Happy New Year Guys….!!!
As we attempt to get back into the swing of things. Over the next two days, we have bank holidays across the board.
Both UK and US will be closed and will re-open on Tuesday the 3rd of January.
A few things to consider:
All Forex pairs will be open to trade: However, Spreads will be very wide as banks are yet to return to thier trading platforms. It is advised to not trade until Tuesday once all banks are open and business is as usual.
So what can we do during this time?
Prepare for the madness about to unfold.
So we go into the first quarter of the year. Businesses naturally are going to be preparing for their earnings (corporate). They are already showing signs that 2023 is going to begin negatively. But here is where you make the first decision.
What are you going to trade and how are you going to do it?
Before Tuesday 3rd January. You must have answers for the following questions:
1) What trader will I aspire to become? Swing Trader, Scalper.
2) What is the asset I want to trade: EURUSD/BTC/NASDAQ/SP500?
3) Will I commit to trading at specific times? Only Market Opens Asia/UK/US
4) Will I be trading to make money or to improve my ability as a trader? (This is probably the deciding question that will determine whether you stay in the game of trading or not)
5) Do I set Money Targets or do I set Execution Targets? –
6) Will I stick to using one system e.g. Just hybrid, or will I use other confluences?
Answer these questions straight away…Then come back and answer them again in 24 hours and you will know the true answers.
So let’s assume you have answered the above and you have come to the charts and you want to get yourself ready for the markets.
Well, let’s dive into bitcoin for a few minutes, given that this is the only asset that is moving right now.
We all know the weekends can be a bit tricky with bold movements by crypto.
Consider the image above with the time stamp on the video. This is where I discuss the reasoning for Bitcoin coming back to the green vector.
The next image shows the current price action bitcoin has already achieved 50% of the green vector recovery and now is coming back up into the stop run zone.
What are we waiting for? We are waiting for another attempt lower.
Next price zone appears to be the 16250 region.
Now lets assume you say to yourself I want to take a stab at this.
What are you up against?
No Markets open
and we are going into big news announcements.
the news due out will be reflected in forex and we are going to dive into that right now.
So here is the thing…All forex pairs are fractal. So whatever is happening on the higher time frames is developing in the lower time frames. We know that the move always “Develops” on the smaller time frames. So a W formation on the 1hr will show a couple of Ws on the 5m time frame. its all down to how you perceive it.
Tuesday I will be doing a video on setting up your charts to be aware of the development of how price becomes fractal in its nature.
The daily chart above on Euro is showing the potential zones that euro could take once the markets get back in to the swing of things.
Notice on the Daily I have labeled the Peak formation which if we go into the lower time frame 15m you will see the W formation that has appeared. now a little exercise for you, go into the smaller time frames 5m 3m 1m and find the W formations that are appearing and you will then come to understand why the charts are all fractal.
So let’s make the assumption that Euro has traction to move higher.
You now need to establish, what are you going to trade when the markets open. Are you going to trade Euro on the daily which is showing the strength to mark up higher and hit the 1.07000 zone once again, and potentially hold until it achieves the big psychological number of 1.1000?
Again, this is where as a swing trader you say to yourself how much risk am I willing to accept?
The only way Euro would invalidate this bigger structure is if it fails to hold above the 1.07000 zone and break below 1.05740. This is the longest consolidation of the Euro so far which started around the…..You guessed it 16th December.
The issue we have is bitcoin is doing its own thing and Euro is going against the dollar with strength.
The NASDAQ and SP 500 are also moving down and up and the yields and bonds are not showing the same consistency.
Black Rock in their latest report of 2023 has stated that the dispersity between a number of assets is not the same as we usually expect, suggesting that something is changing. e.g. Gold is moving up against bitcoin when in principle, bitcoin should be moving up because gold is trading higher against the dollar yet bitcoin is not trading higher against the dollar and trading lower against gold.
I will be frank with you, I dont like Bank Holidays and hate weekends when the markets are closed.
But use this time to get yourselves prepared for the week coming.
By the time the market close on Friday again we would be down 2 whole days compared to a normal week. So be very careful trading bitcoin from now till Tuesday. If anything practices the game of Fractals where you critique the charts each day and look for what may be developing.
If you are a scalper, you are looking for smaller patterns to develop. But be very careful as lower time frame patterns, although they are fractal to the larger time frames, still produce swings in price that can shake you off from the idea of a pattern forming on the 1m or the 5m.
So with that being said, I hope this article keeps you occupied and you can start answering the questions above and get yourself prepared for the Fire we are about to bring into 2023.
Happy New Year Once again guys