School of Pimpology - page 131
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Crude? Why Crude? Gold? Why Gold?
Now we all know how difficult it can be to cover 10 currency pairs, 4 indices and 2 commodities over 4 different timeframes, so what we will do in a while is just tile 6 charts.
Firstly allow me to explain why I look at Gold and Crude and how these two beasts will eventually make you a lot of money.
The 4 major currency pairs are USD related. GBPUSD EURUSD USDCHF USDJPY.
Gold and Crude are also Dollar related.
If America's economy is performing very well then the Dollar is strong, but as we have seen over the last few years, with a weak economy the Dollar is weak.
This gives rise to buying of commodiites such as Crude and Gold.
To term an analogy, which you'll come accross quite a bit over time reading this thread as it develops, let us for simplicity's sake see the whole financial market as a huge Football Club
Crude oil at the moment is the Chairman of the club, the ultimate decision maker, the boss of all bosses. He gives orders to the coach/manager, who is Gold, and this manager then screams instruction to the players, who are.........yes, you guessed it, the four major currency pairs.
As an example, is EURUSD going to rally strongly if Crude is falling heavily?
Well the simple answer to that is 'probably not'
Why? Both EURUSD and GBPUSD are Dollar suffix pairs. Euro before Dollar and Pound before Dollar. These 2 pairs will generally move in the same direction as Gold.
Remember, strong Gold = weak Dollar.
USDCHF & USDJPY are Dollar prefix pairs. Dollar before Swissie & Dollar before Yen. These will tend to move in the opposite direction of Gold.
So why isn't EURUSD going to move up if Crude is dumping.
In a nutshell if Crude is falling heavily like we've seen the last few days, then it's highly likely that the manager of our club, Gold will also be falling. This in turn will add weight to the strength of the Dollar overall and thus EURUSD would fall also. GBPUSD would probably also fall, whilst USDJPY & USDCHF would most likely go up.
Tile a daily chart for EURUSD and Gold horizontally and you will see what I mean (attached now)
Now tile a chart with USDCHF and Gold and you'll see that they are almost perfectly opposite.
So you can already begin to save some valuable pips by not going short on EURUSD & USDJPY at the same time as generally they travel in opposite directions.
There are times when EURUSD & USDJPY will seem to be moving in the same direction for a while. In these cases we look at EURJPY. Why?
Back to the football. If Man UTD can beat Liverpool and Liverpool can beat Real Madrid, then Manchester UTD should be able to beat Real Madrid......
The same is true for currencies. If Euro can beat Dollar (EURUSD bid) but Dollar can beat Yen (USDJPY bid) then Euro can surely beat Yen. This will see EURJPY move aggressively to the upside.
I'll talk more about these other correlations another time and to save confusion lets stick with the Majors for now.
UPDATE 28/10 The JPY has become really strong lately against all currencies, The correlation of this pair, and to a certain extent, the Gold and Crude, so although these are good indicators. They are not completely what this strategy is about.
UPDATE - The chairman has been fired. Crude is no longer the daddy of the firm, and the new boss is Dow Jones.
Euro and Cable are still following Gold to a certain extent but all the currencies are being pulled around now by Wall St.
If you play London hours then get wall street futures charts up, they are open 24hrs.
If you want to follow crude then do so but very limited amounts of people outside u.k have the capacity to do so and it could be outed.
Pink Pimp
Dear Pipsters,
I just finished reading / listening to the Pink Pimper on YouTube. Love it....
Nice work Le Pimp......
Better than the The Sunday Times supplement......
Tubing Rockie
Big Thankyou/ Pyschology
Hi Pipsters
Great idea Zak, will be getting up early with my sunglasses on to view your words of wisdom.
It seems that we have all found it difficult last week, I ended up with a small loss and with the market the way it is am going to try and look at some trading with the longer timeframes.
Over the weekend I have read a few articles on greed and fear as a trader, here is a brief summary, all of which i am guilty of :
Jumping in too early, before the markets given a clear direction - Greed.
Jumping into a trend too late - Fear of missing the move
Getting out of positions too early, only to see them continue in the direction you were hoping for - Fear
Staying in positions too long, and watching the markets take back some of your profits -Greed
Closing a position for a loss, only to see it reverse and go back to your break even straight away - Fear
I think its important to sometimes look at our entry and exits to decide whether we are being controlled by the above, or, our stategy/trading plan.
Bloom and Bills post relating to proper record keeping here is very relevant.
Anyway lets all hope for a better run up to Christmas, good luck next week everyone ( luck ????)
Chris
Good Morning
Morning all.
I hope you all had a lovely weekend.
Ready for a week of pimptastically mad mayhem in the markets.
Here's a little set-up that looks like a good potential.
GBPUSD has been smashed in the last few months. In fact it's gone from 2.09 this time last year to below 1.50. Thats a serious fall and I am with the boys from Merryll who fancy this upto 1.80.
Not going to fall for that parity crap, this must push higher sooner rather than later and if this 4hr 20 can cross the 4hr 50 this SHOULD make some noise to the upside.
Have a good morning
Dow
Dear Pipsters,
I am just off to the pub for the afternoon. Just wanted to share the Dow trade I took this morning 8116 - 8190 +74 pips. Used 4 ema as mark to place s/l and slide up as the dow moved up. Eventually got stopped out but it was a nice way to take a trade without too much risk and maximising on my profit.
Anyway....well done to those pipsters who had the set-up and took the trade.
Guzzling Rockie
hi
are you using gft? can you write an auto trade using pimp strategy? can you attach the layout for me? i cannot make it in gft.
thank you
Monday drinking Rockie? Making up for the weekend I guess.
Nice
Nice trade Rockdrive. I must try drinking more often before pulling the trigger.
Would have been a little bit early for Dan & Jame's liking had I had a glass of mulled wine in hand when posting this trade on youtube at 5 this morning,
Look at the beast. It's gone 500 pips in a straight line !!!
I saw your youtube posting. I was a bit worried about watching it after it started with a husky man whispering. Thought you must have uploaded the wrong video.
More volume please cause I missed a cracking trade.
Nice trade Rockdrive. I must try drinking more often before pulling the trigger.
Would have been a little bit early for Dan & Jame's liking had I had a glass of mulled wine in hand when posting this trade on youtube at 5 this morning,
Look at the beast. It's gone 500 pips in a straight line !!!YEP PIMP,
i listened to the video as well, very deep voice but i thought, " ok too much to drink the weekend so give the guy a chance to get over his hangover and tomorrow will be much clearer"
took the trade and thanks for the pips my friend and look forward to 6am every morning, didnt think i would say that too often but you are changing my ways pimp
paulb