Forex Weekly Report 10-11-2019

Hello, my friends! If this is your first time here, welcome! Today I found some nice opportunities for us, very strong patterns that can turn into profits! So let’s go!

BIG MOVERS

These two tables show financial instruments that had a 15% change in its non-commercial net position from one week to another, so things that are gaining momentum and should give us opportunities to trade with a direction in mind.

CADJPY – BEARISH BIAS

This pattern is one of the most powerful and reliable when it comes to COT Data. We calculate the six weeks rate of change of COT Index, we give this the name of Movement Index, and the signal is triggered when we have +-40 points!

Rules:

During a correction from an UPTREND, +40 points in the Movement Index often marks the end of a corrective pullback and the resumption of the major uptrend.
During a correction from a DOWNTREND, -40 points in the Movement Index often marks the end of a corrective pullback and the resumption of the major downtrend.
The FAILURE of the signal often marks a major trend change

So the most important here is not the pattern itself, but that we are at an inflection point, this means that we have a big trend to ride and if we are wrong about the direction we will know very soon and also that our stop-loss is cheap. One last thing to add before charts is the post from last week where we discussed the bottom formation for USDCAD, this aligns with a short in CADJPY.

CHARTS:

Let’s see what happened in the past when this signal was triggered.

These are the dates when it triggered:

15/01/2017 – Sell Signal
23/04/2017 – Buy Signal
16/07/2017 – Sell Signal
25/03/2018 – Buy Signal
06/01/2019 – Buy Signal

Cot Charts

Price Weekly Charts

As you can see it’s a very reliable signal, so this week I will play shorts on the pair. These are two scenarios if you want to hold the position for longer:

So my friend stay playing the short side because right now is what commercial players are telling us to do! Sell Supply zones, sell demand breakouts and sell pullbacks on previous demand zones.

Every week the trades discussed here are sent to a bot that monitors and sends us supply, demand breakout, and pullbacks alert from 4 different timeframes inside the trading room, like these:

USDMXN – BULLISH BIAS

Our Mexican boy has also triggered a signal that has high accuracy. This is the “Possible bottom” signal and it’s calculated using the COT Index.

Rules:

Possible Top: Cot index is moving out of a commercial selling climax zone
Possible Bottom: Cot index is moving out of a commercial buying climax zone
Buying climax zone is when the COT Index is greater than 90
Selling climax zone is when the COT Index is less than 10

Charts

Last time the signal was triggered:

Weekly Price Charts

From what we can see the signal was right 3 in the last 4 times it triggered, its 75% of hit rate, pretty good! We also have USDMXND in a very interesting zone which makes our stop-loss cheap and also gives us ammo to try more than once if we are stopped. Follow me to understand:

1st Scenario

The final invalidation of the pattern is a clean break of 18.400 level until there are some interesting demand zones that we can play and one of them will give us the winner trade. This is where you should place you buy limit orders.

2nd Scenario – My predilected

Why I prefer this? Because this week we have Banxico interest rate decision and this can put the fuel we need to make USDMXN breaks!

These are the other signals that will be discussed inside the trading room:

CRUDE OIL, BRENT – Possible Bottom
CADCHF – Possible Top

I hope you have a great week! If you want to know more follow me on twitter. To get the supply/demand/pullback/RSI divergence/volume-delta alerts join me in the chatroom!

I hope you all have a great week of trading!

My best regards!

Leo Hermoso