Marc Walton on April 14, 2013
Hi,
the best trade last week was that based around last Sundays Aud
analysis. Intraday I had a handful of losses and wins with a small net
gain and yet one trade from longer time-frames yielded almost a weeks
target. Every week end I explain that is my preferred strategy and why
and yet I still get emails from folks who are taking trades in the
strangest of places for even stranger reasons.
You need to decide whether you are in forex for the adrenalin rush,
the intellectual challenge or simply the money. If you go for the latter
option you will trade less. Be less emotional and have less stress. If
you can get your analysis right you also don’t need too many winners to
be profitable as the risk reward ratio is often better when dealing with
longer time frames.Most of last year and again in 2013 I have explained ad-nauseum about the longer term fibs being in control of the Aud & trading shorts just from WEEKLY charts gave 9 out of 10 winning trades with an average stop of less than 30 pips and a gain of 200+ pips. It did it once again last week. Eventually it will lose but if it does it again this week will I take the trade? Of COURSE!! No guarantee it will work, but probability says that it probably will.
If it breaks and closes higher than 1.0600 on at least a daily chart I will start to consider longing, but until it does I carry on with the current pattern.
When To Trade
A fortnight ago we had a very successful week from the Sunday analysis, lots of entries to the pip and a few decent home runs made it look easy. I said in last Sundays write up “ lots of spookily accurate analysis last week means that forex is now officially easy and we can all make a fortune from now on? Not exactly
Over
confidence has blown as many accounts (including mine in my early days)
than lack of knowledge in my experience. If you had a good week last
week, your first goal is not to give it back in the week ahead.”I explained how big moves and over reaction to NFP news may mean we see small moves and the Euro & Gbp were a case in point. Trading more frequently when times are good and less when they are not is a skill you need to develop. For example, I am unsure on quite a few pairs this week and therefore why would I want to go looking for trouble? Remember the mantra “If In doubt stay out.”
Gold broke major trend lines and silver is sat on one now. Many of the press have spent the week-end predicting a crash. My response? I bought more silver on Friday.
I explained a few weeks ago that was the area. If it continues to tumble, I will buy more. In recent years the $US has been seen as the “safe haven” currency and that appears to be the case at the moment. To me that is completely, utterly ridiculous. The $US debt mountain continues to rise by $Billions per day & politicians continue to fiddle whilst their economy burns.
Ironically the US Government cautioned the Japanese about not weakening their currency at the weekend. That is the same government that has already sanctioned $100′s of Billions of extra paper money and is still doing so at the rate of at least $85 Billion per month. Insanity! In my opinion the day of reckoning is not too far away and gold & silver will resume its “safe haven status. Recent IMF & EU moves against Cypriot Bank account holders (stealing up to 60% of savers paper money) means that even what you have in the bank is no longer safe.
Buying gold and storing it away from your home governments greedy hands has been my strategy since 2010 and I continue to do so.
This is NOT financial advice.
I am NOT a registered adviser but late French President Charles De Gaulle had this to say on the subject of gold:
“Betting against gold is the same as betting on governments. He who bets on governments and government money bets against 6,000 years of recorded human history.”
I actually own a lot more silver than gold as it is used in industrial production and supplies are dwindling and its not cost effective to mine more at the current price. Silver is heavily manipulated and you need a strong stomach but it makes sense to me to hold it.
The Forex Week Ahead
There was an Ecofin meeting over the week-end and there is a lot of major news this week culminating in both IMG & G20 meetings, starting Friday. If you are trading intra day you need to tip toe around these releases. In general I do not open new trades when red flag news is due within the next few hours. I close or move stops on open trades as well. Wait for the dust to settle and then make a trading decision. You should do the same.
There are variations on this strategy. For example imagine the Euro/$ is at 1.3300. BAD news comes out and price tumbles all the way to 1.3000 where I had decided to long (from weekly time frames) I will still take the trade. Why? Often there is an over reaction to news followed by a period of contemplation. Also price would have fallen 100′s of pips more than the average daily range and finally if price is going to stop anywhere that would be the logical, main spot.
Euro/$: Very messy. I prefer the Chf this week. Longer term charts I am interested to short if price gets up to 1.3300. Intra day watch 4 hour charts and 1.300 for possible longs but I am not overly confident and feel there are better opportunities elsewhere.
Gbp/$: Opened and closed in exactly the same spot last week. Complete indecision which makes it almost untradable for me. I think that we need a major news announcement that does not agree with the predictions to be the catalyst to kick start this pair. 1.5370 is still key for me. We either need a clear break and close above 1.5400 to consider longs but in truth I don’t like it. I will look on 4 hour charts for possible longs at 1.5100, half stake. but if its choppy I will walk away.
Euro/Gbp: Last weeks short at 0.8520 failed. Price did then bounce twice off the 78.6% daily fib at 0.8560 so consider shorting there. There is also a Never In a Million Years bollinger band (NIMY) on the daily at the moment. If it stays pointing steeply down that gives a bit more reason to short. More conservative entry I prefer will be to short at 0.8600
Chf: Prefer over the Euro this week as technically more reasons to support my trade plan. Only interested to short and 0.09325 is my preferred entry. If price breaks and closes above then I will look to short again at 0.9400
Aud:Same as last week, last month, last year! There are ZERO guarantees BUT “From longer time frames 1.0570 is strong resistance so I will short there, half stake. From weekly charts I will be interested to long at 1.0200. Intraday I will watch 1.0380 on 4 hour for possible longs. Watch gold carefully. If it tanks then the Aud will likely follow. If it rebounds sharply the Aud should rise as explained in the video.
Yens: There are pin bar reversal weekly candles on many Yen pairs which all strongly support the theory of a reversal or at least a significant pull back.
Aud/Yen: I was taken out by 1 pip, 10 days ago, The move eventually went 800+ pips
Sickening but moveon.com I need a pull back and 100.00 is the major area for me.Euro/Yen: Stopped to the pip at monthly 200ema 127.00 is my zone to long
$/Yen: You could have caught the top on this pair last week, but its not a strategy I recommend. I am only interested to long, with the trend but still need a pullback. My main area to long is 94.50. Intraday look for clues on 4 hour charts at 96.40.
Cad: Still messy but 1.0030 is my preferred entry once more. Its the psych level/parity. Strong previous support & resistance. 61.8% fib and the weekly 55ema – did someone mention multiple reasons! Intra day I will consider shorts (half stake) at 1.0200
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.
We are NOT a “tipping service” our aim is to teach you how to trade for yourself. For more up to the minute updates do not forget to drop by the forum
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.
To view the video click on the link http://www.youtube.com/watch?v=7TzgE8SaFjs