Day Trading Tips and Tricks

February 22, 2011

Erich Senft

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DTS Flight Path and Forex

option-greeks1-150x150Hello Fellow Traders,

By now, many of you know that the new version of DTS has a few new tools included.  From the feedback I have seen, there have been some great questions and comments in regards to how the new “Flight path” market analyzer works and how it relates to trading.  Always happy to try something new, I have been incorporating its usage in my live sessions during this Spring 2014 Profit Run campaign.  I would like to share with those of you who are still wondering what the heck to do with the new tool just how I have found it useful so far.  Keep in mind there are multiple ways to use this tool and depending on the market, the way I use it may not even apply.  But for you forex fans let’s see my favorite ways I use the information to help in my trading.

(CLICK ON THE IMAGE TO WATCH THE VIDEO)

First of all, let’s talk about what happens when you load up Flightpath market analyzer and start adding pairs.  Instantly, it gives you the information on screen for each pair selected, in real time, as to what the recent signal on each of the 3 birds has been in the form of a “green” long and a “red” short description.  This in itself can be useful since when a strong move it made it is logical that all 3 birds will fire the same way as the pair moves in one direction.  Likewise, a pair moving in a volatile manner will constantly be mixing up the colors of the signals from one bird to another.  By paying attention to the “color flow” of each pair individually, it can give you a graphical signal of how the price action of that pair is moving.

The second major use is for “trade priming” across many instruments.  In forex, it is not uncommon to be searching for trades simultaneously on multiple pairs.  It is our goal to always try and identify the best setups BEFORE they happen, so all we have to do is simply wait for the the right signal to fire the trade.  Personally, when I finally get the signal on the DTS I hear a sound similar to the horse racing bell in my head and I’m not kidding, I hear a little voice in my head say “and they’re off!”  Corny?  Maybe, my inner thoughts often are as you can tell from reading my articles.  Anyway, watching 20 charts would not be possible but with the highest resolution and many monitors, or constant swapping of charts from one to the next.  Think 20 charts sounds “a bit high” and not reasonable?  Seven pairs, three birds and you are at 21 charts.  Flightpath gives you a “birds-eye view” of the signals on many pairs in one little box, and if you know what pair you want a particular signal on, or maybe a list of potential trades, you can see them form from ONE SCREEN!  Awesome!

(CLICK ON THE IMAGE TO WATCH THE VIDEO)

Finally, and I think the MOST powerful way to use Flightpath in forex is what I call “pair heat-mapping”  No it’s not a couple’s therapy session.  Flightpath lets you arrange the pairs by instrument, which in forex means that it groups pairs naturally together by their first three letters, aka the front pair.  When you do this with multiple pairs that have the same “prefix” they get grouped together.  So our Aud-pairs, our Eur pairs and our Gbp pairs are all next to each other.  When the market starts its inevitable boogie, you can see, DIRECTLY the “strength” of any single currency rather than wondering if it’s just the other currency in the pair moving a particular single pair.  When all or most of the Aud pairs on the “heatmap” turn green, you can easily tell that the Aussie is moving up, regardless of which cross you want to trade.  This can quickly help you identify which pairs you may want to trade, or more importantly it can keep you out of a trade that might not move as strong as the entry may suggest.  Shorting the Aud/Usd when all the other Aussie pairs are lighting up “green” might be a risk you don’t want to take, regardless of the signal on that particular single pair, at that moment in time.  Using the arrangement (which can be done manually by the way) as a way to monitor individual currency rather than the pairs can be a very powerful tool indeed and by far the best way I have found to use Flightpath for good trading so far.

As more time elapses and I have more time to practice, I’m sure we will discover new ways to trade.  That’s one of the beautiful parts of our community-minded trading sessions which are held live Tuesday, Wednesday and Thursday 1-hour before NY open during this Profit Run.  If you want to come join the fun, then swing on by and share your knowledge and find some new info for yourself as well!  Click Here! (Current DTS Members only for Profit Run).  Want to see what all the fun is about?  Click Here!

February 22, 2011

Erich Senft

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