZD&C3b=EUR&C4a=NZD&C4b=CAD&C5a=NZD&C5b=GBP&C6a=NZD&C6b=AUD&C7a=&C7b=&C8a=&C8b=&C9a=&C9b=&C10a=&C10b=&DD1=01&MM1=11&YYYY1=2016&DD2=11&MM2=11&YYYY2=2016&LARGE=1&M=1&LANG=en

 

CAD

 

http://fxtop.com/en/historical-exchange-rates-comparison-graph-zoom.php?C1a=CAD&C1b=USD&C2a=CAD&C2b=JPY&C3a=CAD&C3b=EUR&C4a=CAD&C4b=NZD&C5a=CAD&C5b=GBP&C6a=CAD&C6b=AUD&C7a=&C7b=&C8a=&C8b=&C9a=&C9b=&C10a=&C10b=&DD1=01&MM1=11&YYYY1=2016&DD2=11&MM2=11&YYYY2=2016&LARGE=1&M=1&LANG=en

 

JPY

 

http://fxtop.com/en/historical-exchange-rates-comparison-graph-zoom.php?C1a=JPY&C1b=USD&C2a=JPY&C2b=CAD&C3a=JPY&C3b=EUR&C4a=JPY&C4b=NZD&C5a=JPY&C5b=GBP&C6a=JPY&C6b=AUD&C7a=&C7b=&C8a=&C8b=&C9a=&C9b=&C10a=&C10b=&DD1=01&MM1=11&YYYY1=2016&DD2=11&MM2=11&YYYY2=2016&LARGE=1&M=1&LANG=en

 

USD

 

http://fxtop.com/en/historical-exchange-rates-comparison-graph-zoom.php?C1a=USD&C1b=JPY&C2a=USD&C2b=CAD&C3a=USD&C3b=EUR&C4a=USD&C4b=NZD&C5a=USD&C5b=GBP&C6a=USD&C6b=AUD&C7a=&C7b=&C8a=&C8b=&C9a=&C9b=&C10a=&C10b=&DD1=01&MM1=11&YYYY1=2016&DD2=11&MM2=11&YYYY2=2016&LARGE=1&M=1&LANG=en

 

Brian Twomey Inside the Currency Market, btwomey.com and Inside the Currency Market.com

Monthly Trades Nov 2016

For November 22 trades were taken for so far 967 pips. The Monthly goal was 30 trades, 1500 pips but each trade had to profit at least 50 pips. I didn’t allow all trades to run to its conclusion but exited at the 50 pip profit point. Many trades ran far more than the 50 but its wasn’t the goal to maximize the trades to the last available pip. Something like 5 or 8 or 10 trades were hit by my 25 or so stop point. The 22 trades were perfect as Stops were placed from 10 to 25 pips from entry. I’ve been on trial with a group of guys so trades were done to obtain proper scoring. For the most part I made it but I didn’t account for position sizes properly and I wasn’t happy with the amount of stops hit because trades with stops hit were actually profitable trades that went to target as expected. I lost about 10 trades. My knowledge of prices, pips and price movements based on years upon years of research, perfection  and model development is not the same as others. The more I see then the more I understand the lack of understanding from market people. Its not for me to judge nor do I care because I’m taking my name out of further consideration. Here’s the trades for interested.  By the way, trades this time were done through Oanda and Oanda Transaction history is not currently working. Hope this comes out correctly.

As I write, I thought I could copy the trades into this post but cannot. I will post the full statement as the function becomes available. As always contact brian@btwomey.com. How much longer I continue to post is always questionable. I find the public bullshit just what it is, pure bull and I’m tired of wasting my days writing. Its the retail guys lost in space and that means the vast majority. be surprised how many hedge fund guys out there just as lost. Its quite astounding. But the vast majority have more exposure, more money to trade and more money to finance  their websites and operation than me. I’m nobody in the larger scheme and I’m not trying to be somebody.

 

Brian Twomey Inside the Currency Market, btwomey.com

 

 

 

EUR/USD V DXY NOV: Monthly Levels, Ranges, Targets

EUR/USD V DXY : Monthly Levels, Ranges, Targets

Every month since October 2015, DXY and EUR/USD not only traded between respective 1 and 2 year monthly averages but topside compression was responsible for EUR/USD’s drop from 1.1400 to 1.0522 and DXY’s fall from 100. A massive shift is in development and it begins with DXY as DXY is now on the verge of a massive breakout higher. More importantly to a higher DXY is the ability for currency prices to finally, after 8 years, normalize. Normalization is a question of price location and critical to currency markets.
Lower DXY and EUR/USD prices were the result of both currency pairs to trade below monthly trend lines 1 to 10 years and every year in successive order. A situation of this magnitude is unhealthy to normal functioning currency markets but its a message to markets the lingering effects from 2008 remains. Healthy occurs when each pair separates and trades above or below trend lines.
EUR/USD currently trades below every trend line from 1 to 10 years while DXY trades above every trend line except the 5 and 8 year averages yet DXY is on the verge of a clean break higher. DXY and USD longs on a break higher will remain for years in the future.
DXY for October was reported a 118 pip range from 95.52 to 96.70 and the lowest range since October 2015. Actual was 364 pips from 95.39 to 99.03. The topside rose for the first time since Oct 2015.
For November, DXY sits above both its monthly 1 and 2 year averages at 96.56 and 96.36. The average range for DXY is located from 296 to 309 and places DXY 99.45 topside V 93.27. Conversely, DXY bottoms and tops places EUR/USD from 1.1460 to 1.0842.

Most vital break points are located from 96.21 to 96.42. Then lower levels 95.83, 95.78, 95.50 and 95.32. Below 95.32 comes next 94.65. Above the best DXY could achieve is 98.12 and 97. 94. A price above then leaves its monthly range.

EUR/USD  Range for October reported 188 pips from 1.1294 to 1.1106 while actual range pips were 398 from 1.0832 to 1.1230.   November monthly averages are located from 1.1085 to 1.1151, 66 pips. Actual range for EUR/USD is located from 214 to 197 and places EUR/USD at 1.1365 to 1.0937 and 1.0871.

Most vital break points below are 1.1085, 1.1031 and 1.1055 then 1.0980 and 1.0976 to 1.0932 then bottom at 1.0814. Above massive resistance is found first at 1.1151, 1.1174, 1.1197, then 1.1228, 1.1297 and 1.1337. Further comes 1.1418, 1.1530 and 1.1614.

Top of EUR/USD’s monthly channel is found from 1.1706, 1.1832 and 1.1931 while bottoms are located at 1.0545 and 1.0505 and mid points at 1.1238 and 1.1218.

Intraday, big line break for EUR/USD is currently 1.1088.

EUR/USD V DXY Monthly Data Nov 16 to 2006

 

 

1.0692,1.1026,1.1212,1.1211,1.1068,1.1228,1.1311,1.1339,1.1099,1.1092,1.0859,1.0877,1.0736,1.1235,1.1221,1.1139,1.0995,1.1213,1.1149,1.0779,1.0837,1.1349,1.1621,1.2331,1.2472,1.2672,1.2901,1.3316,1.3539,1.3592,1.3732,1.3812,1.3822,1.3658,1.3610,1.3703,1.3492,1.3634,1.3347,1.3309,1.3080,1.3188,1.2982,1.3026,1.2963,1.3359,1.3288,1.3119,1.2827,1.2974,1.2855,1.2399,1.2288,1.2526,1.2788,1.3161,1.3201,1.3224,1.2904,1.3179,1.3855,1.3706,1.3770,1.4343,1.4264,1.4388,1.4348,1.4441,1.3996,1.3648,1.3359,1.3220,1.3660,1.3897,1.3067,1.2894,1.2767,1.2208,1.2565,1.3405,1.3568,1.3685,1.4272,1.4613,1.4911,1.4816,1.4561,1.4268,1.4087,1.4016,1.3650,1.3190,1.3049,1.2784,1.3238,1.3449,1.2732,1.3322,1.4369,1.4975,1.5769,1.5552,1.5557,1.5750,1.5526,1.4748,1.4717,1.4570,1.4683,1.4227,1.3896,1.3622,1.3715,1.3418,1.3511,1.3516,1.3241,1.3074,1.2998,1.3212

 

 

97.08,98.42,95.39,96.01,95.49,96.20,95.88,93.05,94.58,98.22,99.65,98.75,100.21,97.02,96.48,95.85,97.44,95.66,96.99,94.71,98.66,95.32,95.00,90.65,88.41,87.02,86.05,82.78,81.52,79.81,80.40,79.53,80.25,79.72,81.40,80.19,80.66,80.26,80.32,82.14,81.54,83.38,83.40,81.81,83.17,82.00,79.23,79.87,80.16,79.99,80.03,81.22,82.71,81.75,83.13,78.85,79.14,78.79,79.42,80.52,78.49,76.31,79.08,74.17,74.04,74.64,74.70,73.11,76.07,76.92,77.86,79.29,81.27,77.46,78.94,83.25,81.66,86.28,86.67,81.99,81.29,80.44,79.65,78.22,74.94,76.47,76.86,78.22,78.45,80.42,79.43,84.78,85.89,88.15,86.46,82.15,86.70,86.34,79.36,77.50,73.42,72.80,72.95,72.72,72.17,73.75,75.28,76.70,76.17,76.46,77.62,80.75,80.66,81.69,82.25,81.30,82.66,83.50,84.43,83.43