10.6 EDSEL

[Pipstubborn]

If you had not been alerted by Bob earlier about the impending NZD turn around, this perfectly valid 10.4 setup would have failed, as the H4 bar was green at the time, and STO7 had earlier signalled > 20/40.

So the method is not as easy as it seems.

I always say this and it is something I learned in my first years of trading. Fundamentals always trump indicators. When they come into play they will dominate. The CSS is basically a fundamental indicator telling us what the overall fundamental of a currency is. Is it weakening, strengthening, slowing down, speeding up? These are fundamentals. From studying these CSS charts I noticed that the NZD trails the AUD most of the time. In other words the fundamental is where the aud goes the nzd will follow.

My 10.6 relies on reading the CSS first and then going to the charts to trade. It told me the aud was dropping and ready to cross the 0 line, which means DT territory. So following protocol I started looking for signs of reversals on the NZD currency crosses. I mentioned the nzd/chf as an example. I had closed all my nzd buy trades to prevent DD. I placed a couple of trades above the previous highs and looked to see if I would get a breakout. Well the news story did it for the gbp/nzd.

The CSS tells you where to go look and what to look for. I also mentioned that the aud, nzd, and jpy are seldom on the same side of the 0 line. Which one was going to break?? I didnt know. The AUD news story broke. So I began to look for signs on the NZD. I placed some trades and bingo it worked.

Since Nov. 1 NZD cross pairs account for 43 of my won pips or 43% of my winnings. I cant tell you how powerful that information is and how much it helps my profitability. Unless some unusual outside force affects this relationship I will be selling the NZD until I see the AUD change directions. Then I know I have a day or two to prepare to reverse directions. The bottom line is I could make a living just doing that one series of trades. Follow the AUD on the CSS and then trade the NZD. You could probably retire in 3-5 years with that information alone in trading. It is there as long as the aud:nzd relationship exists.

Bob, if you study the monthly AUD/NZD you will see that confirms the D1 CSS reads and the prevailing relationship.

Could this relationship reverse? meaning that in the future the AUD could follow the NZD instead?

Thanks for your always invaluable thoughts.

[nanningbob]

If you had not been alerted by Bob earlier about the impending NZD turn around, this perfectly valid 10.4 setup would have failed, as the H4 bar was green at the time, and STO7 had earlier signalled > 20/40.

So the method is not as easy as it seems.

I always say this and it is something I learned in my first years of trading. Fundamentals always trump indicators. When they come into play they will dominate. The CSS is basically a fundamental indicator telling us what the overall fundamental of a currency is. Is it weakening, strengthening, slowing down, speeding up? These are fundamentals. From studying these CSS charts I noticed that the NZD trails the AUD most of the time. In other words the fundamental is where the aud goes the nzd will follow.

My 10.6 relies on reading the CSS first and then going to the charts to trade. It told me the aud was dropping and ready to cross the 0 line, which means DT territory. So following protocol I started looking for signs of reversals on the NZD currency crosses. I mentioned the nzd/chf as an example. I had closed all my nzd buy trades to prevent DD. I placed a couple of trades above the previous highs and looked to see if I would get a breakout. Well the news story did it for the gbp/nzd.

The CSS tells you where to go look and what to look for. I also mentioned that the aud, nzd, and jpy are seldom on the same side of the 0 line. Which one was going to break?? I didnt know. The AUD news story broke. So I began to look for signs on the NZD. I placed some trades and bingo it worked.

Since Nov. 1 NZD cross pairs account for 43 of my won pips or 43% of my winnings. I cant tell you how powerful that information is and how much it helps my profitability. Unless some unusual outside force affects this relationship I will be selling the NZD until I see the AUD change directions. Then I know I have a day or two to prepare to reverse directions. The bottom line is I could make a living just doing that one series of trades. Follow the AUD on the CSS and then trade the NZD. You could probably retire in 3-5 years with that information alone in trading. It is there as long as the aud:nzd relationship exists.

Bob, if you study the monthly AUD/NZD you will see that confirms the D1 CSS reads and the prevailing relationship.

Could this relationship reverse? meaning that in the future the AUD could follow the NZD instead?

Thanks for your always invaluable thoughts.

That occasionally happens. Several pages back I posted this before and talked about the exceptions that happen occasionally during the year. Each time it didnt last long.

HOWEVER, the time is almost up on the China miracle. If govt. doesnt back stop its huge local and provincial debt, several Chinese banks are going to have some serious problems. I keep as little money as possible in the banks here, just enough for a couple of months. I hope I get my school sold before this happens.

http://www.businessinsider.com/wave-of- ... ing-2014-1

Anyway watch the AUD. It will sink some more it looks like. That also means the JPY will strengthen and that will drive the BOJ nuts with their govt. program. Trading this stuff is not for the light hearted. NZD should follow unless it disconnects somehow from the AUD and I dont see that happening but I understand it could happen because its exports are different than the AUD.

[nanningbob]

Bob, if you study the monthly AUD/NZD you will see that confirms the D1 CSS reads and the prevailing relationship.

Could this relationship reverse? meaning that in the future the AUD could follow the NZD instead?

Thanks for your always invaluable thoughts.

I see I didnt answer your question very well. I dont trade the aud/nzd very much because they are so related to each other. Great pair to range trade though. What the aud/nzd will tell you is if one is stronger than the other but it will not tell you how they compare to the other currencies which is what the CSS does. So the aud could be stronger than the NZD but both be strong or both be weak compared to the others. The CSS would definitely help you trade the right direction with those two though. If AUD is higher than the NZD on the CSS buy AUD, if it is less buy the NZD. Sorry I didnt answer this right the first time. I was rambling earlier.

[Pipstubborn]

Thanks Bob, maybe my question was not clear enough. I don't trade the AUD/NZD either.

But it called my attention to see the NZD folowing the AUD on the D1 CSS and asked myself... could this pattern reverse?

That's why I took a look to the monthly AUD/NZD chart.

[SteveHopwood]

Here are my live money trades for the last week:

usdhkdh1.png

These were all trend trades; I am not yet experimenting with range trading.

I remind you guys that I am not boasting when I post my results here. What I am saying here is, if I can do it, then so can you. The profit represents a 2% increase on my account balance. It would have been 3% but for that GU loser that my helper EA closed out when the market hit the 240 in the wrong direction - and kept on going so saved me about 25 pips on my usual 100 sl.

To confused newbies unable to make sense of all this: hang on in there. You have to be around for a while to make sense of Bob stuff - it is not often immediately obvious what he means. Carry on reading and trying and trying again. Eventually you will enjoy a break through in you level of understanding.

Guess how I know?

[nanningbob]

Thanks Bob, maybe my question was not clear enough. I don't trade the AUD/NZD either.

But it called my attention to see the NZD folowing the AUD on the D1 CSS and asked myself... could this pattern reverse?

That's why I took a look to the monthly AUD/NZD chart.

Maybe you are right. I dont understand your question. The monthly aud/nzd shows that the aud is moving weaker than the NZD and has been for several years. This is a comparison between these two currencies. What other currencies are doing is irrelevant.

The CSS aud line is a combination of the AUD against the other currencies. In other words it takes the aud/cad, aud/chf, aud/jpy, aud/nzd, aud/usd, eur/aud, gbp/aud and represents the combined strength with one line. So if the aud is stronger than 3 of them and weaker then 3 of them it will be in the middle near the 0 line. If it is stronger than all of them it will be on the top of the CSS indi. If it is weakest against all of them it will be on the bottom. We call this relative strength of the currency. We can watch that line move and conclude the direction to trade that currency. Buy, Sell, or a mix buy/sell.

So the weakening effect of the NZD being stronger would only be 1/7th of the total figure on the CSS. The CSS line is an average of all the currency pairs. For me I only use the 24 I trade. So even though I seldom trade the aud/nzd I still use it in figuring the weakness/strength of the CSS line.

That is the best understanding I have of your question. If that is not it you will have to forgive me, I have nasty cold and am spending the weekend in bed. However, you did give me a chance to explain better how the CSS works. I have 3 weeks off for Chinese New Year and I want to get a booklet just on the CSS info page. What it is, how it works, how to read it. 10 days are going to San Fran to see my son, his wife, two grandchildren, and my 3 daughters who are flying out to SanFran. I want to go to the wharf and enjoy the clam chowder in a bread bowl. A truly great treat. My son and his wife will be working some days and I will have some free time hopefully to put it all together.

Baluda has also put together a 4H warning system using the CSS and I am studying how to use it effectively. So far I havent liked the 4H CSS but that may change with some new thoughts. So back to bed for me.

[nanningbob]

OK I like discussing economics and asked Steve for a thread for that topic. Lets see what happens.

http://www.stevehopwoodforex.com/phpBB3 ... 98&start=0

[Pipstubborn]

Thanks for your great explanation, it's clear now for me to have a better understanding of the CSS.

Get well pretty soon. If you want to try a mexican remedy.... have a shot of tequila warmed on the microwave and drink it right before bed and cover yourself with an extra blanket, you will sweat a lot and kill the virus. Like new next morning.

Have a great weekend

[art]

celebrating my wifes birthday on tuesday in Lisbon, so no trading for me next week , make plenty of pips guys, and bob get rid of that cold, looking forward to resuming my studies on my return

[SteveHopwood]

In my customary spirit of 'if I can do it guys, then so can you', here are my trades since starting live 10.6 trend trading since the start of the last week in November.

usdhkdm30.png

Thanks, Bob.