The search for tradable assets is the most important part of trading, I constantly look for trending assets and look to buy any pullback. The indices in general may have put in their low, (that is not clear everywhere only the RUSSEL, FTSE, ASX and Nasdaq have put in a new high following the pullback which began in January so a move lower in all of them cannot be ruled out but seems less likely by the day as they all continue to grind higher). It would seem sensible that the Yen pairs also put a new low led by the EURJPY which seems to have hit its low at the end of may. All of this suggests that a more risk on environment may take hold.
I have labelled the chart with an Elliot wave count, however, you could use a number of other technicals and get a similar result, my strategy is just to look for assets trending higher and buy any reasonably sized pullback. In this case I will be looking to buy a pullback if it develops in three waves (shown in green) and makes it close to the green oval. I will also require stochastics to be oversold and RSI to have reset away from the highs. Before taking the trade i will do a check of the yen pairs to make sure they look positive, they are highly correlated with the indices.
This trading plan will ensure i am on the right side of the market, the plan searches for trends first and trades second.
I have labelled the chart with an Elliot wave count, however, you could use a number of other technicals and get a similar result, my strategy is just to look for assets trending higher and buy any reasonably sized pullback. In this case I will be looking to buy a pullback if it develops in three waves (shown in green) and makes it close to the green oval. I will also require stochastics to be oversold and RSI to have reset away from the highs. Before taking the trade i will do a check of the yen pairs to make sure they look positive, they are highly correlated with the indices.
This trading plan will ensure i am on the right side of the market, the plan searches for trends first and trades second.
Comment:
The Nasdaq has moved higher before reaching my buying area, the bullish trend is confirmed but at the moment i am not part of it. I will wait for the next pullback and look to trade that one. Patience, Money management and careful selection of trades these are key to my trading plan.
