GROUND AND POUND
Here is a trade I am sitting on hoping for it to develop, a short in the British Pound. If the price today were to stay where it is now, I will likely short this Thursday at the spot indicated above. We are at a critical juncture in this market. It has been one of the weaker currencies vs the dollar. It has also now rallied enough and for long enough off the lows, that it could be making a trend change. If we were to stabilize here or just a bit lower, this could take off upward. However, for the moment in my mind this is a weak currency on the verge of being tipped over once again.
I do not reveal all of the things I use to determine trades for a couple of reasons. First, this is a free blog, and I have worked incredibly hard developing things over the years. I will not give them up for any price much less free. However, at the same time I do not believe that there is necessarily any magic to how I do it anyway. I know many traders and no two have the same exact style. There are so many ways to succeed in this business. There are probably readers of this blog that have better techniques than what I have any way.
Trading is a process of constantly fine tuning and or improving what you do. If you sit back and just do the same thing over and over it will work well for a time, but the time will come where you will need to step up your game to stay ahead. One basic rule that I always use that serves me very well is selling the weak and buying the strong. If am looking at currencies for example the Canadian Dollar is the strongest one, so if I think there will be dollar strength and want to sell currenices against that, I want to sell the weak ones like the Pound not the strongest like the canucker. This does not mean I would not short the Canadian dollar because there is a possible sell setting up there What it does mean though is if that does set up I will look to see if another currency might have a better sell setup that is also weaker.
In these instances, the weaker one almost but not always, will move more in the desired direction. There was a recent exception to this in the Wheat and Corn markets. I went long Wheat because I was bullish on both Wheat and Corn, and thought Wheat was stronger. It had moved much further up off it's lows than Corn had. It was very clear on the chart. Yet once I went long Wheat, Corn moved up way more. This is rare, but does happen at times. It is not a perfect world. If it was we would not have that pinhead in the oval office.
Next, we have a possible sell signal setting up for the SP 500 for thursday if today closes higher. Here it is displayed below. If that is set up after today I will go over it tommorrow.