When trading longer term time frames ( weekly charts ) the information listed below pretty much says it all. You can have fun with the day to day stuff sure….but with no longer term vision / no “real idea” what’s going on (short of the recent headlines on the tube) – you’re essentially just rolling the dice.
2013 trading:
https://forexkong.com/2013/01/31/2013-you-will-never-trade-it/
U.S Housing Recovery:
https://forexkong.com/2013/05/21/u-s-housing-recovery-media-spin/
Canada / U.S Market Topped:
https://forexkong.com/2013/03/30/has-canada-topped-tsx-weak/
SPY At Major Point of Resistance:
https://forexkong.com/2013/04/20/intermarket-analysis-questions-answered/
It’s interesting that “eternal bulls” appear frustrated as hell here at the “relative highs” – with consistent “claims” of “knocking it outta the park” when in reality – they sit confounded, and likely struggling to figure out “huh! – why isn’t this working out?”
Bulls n bears both get slaughtered – Gorillas make the money.
The Gorilla’s Guide to Multi-Timeframe Market Dominance
Why Weekly Charts Separate Winners from Wannabes
The difference between a professional trader and someone playing with lunch money comes down to understanding market structure across multiple timeframes. While amateurs fixate on 15-minute candles and get whipsawed by noise, smart money operates on weekly and monthly cycles. The USD/JPY’s massive move from 76 to 125 wasn’t predicted by studying hourly charts – it was written in the weekly structures months before the breakout occurred.
When you’re analyzing currency pairs like EUR/USD or GBP/USD, the weekly timeframe reveals the true institutional positioning. Central bank policy shifts, sovereign debt cycles, and demographic trends don’t play out in minutes or hours. They unfold over quarters and years. The housing recovery mentioned earlier? That’s a multi-year structural shift that creates persistent USD strength against commodity currencies like AUD and CAD. Miss that bigger picture, and you’re trading blind.
Professional traders use weekly charts to identify major support and resistance zones that actually matter. The 1.3500 level in EUR/USD isn’t significant because day traders like round numbers – it’s significant because weekly price action has tested and respected that zone multiple times over years. When you understand these macro levels, your shorter-term entries become surgical rather than random.
Intermarket Relationships That Drive Currency Moves
Currency trading isn’t happening in isolation – it’s interconnected with bond markets, commodity prices, and equity flows. When the SPY hits major resistance as referenced above, that’s not just a stock market story. It’s a risk sentiment story that immediately impacts carry trades, safe haven flows, and emerging market currencies. The Japanese Yen strengthens not because of domestic economic data, but because global risk appetite is shifting.
Smart traders watch the 10-year Treasury yield alongside their EUR/USD positions. When rates are rising, it typically strengthens the dollar across the board. But when rates rise too fast, it can trigger equity market corrections that reverse those currency trends through flight-to-safety flows. The Canadian housing market weakness mentioned earlier correlates directly with CAD weakness against USD – but only when you understand the debt-to-income ratios and commodity price relationships driving the fundamentals.
Crude oil prices have a direct relationship with CAD, NOK, and RUB. When oil trends higher, these currencies typically follow – but the correlation breaks down during periods of central bank intervention or geopolitical crisis. Understanding when these relationships hold and when they break is what separates consistent profits from random luck.
The Psychology Behind Market Extremes
The eternal bulls getting frustrated at relative highs represents a critical market psychology principle that drives major reversals. When even the most optimistic participants start questioning their positions, you’re approaching inflection points where real money is made. This applies directly to currency markets where sentiment extremes create the best trading opportunities.
Look at positioning data in currency futures – when speculative long positions in EUR reach extreme levels, that’s typically when the currency starts rolling over. Not because the bulls are wrong about fundamentals, but because there’s nobody left to buy. Professional traders fade these extreme positions while amateurs keep adding to losing trades hoping for reversals that don’t come.
The frustration mentioned above manifests in currency markets as stubborn position holding and averaging down. Retail traders stay long EUR/USD at 1.1000 because they remember when it was at 1.4000, ignoring that structural changes in monetary policy and economic growth have shifted the entire range lower. Professionals adapt to new market realities while retail traders fight the last war.
Building Your Gorilla Trading Framework
Successful currency trading requires treating short-term and long-term analysis as complementary rather than competing approaches. Your weekly chart analysis identifies the major trend and key levels. Your daily charts refine entry timing and risk management. Your hourly charts execute precise entries with optimal stop placement.
Start every trading week by reviewing weekly charts for all major pairs. Identify which currencies are in uptrends, downtrends, or consolidation phases. Note upcoming central bank meetings, economic data releases, and technical levels that could trigger major moves. This becomes your trading roadmap for the week ahead.
Then layer in intermarket analysis. What are bonds telling you about interest rate expectations? How are commodities behaving relative to their associated currencies? Where is institutional money flowing between asset classes? This context turns random price movements into predictable patterns you can trade with confidence rather than hope.