Forex Trading: Advanced Concepts
Seasonal Tendencies of Currencies
USD
Typically tops out in the middle of February and declines into mid-March.
The last half of March is usually strong and then sells off in April (and the last bit of March).
The beginning to middle of May is a strong time for the USD.
The Middle of June usually marks a short-term high, and the USD declines into the end of July. Rally from the beginning of August to early to mid-September.
After this, the lines become divergent, meaning signals are less clear and not strong.
EUR
The Euro typically forms a bottom in mid-February and then moves higher into mid march. A pullback occurs, and we see another climb into the end of April.
Another low in June, which climbs into late July/early August.
Usually, a decline from early August to early September. o Early to late September begins a bullish trend for Euro through year-end, with a pullback in October.
GBP
The Pound typically forms a bottom in early March and then moves higher into the end of April. o Early May to mid-May is usually a bearish time.
A bottom typically forms again in mid-May. We see a move higher into early August.
Prices usually peak early in August and decline into mid-September.
Price peaks in early November, and the price slides into mid-to-late November.
Prices bottom in late November and rally into the end of the year.
Higher Timeframe Analysis
Start from the Higher Timeframe towards the lower time frame.
Monthly Chart - Identify Key Support and Resistance and direction
Weekly Chart - Identify Key Support and Resistance and direction
Daily Chart - Identify Key Support and Resistance and direction
4-Hour Chart - Identify Key Support and Resistance and direction
1-Hour Chart - Spend most of the time here to learn the tendencies of the hourly chart
15-Min Chart - This is the time frame where most trends, projections, and Objectives are made. This is a trade management timeframe.
5 min Chart - Enter Traders on 5 Min
STOPS - If trades require more than 30 pip Stop Loss, Probably let the trade go and look for another opportunity to enter.
RESPECTABLE SWINGS: Consider price moves of 40 pips or more when looking for swings to draw fib.
USDX
Commodities, Equities, and Foreign currencies will decrease if Dollar goes up. •
Commodities, Equities, and Foreign Currencies will go up if the Dollar goes down.
Given the inverse correlation of pairs, when the price on one has lower lows, the other is expected to reach higher highs. When this does not occur, we have SMT Divergence. This suggests major accumulation/consolidation before a major move in the opposite direction.
UNDERSTANDING MAJOR MARKET SWINGS
USDX Declining
USDX Rising
CRB Rising (Commodity)
CRB Declining (Commodity)
Currency Majors Rising
Currency Majors Declining
Stocks Rising
Stocks Declining
INSTITUTIONAL PRICING
These are specific levels where we see the price trading there, and they are in line with a higher time frame. Support/Resistance or Order block and fib retracement will confirm that trade to the market's direction will be underway.
The institutional numbers are 11,20,50,50 and 10,30,60,90
Pay attention to the candle's body at these numbers and not the wicks.
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