03.12.2012
Hi, frustrating markets at the moment but they are still trade able. Markets never stay the same and as a trader you have two options. Firstly if the current market pattern doesn’t suit your methods or trading personality then walk away & wait until they do. Option two is that you learn to be flexible.
When you are new to trading its important that you learn to master one method. Deans STT strategy is the easiest forexmentorpro technique to learn and when markets are clearly trending its not difficult to be a profitable trader, however when markets range the STT either struggles or simply doesn’t work (it needs a trend)! When you have mastered that THEN consider alternate strategies. In the summer price usually goes into a side ways ranging market & I have previously shown you how to trade these “ranges” & I do so again in todays video.
I said in last Wednesday’s write up that price was going sideways, sideways, sideways, big move, sideways. The trick is deciding what you intend to do about it. Do you want to try catch bounces or are you waiting patiently for the big break out? Last week I waited for big pull backs which didn’t arrive & I had NO trades. One missed my entry on the Chf by 5 pips and went 100 which was very frustrating, but at least I didn’t suffer any losses. Not losing is the first goal of any trader.
This week I aim to trade “ranges” in the early part of the week, however its THE busiest news week of the month and if anything is going to break us out of these tight zones then news is usually the catalyst, so how to play? I will look for bounces off repeatable areas. If “red flag, ” potentially high impact, news is due I will leave that pair alone for an hour before the release, then wait to see what happens (if anything) after the dust settles. If there isn’t a big reaction to the news and price continues to range I will once more look for bounces. With this type of trading you need to get stops to entry quickly (around 20 pips) then decide whether you will take some of the profit OR leave the trade running in the hope that you will catch a much bigger continuation move.
The second part of my plan for the week ahead is to still look for those bigger pull backs. These trades usually have a bigger win potential and much better risk reward ratios.
Clues
I often speak about “looking for clues” on 4 charts when trading. Pierre gave you a perfect “heads up” last week that price was looking to stall or even turn on many pairs. Hopefully his cautionary explanation kept you out of losing trades. I explain the subject of clues once again in todays video.
Monthly Candles have just closed, have a look at the monthly charts for pairs you trade for clues to direction for December.
In general I recommend you only take one trade at a time, personally I continue to zoom out and concentrate on longer time frames.
M1: I recommend that under no circumstances should you trade this method at the moment. It needs clearly trending markets, we have the exact opposite, leave it alone.
Euro/$: I prefer to zoom out BUT 1.3000 bounce trades worked on at least TEN occasions last week from 4 hour charts, so its the first place to look as well as pullbacks down to 1.2880 area for longs.
On longer time frames I am still looking if price drops steeply I will be interested to long at the 200ema currently around 1.2550.
On the upside a clear break and close above 1.300 will be a good M2 trade (it will also be a break of that monthly upper trend line, the more aggressive entry is a closed candle on a 4 hour chart, the more conservative (it is a LONG term move) will be to wait for the daily candle to close above. Lots of Euro news and meetings and still the Greek nonsense so anything could happen.
Chf: Price missed my weekly entry by 5 pips last week which was a bit of a sickener, but thats forex. I am looking in the same areas this week Price broke, closed and shot through the previous strong support level of 0.9400 so now I look for pull backs to short. The difficulty is that price may not get further than the weekly 55ema at 0.9355 so I will split my order in half. I will look to short at 0.9340 (exact) and the other half at 0.9400. If price simply keeps falling then I will look for a potential swing trade back up at 0.9210, half stake.
Gbp/$: Weekly charts I will long if price drops to 1.5900 for multiple reasons, weekly trend line, weekly 55ema, previous support & resistance etc. I will also be interested to short if price reaches 1.6200
Intra day price is range bound between 1.6050 & 1.6000 its a small range but I am interested to long at 1.6000 again for bounce trades for multiple reasons: intersection of daily trend line and previous major support & resistance, whole number fibs and emas.
Euro/Gbp: To tiny ranges to play bounce trades I am more interested to zoom out 0.8000 is still the key area for a long . I will also be looking to short (half stake) if price hits 0.8150 for multiple reasons, as explained in the video.
Aud: I am still looking for the longer term pull back from weekly charts, it didn’t happen last week BUT the trend line has been support since May & the fibs have held on weekly charts many times so that is my preferred trad eon this pair. I will long at 1.0380 which also happens to be a weekly 61.8% fib THESE fibs have been mega important on this pair since May. I will also be looking to counter trend short at 1.0580
Lots of Aud news this week, if price drops dramatically after an announcement I will look to long at 1.0300 which is still key. If price drops dramatically I will look to long there once more. If it breaks and closes below then I will M2 short. Make the plan, trade the plan.
Keep watching gold prices for clues as the Aud & gold usually go in the same direction.
Cad: I said last week that we have a possible 600 Pip weekly triangle trade brewing & price still failed to break. The nearer price gets to the tip of a triangle, the more aggressive the move usually is. 1.000 is crucial on this pair. If it hits it once more I will short with my stop just above the recent high. The lower 0.9900 trend line will have me shorting if we get a break and close below, standard M2 trade.
Euro/Yen: Price repeatedly bounced off 106.00 last week so look for range trades from there.
Aud/Yen: Huge monthly candle just closed and usually the following candle pulls back, I am interested to long at 84.70 for multiple reasons, explained in the video. Range traders look for clues to long at 85.50 but again its a small range
$/Yen:All the yens are currently range bound, so only be in one at a time, this one is messier than the Euro/Yen, but I will long at 82.00
New members please note: If I am looking to take a trade long, at for example 1.6000 , I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.
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Pierre, Vassilis (Capsmart), Raa, Omar, Mary, and other experienced members will be available in the forum to give you a more up to the minute assessment & whether they see any potential trades lining up in the next few days. Many members tell me this is the best forex forum there is (no back biting & bitchiness, nor spam, that spoils most forums) and all members are happy to help new visitors. Its a great resource, USE IT: Forex Forum