Analysis

Short and sweet analysis of the main pairs and a few other crosses.

Good Trading.

Aversion & Tolerance

Price generates opportunities for us across a wide range of conditions. The two ends of this distribution I am currently referring to as 'Risk Tolerance' and 'Risk Aversion'.

The risk averse tilted patterns tend to range, consolidate and otherwise move sideways without a clear direction. Without a clear direction we should be weary about taking positions, longs or shorts that relies on price moving in some direction. This weariness, this defensiveness is the 'aversion' side of the distribution. However it can be observed that the sideways ranging market does accumulate on the trend lines or horizontal lines of support & resistance. Price might move sideways but signal multiple times of a coming change through volatility, deceleration and acceleration. These signals accumulate, price accumulates and at some border we find our opportunity. An example of this was illustrated in the video.

The risk tolerant patterns tend to move in a direction. There is less of a desire to consolidate or range even for one bounce or one wave. Price would rather keep pushing through, even picking up speed in its direction. These patterns can be generated without any earlier signal. Price at any moment can break out of all its context and begin moving to some new level as news, world events or other external factors update the situation.

Both examples are in some sense extreme cases as they in their ideal form represent the two ends of the distribution. In reality our positions will always be some blend of the two, some combination of the pair of opposites.

Good Trading.

Momentum Analysis

Momentum is a key aspect of market speculation and is one of the most fundamental parts in my strategy. We analyse a few pairs in this video, the specific pairs and the exact analysis are just examples to illustrate the ideas we're using to analyze price. You need to look and analyze many charts countless times to know the ideas deeply. Then we can arrive at our conclusions quite easily and naturally. These examples ought to be viewed in that context; they are just examples. The point is to understand the method and process of arriving at the conclusions we arrived at. To become familiar and intimate with the ideas we use every day.

Below is a recap of the Yen analysis video from last week if you're interested to see how those ideas ended up playing out. There were a few positions available and an interesting example of how unspecific or universal these patterns are. That until they are invalidated the ideas remain as real probabilities that might spontaneously be produced later on yet exactly how we expected.

Yen Recap

Good Trading.