Marc Walton on June 9, 2013
Hi,
as predicted last week saw some HUGE moves although NFP came out almost
as expected. I finished trading on Wednesday as per my trade plan and
as a result missed a lot of potential losing trades. There were
obviously winning trades to be had and some of you will no doubt have
caught some of them. As long as they were part of your plan then well
done. However if you were simply diving in to trades then its quite
possible you simply got lucky and will not be every time.Over time the patient and disciplined trader will win consistently because they have rules and follow them. This is often the most difficult part of trading from home, where you do not have someone looking over your shoulder who is monitoring your actions as well as your results. Write out your rules, make a plan and then stick to it.
My plan was to be finished trading by Wednesday at the latest due to the ECB interest rate and press conference. In doing so I missed a winner, but avoided 4 losers. I was fortunate enough to make my weekly target on Monday due to an over reaction to some US news. After that I went in to ultra cautious mode and finished trading Wednesday lunch time.
I was trading with an ex bank trader last week (the beauty of the internet
) and he had a big winner BUT he was annoyed with himself and he
explained that if he had taken that trade whilst working for the bank he
would have been warned about his conduct! His crime? He had broken his
trading rules. He explained that the big institutions have rules and
strategies that have worked for them for years and they are actually
more likely to pat you on the back if you did the right thing but lost!I have explained in recent months that the $USA’s recent strength had as much to do with sentiment as fundamentals. The debt mountain continues to grow by billions per day and yet the $ was going up in value. It appeared last week that traders wanted the NFP news to be bad and was reacting severely even to less important news. Technically we also have 5/8 crosses forming on weekly charts on a number of pairs, so we could be on for a period of $US weakness in the run up to the summer months.
The Forex Week Ahead
I have explained many times that you are best to concentrate on a handful of pairs (including your own currency wherever possible). Bank traders often only trade one pair! This week you could simply trade the Euro or Gbp and there are lots of potential trades lining up.
I will watch the markets at the market open and place a few forward orders for major areas, but I will wait for London to open before taking trades of smaller time frames. After a period as chaotic as last week, often traders will pause for a few days before deciding on where to go next. Unless something extraordinary happens I am going to leave the Euro/Yen and Aud/Yen alone but I am looking for the following set ups.
Gbp/$: Multiple opportunities:
From longer time frames my preferred, forward order trade is that a long at 1.5340 where there is a 50% fib, daily trend line, previous support & resistance, 55/34 emas just below. Counter trend there is a possible swing trade short at 1.5620 BUT the daily is not far below therefore if I do take this type of trade the Euro has a better set up. If price breaks and closes above 1.5620 then I will long, standard, M2 break out pull back.
Intraday: Price is in a channel on the 4 hour charts, I will look after the London open for potential bounces back up from the bottom trend line, currently at 1.5475 which is also 50% fib on this time frame. All explained in the video
Euro/$: Multiple possibilities: My preferred entry is a pullback to long at 1.3070 with my stop below 1.3000. 1.3300 is also a major area. Look for clues on a 4 hour (explained in the video) to short here OR if it breaks then wait for a candle to close then look for standard M2 pull back entry long.
Intraday Price is in a channel and 1.3150 is the current area to look for longs (you need to follow the price as it moves up or down a trend line for entries).
Euro/Gbp: Messy, currently meandering around 0.8500 need a clear move in either direction. I will place a forward order to short at 0.8600 and am also interested to long above 0.8520 or short below 0.8470, standard M2 break out, pullbacks on closed candles 4 hour or above.
Chf: Preferred entry is a short at 0.9600 or a break and close below 0.9300 followed by an (M2) pullback. A more aggressive move (I will watch and make a decision, but not place a forward order) is to short from 0.9367 on a 4 hour chart.
Aud: Weak Chinese news at the weekend means this could gap at the open. Price broke and closed below the all important 0.9600 so a pullback to there will be of interest (watch but not forward order for me). The reason I am wary is that price rarely falls in a straight line without a decent pullback, its a bank holiday in Australia, there is macd divergence on the daily and and gold hasn’t tumbled. A more conservative entry will be a pullback to 0.9800 and also watch the monthly 55ema around 0.9650
Intraday a pullback to 0.9650 will also be interesting to short. Finally if it roars back up then a further short at parity.
Aud/Yen: Leaving alone. Messy. If we see a BIG drop then I will long at 85.00 but will be an extra big move so doubt it will happen this week.
Euro/Yen: Too messy, leaving alone. The major area is all the way back down at 117.00 but that could take weeks if at all. If you are going to trade it, watch for a break of the weekly trend line around 126.50 for an M2 short or bounce back up. Not for me.
$/Yen: I am looking to short at 98.60 its a major area of support and resistance and fib and ema. I will watch 1st few hours of Asian session before placing order, unless there is a gap. There is red flag news not long after the open, THAT could rock this in either direction so be careful.
Cad: Very positive Cad news last week and mixed USA saw the loony turn back down. The conservative entry is a long at 1.0020 but I will also watch 1.01000 which is 78.6% fib of latest daily move + 200ema and previous support and resistance and whole number so multiple reasons. If I take that order I will get my stop to entry asap (25 pips) as the Cad is a mean pair with nasty whip saws, not for the beginner.
New members please note: If I am looking to take a trade long, at for example 1.5000 , 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. Its a great resource, USE IT: Forex Forum