Lessons from the Pros

Featured Article

I Always Watch the US Dollar, Do You?

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.

Free Trading WorkshopFirst, 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 were 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     

Identifying opportunities trading the US Dollar

11/17/17 – OTA Supply/Demand Grid FX Opportunity                                             

The importance of keeping an eye on the US Dollar

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.

Sam Seiden – sseiden@tradingacademy.com

DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.

Join over 170,000 Lessons from the Pros readers. Get new articles delivered to your inbox weekly.