A month of GBP/JPY through the eyes of ACD Methodology Mark Fishers ACD Methodology from The Logical Trader
|
| Intro ACD GBP/JPY | << BACK | NEXT >> |
Thursday Jan 10th 2008: 3am - 3am EST
 |
|
Comments for Jan 10th 2008:
Today was unique in the month so far that the opening 30 minutes did not generate the volatility required for ACD to work. Playing by the rules you have to wait for such volatility to take place before you can declare your opening range levels. The next 10 minutes took price up enough and I used that spike to define my opening range for the day. Looking back it was exactly where it should have been.
We have an A-UP day but despite price breaking above C-Level it was not sustained, Eventually scoring a C-Down late in the session to make it our 3rd bearish session in a row for the pair.
Could the system have made you money today?:
1. By 5am we had broken A-UP and priced stayed there for 15 minutes attempting to break below, with price staying above for 15 minutes (which is our confirmation) a Long off the A-UP should get you some pips. Taking profit at C would have done this.
2. Technically we hit our C-UP and got a confirmation (stayed for 15 minutes) but with the break of C we saw a long hammer which should give you concern about the level being sustained. I wouldn't trade long off the C-Level and would look for something better (you can also see clear divergence on MACD to price which tells you that price is likely to go down). Trading short on the way back down through C-UP would be a decent entry with a tight stop. A-Down would have been a good take profit but I generally lock in 80% or so after 20-30 pips to let the rest run. You just can't argue with money in the bank.
3. To be honest i wouldn't have traded the London close today, Bernanke was giving a speech at 12:10pm EST titled "Financial Markets, the Economic Outlook, and Monetary Policy". You just never know what he's going to say until he makes his statements and I for one wait for the aftermath. Despite that, plenty of others were trading as you can see numerous opportunities to scalp off the C-Down during the speech.
4. Late in the afternoon through the Asian session there were a few good short entries trading off the top of the opening range. By the rules the Opening range is more or a no-mans land, but i'm noticing in currencies it's probable that the opening range is just as easy to trade off of as the A-Levels, if not more. Still I'd suggest tight stops.
5. Late Asian session after midnight EST to Asian close was quite a run past the C-Down, A solid 200 pips form end to end. A short on break of the C-Down with a tight stop would have done well no matter where you took profit.
Sponsored Links: