AUD/USD

[Triple B]

Yah .Ihave been short AUD against USD and JPY last couple days. I believe many orders under 0.70 USD .(long holders stop losses) may be responsible for the flash.See it all the time on shorter timeframe , good to see it play out on the longer TF too.
I intend to hold with stops in profit. Been waiting for this for weeks.
Gold is also making a strong move ATM and $1300 During NY tonight looks like a good thing.

 

[cogs]

Thoughts on AUDUSD target after Thursday/Friday move?

I find it amusing financial reporters mixed messages.
Bloomberg reporter after AUDUSD flash down saying AUDUSD will stay around the .70 handle. I think he just wanted to say 'Handle'. Wait and see I spose.

And in another:
First NZDUSD bullish:
https://dailypriceaction.com/daily-setup/nzdusd-weekly-bullish-pin-bar-points-to-higher-prices
Then 10 hrs later another reporter NZDUSD bearish
https://www.dailyfx.com/forex/techn...tinue-Slide-NZDCAD-Faces-2016-Resistance.html

 

[qldfrog]

https://www.macrobusiness.com.au/2019/01/australian-dollar-crash-a-warning-of-things-to-come/
Tend to agree

 

[cogs]

For those interested, it appears a good wick still holds good probability in spot forex amongst all the algo's , albeit on longer time frames now days.
A small attempt was made at a fade after market open (as always) and this can be seen on the crosses, but all sessions were buying the AUD so they had little hope.
USD is coming off nicely so this should be a nice move.

 

[cogs]

Target ~ 0.73470 to where the trapped money was (now blown out with the squeeze and spike).

 

[cogs]

I find it interesting that general traders are baffled by the AUD rising, then attempt to rationalize it, or a financial reporter then writes an article justify the move.
It's just big players via algo's moving the market to close out positions.
There are a lot of positions yet to be closed out right up to 0.73050, then another step up to 0.73700. See previous post chart.
After today's effort we should see another push tonight up to ~0.72500

 

[cogs]

Didn't quite reach 72.5 on the overnight grind. Still more hidden gaps above (while more develop below), with big positions above yet to be closed.

Just thought I would add my trades to show I am not full of it.

Reasonable effort being used to shake traders out at this level, hence all my small positions. USD/CHF still has upside potential so this is starting to get messy. Once this pair finally reaches the ~0.73750 level and gives signals there just may be some valid reasons to look at some shorts, but these daily wicks do hold some punch.

 

[InsvestoBoy]

What defines a hidden gap?

 

[cogs]

Hi Investo,
Just an indicator I developed which has proved itself over time. There are various formulas and indicators out there which highlight these retrace-able areas.

 

[InsvestoBoy]

Hi Investo,
Just an indicator I developed which has proved itself over time. There are various formulas and indicators out there which highlight these retrace-able areas.

Did you develop it? Because I remember following a FX trader on forexfactory.com since 2009 who calls themselves HiddenGap and has a pretty clear definition of what one is...

https://www.forexfactory.com/hiddengap

 

[cogs]

Had a quick look and he/she has some interesting posts, couldn't see their definition tho.
Looks like they may have answered your general question.

 

[InsvestoBoy]

Had a quick look and he/she has some interesting posts, couldn't see their definition tho.
Looks like they may have answered your general question.

From memory their definition is large spread/range candles with no or small wicks, something like that.

But you're just gonna say this:

I find it interesting that general traders are baffled by the AUD rising, then attempt to rationalize it, or a financial reporter then writes an article justify the move.

and then this

Still more hidden gaps above (while more develop below)

and then not define what you're talking about?

 

[InsvestoBoy]

Before I do that, there are a few things I should make clear. WRB analysis was developed by Mark (WRBtrader). He offers a tutorial that consists of 12 chapters for a fee. However, the first three (3) chapters are free. Therefore, out of respect to him and those who have paid money, I can not talk about anything that is only accessible to paid members. Since chapters 1-3 are free to all, I feel it is okay to discuss some of that information and not be breaking any non discloser agreement. Also I have taken WRB analysis and tried to make it my own. So some of what I might say may not be technically 'right', that is, directly from Mark. But we all trade our belief systems and so I have incorporated my belief system into my understand of WRB analysis.

On a side note, this is why it a fallacy to think that a system or method of trading will lose its effectiveness with wide-spread dissemination. In truth, no two traders will trade a system or method exactly the same because no two traders have exactly the same belief system.

As I said before, WRB Analysis is a sub-set of Volatility Analysis. The base definition of a WRB is a candle body (Open-Close for candlestick users) that is greater than the previous three (3) candle bodies. Yet, that number can be user defined. Therefore 1 trader may use this definition while another trader may choose to use another number like 7. If a traders uses bar charts, then the base definition would be a bar with a range (High-Low) greater than the previous three (3). Unless otherwise stated, I will be talking in terms of WRBs with respect to candles.

WRB Analysis is primarily designed to improve a trader's understanding of the Price Action that occurs prior to any trade signal. A chart will have many WRBs but not all WRBs are equal. The WRBs that are of most importance will be Hidden Gap WRBs. A Hidden Gap involves the interval prior to the WRB and the interval immediately following the WRB. The underlying premise of a WRB Hidden Gap is that they represent where key market participants or Big Boys (BBs) have entered or exited positions and this action has created a change in the supply/demand dynamics in the market. Because some of the BBs have entered and exited in this area, and the BBs know that other BBs have likely entered or exited in this area, the area is watched by all the BBs. So all WRB Hidden Gaps represent changes in the supply/demand dynamic but not all WRB Hidden Gaps represent KEY changes in said dynamic. Those that represent a KEY change are determined by the Price Action after the appearance of the WRB Hidden Gap.

Drifters and Climbers are WRB Hidden Gaps with some specific price action components that I have imposed. Whilst they have nothing to do with VSA, I have imposed the concept of Effort into the definition. One way I define Effort is by looking at the relationship of the body to the range. If the open is in the lower 25% of the range and the close is in the upper 75% of the range, then there was Effort shown on the interval. So not only does the body need be greater than the previous three(3) but also the open needs to be in the lower portion of the range and the close in the upper portion. Effort can also be seen by the midpoint of the range of the candle. If the range of the candle is greater than the High of the previous candle (for a climber) then there is effort. In Bill William's first book this represents a two bar trend. Which, by the way, is also where the terms drifters and climbers come from.

Not surprisingly to those who have read some of my posts, most of my climbers will also be "buying" candles. That is, they will make a higher high and not a lower low than the previous candle. This too shows effort on the buy side and a lack of effort on the sell side.

Lastly, I think of range as showing effort as well. This is where I combine the idea of a Wide Range Body with a Wide Range Bar. So not only is a climber going to have a body (Open-Close) greater than the previous three (3) intervals, but also a range (High-Low) greater than the previous three (3) intervals as well.

Here's the best part. In chapter three of Mark's work, he talks about WRB Zones created by the user's own trade signals. Although climbers and drifters are not trade signals themselves, I think I can use them to create Zones as if they were actual trade signals because they could be.

Actually, the best part may be this: A WRB Hidden Gap only creates a WRB Zone based on the Price Action that follows (meets certain predefined criteria). That is another way of saying Result. So I am looking for Climbers and Drifters which are Effort and then looking for Result (the price action that follows). This ties in nicely with VSA and Wyckoff even without the use of volume

from: https://www.forexfactory.com/showthread.php?p=4805164#post4805164

found it from some quick googling...

so are you saying you developed this indicator?

 

[cogs]

Hi Investo,

I am not sure where you got the idea anywhere that I said 'I developed the system, coding or indicator you are referring to', but I guess you are entitled to misinterpret any posting that anyone shares on this forum.

In addition, I have not mentioned I need to, (or intend to) define anything I am talking about. Quite simply take it or leave it. Many others have liked what I am sharing, it would be so easy for me to just not post at all.

I use my own proprietary systems and indicators coded for use on CTrader. I have my own coder O/S. If you follow what everyone else uses and does, expect the same results.

I think your agenda is beginning to be made quite clear now. Do you have anything to share about AUDUSD?

 

[InsvestoBoy]

Hi Investo,

I am not sure where you got the idea anywhere that I said 'I developed the system, coding or indicator you are referring to',

When I asked "how do you define a hidden gap", you literally said:

Hi Investo,
Just an indicator I developed which has proved itself over time.

I think your agenda is beginning to be made quite clear now.

My agenda is as usual to try and understand what people are doing and whether there is anything worthwhile there.

I follow hundreds of quantitative systems and strategies which cover all different kinds of ways of looking at the market. If I see people talking about something which isn't clear, then I question it, to understand if it's something new to add or another take on something I already know about.

 

[thomasc]

Does anyone know what caused that huge down wick in the AUD? Was there some unexpected news at the time?

 

[Triple B]

This is my take on it .
We can see here blue arrow sydney open . as price nears 75.00Jpy tick vol increases.
This is tick vol from Deuschbank my brokers main liquidity provider.
We can assume that most small traders would have been looking for the bounce off 75.00 this is what retail traders do. (get it wrong most of the time)
As price was easily pushed down by big sellers due to thin trading ,longs stop loss orders were hit(the red candle crossing 75.00).
There were then almost no orders below this candle . The orders that were matched were well below the 75.00. no buying happening just selling . eventually buyers (sellers taking profit and bargain hunting) step in and price is pushed back up.
Also note at this time the AUD/USD had just broken below 70.00 the previous day. so many long stops there were ready to be hit at the same time. If this was a campaign from the big bank (s) they look to see if at least a couple major markets are at a significant level, then campaign to hit the stops in both the markets at around the same time. Thinly traded markets help facilitate this by being easier to manipulate due to less orders to chew through.
Have a look at the shorter timeframes over time and you will see mini flashes as two or more pairs reach significant levels, and then the stop hunt triggers in one pair , then triggers the rest.
The balance of the market is upset quite easily

 

[thomasc]

Thanks for the interesting analysis. So it is market manipulation at work...might be a good strategy to look for unusual down candles profit from the rebound provided there is no negative news that triggered the fall in the first place.

 

[sasch]

Thanks for the interesting analysis. So it is market manipulation at work...might be a good strategy to look for unusual down candles profit from the rebound provided there is no negative news that triggered the fall in the first place.

Hi thomasc,

I would be careful with this strategy if you are starting out, as more often than not you will be flattened by the downward momentum. This happened in a matter of minutes. When do you pick the bottom?

There had already been big falls for a number of days before this and according to my broker over 90% retail traders at the time were expecting the price to rise, while the price continued down on a daily basis.

It would have been easier to go with the downward momentum in the days proceeding the crash, with a trailing stop loss. The below screenshot is an AUD/JPY daily chart.

 

[Joules MM1]

Hi thomasc,

I would be careful with this strategy if you are starting out, as more often than not you will be flattened by the downward momentum. This happened in a matter of minutes. When do you pick the bottom?

There had already been big falls for a number of days before this and according to my broker over 90% retail traders at the time were expecting the price to rise, while the price continued down on a daily basis.

It would have been easier to go with the downward momentum in the days proceeding the crash, with a trailing stop loss. The below screenshot is an AUD/JPY daily chart.
View attachment 91824

smooth downward path, series lower highs n lower lows, then the flush, the deep pockets want 70's and ripped weak longs then ripped weak shorts, but, importantly 70 was an easy round number to get the supply...ask where would deep pockets be sitting, what is the % percentage in the move.....that was a big % swing, and what was the swing in the context of the weekly ranges ?

the 78.62 was a covering bar, sure, but if trading that mechanical style it needed confirmation, no convincing signal to be long as the next the bar ran the whole width of the previous "breakout fakeout bar then closed lower than 50% so again, signal of fake bar daily basis ...fakes for bar watchers