Marc Walton on June 8, 2014
Haaaa!! Marc Finally had to deal with NFP
week!! I ALWAYS do that one right??? Of course, our fearless leader
was able to successfully navigate that one and he beat the pants off of
me in gains last week. Of course, I have become rather gun shy with NFP
week and forex myself and didn’t even entertain trades in the market
after Wednesday. OF COURSE, I got to hear from many of our members who
profited nicely from the drop on Thursday.Interestingly enough, as scary as last week was towards the end, it ended up forcing many pairs RIGHT BACK to where they were a week prior. Yup, big moves, and ZERO breaks. Pair after pair after pair. So don’t let the price action fool you!! We come into this week with in my opinion the door opening up to summer range trading, which is rather easy, can be very consistent and profitable as long as:
- Don’t Shoot For The Stars: Its a bit early to be talking about summertime markets but they do often meander from one area to another, hence the term “range” trading. Because they are not making any new ground normally, we don’t see day after day after day of intense movement in one direction. Rather than going for the 500 pipper, take your trade up to the next S/R and close it. If it breaks, take another trade. If it reverses, you have caught the most move you could. The focus of summer ranges is flexibility and modest trades based on bounces from S/R to S/R.
- Focus on Important Areas: Oh how we have seen the 55 EMAs and 200 EMAs really, really come into play lately. At the moment, it seems that the 200 EMA on many pairs is sitting at the bottom of trading ranges and some form of 55 EMA is a “mid-point” EMA on many pairs. By understanding the overall market structure, it gives us a roadmap by which to trade through, and off of ranges. Use these areas to trade around.
- Confirmation? Or Better Entry?: I have discussed this over and over, but decide whether you will simply place a forward order at the area, or whether you will look for confirmation. Personally, during ranging times, I am more akin to choose the forward order rather than looking for the confirmation because of the more modest movement we see and numerous reversals we get during this market phase.
- Plan the Trade(s) FIRST, Then Trade The Plan: Map out all the possibilities that the market could do with our important areas. Then come up with either a plan of action, OR a plan of “no-trade”. Then all you have to do is watch the market play out and you are ready for whatever it does. This will take the stress out of trading and the quicker moves won’t be as scary.
The Week Ahead:
To capitalize on the theme of ranging markets, I’m going to make written analysis rather easy. Since I don’t see a SINGLE trend or important breakout at the moment on any of our pairs, I am simply going to list the important areas for each pair as they traverse the ranges they appear to be in. No need to complicate things further until the market tells us to! I HIGHLY recommend watching this week’s video if you want a little more “color” for the trading.Euro/$: Sure, it was an impressive move compared to the price action we have seen lately and have even finished the week with a very bullish looking candle. BUT don’t be fooled!! We didn’t retake ANYTHING. We are sitting in the same spot we opened and finished the week in the week prior to last week. I see ranging here. This pair in particular has very “heavy traffic” and could be tough to navigate. Bottom of range is 1.3485, midpoint is 1.3570 and top is 1.3715.
Gbp/$: Rangy as well. Bottom area of 1.6730 (VERY important), midline at 1.6825 and top range at 1.70000
Aud/$: Easy peasy! Bottom area .9200, midline at .93-.9335 and top at .9400
Euro/Gbp: Less rangy, but also less movement. Focus on shorts at .8150 unless it breaks, then long from this area.
$/Yen: I have a feeling (still) that it’s only a matter of time before we finally dislodge from the months’ long range. Until then bottom is 101.50, midline 102.50 and top 103.75
Euro/Yen: Top range 142.00. Midline 140.00 Bottom range 139.00
Aud Yen: The MOST beautiful range of all pairs at moment. Bottom range 93.60, Midline 94.50 and top end 95.75
Usd/Cad: Same again. Bottom 1.0850-1.0830, Midline 1.0915 and top 1.1000
Eur/Cad: Biggest mover, very respectful of areas. Bottom 1.4800, Midline 1.4900 and top end 1.5000. That being said, a break above 1.5000 and we may be back in an uptrend.
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
Hope you enjoy the analysis!! See you Wednesday for an update!! Best wishes and happy trading to all!!!