Global Prime: Daily Market Digest

IvanGlobalPrime

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Forex Indices: The Daily Breakdown [01-14]


The North American currencies found strong buy-side flows since the last European session. The British Pound is still the bet performing currency over the last week though even if the structural resistance faced at an index level disallowed further progress. This hidden resistance, unless monitoring the GBP index, won't be noticeable!

Let’s get started…


Opportunities in the Forex indices (video below)​

To see an expanded version, right-click and select ‘open link in new tab’. The indices show the performance of a currency vs a G8 Forex basket. Indicators are available to use these measures via Tradingview and MT4.

The North American currencies (USD, CAD) found strong buy-side flows since the last European session. The British Pound is still the best performing currency over the last week though, even if the structural resistance faced at an index level disallowed further progress. This hidden resistance, unless monitoring the GBP index, won’t be noticeable! Meanwhile, the two currencies most punished remain the Euro and the New Zealand Dollar. Holding short-side JPY exposure has not paid off despite the buoyant behavior of global stocks. AUD and CHF are in wait-and-see mode.

In my video analysis below I use concepts taught in the brand new Academy website such as momentum, volatility measures and market structures to come up with the daily outlook in the currency market.


EUR INDEX​



The single currency remains outright bearish. To put things into perspective, the Euro has been sold in 9 out of the last 10 sessions. The losses have accelerated the moment that a sticky area of support was cleared. Remember that these equally-weighted FX indices studied are a formidable tool to evaluate the technical merits that a particular currency enjoys to appreciate or depreciate in different time horizons. By breaking through the support the chart above exhibits, the odds were stacked in favor of a sell-side continuation. The next clear target is the 100% measured move.

GBP INDEX​



The Sterling saw further buy-side flows in early London only to peter out such exuberant momentum by the time the North American flows made their way in. If you hung onto gains in the Pound, the smart move would have been to start dialing down the exposure at the macro structural resistance so neatly represented through the purple area. If we can historically document, as we in fact do, that the Sterling has been struggling so respectively around this area, and in light of such an overextension from the previous balance area (over 1.3% appreciation), the chances are that considerable profit taking will be seen. The overall stance is still bullish nonetheless.

USD INDEX​



The USD, after briefly sitting at a key area of support, a strong wave of demand kicked in through the London session, which is not surprising given the significance of this area. As stated during yesterday’s report, “I can’t help but anticipate near term buy-side flows; hence, anyone looking to short the USD into this area is asking for trouble.” Fast forward, the US Dollar has now regained its central ‘mean’ line and it looks ready to keep auctioning higher.

CAD INDEX​



I am running long exposure in the CAD following a commanding bullish outside bar reversal through the London session. Such sudden gyration led the CAD to re-take the control ‘mean’ line. The index has now cleared its 2021 peak, which leads me to believe that the outlook has now strengthened. In other words, the currency finds itself in an excellent technical context for further follow through to the tune of 0.2% appreciation from the last US close candle. Why this % movement you may be asking? That would structurally coincide with a strong SR flip from last December.

JPY INDEX​



The sell-side bias in the Japanese Yen no longer is justifiable after 2 days of stagnation. The grey vertical line above exhibits the entry level. As one can notice, we never got out of second gear. The moment the trigger line in the bottom window turned bullish, that was the time to bail out of the position. I am sitting out any exposure for the time being as even if the Yen has regained its control ‘mean’ line, the majority of metrics stay bearish, which suggest that any upside momentum is lacking the technical backing I’d like to see when we cross this vicinity.

AUD INDEX​



If you follow me along, you received my warning to stay clear of AUD long exposure heading into Wednesday as we were trading straight into the top-side of a validated range. Long and behold, buyers have temporarily dissipated as the currency struggles to break past this resistance. Given the strong uptrend in the AUD, I can picture buyers having another go to the upside, and if this starts to happen in the coming 24h, the risk of a breakout will keep increasing.

NZD INDEX​



The strong demand in the NZD failed to find follow up as a strong supply emerged in the last London session. While no entry signal has been fired, the short-term bias has shifted to the downside even if I fail to anticipate how holding shorts can get you into ‘home-run’ trades. The bullish macro trend is very strong and not far below the NZD faces major support. Overall, I am patiently sitting this one out until a long signal pops up.

CHF INDEX​



After clearing a huge area of support, the initial backside retest of that area led to a resumption of the downtrend. However, the lack of further sell-side follow-through has resulted in the establishment of a range. This nullifies any opportunities to get engaged in CHF exposure even if the overall bias is still quite bearish as per the all-red metrics we obtain via the SMT and the trigger line indicators. Bulls need to retake the magenta area overhead to regain the upper-hand.

Education -The Global Prime Academy​

Announcing The Global Prime Academy. Check out our brand new Academy website. Are you ready to learn a set of strategies to take your game to the very next level?

Let me give you a brief background on why we’ve created the Global Prime Academy. The universal praise I received about my trading and content I produce has been incredible. However, clients were frustrated unable to find a structures frame to absorb all this knowledge. Part of these golden nuggets are now going to be encapsulated in easy to follow and digestible lessons.



 

IvanGlobalPrime

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Breakout In The Aussie Index​



The rally in the Australian Dollar index is the gift for bulls that keeps on giving. In the last 24h, there is further evidence that a new technical milestone has been achieved by printing new multi-year highs and hence strengthening its bullish outlook.

Let’s get started…


Opportunities in the Forex indices (video below)​

To see an expanded version, right-click and select ‘open link in new tab’. The indices show the performance of a currency vs a G8 Forex basket. Indicators are available to use these measures via Tradingview and MT4.


The rally in the Australian Dollar index is the gift for bulls that keeps on giving. In the last 24h, there is further evidence that a new technical milestone has been achieved by printing new multi-year highs and hence strengthening its bullish outlook.

In the video below, I analyze the state of affairs in the FX space, even if it is the AUD that looks most attractive for long exposure. I use concepts taught in the brand new Academy website such as momentum, volatility measures and market structures to come up with the daily outlook in the currency market.

Education -The Global Prime Academy​

Announcing The Global Prime Academy. Check out our brand new Academy website. Are you ready to learn a set of strategies to take your game to the very next level?

Let me give you a brief background on why we’ve created the Global Prime Academy. The universal praise I received about my trading and content I produce has been incredible. However, clients were frustrated unable to find a structures frame to absorb all this knowledge. Part of these golden nuggets are now going to be encapsulated in easy to follow and digestible lessons.



 

IvanGlobalPrime

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System Hopping: Way Out Is From Within​

There is nothing wrong system hopping a few times to test things out. Changing the way you trade the markets during your journey as a trader is actually healthy to find out what clicks for you, just realise that sooner or later, you cannot be stuck in this vicious cycle of constantly jumping around how you approach your game plan.

system hopping


This article on ‘system hopping’ has been re-purposed as a ‘guide’ from Global Prime’s academy courses.

There is a very fine line that separates a gradual fine-tuning of one’s strategy without altering its core edge, and the risk of over-refinement, which sooner or later, leads to the dreadful path we’ve probably all faced. I am referring to completely moving away from the strategy we were using in the first place also known as system hopping.

Whenever that happens, what’s important is not as much that you changed your strategy, but why you keep repeating this cycle? Getting to the bottom of this question yields the best revelations. What led you to decide the former system is no longer valid assuming you back tested it and it proved profitable? Were your expectations to get positive results unrealistic? Did you lose faith after experiencing a bad losing streak? Did you feel you couldn’t adapt to the strategy based on your personality as a trader?

Coming up with a congruent answer to these questions will reveal what’s the actual driving force leading to make these decisions. Let me tell you, for the most part, it has to do with understanding first and foremost how you enjoy trading. What ticks for you that resonates with who you are as a trader, your true identity.

There is nothing wrong with changing the way you trade the markets a few times during your journey as a trader, just realise that sooner or later, you cannot be stuck in this vicious cycle of constantly jumping around how you approach your game plan. That’s why understanding yourself and why you make certain decisions is the number 1 question you must always ask yourself.

If the strategy was performing alright but you are the type of trader who doesn’t like to sit on your butt waiting for hours the right setup to pop up but rather you are more the kind of active ‘scalper-like’ trader in and out, sooner or later, that’s going to manifest in how you perform by making an unnecessary amount of mistakes or simply getting dead bored.

The opposite can also be true. If you are very methodical and really like to be very patient, only waiting for the right setups to occur in higher timeframes, an intraday strategy that gets you in and out of the market for quick profits will probably not sit well with you.

Perhaps you are the type of trader who likes to specialise on one single setup on multiple markets. Do you like to focus in just one market? Do you have the capacity to be actively engaged in multiple markets while also deploying multiple setups with an edge? Be aware, if that’s the case, a huge amount of concentration is going to be required.

‘Know thyself’ must always come first before you choose the strategy. The moment you get to really know the type of trader you envision you’d like to be, that’s when the search for the holy grail is over, as you start to look from inside out as opposed to be stimulated from outside factors from which to adapt.


 

IvanGlobalPrime

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Forex Indices: Technicals Favour CAD Longs​



Ahead of Biden's Presidential inauguration in the US and with Martin Luther King Jr. public holiday, the Forex market went through a day of rather suppressed volatility. These dynamics were particularly true in the heaviest currencies by order of volume transacted. I am referring to the US Dollar, the Euro and the Japanese Yen.

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Let’s get started…


Opportunities in the Forex indices (video below)​

To see an expanded version, right-click and select ‘open link in new tab’. The indices show the performance of a currency vs a G8 Forex basket. Indicators are available to use these measures via Tradingview and MT4.


Ahead of Biden’s Presidential inauguration in the US and with Martin Luther King Jr. public holiday, the Forex market went through a day of rather suppressed volatility. These dynamics were particularly true in the heaviest currencies by order of volume transacted. I am referring to the US Dollar, the Euro and the Japanese Yen. In currencies such as the British Pound of the Canadian Dollar, solid buying was observed, including a long signal to speculate in further upside in the latter. For a full-fledged analysis of the market, keep reading below…

In my video analysis below I use concepts taught in the brand new Academy website such as momentum, volatility measures and market structures to come up with the daily outlook in the currency market.


EUR INDEX – NEUTRAL TO BEARISH​



A period of consolidation at a key technical crossroads has ensued following the sharp sell-off experienced last week. This area coincides with the 100% projection target away from the last observed bracketed area and the lowest point from November last year. The concentration of volume around the 100% measured move via the POC outlines the interest by market makers to slow down the ongoing depreciation of the single currency. However, attempts to sustain the buying waves off the lows have proven ephemeral with the Control Line (13ema) capping the upside.

GBP INDEX – NEUTRAL TO BULLISH​



The Sterling has regained the upside with impetus. A close above the purple rectangle above the current price would seal the downside head-fake move. If this occurs, I am suspecting follow through continuation in the British currency to the tune of about 0,20% towards the previous swing high ahead of a rally extension to its 2021 peak for an additional 0.15% gains. However, this bullish premise is still premature and won’t be vindicated until there is a resolution with a close above the aforementioned purple rectangle.

USD INDEX – NEUTRAL​



The world’s reserve currency has paused its rally at the highest point in 2021. The velocity of the move away from the previous pocket of demand (highlighted in a purple rectangle) warranted profit-taking judging by the behaviour of price action which saw a gradual tapering in the size of each successive candle as the overhead resistance got approached. I remain neutral to bullish in this market owing it to the location we trade at even if we are nowhere near a trigger signal to take new positions in this market.

CAD INDEX – BULLISH​



The CAD exhibits bullish tendencies that I’d anticipate can continue. The market looks ripe to expand its 2021 gains on the back of a crossing of price back above the Control Line with most of the proprietary metrics giving us the blessings to speculate on further follow-through this Tuesday. There are no noticeable resistance areas to account for until the supply candle originated on Jan 15th through the European session (circa 0.2% away). This results in a relatively clear path to eat up nearby supply and exploit this voidness in liquidity.

JPY INDEX – NEUTRAL​



The Japanese Yen looks overstretched by any measures. This is typically the worst time to speculate in long exposure unless the interest is hedging, scalping the market, etc. The market has, not coincidentally, stalled at the 100% projection target from what constituted a well-defined broad bracketed area. If the risk-on dynamics return, this is a more than reasonable location to start unwinding JPY longs in what I suspect could be a move back to re-visit the control line (13-ema). Alternatively, a break and close through the 100% proj target allows an extra run of ~0.2%.

AUD INDEX – NEUTRAL TO BULLISH​



The short-term trend in the Aussie has been bearish but once stepping out to see the big picture, the current correction is far from compromising the overall bullish structure. In fact, the Aussie has reached an area of support in the chart where I’d expect selling to abate for a potential retest back towards the control line. The peak printed on Dec 31st that was convincingly broken a week after is now being retested which is what leads me to believe of the substantial risks that exist to see renewed buy-side interest in the currency.

NZD INDEX – BEARISH​



The New Zealand Dollar remains unloved as buyers continue to be far outweighed by the selling wave hitting this market. As a matter of fact, the sell-side pressure has been so strong that even the 100% measured move away from the previous bracketed area has now been cleared. That said, this market is grossly oversold and proof of that is the intersection of price with the lower bollinger band alongside a 2-times ADR deviation away from the central ‘mean/control’ line. I remain bearish but it’s no time to enter positions at this stage in the bearish phase.

CHF INDEX – BEARISH​



I can’t help but anticipate renewed weakness in the Swiss Franc following two consecutive failed attempts to break through a major resistance area. A re-take back below the control line would result in further technical evidence of a potential transition back down to retest the origins of the demand candle from Jan 15th through the European session. Overall, the market is in a consolidation pattern with significant risks of auctioning lower from the top-side to the bottom-side of its currently established range.


Education -The Global Prime Academy​

Announcing The Global Prime Academy. Check out our brand new Academy website. Are you ready to learn a set of strategies to take your game to the very next level?

Let me give you a brief background on why we’ve created the Global Prime Academy. The universal praise I received about my trading and content I produce has been incredible. However, clients were frustrated unable to find a structures frame to absorb all this knowledge. Part of these golden nuggets are now going to be encapsulated in easy to follow and digestible lessons.



 

IvanGlobalPrime

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Statistical Edge In Trading: Have You Found Yours To Exploit?​




If a trader finds a repetitive approach to trade the markets with a positive expectancy return over a large number of trades, this is what we understand as a statistical edge. The law of large numbers vindicates such premise.


This article on ‘statistical edge’ has been re-purposed as a ‘guide’ from Global Prime’s academy courses.

Finding a statistical edge in trading is quite simple, in fact, there are thousands of systems out there that do generate a statistical edge in financial markets. However, in most cases, this simplicity doesn’t translate in this ‘statistical edge’ being easy to apply overtime. Think about dieting, it’s simple knowing what not to eat, but ‘daily temptations’ makes it not easy.

What do we understand as a statistical edge?​

In a nutshell, if a trader can find a repetitive approach to trade the markets via the entry style, the management of risk and keeping the psychological aspect in check, a positive return over a large number of trades is to be expected. The law of large numbers vindicates such premise.

Out of all the 3 cornerstone groups (system, risk management, psychology), assuming you are sufficiently diligent to follow the rules of your system and control your capital at risk, it then really boils down to psychology, particularly in what I believe to be the elephant in the room, which is developing ‘confidence’ around this ‘statistical edge’ your system provides.

Backtesting to the rescue​

If your aim is to build confidence in a specific strategy that will act as your trigger mechanism to enter the market, you should definitely go through a rigorous process of backtesting it to determine if it has proven to be profitable over a large enough sample of trades and most importantly, through different trading conditions (trends, ranges, high/low vol, etc).

The longer the in-sample, the more robust your statistical edge can be, which leads to increased conviction upon its expectancy. By backtesting a strategy, you also avoid the common pitfall of letting the short-term results determine your level of commitment towards your strategy.

You will sooner or later face a rough patch of losing streaks, which is where it will test your conviction towards the strategy deployed. Back in the days, I made countless mistakes of letting these short-term results justify that it was time for me to seek out yet another way of trading, known as system hopping, with the elusive thinking that losing streaks could be avoided.

How to break out of this cycle?​

The way I overcame this seemingly vicious cycle with no end in sight for many aspiring traders, involved the combination of finding a strategy that resonates with one’s personality, and running result simulations as far back as one possibly can with a true sense of authenticity and honesty. Failure to do so is a clear sign of non-commitment to your development as a trader.

In my case, after I completed years of obsessive testing, the next phase was to trade the strategy live with minimal capital on the line starting from as little as 0.25%, and only increase the risk/month if the results had proven profitable over this period. Note, I did that because I already had years of experience chasing my own tail in the market.

Even for newbies, it is recommendable to start on a live account to know what’s like trading the strategy with real-time data yet removing the risk of unnecessary money lost due to lack of experience, hence why the capital at risk should be comically low when starting. You should do that for as long as necessary until your results start being more consistent. Only then look to increase your capital overtime but only if the results are on your side. You must find filters to grant yourself permission to take these risk parameters to the next level.

Don’t fall for advertised EAs​

Also, as a word of advice, don’t fall victim about the over-reliance of automated systems sold for a few hundred dollars. There is a reason why people would advertise these EAs. They tend to perform well in certain market conditions during backtesting only to blow up when conditions change.

Lastly, don’t try to be a hero by not using stop losses (cost of conducting business) and stay away from an over-reliance on money management (including ideas like same-pair hedges, baskets, grids, averaging down recklessly, martingale variants, etc). These strategies are all inherently very risky.

Education -The Global Prime Academy​

If you are interested to follow traders that have found a statistical edge in trading. Not only that, but they are willing to teach it to you, then you should consider the brand new Global Prime Academy website. If you ready to learn a set of strategies to take your game to the very next level, you should definitely check it out.

 

IvanGlobalPrime

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The Technical Breakdown – Forex In Rotational Hiatus​


There is an absence of sustainable trends with rotations in the valuation of currencies the norm. To find out the individual technical merits of each currency, watch the video..

Let’s get started…


Opportunities in the Forex indices (video below)​

To see an expanded version, right-click and select ‘open link in new tab’. The indices show the performance of a currency vs a G8 Forex basket. Indicators are available to use these measures via Tradingview and MT4.


By distilling the performance of currencies in the last 24h, the clear winners included the Euro and the Swissy, followed at a fair distance by the USD and the Kiwi. The latter had a far better performance than the AUD as the market unwound long bets amid risk aversion. However, it was the drop in the CAD that was the most relentless. As one steps out into the weekly performance, there is an absence of sustainable trends with rotations in the valuation of currencies the norm. To find out the individual technical merits of each currency, watch the video below…

In my video analysis below I use concepts taught in the brand new Academy website such as momentum, volatility measures and market structures to come up with the daily outlook in the currency market.


EUR INDEX – MEETS TOUGH RESISTANCE​

To see an expanded version, right-click and select ‘open link in new tab’
Following a rise of such magnitude (+0.8% appreciation pre-ECB trough to peak), the Euro leaves me watching the current action from the sidelines with a rather neutral stance. From a swing-trading perspective, there is minimal value engaging in long-sided business after such vertical movement in price. The currency is now struggling to breakout the previous support from Jan 13th where I could anticipate a short-term setback to release some of its overly bullish pressure. If it transpires, a retest of the control line (13ema) is a real possibility.

GBP INDEX – BULLISH BREAKOUT IMMINENT?​

To see an expanded version, right-click and select ‘open link in new tab’
The Sterling keeps exerting upward pressure against a major area of resistance. There have been two failed attempts over the last week to break through yet the Sterling keeps at it. Should a resolution above the purple-coloured area be confirmed via an 8h candle close, there is significant risk of a more sustained gains ahead for the Pound as it would clear what’s become the stickiest area of resistance for months, ever since the first test of the high was established back in early November last year. Since then, multiple failures at this area have occurred.

USD INDEX – BOUNCES OFF RANGE SUPPORT​

To see an expanded version, right-click and select ‘open link in new tab’
The USD has re-taken its control line within the context of a defined range of about 1%. Structurally, by following the logic of range anatomies, the decisive rejection off the low may shift the focus towards the upside once again. However, the momentum indicators monitored in the bottom window prevent me from turning bullish by hinting it is too premature to engage in longs. Therefore, in the near-term, I would not be surprised in the slightest to see a retracement back down to release some of the buy-side pressure and along the way find out how committed buyers are.

CAD INDEX – SHIFT IN STRUCTURE TO BEARISH​

To see an expanded version, right-click and select ‘open link in new tab’
On the back of a 1% drop from peak to trough, this is not a market that looks ready to be traded from a swing trading standpoint. All the momentum indicators have turned bearish, which makes me overall bearish the CAD, but at the same time, we’ve travelled on a straight line from overbought to oversold conditions in the span of just 48h ever since the outcome of the BOC last week. That said, this bearish breakout has led to the validation of a trap pattern, which makes me think any retracement between 0.3 to 0.5% from the low will be met with initial heavy selling.

JPY INDEX – TIGHT RANGE​

To see an expanded version, right-click and select ‘open link in new tab’
The Japanese Yen has entered a phase of extremely tight consolidation. This narrow passage finds price activity encapsulated between the control line to the topside and a previous area of support on the way down. There needs to be a pick up in volatility that unravels the current stagnant action in the index to shape up the next bias in the index. Until then, stand pat.

AUD INDEX – PAUSES AT BROAD RANGE LOW​

To see an expanded version, right-click and select ‘open link in new tab’
The Aussie has found bids to temporarily pause the sell-side pressure at the bottom-side of its daily range. The risk of buyers outweighing sellers around this vicinity for a return back to the control line is a very realistic outcome to expect solely based on the technical merits. Besides, from a risk reward standpoint, it is at these levels where one can reap the most benefits. Following my default template of range anatomies and how price tends to behave within these environments, the next expected movement, until technicals negate it, is a recovery to the topside of the range.

NZD INDEX – SETTING UP FOR LONGS?​

To see an expanded version, right-click and select ‘open link in new tab’
The New Zealand Dollar may my attention in the next few candles for possible long opportunities. I like the fact that most momentum indicators in the 8h chart have turned bullish as price finds its footing above the control line after going through a much-needed correction of its recent highs. I’d be stalking for longs but I need to first see a re-grouping by buyers via a renewed upward momentum that results in the trigger line (bottom-window) to change its slope to bullish again. Until that happens, I am watching but not engaging.

CHF INDEX – BULLISH BUT AWFUL PRICE TO PAY​

To see an expanded version, right-click and select ‘open link in new tab’
The Swissy is at a high risk of being snapped back down towards its control line. The type of bullish momentum that has built up over the last 48h (+0.8% appreciation) tends to be unsustainable, which is why even if the majority of momentum indicators point to bullish tendencies, that’s just one piece of the puzzle. Structurally wise, this market is in need of a healthy pullback.


Education -The Global Prime Academy​

Announcing The Global Prime Academy. Check out our brand new Academy website. Are you ready to learn a set of strategies to take your game to the very next level?

Let me give you a brief background on why we’ve created the Global Prime Academy. The universal praise I received about my trading and content I produce has been incredible. However, clients were frustrated unable to find a structures frame to absorb all this knowledge. Part of these golden nuggets are now going to be encapsulated in easy to follow and digestible lessons.



 
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