Bullish / Bearish forex selection

[tomorton]

Most of us trading forex are very firmly fixed on eyeing the chart for each pair to identify opportunities - and also the other side of the same coin - risk. This takes up the bulk of our attention.

But this can be too narrow at times. It is very annoying to find you have bought a GBP-or JPY-based pair and only then to realise all the other GBP or JPY pairs are falling as the major players are rotating into USD or EUR.

A simple way to check you're not swimming against the tide is just to check the bullish/bearish consensus on the other pairs. For my own (multi-day trend-following) purposes, I do this by checking if price is above or below the 200EMA on the daily chart for each base currency: above is bullish, below is bearish. Each weekend, I check the consensus on 38 pairs. 11 of these show USD, 10 EUR, 9 GBP, and so on down to ZAR, 2 pairs.

Currently I have USD on 2 bullish points, 9 bearish, and falling. The EUR is stable at 10 out of 10 bullish points. GBP is 3 bullish points and 6 bearish and rising.

The pairs all this suggests would currently be of valid interest would be -
EUR/USD or AUD or CAD long
USD/CHF short

The table also shows GBP or JPY pairs not currently worth the risk.

Obviously, the 200EMA and D1 charts are for my purposes but these could be varied according to your own requirements.

 

[foroom lluzers]

just look at eurgbp and buy eur pairs .Same thing as trading eurgbp.

 

[Atilla]

Most of us trading forex are very firmly fixed on eyeing the chart for each pair to identify opportunities - and also the other side of the same coin - risk. This takes up the bulk of our attention.

But this can be too narrow at times. It is very annoying to find you have bought a GBP-or JPY-based pair and only then to realise all the other GBP or JPY pairs are falling as the major players are rotating into USD or EUR.

A simple way to check you're not swimming against the tide is just to check the bullish/bearish consensus on the other pairs. For my own (multi-day trend-following) purposes, I do this by checking if price is above or below the 200EMA on the daily chart for each base currency: above is bullish, below is bearish. Each weekend, I check the consensus on 38 pairs. 11 of these show USD, 10 EUR, 9 GBP, and so on down to ZAR, 2 pairs.

Currently I have USD on 2 bullish points, 9 bearish, and falling. The EUR is stable at 10 out of 10 bullish points. GBP is 3 bullish points and 6 bearish and rising.

The pairs all this suggests would currently be of valid interest would be -
EUR/USD or AUD or CAD long
USD/CHF short

The table also shows GBP or JPY pairs not currently worth the risk.

Obviously, the 200EMA and D1 charts are for my purposes but these could be varied according to your own requirements.

This is a good approach Tomorton and similar to my dashboards. Most of this information is available online already and part of my morning checks. One can get a good feel for overnight events very quickly.

Just by clicking on the Forex tab on Top RHS you can see what's happening to the pound, dollar, euro and jpy. Same for indeces and commodities.

As for your bullish / bearish points what ever they are - a similar treatment exists here and clicking on your timeframe gives you an instantaneous view of numerous indicators.

I love pivot points and here they have them too. I prefer Woodie's PPs.

US Dollar Index is also worth adding to the page which is another click on the page.

This is my dashboard effectively.

https://uk.investing.com/currencies/gbp-usd-technical

 

[foroom lluzers]

What am I missing here ?I am trying to understand.

 

[foroom lluzers]

The pairs all this suggests would currently be of valid interest would be -
EUR/USD or AUD or CAD long
USD/CHF short

.

eurusd = usd chf

check eurjpy,eur gbp ,eur usd .What does it say?

 

[tomorton]

Cheers Atilla. Although I love my charts, its wrong to be blinkered about what else is going on.

There is a trader on another site who uses a similar approach, but based on calculating the % gap between price and a MA, above or below. Results come out similar as you might expect, but I will always go for the simpler way if I can.

 

[Atilla]

What am I missing here ?I am trying to understand.

Entry and Exit points are missing.

Don't see any emoji icons either. Is that deliberate

 

[Atilla]

Cheers Atilla. Although I love my charts, its wrong to be blinkered about what else is going on.

There is a trader on another site who uses a similar approach, but based on calculating the % gap between price and a MA, above or below. Results come out similar as you might expect, but I will always go for the simpler way if I can.

Strange you should mention gab between MAs. Another friend is just trying to decipher the optimal distance between them.

There is the ADX indicator for the established direction but not one I use my self. I do like MA crossovers though.

 

[gerryg]

Strange you should mention gab between MAs. Another friend is just trying to decipher the optimal distance between them.

There is the ADX indicator for the established direction but not one I use my self. I do like MA crossovers though.

What actually happens on the market when they cross? I mean is their confluence is used to open trades (serve as a technical indicator for many) or it has some underlying fundamental reasons the price should change its mind there?

 

[foroom lluzers]

This is a good approach Tomorton and similar to my dashboards. Most of this information is available online already and part of my morning checks. One can get a good feel for overnight events very quickly.

Just by clicking on the Forex tab on Top RHS you can see what's happening to the pound, dollar, euro and jpy. Same for indeces and commodities.

As for your bullish / bearish points what ever they are - a similar treatment exists here and clicking on your timeframe gives you an instantaneous view of numerous indicators.

I love pivot points and here they have them too. I prefer Woodie's PPs.

US Dollar Index is also worth adding to the page which is another click on the page.

This is my dashboard effectively.

https://uk.investing.com/currencies/gbp-usd-technical

This is called K I S S ?

 

[Atilla]

What actually happens on the market when they cross? I mean is their confluence is used to open trades (serve as a technical indicator for many) or it has some underlying fundamental reasons the price should change its mind there?

Just a simple system for entering trades.

If trading off charts on short time frames to see crossover and enter.

MA's lagging indicator and if price above or below - just simply displays established trend.

No rhyme or reason.

 

[tomorton]

End of week changes in Bullish/Bearish-ness, based on price above/below:200EMA

Currency: (points available): Bullish/Bearish score: (last week's score)
AUD (7): 3:4 (1:6)
CAD (6) 0:6 (0:6
CHF (8) 7:1 (7:1)
EUR (10) 10:0 (10:0)
GBP (9) 1:8 (3:6)
JPY (7) 4:3 (4:3)
NOK (4) 0:4 (1:3)
NZD (5) 4:1 (4:1)
SEK (4) 3:1 (3:1)
SGD (3) 1:2 (1:2)
USD (11) 3:8 (2:9)
ZAR (2) 2:0 (2:0)

AUD has improved significantly and about to turn Bullish on balance.
GBP has become more Bearish.
Slight improvement on USD but this only due to GBP's fall so USD jury still out.

Currently most opposed major currencies -
Long - EUR, CHF, NZD (no change)
Short - USD, GBP, CAD (GBP added, AUD deleted)

 

[tomorton]

Update on currency strengths as of close, 16/06.

AUD has turned slightly Bullish on balance as anticipated
CAD has improved to go neutral from very Bearish
JPY has had a major slip to become Bearish
NZD now at max Bullishness
USD has become even more Bearish.

Currently most opposed major currencies -
Long - EUR, CHF, NZD (no change)
Short - USD, GBP (CAD deleted)

Have a good week all!

 

[tomorton]

Update on currency strengths as of close, 23/06.

AUD - neutral, no change
CAD - neutral, no change
CHF - bullish, no change
EUR - bullish, no change
GBP - bearish, no change
JPY - bearish, slightly weaker
NOK - bearish, slightly weaker
NZD - bullish, no change
SEK - bullish, no change
SGD - neutral, no change
USD - bearish but significantly stronger
ZAR - bullish, no change

Currently most opposed major currencies -
Long - EUR, CHF, NZD (no change)
Short - GBP, JPY (USD deleted)

Results from last week's trades if taken from this analysis only, 5 wins out of 6 trades -
Long EUR/USD - LOSE
Long EUR/GBP - WIN
Long NZD/USD - WIN
Short GBP/CHF - WIN
Short GBP/NZD - WIN
Short USD/CHF - WIN

Have a good week all!

 

[wackypete2]

just use a forex strength meter.

Peter

 

[tomorton]

just use a forex strength meter.

Peter

Yes, these are available, of different types, giving different results. I don't use one, whereas I do have the charts and I'm going to review the TA of these anyway. And I can fully understand what I'm doing, and change it as necessary.

If you do use a strength meter (or anyone else) it'd be interesting to see the variation in results.

 

[progix]

TA are always helpful because most of the times the price moves within the support and resistance..

 

[tomorton]

Update on currency strengths as of close, 30/06.

AUD - neutral, weakening
CAD - neutral, strengthening
CHF - bullish, no change
EUR - bullish, strengthening
GBP - bearish but strengthening
JPY - bearish, weakening
NOK - bearish but strengthening
NZD - bullish but weakening
SEK - bullish, no change
SGD - neutral, no change
USD - bearish, weakening
ZAR - bullish, no change

Currently most opposed major currencies -
Long - EUR, CHF, NZD (no change)
Short - JPY, USD (USD added, GBP deleted as strengthening)

Results from last week's trades if taken from this analysis only, 23/06 - 3 wins out of 6 trades -
Long EUR/GBP - LOSE
Long EUR/JPY - WIN
Long CHF/JPY - WIN
Long NZD/JPY - WIN
Short GBP/CHF - LOSE
Short GBP/NZD - LOSE

Good luck all.

 

[Atilla]

Update on currency strengths as of close, 30/06.

AUD - neutral, weakening
CAD - neutral, strengthening
CHF - bullish, no change
EUR - bullish, strengthening
GBP - bearish but strengthening
JPY - bearish, weakening
NOK - bearish but strengthening
NZD - bullish but weakening
SEK - bullish, no change
SGD - neutral, no change
USD - bearish, weakening
ZAR - bullish, no change

Currently most opposed major currencies -
Long - EUR, CHF, NZD (no change)
Short - JPY, USD (USD added, GBP deleted as strengthening)

Results from last week's trades if taken from this analysis only, 23/06 - 3 wins out of 6 trades -
Long EUR/GBP - LOSE
Long EUR/JPY - WIN
Long CHF/JPY - WIN
Long NZD/JPY - WIN
Short GBP/CHF - LOSE
Short GBP/NZD - LOSE

Good luck all.

fwiw Tomorton I've been bullish on cable since election surprise and after a strong rally from cable GBP is still short but strengthening.

I was wondering what TimeFrame TF you looking at in your analysis?

 

[tomorton]

fwiw Tomorton I've been bullish on cable since election surprise and after a strong rally from cable GBP is still short but strengthening.

I was wondering what TimeFrame TF you looking at in your analysis?

This is all from the daily charts but I only do a review at the end of the week. I use the 200EMA to determine if bullish or bearish - bullish if price above, bearish if below. Too crude to be meaningful on an individual chart but the hope is that it will intimate changing conditions when looked at in aggregate. Kind of like watching one person's behaviour in the high street reveals little but watching the crowd tells you where the sales are....... He he he.

Someone mentioned Hari Seldon recently.....

It certainly doesn't look like time to be short on GBP. I blame it on the new pound coin.