AstroFx - The Art of Technical Analysis

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The Traders Constitution

  1. I am a successful, disciplined Forex trader. 
  2. I enjoy trading to make a profit. 
  3. I honour the responsibilities I ask of myself and those who are watching and depending on me to be such a trader. 
  4. I will always continue to educate myself on how the market works. 
  5. I know how to determine market direction and I have a simple trading methodology that works and consists of an entry and 2 exit strategies. One for profit and one to protect me from taking large losses. 
  6. My stop loss order is placed to work within my equity manage- ment rules and I feel comfortable with that stop loss order when I trade. 
  7. I have a set of rules that make sense to me that are easy to ex- ecute and easy to obey and I obey these rules. 
  8. I trade for PIPs, not for money. 
  9. I trade non-emotionally and turn off my profit loss window on my dealing station to support that decision. 
  10. I always trade with a protective stop. 
  11. When I find a trade I create a Trading Plan and ensure to trade my plan. 
  12. If the currency I trade does not meet the criteria of my meth- odology I will look to trade another currency. 
  13. If I cannot find a trade then I am patient and will wait until the market meets the criteria of my trade and after each trade I always WIN, either pips or experience. 
  14. I am always positive when I trade. 
  15. I will remove the word ’should’ from my vocabulary and re- place it with ’will’ or ’must’. 
  16. I never take anything personally. 
  17. I never assume anything. 
  18. I always use positive words. 
  19. I always succeed in anything I do through persistence. 
  20. I always do my best, if I make a mistake I accept it, learn from it and move on.
End of trend


Fundamentals
  • Correlations and Market Participants
    • Countries include: United Kingdom, United States of America, Australia, China, Japan, Switzerland, Russia and Brazil. Central Banks and financial Institutions: Federal Reserve (FED), European Central Bank (ECB), International Monetary Fund (IMF), Bank of England (BOE), Reserve Bank of Australia (RBA), Bank of Japan (BOJ), Peoples Bank of China (PBOC). There are also important decisions that are made by Standard & Poor's (S&P) Moody’s and Fitch (Fitch Ratings).
  • Quantitative Easing/QE
    • Potential weakening of the US Dollar (Bullish EUR/USD).
    • Increase prices of the Crude Oil (Bullish WTI)
    • Growth of the inflation (Long Gold and AUD/USD)
  • Sovereign Debt Problem in the Eurozone
    • Downgrade Ireland in the credit rating by Standard & Poor's, Moody’s or Fitch (Short GBP/USD)
    • Blocking Payments by the International Monetary Fund (IMF) for Greece (Short GBP/USD) 
    • Approval of austerity measures by Greece (Bullish EUR/USD)
  • Unexpected announcement of quantitative easing in the United Kingdom
    • Sharp decrease in price of the (GBP/USD). Await the pullback (correction) before selling this currency pair.
    • Possible short on EUR/USD
  • Unexpected increase in the interest rates delivered by the peoples bank of china
    • Decrease in the price of the AUD/USD currency pair
    • Possible sell entry upon a price spike to the upside on AUD/USD or go long EUR/AUD
  • Dovish (Inflationary) tone of the Bank of England press conference
    • Decrease of the GBP/USD, EUR/USD and a potential increase on the AUD/USD
    • Short GBP/USD or EUR/USD (If you have time for it)
  • Dovish (Inflationary) tone of the European Central Bank press conference
    • Decrease of the GBP/USD, EUR/USD and a potential increase on the AUD/USD
    • Short EUR/USD or GBP/USD (If you have time for it)
  • Hawkish European Central Bank conference stating strong vigilance relating to an increase in interest rates in the European Union
    • Increase in EUR/USD price (Possible 30 PIP rise) 
    • Long EUR/USD or maybe Long GBP/USD 
    • Hawkish is typically used to describe monetary policy which favours higher interest rates, and tighter monetary controls to keep inflation in check 
    • Dovish refers to an economic outlook which generally supports low interest rates as a means of encouraging growth within the economy.
  • Non Farm Payroll
    • A statistic researched, recorded and reported by the U.S. Bureau of Labor Statistics intended to represent the total number of paid U.S. workers of any business, excluding the following employees
      • General government employees
      • Private household employees
      • Employees of non-profit organizations that provide assistance to individuals
      • Farm employees
Fear, recvenge and greed will kill the trader.

Moving Average

1— Breakout and candlestick close above/below the trend-line with the M.A’s crossing over at the same time on your execution timeframe. (often just behind/next to the breakout candle)


2— Breakout and candlestick close above/below the trend-line with the M.A/s crossing slightly after the breakout candle. In such scenario it is ad- vised to be patient until the M.A’s have crossed over on your execution timeframe.

Trendline comparison





Patterns


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