Technical - Short Trade Fibonacci

For M5 @ -2 Magnification
1. Conditions
- At least 20 bars & 30 pips (5 horizontal squares)
- More than 135 degrees from horizontal (Less than 45 degrees for long trade)
- Price slows down as it approaches the retracement level
- Only trade in the direction of the overall trend determined from D1 & H1
- M1 for overbought/sold stochastics drop to neutral
2. Min 38.2% retracement level: Set stop-loss exit point at 50% retracement level (Must set stop-loss in case d/c or value jump), set profit target exit point at 5% retracement level.
3. If trade continues to short beyond profit target exit point of -5%, analyse the previous retracement of that trend with fibonacci extension to check if the trade would short to the 161.8%. If yes, shift stop-loss down to previous 0%.

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Fundamental - Breaking News

- CHF & CAD considered safe-haven currencies.
TERRORISM, USD SS UP, USD VALUE DN, CHF DD UP, CHF VALUE UP.
- JPY is closely related to CNY.
- Non farm payroll released on 1st Friday of each month indicate strenth of US economy

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Fundamental - Stock MKT

US S&P500 UP, FOREIGN CURRENCIES SS UP, USD DD UP, USD VALUE UP.

US S&P500 UP, EUR/JPY UP (88% correlation)

Germany DAX UP, EUR/JPY UP (87% correlation)

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Fundamental - US Debt & Interest Rate

US debt is tracked & catalogued through the Treasury International Capital (TIC) system. TIC data is usually released by the Department of the Treasury on the 11th day of the month at 9am Eastern time. US holds almost half of the total US debt.

US interest rates have a more direct effect on USD value than other fundamental factors.

INFLATION RATE UP, US SELL US DEBT TO FOREIGN GOVERNMENT, FOREIGN CURRENCY SS UP, FOREIGN CURRENCY VALUE DN, USD SS DN & DD UP, USD VALUE UP, LESS $ IN ECONOMY, ECONOMY DN, US INTEREST RATE UP, INVESTORS IN US DEBT UP, ECONOMY DN because more EX to borrow $.

INFLATION RATE DN, US INTEREST RATE DN, USD VALUE DN

Confirmation of USD trend: Foreign governments confident USD bullish trend to continue, investment in US assets DN.

CNY UP, USD DD DN, USD VALUE DN

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Fundamental - Balance of Trade (BOT)

Export > Import = + BOT
Export < Import = - BOT

- INCREASE IN US BOT, USD SS UP, USD VALUE DN

USD VALUE UP, IMPORTS UP due to goods from other countries less EX.
USD VALUE DN, EXPORTS UP due to US goods less EX.

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Fundamental - Commodities

OIL
- Oil is priced and sold in USD.
- Japan imports nearly 100% of its oil. US imports more oil from Canada than any other country.
- OIL PRICE UP, S&P500 DN (Counter scenario), YEN SS UP for conversion into USD to buy oil, YEN DD DN as less people can afford more EX JAP GDS, YEN VALUE DN, USD DD UP, USD VALUE UP, USD/JPY UP.
- OIL PRICE UP, USD SS UP to buy oil from Canada, USD VALUE DN, CAD DD UP, CAD VALUE UP, USD/CAD DN. (92% correlation)

Gold
- GOLD PRICE UP, AUD/USD UP. (78% correlation)

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Learning - Fibonacci Extensions

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Learning - Fibonacci Retracements

Stocks will often pull back or retrace a percentage of the previous move before reversing. These Fibonacci retracements often occur at 38.2% & 61.8% level.

Do not automatically buy the stock just because it is at a common retracement level. Wait and look for candlestick patterns to develop at the 38.2% area. If you do not see any signs of a reversal, then it may go down to the 50% area. Look for a reversal there. You do not know if or when the stock will reverse at a Fibonacci level. Just mark these areas on a chart and wait for signal to go long or short.



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Technical - Moving Average Convergence-Divergence (MACD)

MACD turns two trend-following indicators, moving averages, into a momentum oscillator by subtracting the longer moving average from the shorter moving average.

A bullish centerline crossover occurs when MACD moves above the zero line to turn positive. A bearish centerline crossover occurs when MACD moves below the zero line to turn negative.

MACD: 21, 55, 8
Stochastics: 8, 3, 5

The term stochastic refers to the location of a current price in relation to its price range over a period of time.This method attempts to predict price turning points by comparing the closing price of a security to its price range.



1. MACD trading in opposite direction of MKT signal that trend is due for reversal.
2. BUY: MACD line X above signal line
SELL: MACD line X below signal line

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Technical - Moving Averages

Basic Chart Setup

Speed 21/55 EMAs
Momentum 8 SMA & 5 EMA

Steep angle & wide separation of the MAs indicate strong momentum

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