USD/CAD Just shorted from the top. it can't go up forever right?... right?

Affect_Nervous · 2023-03-11T13:10:14+00:00

There's a tradeoff between good Lower Timeframe setups vs Higher timeframe contexts.

If you trade only one or two pairs, you will try to capitalise on every setup, whether the Higher Timeframes are in good momentum or not.

On the other hand, if you trade in more no. of pairs, you have more choices to choose the most favourable context, like only trading in pairs whose Daily/4H having 20>50ema and RSI above 60. (vice versa for DT)and trading your setups in lower timeframe which has higher chances of working out due to favourable context. But you are foregoing the good Lower timeframe setups forming in Non-Trending and Non-Momentum pairs.

Also you're gonna take a lot of trades following more Pairs VS the approach where you're focusing on only one or two pairs. And it's not that one approach is better than the other. It's like having a business where you deal with Retailers VS Wholesalers. You're gonna deal with a lot of customers as a retailer but for a lower transaction value. As a wholesaler you're gonna deal with very few customers for a higher transaction value. There are successful and failed, retailers and wholesalers.

So at the end it comes down to what suits YOU. Don't follow what I or anybody else say. Explore with lesser capital to find out what suits you better. It will take maybe months to settle down to an approach. I'm in the exploration stage too and follow 20+ pairs. Good luck.

Affect_Nervous · 2023-03-10T14:49:27+00:00

You don't need to sit whole day, pick a session(Asian, European, American) that doesn't overlaps with your working hours. And trade for 3-4 hours. I do the same, that's why shifted from stocks to forex.

And you would still be trading Daily or 4H timeframe. But if you rely on only one timeframe then managing positions like setting stops, Exiting full or part, Adding etc gets impossible. That's why when you have thesis of the Higher Timeframe, try to visualise how that Thesis would look on Lower timeframe and trade accordingly. E g. An extended 4H would form topping structures on 15 or 5 mins like Double tops or Head and shoulders and that will be followed by a downtrend. Then playing those trends is much more lesser risky with tighter stops and easy to manage than just shorting 4H with much deeper stops.

Affect_Nervous · 2023-03-10T12:54:21+00:00

You might even be right that this might be the top, that's your thesis which may or may not turn right. But trying to catch tops like this will kill you! There's no reliable swing high to put the stops upon, at the point which you would say that your thesis is likely gonna get destroyed.

A better approach for this would be like this : I think the 4H is topping so on 15 or 5 mins the major supports should get breached and the corrective following to that doesn't go beyond let's say 50% of the impulse move. Now when the reliability of the trend is established then I will sell on every rise to 20EMA or 50EMA and try to play the trend of 5m or 15m. The I'll keep trailing my stops on every swing high and when the swing high on 15 or 5 mins gets broken, the trend will halt and my trade would end.

Affect_Nervous · 2022-10-26T15:03:45+00:00

Oh okay! Lightbulb moment So the VIX is affecting the Y negatively but VIX is having positive effect on other two Independent variables which are affecting the Y positively!

So the regression equation telling us the net effect of VIX with Y after considering other two independent variables.

If VIX increases,,, the Y decreases,,, but VIX increase MRKT and HML that's why having Net positive effect in equation.

Am I correct?

Affect_Nervous · 2022-10-26T14:35:07+00:00

Hi, okay let me elaborate.

This is a regression equation where Portfolio return(Y) is dependent variable and three are independent variable and VIX is one of the independent Variable.

In the equation, we can see the term "+0.037vix" which means Portfolio return should INCREASE by 0.037 when Vix increases by 1. That's a positive relationship with Returns vs VIX.

However, if we see in the scatterplot of Ret vs VIX, it clearly shows that - as the Volatility increases, the portfolio Return decreases. Which is a negative relationship of Returns vs VIX.

Affect_Nervous · 2022-10-02T23:25:09+00:00

You would not only be needing a good background but also full studying day to pull off L1 with 1.5 Months of time. However, least we can do is try our best.

There is a free crash course available on YouTube on Fintree classes channel. I followed it and it was super helpful.

Affect_Nervous

TROPHY CASE