I just have two small, quick questions.
1. If one starts his or her habits at 12pm, do you push recording the news impacts that occur after 12pm until the next day?
2. When recording the correlation or sentiment for the day and summarizing/evaluating the movements of a currency, do you do it in context of its respective session? Like sometimes the yen will make a substantial move during the US session and lay stagnant during the Asian session. When I write about the sentiment and what the currency did that day, should it be whatever the currency did during its own session or during an arbitrary time I choose or just the most important thing that effected the currency to the greatest magnitude for that day?
I try to just commit to the habits and reread your book over and over and that usually answers most of my questions as of late, but these two things have just been buggin’ me haha
1. Sometimes I can record the news releases after 12pm during the next day, or I can do a small mini update before I go to bed.
I like to think of the daily habits as one snapshot in time. You record the snapshot of the market at the time you do the habits. Then you try to figure out what changes can occur that can move the market from the moment you end your daily habits. So if something big happens after 12 pm EST – 12 AM EST, then I definitely want to be aware of it. I can do a small mini update during the evening, or I can just push that off until the next day. Regardless, if there was market moving information flow, then you should be aware of it, at least mentally, if not both mentally and written in your daily habits.
2. For the correlation or sentiment, what I usually either do is use either the 5pm EST market close, or sometimes I use the 12 AM as the cut off points. Again, if you do the correlation sheet at, say 2pm EST, then you just do what you with whatever market action you have seen up until that point. Sometimes the market does move during the late NY session or the Asian session, which causes me to update my currency files by adding or deleting a few lines, etc. But I don’t think it is that bad. I just want to take a market snapshot at that moment in time with my daily habits, then I can project out different scenarios of what can cause the market to move from the current moment.
For what the currency did, I write in what happened over say a 12-24 hour period. I don’t break it down by session. There have been some members that have told me they split the correlation sheet into two parts: One for a certain 12 hour period, and another for the other 12 hour period of the day. So they have modified it to suit their needs. Personally, I just try to take a broad look at what happened over the day. If a currency is only up 10 or 20 or 30 pips for the day, then I may just put it in the neutral column, because it was such a small move.
You can alternatively see what your ticker / price screen says. Depending on your broker, they can list how many pips the price changed (moved) and the percentage change for the day. So you can use that to see where the big moves were.
If say USD/JPY remains flat during the European session, moves 100 pips during the NY session, and lets say retraces 20 pips, then it still has moved 80 pips, so if it was a bearish move, then I write in JPY strength in the Risk aversion column. If the market moved down 80 pips during the NY session, then retraced 80 pips higher, then I would put JPY in the neutral column.
Sometimes I do have to analyze multiple currency pairs to see where the strength/weakness was concentrated in. For example, for today on Wednesday, June 5, 2013, the reason the GBP/USD went up was both for GBP strength specific reasons, but also for USD weakness specific reasons, so it was a combination. The reason AUD/USD went down, was for purely AUD bearish specific reasons.
Here is my correlation sheet for today, Wednesday, June 5, 2013: