Hi guys, this is more of a lesson for those of you who use the Market Barometer. Here is a screen of what the chart looked like before I turned all of the other currencies off:
This is a 4 hour view. Notice the 2 different trend lines. The AUD broke below the first, but has not punched through the second (long term trend line). Before opening a trade, wait for the currency to clear 'all' trend lines (support or resistance if long). Breaking below the short term trend 'will' create a move, but we are more interested in the larger moves (i.e. better risk/reward, etc...).
This is not investment advice, just my opinion(s). Please trade accordingly.
Trade safe and keep an eye on news.
Kommentar
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We are below the Trend Line now. We should see continued AUD weakness.
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Expect a short term bounce or pull back, then AUD will continue to weaken (i.e. use the pull back to get a better entry price):
Kommentar
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When the short term hits 50ish on the pull back, that's a good time to enter a trade 'selling' the AUD.
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Just like when you are in a trend trade. Prices never go in a straight line, but you know where they will end up. This is a same idea. The larger time frames tell you where you are headed and the short time frame let you know when to expect pull backs and consolidations along the way.
is your barometer tool based on actual real time collection of pips for the pair compared with it crosses or its only a moving average of the pair?
riffster21
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@a.h1979, Hi, it doesn't use MA's at all. It's using price averaging and few technical indicators like Stochastic, RSI, etc... MA's lag too much. In my opinion.
a.h1979
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@riffster21, hi, yes agree with you about the MA's so i thought to ask if it is collection of real time change in pips or MA's same as the ccfp indicator, seems great tool :)
WINSTON2016
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are you looking for a 3rd touch of long term trend , if aud around 50 % mark its in neutral territory ? - wait for reaction at long term trend ?
cheers ally
ps how do you decide to single out a currency ? is it based on trend lines or something else
riffster21
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@WINSTON2016, I'm waiting for it to cross through the trend line. The line on this indicator work just like a price chart. If the line goes below a trend line, it usually stays there. So if the AUD break below, I know that they AUD should continue to get weaker and I will sell the AUD against another currency (i.e. buy the GBPAUD or sell the AUDUSD).
You can and should perform a trend line analysis for each currency at least once a day. Just open the indicator settings and turn off 7 of the currencies, do your analysis, rinse and repeat until you've performed an analysis for all 8 currencies. I usually do this on the 4 hour (I take a chart shot for each currency), then switch to a 15 min and watch the market for trades. Trend lines on the market barometer are just as important as trend lines on a price chart. It takes a second to get your head around it, but it's very powerful. You can use this analysis on any time frame chart. The smaller the time frame, the smaller the move (just like a price chart), but the concept holds. It's a fantastic trick for scalping.