Karina Fabi - Price Action For All
Karina Fabi - Price Action For All
Karina Fabi - Price Action For All
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www.watchmytrading.com
@watch_my_trading_
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Until now, traders who wanted to learn about price action did
not have technical support and could access our courses
online. Finally we managed to finish the first publication that
will help you with solid bases on price action. The financial
market is dynamic and versatile and these features make
online trading the most attractive business in the world. This
material puts in writing the history of the main financial assets
over time and how we can take advantage of all this
information thanks to price reading.
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Introduction 9
Preparation 10
Price action 13
Equilibrium prices 15
Japanese candles 42
Price identification 46
Market pressure 48
Open interest 52
Pivots in DAX
Pivots in BTC
Pivots in SP500
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Strategy 63
SWAPS 86
Lots, margin and free margin 88
Hedge in practice 90
Price expiration 95
Ranges and psychological prices 97
Volatility and price action 102
Oil 109
USDMXN 117
USDCLP 118
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Introduction
The assets that we will use within this content are contracts for
difference (CFDs) in currencies, index and commodities.
However, the core of each topic is the price. The currency
market is the most important when it comes to transactions. The
spot, swaps and forwards market accumulate more than 5
trillion a day. This amount of active money makes the supply and
demand of the price dynamic and highly profitable with a good
strategy. You can apply the price reading system in every
instrument and also in futures. The only requirement is that the
asset must have a trading volume which is massive enough to
have generated a market history.
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Shares in initial public offering or cryptocurrencies are
governed by different strategies. The price action will not have
enough action for you to use as a strategy.
Preparation
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Focus on regulation. You just need your broker to be in the
books of some entity that audits its activity. Your broker's
jurisdiction is key when it comes to regulations. The regulation
of brokerage companies that offer financial derivatives is non-
existent in Latin America.
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It keeps all the brokerage competition with greater
responsibility for money withdrawals, market executions and
support.
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Price action
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This behavior is typical in times of uncertainty.
However, this is not always the case. We will have years or months
of stability where countries will begin to align their monetary policy
and buyers will feel safe to hold their positions.
Equilibrium price
The price path finally makes its behavior repeat itself over time.
A market asset, such as transactions in currencies, commodities,
index, stocks, etc. builds its levels of supply and demand over
time. Market areas may be exceeded in tops and bottoms, but
once the price equilibrium is reached, it tends to remain for
years in their areas.
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Trend and market areas
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All of this is about to change with your experience trading
with prices, where the loss closings with stop loss orders will
be replaced by hedging strategies that we will discuss later.
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The transitions are due to the phenomenon of profit taking,
or to periods close to new market impulses. A transition zone
may have days, even weeks, where the market will not
generate adverse movements. Usually, the transition
moments that are related to those of market consolidation
occur after high-impact macroeconomic data or market
correction scenarios. The price action explains that
consolidation or market transition is a market equilibrium
that is only temporary.
In the following sections you will see the price map of the
transactions we take to trade. My intention is that this
information will help you to trade as soon as possible and,
therefore, the intervals or charts that you will see are in times of
4 hours and 1 hour. These are also general price maps. Each day
will trade with different strategies depending on the market
pressure of the moment and wether or notit is a day with high
impact data.
EURUSD
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PRICE MAP
Explanation:
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To explain the SELL ORDERS, we will use the symbol "<": less
than ¨x¨ or below of ¨x¨, and to explain the BUY ORDERS we
will use the symbol ">", greater than ¨x¨ or above of ¨x¨ ...
< 1.10 sell to 1.0983 or also better explained: trader sell down to
last price of 1.0983
BUY
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Note: On buy days between 1.1070 and 1.1060, close before
the European market closes. Do not forget that these prices are
below 1.11 and if this fails to close "bought" the day between
those prices, it is better to retire and wait for the sellers.
Or, buy the next day if it exceeds 1.1070.
PRICE MAP
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Explanation:
Decision making:
SELL
BUY
Note: Any inter-daily buy that takes time to reach its target,
between levels of 1.0950 and 1.0970, will be canceled. Below
1.10 the buyer does not get enough participation.
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Between 1.0904 and 1.0886: HIGH RISK
This interval is of very high risk. Therefore, if the day does not
propose a defined strategy, any entry in this specific interval
should be avoided.
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PRICE MAP
SELL
Risk: Under this last price we avoid sell, since it has a high
potential as a buy price.
BUY
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PRICE MAP
GBPUSD
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SELL
BUY
Any inter-daily buy exceeding 1.21 and 1.2110 that does not
complete its inter-daily interval must be canceled within the
inter-day.
GBPUSD
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SELL
Note: Above 1.2200 the buyer will have more control over the
price than the seller, even if we are still in a sell area. Sell
GBPUSD above the 1.22 zone will take a long time until drops
again, therefore scalping to sell above 1.22 and not closing that
sell trade can imply high risk.
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BUY
Note: A buy below 1.2200 is high risk. If you are trading in this
first interval, do not keep a buy without closing while below
1.2200 in the inter-daily market. Floting buy trades below 1.22
are not safe.
XAUUSD- Gold
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SELL
I will divide the gold intervals into two charts. It is an asset very
complex to divide into tight intervals, as the price action is
presented. I will do my best to represent the buy opportunities
and corrections.
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Buys are traded during specified times that are determined by
new tops, or after a market correction (sells). The general
strategy is LONG. Years of dovish monetary policies are
conducive to safe havens such as commodities.
CHART 1
BUY
>1320 to 1350
>1350 to 1430
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> 1430 to 1530 and 1550 and extensions
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BUY
>1500 to 1515.50
>1515.50 to 1527
Note: Interval between 1490 and 1500: HIGH RISK. Do not stay
as a buyer in the inter-daily without being able to go out on a
buy that has not exceeded 1500. Any buy trade left holding at
this highs are higly risky. Stick to your two hours of opening
market as reference to close a trade. If no target reached
withing that timeframe consider a loss taking decition.
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SELL
<1517 to 1515.50
<1515.50 to 1500
<1500 to 1490
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USDJPY
SELL
>107.00 to 107.50
>107.50 to 108
>108 to 108.50
>108.50 to 109
(Chart 3)
AUDUSD
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PRICE MAP
SELL
<0.74 to 0.7320
<0.7320 to 0.72
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SELL
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Japanese candles
The price activity should be calculated with tools that shape the
market, so that it is easy to read. Japanese candles fulfill that
purpose. If we imagine the market as just prices, without the
complement of a chart, it becomes complex and it is difficult to
define a strategy, although the result should be the same. If we
group all buy prices in one row and all sell prices in another,
market entry and exit strategies should be reflected in Japanese
candles under the same result.
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Let’s remember the formation of Japanese candles:
The body of the first candle is buy and of the second is a sell
one. The activity of the price around volume is what we pay
attention to. When the Japanese candles begin to form these
present two important pieces of information: the opening and
closing is when we already get on business. If the market
reacts for buy at a certain price, then the closing of the candle
will be above that price. If, on the contrary, the closing of that
candle is lower than the buy price, the market did not find
enough capacity to buy.
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The same goes for sell prices. The trader detects a sell
price and the closing of the candle (at the chosen time) would
close below that price. If the candle closes over that price, then
a second formation or second opportunity should be expected.
The prices are always the same. The chart temporality only
increases or decreases the wait for the entrance. If the price of
an ounce of gold is $ 1,300 for the buyer, then any formation
of candles, whether 15 minutes to 4 hours, when closing above
that price confirms a buy.
Closing candle higher than a
buyer price of $ 1300 confirms
buy.
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Price identification
Therefore, you will see that for example the price of 1.12 in
EURUSD is a buy price and at the same time represents a level of
important decisions for both sides of the market. You will also
notice that over 1.12 the price fails to hold very far, and then
you will see that below 1.12 the price drop is also important and
is directed around 1.1180. You have just identified a market
interval that is understood as follows: EURUSD below 1.12 sel up
to 1.1180. Then, potential buy at 1.1180 towards 1.12. That is a
market interval.
Do not try to stun yourself with all the market candles that you
will see in an hour around your price in question. We are
interested in knowing only if 1.12 is a level of buy or sell. Around
your price there will always be higher and lower market activity.
You will have hundreds of candle shadows that will be presented
to confuse you. Keep calm and think strategically. First and
before entering the market, visualize your entry. View both
scenarios.
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At the beginning, your internal dialogue will look a bit
disorganized. Over time your question order will be cleaner
and faster at the same time:
If I go on sell,
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Where do the sell positions expire? Do I wait for the
15-minute candle closing to go on sell below 1.12? Or
do I enter without confirmation? Is the market
volume good or do I wait for it to reactivate?
EURUSD
1. 1,1200
2. 1, 1215
3. 1.1180
4. 1.1140
5. 1.1100
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Therefore, the indicator information is of little use for an
inter-daily trader. When the price action determines the buy
pressure during the day and we already have the max of the
session, it is likely that all indicators give a signal of sell. At that
time, when the market is ready to take a reversal, the price
gets a max again and increases the buy pressure.
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Let's go to another example of how to understand the market
pressure in the inter-daily. Here we have gold (XAUUSD). The
first line from the bottom up in 1280.23 marks the lower
shadows, which are more important than the upper shadows.
Both cases indicate a buy pressure over 1280 (Chart 6)
The line in 1288.12 indicates the max price recorded over 1286.
The second line from top to bottom in 1285.98 marks the
beginning of sell in the area. The conclusion for the inter-daily
trader is that above 1280 the market is bought terms of gold and
below 1288 it does not continue to buy. Both scenarios are
useful for planning the inputs and can be detected very simply.
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(Chart 6)
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(Chart 7)
Open interest
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The precaution to be taken when trading under the concept of
AI is that it should preferably be carried out with assets within
the bull market or buy markets.
The first two circles are the opening levels at 1. The second two
are the closing hours. In the first image we have the first candle
indicating sell and the second indicating buy. Then, the next two
circles are on two sell candles. In this case, the European market
closes almost equal to or less than its opening (circle 3) and the
closing of the American market closes almost the same or lower
(circle 4) than its openings. (Chart 8)
(Chart 8)
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Consider performing the following exercise until you find a quick
analysis on how to consider a bought market (open interest) or
a sold market. Enter the EURUSD crossing and refer your chart
to time. Then analyze the last four sessions of the market.
Identify the opening candle of Europe and the opening candle of
the United States.
The pivot point daily shifted formula is the only tool that will
serve to understand the price. The indicator, by itself, will not
give input and output signals to the trader.
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No indicator fulfills the function of a human being in putting
together an entry strategy. The pivot point is the only
fundamental tool for any trader that starts trading with price.
Within the different formulas, the daily shifted is the most
accurate for inter-daily trading.
The lines that are seen in the pivots are not necessarily the
prices we have to consider. If you extend a line on each pivot
of the indicator towards the price, you will have an X value.
However, between one line and another of each pivot there
will be a space, and that is the area of supports and resistances
that serves to identify buy prices and sell prices.
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Do not consider the exact line that marks the pivot on the
price. You will have days when the entries will be below or
above each pivot line. For example, on market day X, we will
have between the pivot S1 and S2 more than 20 sell prices,
which are not necessarily those indicated by the green line of S1
and S2.
As a general rule, when the price is above the central pivot the
pressure of the day will be to buy and will indicate a buy day.
When the price is below the central pivot, we would have, on
the contrary, a day of sell pressure. Resistance levels provide
two types of information. On the one hand, they report that the
price reached daily tops. Secondly they inform about the
possibilities of these max. That is, it can be a max in R1, R2 or
R3.
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(Chart 9)
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Image of Pivot Points in DAX instrument
This is how your indicator will look in one hour in the Dax
index. The image contains three full days of trading divided by
the pivot and one last session that is just starting. A market
session represents the eight trading hours of the stock market
of a country or region. If we join the session of Asia, Europe
and the United States, they complete 24 hours and, therefore,
you will see the Japanese sails moving within the frame of the
pivots day after day. The prices above the central pivot
indicate buying pressure up to R1 within the trading session.
You don't need any other tools to build your strategy. Simply
follow the price positioning BY above or below the central
pivot. With this information you already have enough data to
think about your inter-daily strategy.
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Day 1: the price in the Asian session is below the central pivot
(gray line), indicating sell up to S1 and S2 (lower green lines).
Then, at the beginning of the European session, the market
began to buy by positioning the price above S1, indicating buy
up to S2, and then to the central pivot again. Once above the
central pivot it reached R1 (upper red line). At the closing
session, the price reached above the central pivot, indicating
that the day closed with an index buy above 11,500 points.
When the price closes above the central pivot it indicates that it
will continue to rise in subsequent hours or that it will be in
consolidation.
Day 2: the price started above the central pivot, this indicates
that the day was to buy. Then, at the opening of the market in
Europe it returns to the central pivot and falls below it. At that
time sellers began until S1. Once the price is above S1, it again
signals buy until the central pivot.
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Image of the pivot point in Bitcoin (BTC)
Here you will see how the indicator has given correct
information to trade the BTC in the inter-daily. However, the
trading volume is smaller than that of the index and currencies.
Therefore, the price has remained in the last three sessions
above the central pivot with little approach to R1, except for the
previous market session, where it did manage to rise to R1 and
R2. Therefore, the buyers above the central pivot have had
excellent days, exceeding $ 4,000 bitcoin.
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Pivot point image on SP500
Strategy
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The price fluctuation around the order exectuted is normal,
as long as the swing limit is understood. Expect to see a
fluctuation of 10 and even 20 pips around your trade. That is
the main reason why stop loss is not recommended. The
order will be valid as long as it does not expire. If expiration is
done then take the loss but
To simplify the explanation of putting together a market
strategy, we will consider examples of psychological price levels.
To exemplify, we will go to the world's most traded currency
crossing, EURUSD. More than eighty percent of the international
market is made in these two currencies.
The exchange of Euro against the Dollar came into effect since
2001, when the euro begins to circulate as a currency adopted
by 16 countries. From then on it gains ground in the difference
contract market thanks to its inter-daily trading volume and its
highly competitive spread. As mentioned before, the inter-daily
trader will have more performance in its trade during the first
two hours of the market.
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To exemplify what parameters must be taken into account
when putting together an entry strategy, we will simulate a
market opening in Europe. The temporality to use should be
between ten and fifteen minutes. A lower temporality is
possible, but the price fluctuation will get you out of focus. If
the opening of the European market begins with buying force,
wait for its first 15 minutes to execute. From there, any of the
following fifteen minutes is valid to wait for confirmation. The
trader can find support in the pivots to determine the strength
of the market of the day. Remember that pivots do not build a
strategy, but are only a guide to price activity.
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Planning a buy does not equal or means that the target or
starting price will necessarily be a sell price. For this reason, the
trader must establish two targets or possible levels where it will
reach its buy level.
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1- Non-farm employment data of the United States and
unemployment rate (published simultaneously).
2- Interest rates of the country in question.
3- Retail sells.
4- Minutes of the federal reserve of the United States.
5- Consumer inflation.
The first impulse, which will last a few seconds, is the most
important within the scenario of the data. After the first
fifteen minutes confirmation it will be the second phase of
entry. The first market impact is what every trader wants to
take advantage of. However, this presents trading difficulties.
The first impulse lasts just a few seconds. Examples and live
recording videos over high impact trading are published in
our youTube channel. Find it as Watch My Trading.
GBPUSD
USDCAD
Day opens for buy above the central pivot.
Impact: positive for the dollar.
Price above 1.3230 before publication. Confirmed to buy.
Strategy: buy stop at 1.3230, or buy stop at 1.3240.
Sell stop at 1.3220.
Result +60 pips
Target 1: 1.3250
Target 2: 1.3360
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The best option is to buy at a safe price higher than the min
levels, such as 1.3110 or 1.3115, or place a "buy stop" in the
case of a previous publication of high impact data.
Non-farm payrolls:
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On Wednesdays or thrusdays of the same week is also
published the advance on the creation of final employment.
By "data in advance" it does not mean that it is related to the
final data two days later. The way you will see it presented in
the economic calendars is as follows:
Interest rates
In the economic calendar you will see the current interest rate
data and its forecast. It is generally not a piece of information
that does not meet your forecast. Within a week of publication
of this data the market will be prepared for the information.
However, it is the CB and the Fed that are responsible for making
the best decision and this may be different from the forecast.
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Strategy on published data 03/27/2019
Analysis:
The price, at the time of the opening of the Asian market, was
above the central pivot point and with a closed price above
0.69. Everything indicated that the market would react as "buy",
given the forecast of maintaining rates. However, strategically
we must consider the context of the price to plan the orders
around the market price. The market was placed to buy and
expected a good impact. However, the publication of the data
was accompanied by its corresponding statement. The
statement warns that if the domestic consumption of the
economy continued to contract, they will consider a cut for the
next interest rate decision. In conclusion, the impact of the data
was negative for the currency given that there was sell in all
transactions with the NZD.
Strategy:
Precisely with this data the "buy stop" type pending buy
orders were above 0.6910, which were activated before the
impact. In these cases you must act as soon as possible, closing
the position and leaving at a higher price. Therefore, if the buy
prices were between 0.6910 and 0.6912 consider a price higher
than the max levels to prevent previous volatility from activating
your order.
Chart: NZDUSD
Price before the data: 0.6909
Price after data: 0.6808
Total pips on impact: 102 total pips
Entry duration time: 1 minute.
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Data strategy published on 05/08/2019
Analysis:
The price at the time of opening of the Asian market was below
the central pivot point and with a closed price below 0.66.
Everything indicated that the market would react to sell, despite
the forecast of maintaining rates (expected impact: increase).
The previous day, the main trading partner of New Zealand,
Australia, maintained its interest rates despite a cut-off forecast
of 25 basis points. That is to say that at the fundamental level
there was no surprising scenario and a maintaining of the rates
was in line with the decision of Australia. However, rumors of
rate cuts had already begun.
Strategy:
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Chart: NZDUSD
Price before the data: 0.66
Price after data: 0.6526
Total pips on impact: 75 total
Entry duration time: 1 minute.
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The price action trader does not trade during the day. The
second problem is to trade with indicators of moving averages.
These generally begin to cross, implying that a min is indeed a
potential buy area and the tops are a potential sell area. In
another section we will review how the indicators tend to give
us information contrary to the price action.
The same situation occurs with the tops. The last price that the
market quoted during the trading day in the United States and
Europe on the day is the level that the market will consider as
the next level of buy. In min and max the market will necessarily
have a rebound. However, by then the trading volume will be
over. Weekly, monthly or annual min and max are analyzed by
the long-term trader and an inter-daily trader can join a long-
term strategy as well.
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Pending Market Orders
All platforms will offer two types of orders; those that are
executed at the moment or those that are executed at a future
price. The most important thing in both types of orders is to
consider the spread. At the time of executing an order,
whether on the spot or at a future price, we will have a spread
to pay, which ideally should be floating. When having a trading
account, the spread is an important element to understand.
The buying and selling differential is what the spread will finally
give us. By having more buyers and sellers in the market we
will then have a smaller spread, since the price of supply and
demand are less far apart. Industry brokers will have the
possibility to offer a fixed spread. However, this is not
competitive over high volume pairs.
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Spot order: sell
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The trader must consider in these cases that the most
appropriate thing to do is to close the original expired position.
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The hedge system is a great thing that will always save you as
long as you first learn to control the emotional side.
SWAPS
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If your position is held during the weekend, those interests are
accrued with credit / collection during Wednesday. You will see
on Wednesday that, after 6 pm or 7 pm, the swap differs and no
longer represents the accumulation of the previous day, but
represents three total days of interest.
• Spread
• Leverage
• Margin requirement
• Level of "stop out" or "margin call"
• Conditions on margin requirement increases
Hedge in practice
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Entry: USD 260 or equal to 1 standard lot at 1: 400 leverage
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Second hedge: buy stop of a lot (remember that I am hedging and my
margin is overlapped between 0.70 and 1 lot = margin used equivalent
to 0.30 lots).
(Enter a demo to test this equation before applying it.) Everything will
vary based on your required margin and the characteristics of your
account.
Price closes below 1.1240 and sells return. I do not add sells to
my position until I am at a level according to my price. In this
case, EURUSD would need to fall to 1.1220 to consider a sells
again.
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Covered earnings are used to close expiring positions. Then
you will have two paths in the market:
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An active lot, whether for buy or sell, requires X amount of
money to support itself. To the extent that the position
increases in loss proportionally, so will the percentage of
margin. The hedge is a partial bailout, but it must be
accompanied by partial closings of the position or the trading
account must have sufficient liquidity to face reversals. The
term used to measure floating loss is "drawdown".
Price expiration
The way that the price action gets you out of a losing position
is through the expiration of the buy and sell levels. For this, the
trader will understand in which market levels their positions
expire. To give a practical example: EURUSD trades in the inter-
daily of 1.1340 and 1.1362. The trader goes into buy at 1.1352.
Therefore, if you face an inter-daily reversal it should be
covered naturally below 1.1340. However, the expiration level
of your order will be below 1.13. This means that the market
trades in areas where there may be fluctuation and drawdowns,
but they are acceptable in inter-daily trading and do not require
taking losses. Everything will change if the price rises or falls
below 1.13.
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1. The inter-daily interval is considered as the overlap
between Europe and the United States.
2. Psychological levels are the prices where the market
begins to consolidate.
3. The psychological price is where the market closes
without decimals.
4. A buyer price expires when the market expires at the
min of the buyer range.
5. A selling price expires when the market expires at the
max of a sell range.
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Psychological ranges and prices
EURUSD
1 hour
Inter-Daily Interval
Total: approx 20 pips.
Min: 1.1180
Max: 1.1213
Buyers prices: 1.1180 to 1.1190
Below 1.1180 expiration of buys. Start of sellers
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EURUSD
1 hour
Inter-daily interval: 17 pips approx
Min: 1.1185
Max: 1.12
High impact day at market close, up to 1.1237.
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On days where the market breaks the max psychological
levels, such as 1.12, the market tends to generate a new upper
market interval. The new EURUSD range has bottoms at 1.12
and tops at 1.1220 and 1.1230 approx. In this new interval the
buy prices will be at 1.12 and not at 1.1180.
A buy entry into the market will have a hedge level and a final
expiration level. What follows after the expiration is to
gradually take the loss of the order that failed to close in the
inter-daily. In this situation, the trader can choose to hold the
order until the start of the next market session.
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The previous image shows the start and closing time of the European and
Asian markets. The letter A is about the opening time of Europe.
Therefore, the opening is considered as a "seller" since it opened
downwards. The pivot point also provides that information, thus
averaging the start of the market below the tops of 1.1360 and 1.1350.
Letter B is the beginning of the United States session, also below the
central pivot and below the tops of 1.1360 and 1.1350. Letters C and D
are the hours of closing prices. The C marks the closing of Europe. It can
be seen that at a certain time he managed to hold himself above the
central pivot point although below the max. Finally the letter D closes
again below the central pivot point and below the max.
The example image clearly represents a day that was only for sellers.
However, near the close of Europe we had an attempt on the part of the
market to stay close to the tops. A more experienced trader would have
handled the hedge above 1.1360. However, less experienced traders
would begin to take losses from that hour where the market formed
above the central pivot. The sellers of that day did a good job of analysis
and strategy. However, at the time of hedging over 1.1360 the problems
would have begun. On this particular day, a sell would have expired above
1.1360.
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GBPUSD
1 hour
Inter-daily interval: +100 pips
Min: 1.2694
Max: 1.2780
High impact day, with max up to 1.2817
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In the previous example, the price remained below the tops of
the area of 1.2730 during the opening of Europe. The day
indicated that it would be for sell, with a max at 1.2730. Along
with the opening of the United States, volatility began and the
market pressure of the day changed from sell to buy. In a
matter of an hour the price was above 1.2730 and the market
strategy had changed. After the American opening there were
only buyers dominating the market.
Instrument: EURUSD
Chart temporality: time
Date: February 18-22, 2019
Asset projection: sell
Macro situation: Dovish European Central Bank, low interest
rates unchanged.
Max prices: from 1.1330 to 1.1350
Min prices: from 1.1270 to 1.1250
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PP: indicates where the central pivot points are located in the three
different market sessions.
Closing of the day: The trading session of that day closed as a "buyer"
for EURUSD. The price is expected to continue to rise during the next
Asian session.
PP2: Prices above the central pivot point, full swing up to R1. Opening
of both markets in buy and market closing prices equal to the opening
prices.
Closing of the day: the trading session between Europe and the
United States closed unchanged or equal to the opening prices.
Both market sessions failed to sustain prices in the max zone.
This information would imply a consolidation for the next
session of the market, or sells.
Instrument: Gold
Chart temporality: time
Date: February 18-22, 2019
Asset projection: buy.
Macro situation: risk aversion.
Max prices: from 1345 to 1250
Min prices: from 1240 to 1238
Closing of the day: the closing prices were higher than the
opening ones, which would indicate more buys for the next
trading session or possible consolidation.
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Volume: high volatility
Closing of the day: the market closed below the opening prices
of 1340. Everything would indicate that it will continue to
decline during the subsequent session.
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Instrument: AUDUSD
Chart temporality: time
Date: February 18-22, 2019
Asset projection: sell
Macro situation: dovish central bank.
Max prices: 0.7190 to 0.7180
Min prices: 0.71 to 0.7090
PP1: Prices above the central pivot towards R1. At the end of the session it
manages to rise to the next level or R2.
Closing of the day: the market closed above the openings, which would
indicate that the market would go beyond the max of the area in the
following session.
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PP2: the European market opens below the central pivot,
thus confirming its first sells below 0.7160 to S1, S2 and
finally the area bottoms. Then, the opening of the American
market had buying pressure at a bottom of 0.71 to S2.
Oil
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Both commodities have an important trading volume that allow
for good inter-daily swings. Traders must keep in mind the dates
of the rollovers. Unlike all other financial assets, oil has an
expiration of the contract price and implies that there will be no
market activity until the new price begins.
Historical levels
The following chart shows the activity of oil since the last 4 years
in daily chart. The WTI presents a buyer area above $ 50 per
barrel. From there it exceeds the max, towards 64 and over 64,
continuing up to 74 dollars. On the contrary, below the area of
50 dollars the east barrel falls to 44.60. Once below 44.60 this
gets a min of up to approximately 35.80 dollars. We decided to
divide the price map given a general spectrum to give a
spectrum of all possible WTI intervals.
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Next we will segregate in more detail the market areas of
2019:
The information that affects the price of the WTI varies year
after year. Currently, data such as oil inventories ceased to be
published in the calendar. The price of oil is manipulated by
producing countries, thus c
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International challenges
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However, the alleged sells of the traders were not recognized
by the brokers, since at the time of selling there was no
counterpart to buy them. Therefore the positions were not
specified, but only a price gap was seen that went from 1.20 to
0.97 in the EURCHF, and from 1.02 to 0.82 in the USDCHF.
EURCHF
Price before crash: 1.20
Price after the : 0.97
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USDCHF
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The international economic agenda of the United States also
has a duality between integration and protectionism.
Agreements are reached and the NAFTA, a free agreement
between Canada, Mexico and the United States, which are still
in force. However, the opposite is true with its main Chinese
trading partner. The import tariff protectionist strategy is
commonly used to safeguard the national industry. This strategy
must be carried out within a limited framework and in certain
products that do not affect commercial ties.
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International opportunities
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USDMXN
Sells area
<20 dollars
18.80 to 19
19.08 to 19.50
19.50 to 20
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The crossing is below $ 20 and responds to a sell area.
However, this year began with buyers accumulating from the a
min of 18.82 to 19.00. Then it exceeded $ 19 and continues to
accumulate buyers. Therefore, it could be interpreted as
starting within the area below $ 20, but with new bottoms.
USDCLP
Buy area
>500 dólares
Monetary policies
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For the inter-daily trader, trading with the publication of
interest rates is the most anticipated event. Unlike trading on
economic indicators, interest rates are par excellence the main
data that provides an impact on the market and even possible
reversals.
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Canadian interest rates
USDCAD 10-24-2018
Forecast: 1.5%
Result: 1.75%
USDCAD
Price before the data: 1.3095
Price at the first minute of publication: 1.30
Price final 20 minutes: 1.2970
125 total pips
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Trading this data was predictable based on the forecast and
the result, but not in terms of strategy. As can be seen in the
chart, the price during the last second before the data was at
1.3095, below the central pivot point. The price below 1.31 was
for "sell." However, in order not to have execution problems
given the volatility or possible gap, it is decided to surround the
market price only by taking a sell scenario.
USDCAD 04-24-2019
Forecast: 1.75%
Result: 1.75%
Sell stop entry 1.3090 to target 1.30.
USDCAD before the data: 1.3440.
Price at the first minute of publication: 1.3506
Price final 20 minutes: 1.3518
78 final pips
Background: interest rates remains the same accompanied by
a dovish statement. Monetary policy under international pressure.
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For this data, the market was above the central pivot point and
it was decided to enter as "buy" with a pending order at 1.3450,
at target 1.35 and 1.3510.
06-14-2018 1.75%
Forecast: 1.75%
Result: 1.75%
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This day the Federal Reserve rates were published. Here the
price was below the central pivot point and with a preference
to sell below 1.14. The strategy in this case was to enter into a
"buy stop" type buy in the area of 1.14, avoiding volatility
between 1.1390 and 1.1388.
EURUSD 18-05-2018
Forecast: 1.50%
Result: 1.50%
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Neuroscience and programming
From this moment on you already know that your mind reacts
to what you say. What you say verbally has a direct impact on
the result. Let's start quickly to produce the changes you need.
Completely eliminate your self-destructive statements from
your vocabulary. "I’m no good for this," "I'm a mess," "I don't
have support for this or that." Absolutely everything that your
reality is presenting to you at this moment has been and is the
result of how you have intensified a single moment of your life
with self-destructive affirmations.
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Human beings are experts in this matter. It is as if from the
moment we possess the power to reason and speak, we
acquire the ability to self-destroy. They have made us see that
we fail all the time, in school, work and family. In the world of
trading, when a person is in their first two months where
everything is going very well, suddenly begins to lose control of
the strategy and negative emotions flood it. Next step, they
begin to remember that they were not good at math, or that
they would really give up why they had no formal education in
economics or finance. Others will use other techniques; They
will blame the economic situation or international instability. ¨
I think that becoming independent now is very risky. I'm not
ready yet¨
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However, I guarantee that emotional self-control will be your main
challenge in life.
I will tell you how the process of fleeing a fight was personally for me.
In my first 6 months of trading, back in 2008, I lost my first investment
account with 23 years. At that time I had no emotional preparation
and traded with conventional indicators. By then I was based in the
United States, in the city of Honolulu, Hawaii. Not everything was a
paradise for the United States that year. Barack Obama assumes and
being Hawaiian the whole state was partying. All but me, of course.
That same year began the interest rate cuts in the Federal Reserve and
everything I had learned seemed to make no more sense.
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I contacted New York hedge funds. I needed to know what was
happening and there was clearly a lot to learn. Trading in crisis
situations is not strategic, but emotional. I managed to make a
place for myself in Wall Street and I moved to the city. From
Queens to Manhattan, five months taking the subway at 6:30
am to be on the trading floor at 7:45 for the line up of the day.
The training of a trader on Wall Street is the closest thing to
entering a battlefield. They were just shouting for prices and
being prepared to take orders. Of course, there you learn how
not to listen to your brain and trade with emotional coldness,
fast and without overthinking.
Get used to the fact that when deciding to be a trader you are
already an entrepreneur. Your job is to dedicate yourself to
moving money from one side to another that will then help
you generate new sources of income. Entrepreneurs have a
very different lifestyle from the rest of the people. When you
are asked about your vacation you will not know very well what
to say because perhaps in your first 5 or 6 years of entrepreneur
you do not have time for distractions. When family or friends
organize weekend walks you will still be working on your ideas.
Your phone, laptop and internet are infallible allies in your
entrepreneurial phase, wherever, whenever.
Your brain will face many changes, since so far it only knows
how the systems within which it is trained to function work. The
good news is that neuroscience has shown that the brain is
totally trainable to the new and different. Neuroplasty has
delivered results of new microcircuits that are formed by
relating different concepts.
Once you understand that what you know and think does not
necessarily come from your free thinking, the question you
should ask yourself is: where is everything I have learned stored
and how do I unlearn all that to really change my life?
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Now we have entered the most fascinating part of the human
mind. On a rational level you are understanding everything you
are reading. However you have a sub-mind that is on constant
autopilot. That sub-mind is functioning as a perception filter of
everything you do and what surrounds you. This sub-mind or
subconscious is ruling and boxing every second of your day in
different areas that it already knows. The problem in adulthood,
unlike children, is that everything new that you don't know is
considered a threat.
Any new idea you have or new experiences that you want to go
through, is sub-mind does not know them. Therefore, it will take
care of flooding you with bad filters or thoughts to take you to
what you know to keep you safe and secure.
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All the remaining work has to do with what habits you will have
to change, what new thoughts you should adopt and, above all,
how you should speak to fully enter the training of the mind. I
will stop for a moment to talk about new habits and language.
Language is the basis of everything, the way you communicate
may require adjustments and changes.
The pseudoscience that will help you apply your language skills
is neurolinguistic programming. It has been proven that words
have power over the formation of your brain neurocircuits and
generate a certain emotion to each word you mention. If there is
anything I can guarantee you is that every minute spent on your
mind is worth it and your trading results will improve.
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