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26/52
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Hello again from Southern California! The school year is done, some wedding bells are ringing, and summer is nearly here. I wish everything were really that rosy, but summer doldrums are definitely in the cards for financial markets, and I’m hoping that tensions will subside, I sense that fear could take over with regions across the globe on alert as they are here in Los Angeles.
I am so excited for the Olympics and for the beautiful country of Brazil that they may have a safe and prosperous games. For this article I’m going to make it article as useful and entertaining as possible, so I’m embedding a video presentation that can be viewed, and here it is:
SHINY SPOTS
This week’s update is fairly straight forward, no surprises, which should be good for most. As I mentioned in the previous article, there are a few bright spots that are shining very well in the U.S. economy. Reports of new home sales soared very well and pending home sales demolished consensus expectations by a margin of 430 basis points with a 5.1% month-to-month gain.
JUNE RATE HIKE
The strength of the dollar was a bit of a surprise to me, but when factoring all the talk about rate hikes imminent for June, it’s…
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hrustiashka avatar

Good!

pshan avatar
pshan 5 June
FX Presentation 6 1 2016
Video presentation that accompanies article on 6.1.2016. Video presentation that accompanies article on 6.1.2016.

Thank you love! Here is the video link to accompany the article.

s_amira avatar
s_amira 6 June

Thank you for  your article!

Sennna88 avatar
Sennna88 7 June

good job! well done!

scramble avatar
scramble 9 June

nice idea to attach a video on comment section! can I steal your idea for my next ones :)?
I don't really see any reasons why the US should hike rates now a part of rumoring and shaking markets. Could be eventually a shy 0.10 hike. But I personally see this coming later this year (maybe)

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2/44
Ranking
The US Dollar has been on the spotlight since beginning of the year as momentum has surprised everyone. Retracements continue to be shallow. The dollar bullish trend is well mature on its own and I thought it's the perfect time to reinforce my view on the dollar as many are asking: what's next for the US Dollar?
This is the US dollar's fastest rise in 40 years, and it's up 14% on this year alone, and I was one of the few to speak about the dollar rally, even before the trend to be put in motion.
Explaining the dollar's incredible turnaround, at current speed and velocity is not quite hard to explain if you have been following my articles. There are plenty of evidences, from my side, as I was preparing for this kind of move. To understand better what it's happening with the dollar i'll suggest to go over and re-read my previous articles here:
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Daytrader21 avatar

For those who are interested to find more about my own view on the US Dollar, I wrote last week an blog post talking about the 1980-1985 US Dollar analog which fits perfectly to current market environment and also it's a fractal for current price action. See link above.

foreignexchange avatar

Thanks, this article is interesting and qualitatively. Did you also have some correlation analysis with labour market ?
Great article 

Daytrader21 avatar

foreignexchange Unfortunately I never looked into that stuff, when it comes with the currency market the 2 most important things I look at are inflation and interest rates I think that anything else will just alter the view of the market, of course this is just my own opinion. Thanks

Illya avatar
Illya 27 May

It looks like you spend a lot of time for this report.Good job!!!

Daytrader21 avatar

@lllya It takes some times to put all the pieces together and also I do a lot of research because I want to provide high content to my readers. Thanks for the good words.

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3/33
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If the main macro theme of 2014 was the broad based dollar strength, the general consensus for 2015 is for further appreciation of the dollar. The implication of a strong dollar, and with the pick up in volatility, have also set in motion other trends, like the bearish commodity trends(see Metals and Oil), the carry trade has died (see AUD/USD and NZD/USD) and last but not least EUR/USD has finally started trading to the downside.
The broad based dollar strength can have a big impact on US economy, like lower inflation and this can be the trigger, next year 2015, for a considerable correction in the equity market but without altering the secular bull trend. I'm making a bold call here that the equity market will have a severe correction in 2015, once we complete a PI cycle from the 2007 high. "PI" the magic number has the following significance:
  • PI=3,141;
  • Multiply (Pi)*1000=3141;
  • 3141 days equal 8.6 year;
  • If you add 8.6 years to the 2007 high it bring us to October 2015 as the next intermediate top.

Because of the dollar's role as the world's primary reserve currency, the impact of the broad based dollar strength can trigger some "consequences" in other part of the world such…
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Daytrader21 avatar

JockPippin I really don't understand what are you trying to say.

WallStreetBlog avatar

Thanks!!!

salamandra avatar
salamandra 28 Dec.

Багато з чим не погоджуюсь... Але робота сподобалась в плані знаходження позиційного планування і інвестування...

foreignexchange avatar

Good Evening Daytrader21, thanks for the article. It could be very interesting. I like the article even there are parts that could be explained differently. HMM can probably prove mathematically the assumption in fig 5, maybe also other different stochastic processes ...... but I suppose that fractals are not so indicated. You should need a kind of  complex quadratic polynomials to calculate  swing below 1.3490. But if it is just your intuition it could be statistically compatible with other parametric models.  But .. GOOD JOB and THANK YOU VERY MUCH. Good trading 

marius24 avatar
marius24 30 Dec.

yap. I like this article. Let's see if you are right when 2015 ends. Good luck bro with your trading and hope you put all this work into practice.

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3/38
Ranking
There are many structural reasons that support a dollar bullish trend in the coming years but like anything else timing is the key.
Currently the outstanding US Dollar short positions are enormously and usually when everyone is on the same side of the boat the market goes in the opposite direction. But this current bearish trend will not reverse just because there will be a mythical big buy position that will reverse the trend.
A bearish trend will reverse when all the sellers who wanted to sell are in the market and there is no one left to sell. The same is the case with a bullish trend which will not reverse because some huge sell will come in the market but because there are no more buyers to lift the market.
So in our case it will not be a bullish dollar trend because some positive reasons. It will be the outstanding US Dollar short positions which are going to create the bullish trend least expected. It will be the biggest squeeze of our lifetime and when this short position will feel the pain of market going against them they will fuel the market new trend as they will be forced to buy back their shorts, which in turns will add more power to the new bullish trend.
The his
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Jignesh avatar
Jignesh 22 May

Well written Daytrader21 , although my view calls for a weaker USD.  Take a look at the weekly DXY Chart, there is a good case for a bearish triangle from 2008,  Most likely making a low sometime this year around 75, bullish 2015 inline with your analysis.  But would probably only retrace to current levels before turning lower to breakout.  Let me know what you think.

Daytrader21 avatar

Jignesh I move towards 75 DXY is quite a dramatic move and we really need a strong catalyst for that to happen, which at this point I just can't see it. The return of fx volatility will be a strong sign for a directional change in the dollar, so until that happen I see further consolidation. We need a really strong catalyst to break from current low volatility and consolidation zone and this can't happen in isolation, we need to look at credit markets and equity markets as well. Time will tell how it will develop I only hope I'm smart enough to see when I'm wrong:). Thx

doctortyby avatar

Just one article from you this month my friend? I want to see more useful info from you :D

Daytrader21 avatar

doctortyby Well, unfortunately I only have time for 1 article/month and I'm also running out of subjects:) so I'm not even sure I'll have something to write for the next month. I hope at least you enjoyed this one:)

doctortyby avatar

A good subject can be the ECB future Monetary Policy ;) ... I always enjoy your articles

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23/43
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On the back of a more pessimistic outlook for the Euro zone economy by the European Central Bank (ECB), the Euro is set to lose ground against the US Dollar and the Aussie Dollar in the weeks ahead. Supporting this forecast are the strong bearish technical signals on the larger time frames of these pairs that point to the start of major downtrends, as investors and traders gradually move away from the single currency. With 2012 expected to end with the Euro zone in recession, the ECB decided to keep its benchmark interest rate at 0,75%, citing a lower than expected growth forecast for 2013 and increased downside risks to economic activity and inflation. The Governing Council of the ECB pointed to ¨uncertainties about the resolution of sovereign debt and governance issues in the euro area, geopolitical issues and fiscal policy decisions in the United States, possibly dampening sentiment for longer than currently assumed and delaying further the recovery of private investment, employment and consumption.¨ Indeed, data released earlier in the week supported this assessment, as retail sales for the Euro zone fell sharply in October by 1.2% - the largest cut back in this category of…
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DaddyPapi avatar
DaddyPapi 10 Dec.

Yeah, thats a tricky one. Given the impact of the US economy on the rest of the world, I think a resolution would be dollar negative. Even though it is going to be directly beneficial to the US, it wont be that USD positive until broader economic data in the US improves.

LinnuxFX avatar
LinnuxFX 10 Dec.

Nice article, and great analysis, good luck...

SpecialFX avatar
SpecialFX 11 Dec.

So many people keep saying for quite a long time that the euro must go down, and so far it either does not move or actually goes up :) Unemployment, austerity, low growth, all that has been going on for a couple of years now, and everything is already priced in. For the euro to go significantly down we need something new (like Greece being kicked out of euroland, for example), because without fresh bad news (that are not already priced in) I see no reason for the euro to decline significantly. EUR/USD is back above 1.3 even with all the latest data, the market is telling us something... ;)

DaddyPapi avatar
DaddyPapi 11 Dec.

Depends on your definition of a decline..100 pips, 300 pips, 1000, pips..and over what time period...since mid 2011 to its current price, it is down by 2000 pips..having gone down by as much as 3000 pips in July this year.. so technically speaking over the long term, it is already declining. Short-term, however, it is moving sideways in waves of 200-300 pips, rising and declining. My definition of a decline in this forecast is 300-pips from that 1.3000,.beyond that, who knows.

SpecialFX avatar
SpecialFX 11 Dec.

Yes, but since July it is up 1000 pips, when most people were predicting the euro to collapse due to Spain (eventually reaching parity with the USD), and since then things just got worse in Spain and the euro went significantly up. By decline I mean going below 1.2, because thats what I keep seeing in those doomsday scenarios. 300 pips to me is not a significant decline, but then again I trade long term, so 300 pips is not that much really and anything can cause it. My definition of decline would require something special, and I wont even mention those predictions of 1.05, parity, etc... :)

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20/108
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IntroductionThanks for your continued support to my articles, which really motivates me to write more! I sincerely hope these articles would help you adding something nice to your trading while I learn how to share things with world to the best of my knowledge, skills in an easy to read words. This month I'd not explain another trading strategy, although the plan was to write about Market Cycles and that would be fulfilled too for sure.This article is focused on a LIVE trade I took today (order is pending at the time of writing, so it's a freshly sneezed juice out of my recipe). I figured out on Monday (10-October) that Aussie is in supply zone based on daily time frame. As all of you might have already read my supply-demand mismatch article, this trade is little different as it lacks the confluence with Divergence and henceforth would be short lived. Even then!, we're able to get a trade opportunity of 1:9 risk:reward (giving out 50 pips at risk, to make 450). Now who needs a divergence when we already have such a nice setup at hand.The supply-demand based system is simple enough and that's why takes less than 5 minutes to see the trade. A trading system must be simple so that we …
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ritesh avatar
ritesh 12 Oct.

An update on this trade entry: We entered as planned at 0.9986, SL 50 pip, TP 450 pip (RR is 1:9). The trade "immediately" goes 120 pips in positive, giving us ample time of more than "8 hours" to move Stop Loss to Breakeven and make trade risk free as explained in article above. After that market reversed and hits SL at Breakeven. We're out without loss and the next supply zone is at 1.0260

ritesh avatar
ritesh 12 Oct.

You're most welcome, Big_Daddy. I'm now waiting for Aussie to rise up to 1.0260 :)

ritesh avatar
ritesh 12 Oct.

Yes, it's easy to execute this strategy. I tried to execute this same trade on trader contest as well, however that closed in red as SL was not moved to breakeven. It's a nice lesson for all that even after precise timing and good entry price, only making trade "Risk Free" by moving SL to break-even can make our trading a consistent winner.

Strader99 avatar
Strader99 13 Oct.

Well explained article with logical plan. I definitely liked how you wrote the article without knowing the conclusion. Even though it did not hit your target profit, I would consider this a successful trade as you managed your risk.

I'm impressed!

Looking forward to your future posts.

ritesh avatar
ritesh 13 Oct.

thanks a million Strader99, i'm humbled by your support. Actually there is one supply zone which i missed drawing, can one locate that? ;)

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38/94
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The US Dollar began its journey as a store of value, with coins being minted in silver and pegged to the value of gold by the Bretton Woods system until the withdrawal of the gold standard in 1971 - right until then, the US Dollar was considered to be a better investment than gold as it also earned interest.  Then with the creation of a institution called the Fed, the bankruptcy of America was begun.The US Dollar today defies the basic premise that the currency of a nation is reflective of the state of its economy.  With the advent of globalization, corporate America started outsourcing the manufacture of everything - shoes to Vietnam, clothes to China and Bangladesh, consumer durables and cars to Japan and Germany, and software to India.  The good part of this was that all that they had to do was print more dollars to pay these countries.  These countries in turn bought US debt instruments.  China actually bought entire factories in the US, dismantled them and carried them across the seas, and set it up again in China.  In layman's terms,  these countries lent America money so that they could buy more !As stupid as it sounds, the problem with the US Economy today is that there are…
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doctortyby avatar

US $ and all the other currencies have been falling in real value in the last 100 years. It is interesting to follow the Misery Index ;)

Livornese avatar
Livornese 11 Sep.

So true so true!!! Hope it will no rest with the euro as well :-) Keep waiting other interesting articles from you.

santoshk avatar
santoshk 14 Sep.

Nice article.

ritesh avatar
ritesh 27 Sep.

Great article and last week of competition, so best of luck buddy +1

men79 avatar
men79 17 July

very good, man....

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