Forex Trading Diary

I think the title or name of the ebook was, with the word .. Stochastic Secret. I search again the internet and just found important pieces. Don't know if it all had all content or just some pages, its look not completed. This part started from chapter D, i need dig for pervious chapter. I still can't find the match, er... right keyword for searching the ebook.

By the way its the continues sequel from One Tool Much Patten.

I got from... 4xedu.blogspot.com and forexinterval.blogspot.com,


Stochastic Secret

Stoch settings
‐ K% = 3;
‐ D% = 2;
‐ Slowing = 3);
‐ MA simple
‐ Price field Low/High;
‐ levels 80, 70, 50, 30 and 20.

(Assuming that the trader, respects the basic rules of trend trading).


D. Entry points

1. Classic crossing (cc)
Characteristics:
- it occurs over the 70 or 80 level/under the 30 or 20 level;
- has only one intersection;
- after the intersection, it returns in the 70‐30 (80‐20) interval.

Interpretation:
- if it moves over 70 but not over 80, wait to get under 70 and then sell;
- if it moves over 80, wait to get under 80 and then sell
(on a lower volatility it’s recommended to get under 70);
- if it moves under 30 but not under 20, wait to get over 30 and then buy;
- if it moves under 20, wait to get over 20 and then buy
(on a lower volatility it’s recommended to get over 30).



2. Knotted crossing (kc)
Characteristics:
- it occurs over (or on) the 70 or 80 level/under (or on) the 30 or 20 level;
- makes a knot 1;
- after the knot, it returns in the 70‐30 (80‐20) interval.

1 Knot = a series of (usual) 3 consecutive intersections,
disposed horizontally or angled, occurring outside or on the 30‐70 interval,
intersections from which only the last is reliable.

Interpretation:
- if the knot forms above 70 but not over 80, wait to get under 70 and then sell;
- if the knot forms above 80, wait to get under 80 and then sell;
- if the knot forms under 30 but not under 20, wait to get over 30 and then buy;
- if the knot forms under 20, wait to get over 20 and then buy.



3. Reversed crossing outside the 30‐70 interval (outside rc)
The reversed crossing differs from the knotted crossing in this way:
- between the first and second intersection there is a free space
(no other intersections) that corresponds on the chart with at least
2 closed candles/bars .

Characteristics:
- occurs over the 70 level/under the 30 level;
- has 2 intersections;
- between the first and the second intersection there is free space;
- the second signal is opposite to the first.

Interpretation:
- after the signal over the 70 level it’s received, then, on a bigger time frame a)
there should have been received a classic crossing buy type signal (§ D.1.) or b)
the stochastic should be in the continuation status (§ E.3.);
- after the signal under the 30 level it’s received, then, on a bigger time frame a)
there should have been received a classic crossing sell type signal (§ D.1.) or b)
the stochastic should be in the continuation status (§ E.3.).



Specifications:
- for recommended close points see § F.

4. Reversed crossing inside the 30‐70 interval (inside rc)
Read first the bolded text from § D.3.

Characteristics:
- occurs under the 70 level/over the 30 level;
- has 2 intersections;
- between the first and the second intersection there is free space;
- the second signal is opposite to the first.

Interpretation:
- after the signal under the 70 level it’s received, then, on a bigger time frame a)
there should have been received a classic crossing buy type signal (§ D.1.) or b)
the stochastic should be in the continuation status (§ E.3.);
- after the signal over the 30 level it’s received, then, on a bigger time frame a)
there should have been received a classic crossing sell type signal (§ D.1.) or b)
the stochastic should be in the continuation status (§ E.3.).



Specifications:
- recommended if the correction received a classic crossing but the impulse
didn’t, with the scenario that stochastic couldn’t give as well a classic
crossing signal and reversed crossed in the 30‐70 area;
- because the outside rc tends to be stronger than the inside rc, more
attention and a good money management are required.

5. Power peak (pp)
Characteristics:
- consists of 2 classic crossings (as a result, occurs over the 70 level/under
the 30 level);
- on a flat or a descending trend (when sell is expected), the first
intersection will be a higher‐high and the second intersection a new lower‐high;
- on a flat or a ascending trend (when buy is expected), the first intersection
will be a lower‐low and the second intersection a new higher‐low.

Interpretation:
- if on a flat or descending trend, it gives a cc signal over the 70 level,
but the price remains in consolidation, wait for another cc signal under or
on the 70 level and then sell;
- if on a flat or ascending trend, it gives a cc signal under the 30 level,
but the price remains in consolidation, wait for another cc signal over or
on the 30 level and then buy.



6. Divergence
As many other oscillators, stochastic also shows divergences.

7. Arc
Characteristics:
- outside the 30‐70 interval, it makes an arc (a long loop which stays outside a
long while).

Interpretation:
- on a flat or descending trend, after it comes under 70, sell;
- on a flat or ascending trend, after it comes over 30, buy.



8. Minus

Characteristics:
- the stochastic lines (%K and %D) merge, forming a single straight line,
which can be horizontal or angled.

Interpretation:
- if it occurs inside the 30‐70 interval, a) look for a signal on a lower
time‐frame or b) wait until the lines unmerge and open a position in that
direction (which should be the same as the direction indicated before the merge) –
otherwise don’t open any position;
- if it occurs outside the 30‐70 interval a) if you have an active position,
lock a profit and wait the eventuality of continuation of the previous move or b)
treat it like a cc crossing.



Specifications
- This procedures requires a bigger stop loss.


E. Waiting moments

1. End of low noise (eln)
Characteristics:
- a period when in the 30 level/70 level area many contradictory signals were
received.

Interpretation:
- wait until stochastic touches the 50 level and then you can a) wait for signals
specified in §D. or b) if it comes from level 30, buy and if it comes from
level 70, sell.



2. End of high noise (ehn)
Characteristics:
- a period when inside the 30‐70 area, many contradictory signals were received.

Interpretation:
- wait for stochastic to touch the 80 level, and after that wait for signals
specified in §D.;
- wait for stochastic to touch the 20 level, and after that wait for signals
specified in §D.;



3. Continuation status
Interpretation:
- assuming that at least one trade is open and has it’s locked profit, as time as
on a bigger time‐frame, an opposite signal it’s not received, the trader should
wait for the price to move in his/her favor.


F. Closing points

1. The opposite signal
Interpretation:
- assuming that at least one trade is open and has it’s locked profit, after on a
bigger time‐frame, an opposite signal was received, the trader should think about
a) readjusting the amount of locked profit or
b) close the trade and wait for a reversal.

EUR/USD
It is more likely to go up to around 1.4120, and after that, it might have potentially to go down to around 1.3950.
(Current Price: 1.4022)

GBP/USD
It is more likely to go up to around 1.6650, and after that, it might have potentially to go down to around 1.64.
(Current Price: 1.6428)

AUD/USD
It is more likely to go up to around 0.8150, and after that, it might have potentially to go down.
(Current Price: 0.8050)

USD/JPY
It is more likely to go down to around 96.
(Current Price: 96.77)

USD/CHF
We predict that it is more likely to go down to around 1.0750, But if it is still goes up to 1.0950 then it will be bullish.
(Current Price: 1.0871)

Beware from today news: (time is using GMT+7 / Indonesia – Jakarta Time)
(see your time conversion at www.timeanddate.com)

13:00 EUR
13:30 AUD
14:30 CHF
15:30 GBP
19:15 USD
21:00 USD
22:15 USD

All the forex signals and technical analysis can be affected by the news report (fundamental)

thx gainscope

Fundamental Analysis

No news out worth trading on Monday, so most of the video is focused on discussing the trends on EUR/USD, Gold, and the S&P 500. In news on Friday 6/26, we saw US Spending data and PCE come out right as expected, but Personal Income came out very positive over 1% better than expected. Honestly, I got fooled on this thinking it would lead to some risk appetite buying; however, I guess some of the details behind the number showed it was more of a one time payoff effect of the stimulus bill and since people saved it all instead of spending it, the market reaction quickly flipped negative on it. Just a pretty complicated release, but it shows us that next time we need to focus more exclusively on the spending numbers.

Right now, Gold's new downtrend is pretty firmly established, so it remains a good position trade short or swing trade short opportunity at rallies to key fib levels shown in the video.

Stocks and EUR/USD are a bit more tricky though. Stocks still look poised for a good decline, but their volatile strength last week is starting to increase the odds we may be wrong there... On the EUR/USD, we've maintained a sell on rallies and hold short for position trades bias since around June 5th, but the bigger break lower just hasn't come, and this very rangebound consolidation could turn into another major bullish leg if we start setting some higher highs on the 4 hour chart. A move above 1.4120 and especially 1.4140 is probably the nail in the coffin and we'll need to either stand aside into a neutral bias, or flip bullish based on how things look at that point. So, long story short right now, is we're still tentatively biased short and holding short in both stocks and EU, but the situation has degenerated to more of a day to day touch type of scenario, so we'll have to wait and see how things develop over the next day or two. Hopefully our perseverance will pay off and we'll get some risk aversion stock weakness and USD strength here.

Thx sir pipsalot, fxpeacearmy.

EUR/USD
It is more likely to go up to around 1.4120, and after that, it might have potentially to go down to around 1.4.
(Current Price: 1.4068)

GBP/USD
It is more likely to go up to around 1.66, and after that, it might have potentially to go down to around 1.64.
(Current Price: 1.6525)

AUD/USD
No comments for today.

USD/JPY
It is complicated, but we predict that it is more likely to go up to around 95.80. But we predict that we can entry Buy when it reaches around 94.50.
(Current Price: 95.20)

USD/CHF
It is more likely to go down to around 1.0720, and after that, it might have potentially to go up to around 1.0850.
(Current Price: 1.0813)

Beware from today news: (time is using GMT+7 / Indonesia – Jakarta Time)
(see your time conversion at www.timeanddate.com)

06:50 JPY
15:30 GBP
16:00 EUR

All the forex signals and technical analysis can be affected by the news report (fundamental)

Thx to gainscope

Most of trader forex know Stochastic, if you think about simple buy when reach level 20 or sell when reach level 80, yes you're right but not always, in different perspective. See this article, i want remind myself about this too.

The Stochastic Kiss Pattern

A unique way to utilize the stochastic indicator

Here is a simple technique I devised some years ago and introduced to the institutional market. It takes one of the markets' favored indicators Stochastics and identifies a pattern that when used in conjunction with other analysis can provide great trades.

It is called the "Stochastics Kiss" simply because of the appearance of the fast stochastic line dipping towards the slow line (in a move higher) or blipping higher towards the slow line (in a move lower) and then reversing the next bar.

It looks like this:



The image shows a section of slow stochastics, the blue line being %Fast D and the green line %Slow D. Note that during the strong rise in %SlowD on the left how the %FastD pulls back and then rises again the very next bar. It is effectively showing that price has corrected lower within the range but failed in the decline and caused a reversal back higher.

Equally, on the right we have the opposite. During the strong decline in %SlowD the %FastD pulls back higher and then drops again the very next bar.

These can often provide good trades that can be held for one or two bars at least and occasionally longer.



When looking at this pattern the very best examples are those where the %SlowD maintains the same direction as at Point 1. The %Fast D line moves up towards the %SlowD line and then reverses lower and a sale can be made on close. Note that after two bars profit is taken on close.

Point 2 is not a valid example with the rally higher and reversal in %FastD occurring while %SlowD has no direction. At Point 3 the same thing happens as at Point 2 so should not be used.

However, at Point 4 we see a valid pattern. It is not as clean as the first example since as %FastD dips and reverses higher %SlowD does the same but recovers to be higher again and more importantly higher than two bars prior. Again, a two day trade reaps profit.

What is important with this type of strategy is that price action is also scrutinized. It is important that the price extreme on the single bar move in %FastD does not penetrate a previous swing high or low. Remember the definition of an uptrend is that both highs and lows are moving higher and vice versa in a downtrend.

This most certainly occurs at Point 1 with the sharp correction in price remaining below the previous swing high. Equally, at Point 4 the corrective dip in price remained above the previous swing low and thus the underlying directional move remained intact.

Here is a second example of where this pattern has worked well:



This is the daily chart of the Pound versus the U.S. Dollar where we have seen two good sell signals and one buy signal, all making good profit.

I should add a few instances where it would be wiser to be cautious and possibly not take the trades. There are basically two things to look for:

* Where the Stochastic is either overbought or oversold. These could be considered but will require confirmation from price movement. However, quite frequently because of the extreme reading of the Stochastics there is a higher instance of the pattern breaking down.
* Where the reversal bar that completes the kiss pattern has seen a strong reversal that takes out the extreme of the last two bars then there is a risk of a delay to follow-through. Again any positions taken should be well guarded by a close stop loss.

You may also find that using the support and resistance levels from Pro Commentary, available through Dealbook may also provide guidance towhen to use this pattern.

Good luck with your trading
Actionforex article by gftforex.

P.S Its just one of many pattern from stochastic characteristic, i was read in ebook that describe more detail about all stochastic pattern but i lost it somewhere... i will search it again.

GBPUSD
The GBPUSD attempted to push lower yesterday, bottomed at 1.6232 but closed higher at 1.6366. On h4 chart below we can see that the pair is trapped in rectangle area indicating consolidation phase. We are still in no trading zone since we have no clear direction yet. Immediate resistance is seen at 1.6400/50 area. Initial support at 1.6200. CCI in neutral area both on h4 and daily chart. Be patient.



GBPJPY
The GBPJPY had another indecisive movement yesterday. It’s been 3 days in a row of indecisive movement since Tuesday. On h4 chart below we can see that the pair still trapped in triangle area. No trading until we have valid triangle breakout/breakdown. Immediate resistance is seen at 158.51 (yesterday’s high). Initial support at 155.80. CCI in neutral area on both h4 and daily chart.



EURUSD
The EURUSD had a moderate bullish momentum yesterday. On h4 chart below we can see that the trendline support still hold so far, preventing the pair from further bearish attack. However we don’t have significant movement yet so be patient and don’t rush jump into the market. On the upside we have 1.4176 as key resistance level. On the downside we have 1.3750 support level to watch closely. Any movement between that area should keep us stay out from the market. Immediate resistance is seen at 1.4050. Initial support at 1.3850. CCI in neutral area both on h4 and daily chart.



Thx fxinstructor

What a day with the SNB intervention, eh? Made for a wild ride on quite a few pairs this morning. Essentially, the SNB has made it clear they are going to defend the 1.5000 level as a line in the sand on EUR/CHF. Our plan to sell Tuesday's rally on the EUR/USD paid off nicely as we sold off from around 1.4100 to 1.3900 in the post FOMC lows. I'd say as long as Wednesday's highs hold, any other decent rally attempts should be shorted on EUR/USD and any position trades short should be fine. The FOMC Statement today wasn't groundbreaking, but the fact that they did not expand their quantitative easing in any way was USD strengthening, and in my opinion, their statement was a bit more pessimistic than the market was looking for. Based on this, we managed to nab 40+ pips on a scalp, but I don't think there was a big enough surprise on the statement to warrant any modifications to our long term view. Stocks may float up a bit above Wednesday's highs, but as long as they don't surge through 917, the short side should be rewarding. No change on our long term gold outlook... look for lower prices over time. We're looking for stronger USD for sure, but in recent markets, it's been better to short pairs like EU and GU on big bounces for medium to long term trades, and chasing quick momentum is really only ok for scalps. Also, if EUR/CHF works back down to the 1.5000-1.5100 range again, it could be worth a nice buy as more intervention or the anticipation of intervention steps in to send it upwards. For news Thursday:

0830 US GDP 1Q Final Annualized (-5.7% expected) - Usually the final revision to GDP is the least important and deemed less significant by the markets; however, it is still a GDP release, and it should have an impact if there's a big surprise. Since this is a final revision, we'll need a decent 0.5% deviation to make it reliably worth trading. The likelihood of hitting that trigger is somewhat small historically, but it's possible given all the unusual complexity to the data from the first quarter.
If it comes out at -5.2% or higher, EUR/JPY should rally 50 pips.
If it comes out at -6.2% or lower, EUR/JPY shoudl sell off 50 pips.

1845 NZ GDP q/q (-0.7% expected) - This should be an ok trade as long as it hits a 0.3% deviation. If we get a smaller 0.2% away from expectations, it might be ok if the y/y (expected at -2.3%) difference is decent also, but it's not quite as reliable.
If it comes out at -0.4% or higher, NZD/USD should rally 30-40 pips.
If it comes out at -1.0% or lower, NZD/USD shold sell off 30-40 pips.

Thx sir pipsalot, fxpeacearmy.