Monday, January 9, 2012

How we work

Just a quick update on what has happened so far since the last time we took a look at the market. Some of our set ups worked out nice others not so much. We hope some of you had an opportunity to take advantage of some of those set ups. Just to clarify and show you guys how to take advantage of our analysis or trade set ups. The way we work is quite similar to playing chess with the market where the market is white and always makes the first move and we simply respond. We will look at possible scenarios the market can move, we will anticipate which way it wants to move and sometimes we are right and other times we are wrong. The important thing to remember is in fact that the market is always right and it will move whichever way it wants to. The matter of fact is, there are many unforeseen variables that can change market direction in an instant and they happen all the time. Anything from a fundamental announcement to an oil shock can shift the flow of money from one place to another. Now, remember we always allow the market to move first and we react to it. Our trade set ups or analysis is nothing more than an anticipation of what the market is going to do, if the market does indeed do what we think it does, than we will be ready to respond accordingly. For example let’s say I have an uptrend and the market is in retracement mode I can anticipate where the market can find support, and this is where I’ll be looking for buying opportunities as long as support holds. A nice trend line break, a bullish candle formation etc. can all justifty a buy. However, if the market takes out my support, I stop looking for buying opportunities and start looking to short the market instead. So in this chess game, if the market holds at support ill buy, if the market breaks support ill look for shorts.

lets take a look at what happened since the last time we looked at some pairs. As expected the fundamentals on Friday caused some major moves for the commodity dollars against the dollar. All 3 pairs, Nzd/Usd, Aud/Usd and Usd/Cad weakened against the dollar. The commodity dollars against the yen also responded in a similar fashion. We analyzed the cable and were looking to short the market on a trendline break. This we did and definitely paid off. The bulls in gold and silver couldn’t take out the previous high and are currently u turning.

So this brings us to today...

No comments:

Post a Comment