Fundamental News Trends Too
As market educators we talk about market trends a lot. Most times we are refering to the direction of price on a chart. It’s a simple as observing and recording the pattern of highs and lows and closing prices. If the higher time frames are coordinated we look to take coordinated signals in that direction. If the higher time frames are counter to each other then we look to trade lower time frames with little or no directonal bias.
Today I made a point/observation that I took for granted, but that a client thought signifiant. We were observing EURJPY today just ahead of the 10:00 ET numbers/econ releases. The weekly and daily were down, but I told him I was not interested in sell signals just yet, because the 60-minute and 240- minute charts were still holding higher – he understood that because we can both physically see that – and, I further pointed out, the current trend in U.S. economic numbers has been favorable. That’s the point he found interesting. Once I reminded him that eurjpy tends to track stock indices he saw the significance of that.
With the recent core durable goods better than expected, GDP higher than estimates, and Chicago PMI and Consumer Sentiment both better than expected last week, it just made sense to me to let the U.S. economic data blow through first, and then resume our analysis/trading.
The significance of the buy signal on the 15 minute chart in line w/ the 60 and 240 just ahead of today’s positive PMI and Housing numbers was not lost on me, and reminds me why we only act on fact based technical triggers. But the “back-drop understanding” of the significance of the current trend in U.S. economic releases was also important. I’m constantly reminded in trading to not take anything for granted and to take the time aftertwards to spell out the lessons learned so that it becomes hard wired a little deeeper in my mindset, and that these lessons be available for the next generation of traders. What is simple to someone with experience may not be at all to someone still learning.
Jay Norris
www.trading-u.com
To attend a complimentary live, one on one 1/2 hour tutorial with the author of Mastering the Currency Market e-mail Jay direct at jnorris@brewerinvestmentgroup.com and request a date and time during CDT business hours that is convenient for you.
DISCLAIMER: Futures, options and Forex (off-exchange foreign currency futures and options, or “FX”) trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures, options and Forex may fluctuate, and, as a result, clients may lose more than their original investment.