I just recently concluded an analysis for a customer who was seeking to understand what the Great British pound Futures instrument he was trading might do into the future. In the video below I demonstrated several techniques that Traders can use when doing research into probabilities concerning how the market they trade is most likely to move long-term.
One of the first techniques I recommend Traders use, whether they are Futures Traders or Forex Traders or even equities Traders is to examine the seasonality of their instrument over several years. For example if you are studying an instrument in March it would be helpful to look at how that instrument moved in March over the past several years. New Traders are surprised to see that there are patterns in terms of price action that repeat year after year after year in the instrument that their trading.
Another useful technique involves measuring how far the moves during that seasonality occur. To see how far these moves occur during these seasonal impulse moves, how far that is to say how many ticks or how many Pips does the market actually move? In the video below you'll see that there are clearly repetitions of movement that is to say measured moves that are occurring quite frequently in the Great British pound the past several years.
We can also use a predictive indicator like the Flux daily cycle markers indicator for ninjatrader to help us anchor the patterns that were studying during these seasonal movements. The Flux daily marker indicator is particularly helpful as it provides anchor points, predictive anchor points for us to look at the movements during the seasonality we're examining and researching. Flux daily cycle markers indicate phase one, phase 2, phase 3, and Phase 4 market movements. What the market does at each of these phases during the season we're examining can give us a clue as to where we are in the cycle and what to expect next at the upcoming date.
Watch the video and please leave comments below. I'm curious to see what you think about this analysis in one of the methods and techniques are useful to you as you study and analyze the market you're Trading
