Wednesday, May 4, 2011

Probability Trading - Part 1



Hi all,

Below are basic Technical Strategy that I use on my daily trading.

Group A: GU, GJ, EU & EJ
Group B: UCAD or UJPY or UCHF
Group C: EG
Group D: AU & XAU/USD



Group A: Most of the time I study this Group using Fibonacci and S&R. Each one of them seems to have friendly momentum correlation on each other. e.g: All pair stop at certain hidden point. Let says, GU(61.8%) GJ (76.4%) EU(50%) EJ(50%). This show that all of the Group A pair are standing at a support which all of the pair would at the same time having less momentum. This mean that my Support or Resistant have the highest chance of it to bounce. So here I would trade on one of the pair which give me a better strengh on that particular day by using Bounce Strategy on Fibonacci Extension or Fibonacci Retracement.

Group B: Base on my experiences, USD/CAD is the best counter pair against Group A pairs. I would draw a Fibonacci on this pair but most of the time, I just draw a simple Support & Resistant to show the Possible Range or the Major S&R. The reason of drawing S&R on this pair is because I want to see the momentum on the breakout or the bounce of USD. e.g. If Group A is Bullish - Group B is more likely to be bearish.

Group C: I use EUR/GBP to see strenght on EUR or GBP at certain time(indicator to Group A pairs). Most of the time I wish that this pair don't move at all. It's simply because when this pair is on ranging, Group A pairs will move together in one direction with the same momentum. I only draw a Possible Range/S&R on this pair.

Group D: This group I will put as an extra pairs in my trading - Only to trade with the highest probability available. So here it goes. In my trading, I would put AUD/USD in Group A because it happened to be following them in term of 'Hidden S&R'(Fibonacci). Currently, AUD/USD is way too strong & trendy compare to other pairs in Group A, correlation between AUD/USD and Group A pair clash sometimes (see couple of month back). As of now, it seems like the correlation has moving back side by side again. As I mention earlier, only to trade this pair when it giving you the highest probabily.

I'm very new in trading the XAU/USD(Gold). Been watching as indicator to other pairs but never put any single trade until last month(After been persuaded by my friend). As we all know, Gold can be a very good indicator to see USD momentum. Gold up USD down and vice versa. In my view, this pair is very sensitive to S&R and Its very volatile. Most of the time I would trade on retracement/bounce by using scalping strategy. So I would suggest you guys to really understand the basic movement of this pair before trading it.       

Timeframe I use on each group:
Group A: Daily - H4 - H1 - M5
Group B: H4 - H1 - M5
Group C: H1 - M5
Extra: Daily - H4 - H1 - M5

That's all for today. Happy trading to all... ^_^ 

Thank you 

Regards,
AHMAD SHAHMI AHMAD NORDIN
ASIA ALLIANCE CAPITAL | www.AsiaFXCapital.com

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