Saturday, June 4, 2011
Currency Cash Machine Review
Currency Cash Machine is the name of the new mirror trading service from Mike Maffei, who is a professional hedge fund trader. He has access to the order flow data of all of the major banks such as Bank of America, Barclays, Citibank and UBS, etc (who help drive the prices of the various different currency pairs), and has a huge advantage because he is obviously able to make profitable trading decisions based on this data.
He has been making huge profits trading this data based on his own proprietary trading system for a few years now, and is now going to help others profit from this data as well.
He is not offering access to this bank flow data, or indeed the trading system that he uses. However what he is offering (through the Currency Cash Machine membership) is the opportunity to mirror trade every single one of his trading signals automatically in your trading account.
So in other words every time that he opens or closes a trade, it is automatically replicated in your own forex trading account at the same time. Considering he made more than 4000% profit in 2010 and some equally impressive gains in 2011, this seems like an excellent deal. In fact it seems almost too good to be true.
However he provides an in depth look at his three different trading accounts, that have all been verified by an independent body, and the results do look genuine.
I am always sceptical of huge profit claims even when the results have been independently verified, but the fact that he uses bank order flow data, which gives you a huge advantage and is very hard to get hold of, does make these kinds of gains more achievable in my opinion.
Anyway the good news is that you can try out these automated trading signals risk free, either in a live trading account or a demo account, for 90 days.
If you would like to take up this offer, or simply want to find out more about this service, you can do so by visiting the official Currency Cash Machine website. Here you will find a video that will explain everything in a lot more detail.
Determining Your Risk When Spread Betting The Forex Markets
Many people trade the forex markets using a traditional forex broker, but I am well aware that lots of people, particularly here in the UK, like to trade using a spread betting company instead. I nearly always trade this way and it's a fairly simple way to trade because you don't need to worry about lots or anything like that. You simply choose your stake, ie £1 or £10 per point for instance, and enter your position long or short.
Anyway in this article I want to discuss how you can determine your risk when spread betting the forex markets, and subsequently how much you should be staking per point. It is quite straight forward, but it can be slightly difficult if you are new to spread betting.
The first thing you need to do is to determine how much of your account you are prepared to risk per trade. The common advice is to risk no more than 2-3% per trade, and I myself rarely risk any more than this except on very rare occasions where I am extremely confident about a particular position.
So let's assume that you have £5000 in your spread betting account and you are prepared to risk 3% per trade. Your maximum loss from this trade is therefore £150 (3% of £5000).
The next step is to look at your stop loss for this particular set-up. If you are planning to enter a position with a stop loss set at 50 points, then your stake would be £3 per point because 50 points @ £3 per point would give you a maximum loss of £150, which is the 3% that you were prepared to risk on this trade.
Similarly if you intend placing a stop loss just 15 points away, then you would therefore be looking to enter a position at £10 per point to give you the same maximum loss of £150.
Of course there is always the chance that you may not be automatically closed out at this exact stop loss due to slippage, in which case your loss may be slightly more than £150. However you can hopefully see the point I am trying to make.
In summary then, if you want to determine your risk when spread betting, you simply work out how much you are prepared to lose based on a percentage of your capital, and then determine how many points away you are going to place your stop loss. You can then work out your stake per point fairly easily and enter your trade.
Forex Day Trading Using Price Action And Pivot Points
Today I want to talk about how you can day trade the forex markets using nothing more than price action and pivot points. I sometimes visit a few trading forums and often come across some really complicated trading systems that use many different indicators. However the fact is that you can do just as well stripping away all of these indicators and just following price action, using pivot points for additional guidance.
So you basically want to set up a basic 5 minute candlestick chart and add pivot points to this chart.
Then if you simply study these charts really closely on a daily basis for the major currency pairs, you should start to see the same sort of patterns reoccurring, and you will soon have enough confidence to start opening and closing positions.
I actually placed a few trades today on the GBP/USD pair earlier today, which will hopefully show you my own thought processes when trading these shorter time frames. First of all let me show you the chart:
I should point out that I will only consider trading the 5 minute chart if the overnight trading range is small (in comparison to the average daily range) . Luckily this was the case today.
The overnight trading range between 12.00 and 08.00 (UK time) was approximately 40 points, compared to a daily average of around 120 points (according to the Average True Range indicator on the daily chart). This means that there was always likely to be a decent sized breakout either upwards or downwards at some point during the day, so there were plenty of points available.
You can see from the chart that there were 4 points of interest:
FALSE BREAKOUT - The price broke down through the pivot point and closed below the overnight trading range (as indicated by the blue lines) just before 8.00. So this was a high probability trade and a great opportunity to go short. However after opening a short position at 1.6139, it turned out to be a false breakout and I closed out for -14 points after the price closed back above the pivot point.
INITIAL UPWARD BREAKOUT - After looking as if it might have another crack at breaking downwards, the price then moved sharply higher and closed above the overnight trading range. At which point you basically have two options. You can either enter a long position and hope that the breakout continues, or you can wait for confirmation. I personally went long straight away at 1.6198 after the breakout candle closed.
CONFIRMATION BREAKOUT - There was then a short period of consolidation followed by a confirmation breakout. So if you hadn't already entered a long position on the initial breakout, you could have taken a long position with more confidence at this point.
CLOSE POSITION - The obvious exit point for this trade was always going to be the first line of resistance, ie R1, and you can see that the price just about touched this resistance level at around 1.6241 before falling back downwards again. So in the end I banked a profit of 43 points from this particular trade.
Of course if you subtract the spreads and the loss from the false breakout earlier, the total profit is only around 23 points. However it was still a profitable trading day overall, and hopefully you can see how easy it can be to bank a decent profit on days like today when the overnight trading range is relatively small.
Weekly Trading Update - 09-13 May 2011
With regards to my forex trading, it's been a rather lacklustre week this week. My main 4 hour trading system (see right for more details) did manage to squeeze out a decent profit thanks to one good trade on the GBP/USD pair, but this was negated somewhat by the Forex Morning Trade system, which had a rare losing week and ended up losing 40 points in total. The full results of this early morning trading system for this week are as follows:
Monday: no trade
Tuesday: no trade
Wednesday: -40 points
Thursday: +40 points
Friday: -40 points
Going back to my 4 hour system and as I say, there was just the one trade on the GBP/USD pair. This pair is now in a downward trend (according to the Supertrend indicator on the daily chart), so I was looking to go short on a downward EMA crossover on the 4 hour chart.
This occurred on Wednesday afternoon and I was initially cautious about opening a short position because the crossover candle was pretty long, but I did eventually decide to take a position. I waited for a pull-back and went short at 1.6360.
I had to leave it running overnight so I set my target price at 1.6300, but thankfully this wasn't triggered and I could revert to my usual strategy the next morning. So I ended up closing half the position for 50 points and letting the other half run, moving my stop loss to break-even. The price then dropped sharply and I decided to close the position once it was 100 points in profit.
There have also been a few downward EMA crossovers on the USD/JPY pair but I really think we are close to the bottom for this pair, so I decided not to take any positions.
As regards my share trading, I have started building positions in BP and dabbled with a few spread positions in Tesco, but there's not much else to report. It's frustrating seeing the FTSE meander between 5800 and 6100. I wish we would see a big breakout one way or the other so I could either bank some big profits or pick up some juicy bargains.
Anyway that's just about it for another week. Have a great weekend.
Weekly Trading Update - 23-27 May 2011
It's been quite a profitable week this week on all fronts. My share trades did well, the Forex Morning Trade system generated a profit of 92 points, and my main 4 hour forex system (see right for more details) generated a decent return as well. (I also traded a few breakouts on Wednesday which produced a small profit as well, which you can read about in my previous blog post).
I should mention that despite the fact that the Forex Morning Trade system produced a nice profit this week, I have decided to stop trading this system for now. It has had a few more losing weeks in recent times, and to be honest I am getting fed up of getting up so early every day. So this will be the last time that I report the results from trading this particular system:
Monday: +40 points
Tuesday: no trade
Wednesday: 0 (break-even)
Thursday: +40 points
Friday: +12 points (closed manually because didn't want to take a loss)
I may return to this system at a later date and will still keep on eye on the results, but I am putting it to one side for now.
On to my 4 hour system now, and it found some decent trading opportunities this week. There were two trades in total - one on the GBP/USD and one on the USD/JPY pair.
The first was on the GBP/USD pair on Monday morning. The EMAs crossed nicely downwards on the 4 hour chart and I went short at 1.6178 after a slight pull-back. I then closed half the position for 50 points and moved my stop loss down to break-even. I then closed the second half of the position at 1.6100 in the end, which was extremely cautious but I didn't think it was going to fall much further at the time.
There was actually another downward EMA crossover on Wednesday morning, but to be honest I was so busy trading the breakouts that I mentioned in my last blog post that I didn't even notice. Not to worry though because it would have been a losing trade anyway and the breakout trades generated a total profit of 23 points if I remember correctly.
The other trade (on the USD/JPY pair) occurred on Thursday afternoon. I was reluctant to enter a short position after the EMAs crossed decisively downwards on the 4 hour chart, simply because the candle was so long. However I did eventually decide to open a position and went short at 81.40.
I managed to close half the position at 81.00, and having moved my stop loss to break-even, I am still waiting for my second price target of 80.60 to get taken out. I'm just going to sit and wait to see what happens for the rest of the day. It's essentially a free trade anyway, which is the major benefit of moving the stop loss to break-even after you close the first half of the position.
Finally it's been a great week on the shares front. My spread betting account is in a very healthy state after banking profits in Barclays, Lloyds and BP and my main investment portfolios are not doing too badly either with Lloyds the only share currently in the red. However I'm planning to hold on to those for about 5-10 years anyway.
I bought some shares in Vedanta this week at 2080p, but other than that I'm still most interested in accumulating shares in Barclays, Lloyds, BP and Tesco for the medium-long term.
Anyway that's enough for this week. I've waffled on far too much already. Have a great bank holiday weekend.
Weekly Trading Update - 16-20 May 2011
Well it's been another mediocre week this week. My main 4 hour trading system did generate one winning trade, but the Forex Morning Trade system, which lost 40 points last week, is set to have another losing week. I am still waiting for today's trade to reach it's conclusion (I need the price to go up to 1.6275 to hit the 40 point profit target), but at the moment it is either going to lose 80 points or 120 points (it turned out to be 120 points). I will update you with the result of this trade later, but these are the results from using this particular day trading system so far:
Monday: -40 points
Tuesday: -40 points
Wednesday: -40 points
Thursday: no trade
Friday: 0 (break-even)
As you can see, this is not good at all and I am now seriously considering whether I should continue using this system. It had a tremendous winning run for many months, but the GBP/USD has been difficult to trade this year (with the ADX staying below 20 for much of 2011 so far) and this is reflected in the results with more losing weeks than last year. It would also be nice not to have to get up at 6.15 every morning, which is another reason why I am considering abandoning this system.
The annoying thing is that I made money using all my own systems. My 4 hour system found a nice winning trade on the GBP/USD pair. This pair is now in a downward trend according to the Supertrend indicator on the daily chart, so I went short when the EMAs crossed downwards on the 4 hour chart, eventually opening a position at 1.6184 on Wednesday evening after a slight pull-back.
I had to wait a while but it eventually hit my initial 50 point target the next day, where I closed half the position. However after moving my stop loss to break-even, the price bounced back and quickly took out the second half of the trade at this break-even point.
There were also a few good breakout trades for this particular pair (where the overnight trading range is very small compared to the average daily range). I went short on Wednesday morning after the price broke below the range and below the pivot, and rode it all the way down to the S1 line for around 53 points, and this morning I went long after an upward breakout and closed the position at R1 for around 24 points.
Not every trade worked out though because I placed a similar breakout trade yesterday and had to take a 35 point loss after going short at 1.6151.
Finally as regards my share trading, it's been a great week overall. After a very nice rise in BP yesterday and today I have managed to bank some decent short-term gains, and I was automatically closed out on my main Barclays position for 10 points this morning as well.
So overall I finished up on the week but the Forex Morning Trade system cancelled out some of these gains unfortunately. Even if it only loses 80 points, which is looking likely, it has still had a really bad week. I think I will possibly trade it for one more week before making a final decision as to whether I will carry on using it.
Anyway have a great weekend and I will speak to you again soon.
(If you want to check out my main 4 hour trading system, you can access it for free when you subscribe to my newsletter. Simply fill in the short form above).
Weekly Trading Update - 30 May - 03 June 2011
This is the first week that I haven't traded the Forex Morning Trade system and I have to say I've enjoyed the extra hour or so in bed. I just looked at the charts for this week and I think it would have lost 40 points using the original settings, so I think I have made the right decision as it doesn't seem to be as profitable as it used to be.
My main 4 hour trading system didn't generate any decent set-ups on the major forex pairs this week, but I did manage to find a trade on the FTSE 100.
The Supertrend indicator was red on the daily chart (indicating a downward trend) so I was looking to go short on any downward EMA crossover on the 4 hour chart. I don't trade this index very often, but it had just rejected the key 6000 level a few times and looked like an excellent shorting opportunity.
The EMAs looked like they were crossing downwards on Wednesday afternoon after a double dose of poor economic figures from the US, and after a slight pull-back I went short at 5930. My plan of attack was to close half the position for 40 points and the other half for 80 points, and I did eventually manage to achieve this goal after the price hit 5850 yesterday afternoon.
Other than that I think I placed 5 separate breakout trades on the GBP/USD during the week. I don't really feel like discussing each of these trades separately as it will take forever, but they were all based on low overnight trading ranges and subsequent breakouts occurring after 08.00, when the London market opens.
You can check them out on the 5 minute chart if you want. There were two breakout trades on Wednesday morning (one long and one short). With the first trade I closed half the position for 10 points before being stopped out at break-even, and with the second trade I closed the entire position at S1 for around 20 points after poor manufacturing figures had just been released.
There were another two breakouts on Thursday morning. The first one didn't come to anything and I took a loss of 20 points, but the second one generated a nice profit as I closed half at the pivot points for around 14 points, and the other half at 1.6400 for around 32 points profit.
Finally there was a decent breakout opportunity earlier today on this pair as well. Unfortunately because I always like to end the week with a winning trade, I was a little too cautious and decided to close half the position for 10 points and move my stop loss down to break-even, which was subsequently triggered. The annoying thing was that I was targeting the S1 support level as my exit point, and the price did actually hit this point relatively easily.
Elsewhere my shares haven't really gone anywhere, except for Lloyds which has been woeful, and I am now just sitting on the sidelines mainly. There are a lot of potential bargains out there such as Barclays, Lloyds, Aviva and BP amongst the large cap stocks, but ideally I want the FTSE to fall to around the 5750/5800 area before buying into any of these.
Anyway that's all for this week. If you want to check out my main 4 hour trading strategy, you can access it for free when you subscribe to my newsletter via the form above.
Weekly Trading Update - 02-06 May 2011
Well it's been a fascinating week on the markets. I'm sitting here watching the oil price getting absolutely hammered, and am tempted to buy a crude oil ETF for the long term with the current price just below $95, but ideally I would prefer it to fall to around $90.
Anyway back to the forex markets and it's been a fairly quiet week overall. My main 4 hour trading system didn't actually generate any trades at all. There was one on the EUR/GBP pair which would have worked out well, but this occurred on Bank Holiday Monday (and on the day it was announced that you know who had been captured) so it would never have been considered, even if I had been at my computer that day.
Thankfully the Forex Morning Trade system had a return to form and generated a total profit of 80 points, as you can see below:
Monday: no trade (bank holiday)
Tuesday: +40 points
Wednesday: 0 (break-even)
Thursday: no trade
Friday: +40 points
This system does have the occasional losing week, but on the whole it has been extremely profitable. Mark Fric has made a few adjustments recently, but I am still using the original settings of 40 points for the stop loss and target price, and moving the stop loss to break-even when it is 24 points in profit. This seems to work really well so I see no reason to change it at the current time.
If you want to find out more about the Forex Morning Trade system, you can do so by clicking here.
With regards to my share trading, I've had slightly mixed fortunes. I made the decision to close out most of my positions with the FTSE trading close to the stubborn resistance level of 6100. I closed multiple positions in Tesco at 410p for some very healthy profits (with the aim of buying in lower) and closed my positions in Barclays for a small profit.
I am left with one long term holding in Tesco and another long term holding in Lloyds, which actually dropped a lot this week. However I think they have tried to issue all the bad news at once, so it should hopefully be onwards and upwards from here on in.
It's nice to be sitting on a pile of cash at the moment as there are quite a few bargains around. However I think I will try and be patient because the Supertrend indicator has only just turned red on the FTSE 100 daily chart and the Smoothed Repulse indicator has just crossed below 0, which suggests that there could be a lot more downside to come.
Next week should be very interesting and it's actually a full five day week for once. Bank holidays are all well and good, but when you work for yourself they can be quite frustrating because you cannot earn any money. Anyway have a great weekend and I will speak to you again soon.
Should You Use Multiple Time Frames When Trading Forex?
In today's article I want to talk about the merits of using multiple time frames to trade the various different forex pairs. If you go to some of the forex forums and check out the different strategies that people use, you will find that some prefer to use just one time frame, whilst others prefer to use two, three or four different time frames. So how many time frames should you use?
Well the short answer is that you can potentially make money from forex trading using however many time frames you want. There is no right or wrong approach in my opinion.
You may automatically assume that you are more likely to make winning trades using multiple time frames because you can find pairs that are trending in the same direction on each of these time frames, and then pinpoint your entry point on the shortest of those time frames. For example you could look for currency pairs that are trending upwards on the 1 hour, 15 minute and 5 minute charts, and then look to go long at the most opportune moment on the 1 minute chart.
This kind of strategy definitely has it's merits because you are always trading in the same direction as the longer term trend, and therefore you always have probability on your side. However if you use too many time frames you can over-complicate things and you ultimately end up getting a lot of conflicting signals and fewer and fewer opportunities to actually trade the markets.
That's why when I trade my main 4 hour trading system (see right for more details), I only use two time frames. I use the daily chart to highlight the current trend, and the 4 hour chart to find opportunities to go long/short in the same direction as this trend.
The actual system I use only produces a few really good trading opportunities every week (and sometimes none at all) across the major currency pairs. So if I were to use the weekly and monthly charts for additional confirmation of the long term trend, then my trading system would barely produce any trades at all.
I also think it's important to point out that whilst it's a good thing to always be trading in the same direction as the long term trend, you don't always need to use multiple time frames when trading forex. For instance the Forex Morning Trade system, which has made me a lot of money since I first started trading it last September, only ever uses the 15 minute charts.
Similarly when I trade early morning breakouts using my own breakout trading system, I only ever use the 5 minute charts to enter and exit positions. I don't even look at the 15 minute or 1 hour chart, for instance, to look at the longer term trend. All I am interested in is finding a profitable breakout opportunity on the 5 minute chart using simple price action and a couple of technical indicators.
So the point is that you can indeed use multiple time frames to trade forex. I myself use two different time frames when trading my main 4 hour trading system. However as you start to use more and more time frames, you will start to get a lot of conflicting signals and you will also get a lot fewer trading opportunities. Furthermore it is sometimes just as easy to make profits trading just one single time frame, as I have hopefully demonstrated using the two examples above.
The fact is that everyone has their own trading strategies, and it doesn't really matter how many time frames you use because you can still generate profits regardless of how many you use.
Q3 Predictions For 2011
I have a guest post for you today which has been kindly contributed by Christopher Lewis from DailyForex. It basically offers predictions as to where the major currencies are likely to be headed in Q3, which is not that far away now. Anyway here's the article:
When looking at the Forex markets, there are several things that can be concluded when looking around the world. While there is no accounting for “black swan” events, there are several things that are starting to play out in the headlines that could move the markets during this time period.
The first area of concern is Europe. The Greek debt issues are starting to creep back to the forefront, and Ireland recently suggested that they are looking to restructure their debt as well. Be clear, when the phrase “restructure” is used, it means that someone isn’t getting paid. When this happens, it can absolutely crush a currency. While it is speculation to think that the Euro is going to collapse, the truth is that there are a lot of issues just waiting to pop up in that region. In fact, some of the brightest minds are openly wondering how long the Germans and French are going to be willing to fund the poor decisions of the Portuguese, Irish, Greeks, and Spanish. Because of this, we remain cautious about the future of the euro, and think that it may suffer later this year.
The British pound has been strong against the dollar for a large part of this year. The 1.70 level should continue to be the line in the sand and with some of the economic malaise in the UK – the area is likely to be a top in this pair until something good happens in the UK, or the world finally punishes the United States for printing money.
The US dollar will be mixed, but it is hard to see a situation where the world doesn’t run to it when things go wrong. There will more than likely be a move to the USD sooner or later, due to issues in Europe as outlined above. The dollar will probably see continued weakness against other more responsible economies such as Switzerland, but will win “by default” against many others. The destruction of the dollar will continue in the long run, but the feeling that one of these “panics” is coming can’t be ignored.
The rest of the year will not be as smooth as the first part of it has been. The easy profits have been had, and now we shall see concerns overtake the market from time to time. This is obvious as every minor issue causes a sell off in the “risk currencies” in short order. The market acts like a market that has little confidence in the safety of trading. Because of this, we will see strong moves down in commodity currencies as well. However, there will be periods of optimism as well. This is what will cause the choppiness. Even with these headwinds, the likelihood of another meltdown isn't very high. Shorter-term trading will be the order of the day.
About the Author:
Christopher Lewis is a regular contributor to DailyForex, a website that offers Forex broker reviews, technical analysis and Forex news aimed at helping traders make their Forex trading as profitable as possible.
Friday, June 3, 2011
Forex Trading Signal Week #20 2011
1) Forex Trading Signal For EURUSD
Forex Trend Analysis
As a whole, the trend for this week is DOWN.
Forex Technical Analysis
Hourly Chart
There is a formation of a rising wedge which is a sign of bearishness. From the formation, it looks like the the price will collapse downward. However you have to take note of the R2 Daily Pivot which is a major support for the price.
Hourly Chart EURUSD4 Hourly Chart
The price is approaching a major resistance which is in confluence with the 200 EMA.
4 Hourly Chart EURUSDOverall Forex Analysis
I will look to go SHORT if the price breaks below the wedge and R2 Daily Pivot.
2) Forex Trading Signal For GBPJPY
Forex Trend Analysis
As a whole, the trend for this pair is UP.
Forex Technical Analysis
Hourly Chart
The price has broken the symmetrical triangle and is now testing the new support after the breakout.
Hourly Chart GBPJPY4 Hourly Chart
On this time frame, you can see that the price is being held by the 200EMA support.
4 Hourly Chart GBPJPYOverall Forex Analysis
I will wait for the price to break through the 200 EMA before entering any long trade.
Other
Forex Trading Signal Week #12 2011
1) Forex Trading Signal For EURUSD
Forex Trend Analysis
4 Hourly Chart: Strong BullishAs a whole, the trend for EURUSD is UP for this week.
Forex Technical Analysis
Daily Chart
The price looks like it is being resisted by the major resistance level and moved back down. The MACD negative divergence formed on this chart still holds as the MACD makes lower high while the market makes higher high. However you have to be careful of the strong support level at 1.40509.
EURUSD Daily Chart4 Hour Chart
In this chart, it seems to me that the price is forming a 123 reversal pattern. If the price manages to break below the major support which is pretty close to the neckline of the reversal formation, the price looks like it will reverse.
EURUSD 4 HourOverall Forex Analysis
I will look to go SHORT if the price manages to break below the 1.40509 level as the price will most probably reverse.
2) Forex Trading Signal For GBPJPY
Forex Trend Analysis
As a whole, the trend for GBPJPY is DOWN for this week.
Forex Technical Analysis
Daily Chart
The price is being resisted by the 200 EMA and is moving down.
GBPJPY Daily4 Hour Chart
The price is being resisted by the monthly S1 pivot and it looks like it has attempted to break above it for 6 consecutive times.
GBPJPY 4 HourlyOverall Forex Analysis
I will look to go SHORT for this pair but I will be cautious when it reaches 129.401 which is a major support level.
Other
Forex Trading Signal Week #18 2011
1) Forex Trading Signal For EURUSD
Forex Trend Analysis
The overall trend remains bullish as the higher time frame is still pretty bullish. As for the bearish sentiment on the lower time frame, it could be just a retracement on the higher time frame.
Forex Technical Analysis
4 Hour Chart
The price continues its strong downmove on this time frame and the price is currently supported by the M1 Daily pivot.
Hourly Chart
The price has retraced to the 0.382 Fibonacci level and is now moving its extension. The minimum extension will be to 1.272 at 1.40434.
EURUSD HourlyOverall Forex Analysis
The price will continue its strong downmove as there are still no sign of reversal. Maybe you can go for selling the rally in this kind of situation.
2) Forex Trading Signal For GBPJPY
Forex Trend Analysis
As a whole, the trend for this pair is DOWN for the week.
Forex Technical Analysis
4 Hourly Chart
The price retraces to the 0.500 Fibonacci level which is in this case the same level as the 200 EMA. With this confluence of event, the price forms a railway track which is a sign of price reversal.
The price has moved past the most recent swing low and look set to move to at least the 1.272 extension at 129.249
GBPJPY 4HourlyOverall Forex Analysis
I will look to go SHORT for this pair until a reversal pattern is formed.
Other
Forex Trading Signal Week #16 2011
I hope that some of you make some money from the head and shoulder down move on EURUSD last week. Although the price did not hit my price target and move further up, you should have made some profit from it. Below is the analysis for this week.
1) Forex Trading Signal For EURUSD
Forex Trend Analysis
4 Hourly Chart: Strong BullishThe overall trend for this pair is pretty strong and it is UP.
Forex Technical Analysis
Hourly Chart
On this chart, there is a formation of a double top but the price has not touched on the neckline yet.
EURUSD HourlyOverall Forex Analysis
I will wait for the price to break below the neckline before I enter a short trade.
2) Forex Trading Signal For GBPJPY
Forex Trend Analysis
The overall trend for this pair is flat and it looks to me that it is consolidating and a big breakout is likely to occur.
As a whole, there is nothing much to talk about for this pair as there is no specific pattern forming.
Other
Forex Trading Signal Week #17 2011
Although the double top neckline is being held, the price actually forms a trend channel after that and upon breaking the channel, the price moves down for about 400 pips.
1) Forex Trading Signal For EURUSD
Forex Trend Analysis
4 Hourly Chart: Strong BullishThe overall trend for this pair is still Up despite the big drop in price.
Forex Technical Analysis
Hourly Chart
After the double top formation highlighted by me last week in my analysis, the price is being supported by the neckline and then forms a trend channel.
In fact, there is a fakeout in the trend channel which leads people to enter a LONG position. For those of you who have purchased my forex trend line strategy book, you will be able to tell the fake out and should not have entered the trade.
After the fakeout, the price actually move down and break through the support trend line with a valid breakout signal.
EURUSD HourlyOverall Forex Analysis
I will advice you not to take any trade in this pair as the price is too volatile and therefore the retracement will be pretty wild at time. Wait for the price to stabilise before looking for another trade.
2) Forex Trading Signal For GBPJPY
Forex Trend Analysis
The trend for this pair is Down for the week.
Forex Technical Analysis
Hourly Chart
The price might reverse up this week as there is a formation of a MACD positive divergence. As you can see from the picture, the price makes a higher high and a higher low which is a sign of upward movement.
GBPJPY HourlyOverall Forex Analysis
The price might move up this week, however it does not constitute a reversal yet as it might be just a retracement on the higher time frame.
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Forex Trading Signal Week #19 2011
1) Forex Trading Signal For EURUSD
Forex Trend Analysis
As a whole, the trend for this week is still DOWN
Forex Technical Analysis
4 Hourly Chart
The price has retraced quite a lot last week and upon hitting the major weekly R1 pivot resistance, the price moves down quickly. In fact the price has broken the Weekly Pivot Point and has moved down further.
EURUSD 4 HourHourly Chart
You can see the major support level on this chart at 1.41347 as it has been tested several times before.
EURUSD HourlyOverall Forex Analysis
The price will continues to move down this week and therefore I will look for opportunity to go SHORT.
2) Forex Trading Signal For GBPJPY
Forex Trend Analysis
As a whole, the trend for this pair is DOWN for the week.
Forex Technical Analysis
4 Hourly Chart
The price is being resistance by the Fibonacci 0.618 Level at the moment. At the same time, there is a weekly R1 pivot resistance slightly above the Fibonacci level. This will give rise to the difficulty in breaking upward.
GBPJPY 4 HourOverall Forex Analysis
I will look to go SHORT for this pair due to the strong resistance this week.
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Forex Trading Signal Week #15 2011
If you have followed my signal last week to wait for the breakout of EURUSD and then enter your position when the price came back to retest the support of 1.43807, you should have profited at least 200 pips from the movement.
1) Forex Trading Signal For GBPJPY
Forex Trend Analysis
The overall trend for this pair is still DOWN
Forex Technical Analysis
Hourly Chart
The price is moving within a horizontal trend channel and the price is being held between a strong support and a strong resistance level. In addition, the MACD has neutralized which means that the downward pressure has been relieved.
GBPJPY HourlyOverall Forex Analysis
I will continue to go SHORT for this pair but I will wait for the price to break below the trend channel before I take any position.
2) Forex Trading Signal For EURUSD
Forex Trend Analysis
4 Hourly Chart: Strong BullishAs a whole, the trend for EURUSD this week is UP.
Forex Technical Analysis
4 Hourly Chart
I hope that you guys have profited from the downmove. However the price reverses and move back up nearly 300 pips and created another new high.
However at the same time, the price also created another MACD negative divergence with the formation of a railway track formation.
EURUSD 4 HourHourly Chart
The price also forms a head and shoulder pattern on this time frame. In fact, at the time of writing this post, the price has broken below the neckline.
EURUSD HourlyOverall Forex Analysis
I will look to go SHORT for this pair and I will look to exit at 1.44377 which is the price projection for the head and shoulder pattern.
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Forex Trading Signal Week #13 2011
1) Forex Trading Signal For EURUSD
Forex Trend Analysis
4 Hourly Chart: Strong BullishAs a whole, the overall trend for EURUSD is up for the week.
Forex Technical Analysis
4 Hour Chart
If you have read my previous analysis on this pair, you will have notice the formation of the 123 reversal pattern. I said that I will go SHORT if the price manages to break below the neckline of the pattern. However the price hit the level and indeed attempt to break below for six consecutive times without success.
After the sixth attempt, the price moves up and then came back down to test the same level for another 5 times below moving up again.
EURUSD 4 Hour ChartDaily Chart
The price is moving up towards the next major resistance at 1.44839. The MACD negative divergence still holds as the price is making a higher high but the MACD did not manage to create a higher high.
EURUSD Daily Chart
EURUSD Daily ChartOverall Forex Analysis
The trend for this pair remains strong but the MACD negative divergence did not get invalidated and therefore I will not look to go long. I will look to go SHORT when the price hit the major resistance but I shall be looking for other confluence like the reversal candlestick pattern.
2) Forex Trading Signal For GBPJPY
Forex Trend Analysis
As a whole, the trend is mix for this week but I will look to go SHORT as the higher time frame shows sign of strong bearish
Forex Technical Analysis
Hourly Chart
The price is currently moving within a trend channel which is a sign of pressure relieve after a big up move.
GBPJPY ChartOverall Forex Analysis
I will wait for the price to break the channel before I decided which direction to go.
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Best Forex Trading Strategies For Working Person
In today currency trading Q & A, we have a fellow trader asking for the best forex trading strategies for working person.
Here is the question:
I’m looking for a trading system suitable for a working person. I have 2 hours each day before work available where I do my chart analysis. I have had mixed results but still haven’t found the necessary confidence in a system suitable to my situation.
I know that most of you here are holding a job and trade forex after your work using your free time. Therefore this must be one question that most of you are interested to ask. Therefore I will like to thank this trader for asking this question in behalf of all of you here.
If I were to recommend the best forex trading strategies for working person with limited time per day. I will recommend the below 2 trading strategies
1) Forex Swing Trading – This is a trading strategy where you will enter a trade to profit from the market swing. As you may have know, the market is made up of waves which is what we call the swings.
We are not going to trade all the swings but we are only going to focus on swings that are bigger in magnitude as these are where we are going to grap more profit from.
However big swing only occur at specific period of time and this is why I think that this strategy is suitable for those of you who are working in the day but trading in the night. Big swing occurs at London Open, Close, New York Open and Close period as these are timing where the market is most active.
Forex Swing Trading StrategyTo find out more about the forex trading hours, you can read this article I have written some times back
Click Here To Find Out About the Forex Trading Hours
2) Forex Breakout Trading – The next strategy that I want to recommend you guys is the forex breakout strategy. This is one strategy that I often recommend new traders to learn as it is very easy to spot and easy to execute.
What we are doing here is to identify the market consolidation and then wait for the market to breakout of a candlestick pattern or trend channel. Similarly the real breakout usually occur at the major trading hours.
For those of you who are working in the day, you can just focus on trading during this hours. In fact, I have previously purchased a course that I think is very suitable for working traders as it will teach a method to check if there is a trading opportunity everyday with just 10 to 15 minutes of your time.
Before I purchase this course, I was pretty skeptical but after I got hold of it and go through the lesson, it was worth the effort and I am still using the technique taught today in my trading.
For those of you who are interested to find out more about the course, you can visit the official website below
I hope that I have answered your question on the best forex trading strategies for working person and if any of you have anything to share, do feel free to give your comment below as it will be very useful for this community.
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