Marc Walton on June 2, 2013
Hi,
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The link is at the top of the page.May was a very good month from a technical perspective with lots of repeatable patterns behaving as we hoped. This week is less straight forwards in that we have many pairs at major areas and this Friday coming is NFP (non farm payrolls/USA jobless figures) which I never trade as its forex at its most volatile and often sees extreme moves that promptly disappear after the weekend. Having said that I do have a potential 1:9 risk reward ratio Jpy trade on my list of possibles for this week, so all is not lost!
In the start of this weeks video I recap last weeks events with good wins on the Chf, Gbp , Euro/Gbp and initial Aud trades. Followed later in the week by a strong looking Euro short that simply failed. This trade had multiple reasons why it should have worked and if the same set up presents I will take once more. You have to learn to accept the fact that nothing is guaranteed in forex, which after all is supposed to be completely random.
My goal as ever this week is to be finished by Wednesday evening as we also have Euro interest rate news on Thursday and the even more volatile press conference a few hours later. There is serious discussion in the Euro zone at the moment about the possibility of a zero or even negative deposit rate. Even a hint of such a move should see the Euro drop like a stone, so this weeks announcement will be more closely watched than normal.
What usually happens is that the Euro goes nowhere before the announcement on Thursday morning then have wild swings, only to go nowhere Friday morning leading up to Nfp news which can see even wilder swings.
I aim to find as many low risk, high reward trades as possible like the afore mentioned Jpy and avoid the markets at their most insane such as major news!
The forex Week Ahead
The monthly candles have just closed and you need to get in the habit of checking them out as they can often give clues as to future direction and you definitely need to make a note of monthly trend lines as traders all over the world will be aware of them and therefore these areas are by definition much stronger than say a 1 hour chart.
I show in the video how we are still waiting for a “Head & Shoulders” potential trade Set up on the Euro/$, if you are new or need a refresher, here is a link to a previous post where I explain this set up in detail. Head & Shoulders & Triangle Break Outs Since a made this post members have started to see them on lots of pairs, which usually suggests that we should be on some big break out moves before we hit summer ranging markets.
On the subject of ranging markets they usually start late July through August and many pro traders walk away, however I have a very simple system that is usually very profitable and I will show you nearer the time.
The $USA again saw some pull backs towards the end of last week which was not surprising after the recent moves and even more so with the Yens. I explained last Sunday that there were lots of clues that the Yens were stalling last week and further clues that we could see some BIG pullbacks. I will be very wary again with the Yens this week. It is very unusual for pairs to simply power in one direction without a major pause or pullback.
Gbp/$: The bounce at 1.5000 worked again last week for 100′s of pips and that is the main area I will be interested in again for multiple reasons as explained in the video. If it gets down there I will long once more. If that trade loses and price clearly breaks and closes below 1.500 I will look to short as 1.500 is a MAJOR, KEY area. I explain in the video how I only take trades with a minimum risk reward ratio of 1:2 and therefore over time you can lose 40% + of the time and still be a profitable trader.
From longer time frames my preferred, forward order trade is that long at 1.5000 or to short at 1.5400 once more for multiple reasons.
Those trading intraday from 4 hour charts look around 1.5150 for possible pull back longs
Euro/$: I said in recent weeks There is a monthly potential 2000 pip brewing and a weekly 720 pip head and shoulders potential move”! Nothing has changed.The head and shoulder entry will be a break and close below 1.2790 followed by a pull back – explained in detail in the video.
My other preferred trade is to short at 1.3300 for multiple reasons.
Intraday I am leaving alone it is simply too messy in its current position. Its important to learn to walk away if you do not see a potential trade, do not try to force things as you will lose much more times than win.
Euro/Gbp: Price continues to bounce between o.8500 and 0.8600 I will look to take trades there until it breaks. Once it does break those same areas will be where I will look for M2 break out entries followed by a pullback
Chf: Weekly inverse head and shoulders pattern gave 100′s of pips last few weeks, price has now broken back below the all important 0.9600 line. That is now the area for potential shorts, but only from closed 4 hour candles. Personally I prefer a big pullback and a long at 0.9370 which has weekly 55ema, steep bollinger band, daily 200ema, 78.6% fib just below as well as a trend line, did someone mention multiple reasons
This will have an excellent risk reward ratio of possibly 1: 10 !!Aud: Be careful. Winning bounce trades in recent weeks at 0.9600. Price just broke below this area on Friday which would normaily see me diving in to a short BUT I explain in the video how there are clues on gold, silver and other charts that this may just be a fake out. The best way to play this for me will be if we get a bigger break down, preferably on a closed daily candle THEN a pullback to short.
Intraday a pullback to 0.9670 will also be interesting to short. Finally if it roars back up then a further short at parity for all the reasons stated above.
Aud/Yen: Leaving alone. Feels too risky to me. More aggressive traders consider a short at 0.9740
Euro/Yen: Too messy, leaving alone.
$/Yen: I am only interested to long, 100 is the 1st place for a pull back after a major move up. More conservative entry with a great risk reward of possibly 1:9 is a long at 98.7580/99.00 all explained in the video.
Cad: Stopped to the pip at monthly 55ema which has not broken since 2008 so swing traders will consider shorting at 1.0400 and bounces back up at 1.0300, not a pair for beginners, I will watch and wait at the market open and only trade from 4 hour or daily candles. I will NOT place a forward order. Still 370 in profit from Parity bounce 3 weeks ago with stop now at 1.0280
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
To View the Video, click on the link here http://youtu.be/3pFL9jzNscw