Sam Seiden
Independent Analyst
Most people who view my income and wealth trading workspace in one of the many live trading sessions I deliver eventually ask me the same question… “Why is the US Dollar chart always on your screen no matter what market you’re looking at?” There is a reason, and it is the focus of this piece.
Let’s go over a trading opportunity from the other day using our Supply / Demand Grid in the GBPUSD, Euro Futures, and EURUSD and walk through all the deciding factors that led to these quality trading opportunities.
First, notice the charts on the right. These are charts with supply zones in the GBP and Euro futures and spot markets. On the charts, you will see that price has rallied to an area of supply that the arrows are pointed at. When price is at or near supply and there is a significant profit zone below, we only want to think about shorting. This offered our student members a low risk, high reward and high probability trading opportunity but not just because of the quality supply zones found using our grid.
Next, look at the chart of the US Dollar on the left in both cases. Notice that while there was supply above, current price was at demand, and this is a weekly chart which is significant. That US Dollar demand information was a strong hint that FX markets against the Dollar were likely to decline. What we had in front of us and in advance was clear vision as to where major global banks where buying and selling. Quantifying financial institution supply and demand is the key to getting this right and accurately predicting price movement in any and all markets.
11/16/17 – OTA Supply/Demand Grid FX Opportunity
11/17/17 – OTA Supply/Demand Grid FX Opportunity
Setting up these trading opportunities in advance based on objective information is also very important, it takes all the emotion out of the decision-making process and also means we don’t have to sit in front of the computer screen all day, which no one wants to do.
During that trading session and over the next couple days, the Dollar rallied off demand and EURUSD and GBPUSD declined, as they should. Identifying fresh institution demand and supply, properly correlating the US Dollar market, and then executing our rule based strategy is the key to making this work.
Hope this was helpful, have a great day.
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Editors’ Picks
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GBP/USD slips back to daily lows near 1.3640
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Editors’ Picks
AUD/USD tests 0.7100 after China inflation and RBA Hauser's comments
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USD/JPY extends three-day rout below 154.00, NFP eyed
USD/JPY is extending its three-day rout below 154.00 in the Asian session on Wednesday, awaiting the release of the closely-watched US NFP report. In the meantime, rising bets on Fed rate cuts keep the US Dollar depressed. In contrast, expectations that PM Takaichi's policies will boost the economy and allow the BoJ to stick to its hawkish stance underpin the Japanese Yen, weighing on the pair amid intervention fears.
Gold recovers to $5,050, focus shifts to US jobs data
Gold turns higher to test $5,050 in the Asian session on Wednesday. Traders assess whether Gold has found a floor following a historic sell-off. The delayed US employment report for January, which was pushed back due to the recently ended four-day government shutdown, will take center stage later on Wednesday.
Ethereum: Whales buy the dip amid rising short bets
Following one of Ethereum's largest weekly drawdowns, whales are slowly returning to action alongside a drop in retail selling pressure. After slightly selling into the decline at the start of the month, whales or wallets with a balance of 10K-100K ETH began buying the dip last Wednesday as prices crashed further.
Dollar drops and stocks rally: The week of reckoning for US economic data
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