Monday, August 16, 2010

What I do every morning after going through the news!

This is how I usually figure out exactly where i should be heading with my strategy for the day. It's not fool-proof, but helps me figure out where i would want to enter the market, and also what's the trend for the day etc.

First thing I do is look at where the U.S equity market is, specifically the Dow Jones and S&P 500, because you can usually tell what's the risk sentiment by looking at how equities are doing. So here's the figures at the end of Friday close.
Dow Jones: 10,303.20
S&P 500: 1,079.25
Looks like equities had dropped further from 10,320 and 1,083.61. Risk aversion still holds.

Now I go to the technicals!

For each pair i look at eg. EUR/USD, I get the day open, close, high and low.
So since I start my day when Asia opens which is when Tokyo opens at 0:00 GMT, I look at my day open and close at that point.
So here's the OHLC for EUR/USD, GBP/USD, AUD/USD and USD/JPY (these 4 pairs are what I trade).
EUR/USD: open 1.2841    high 1.2905  low 1.2747  close 1.2755
GBP/USD: open 1.5592    high 1.5679  low 1.5564  close 1.5584
AUD/USD: open 0.8969   high 0.9034  low 0.8916  close 0.8920
USD/JPY: open 86.16      high 86.36     low 85.91   close 85.97

I then calculate the Pivot point using Fxstreet tool Pivot Point Calculator . All you have to do is enter the High, Low and close of the currency pair and you get the Pivot points for the day. I usually calculate the classic pivot point and the camarilla. For intraday i like to look at the R3 and S3 of the camarilla. If these levels break, i then start looking at the classic, as the camarilla R3 and S3 coincide with the R1 and S1 of the classic PP.

EUR/USD
Classic PP: 1.2802.  Camarilla: S3 1.2712  S2 1.2726  R2 1.2784   R3 1.2798
GBP/USD
Classic PP: 1.5609. Camarilla: S3 1.5552   S2 1.5563  R2 1.5605   R3 1.5616   
AUD/USD
Classic PP: 0.8957. Camarilla: S3 0.8888   S2 0.8898  R2 0.8942   R3 0.8952
USD/JPY
Classic PP: 86.08. Camarilla: S3 85.84       S2 85.88    R2 86.05     R3 86.09

Finally I look at the chart and see where the 4 hour and daily charts are, to get an idea of which direction the trend is at.

EUR/USD: 4 hour - bearish but i see a turn up. need to be cautious.    daily - looks very bearish 
GBP/USD: 4 hour - neutral. see some consolidation.   daily - looks very bearish
AUD/USD: 4 hour - looks very bearish       daily - looks very bearish
USD/JPY: 4 hour - looks bearish       daily - neutral. I see some consolidation.

here's an example of what my 15 minute chart would look like. Helps me see good points to enter trades.

No comments:

Post a Comment