Archives for August 2013

Overall Friday was a light news session lacking high impact potential economic releases.   The first part of the UK session was lacklustre, but as traders reacted to disappointing US figures, the EUR began to move down.  Price moved slowly down re-testing yesterday’s low before dropping to our Target 1, where we exit… when price bounces above.

Summer draws to an end and Monday is a holiday in North America.  It’s been a good summer for trading and we anticipate trading ranges will increase by the middle of  September.

Enjoy your weekend!

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Back Tuesday if can find a trade.

The majors didn’t offer many attractive setups to my eyes during the UK session.  A series of lower highs made for an appealing setup in the EUR, but he gains were modest.  As price reversed to re-test the Asian session lows once more, we are closed – protecting our profits.

One thing a trader never wants to do, is let an acceptable level of profit get away and  turn into a loss.  In this case, we had a wicky candle which warned us to tighten and continue to tighten our profit stop.

Good luck with your trading!

Back tomorrow if we can find a trade.

An active session as the UK traders returned from a long weekend.  Initially the UK traders pushed the CHF down and quickly reversed it with the German IFO Business Climate release, but the Asian session high is not challenged.  Price fades but cannot get above the Asian session high again.  A triple top forms and the US traders begin by reversing the market down.  Although I hesitate to enter trades in the middle of the Asian session range, this set up was too convincing not to, and only required a 15 pip stop.  Price moved down and just missed going through our Target 1.  As price bounced at this level and ran back up forming a wicky candle – coupled with major US news pending…the trade is closed.

The EUR also had a good trade set up, but I didn’t like it as much as the CHF.

Off to a good start this week.

Good luck with your trading!

Back tomorrow if can find a trade.

The GBP had economic news to digest, then made its move lower.  It’s always best to wait until the news is out of the way and look for the trending move to begin.  Let price tell you when it’s underway.  Do not trade based upon the economic news outcome and do not chase price.

After the news candle, we waited and look for signs.  After 2 wicky candles a very bearish engulfing candle followed.  Sellers were in charge and an entry is taken with a stop above the post news candle spike.  The more conservative stop is above the news candle spike high, but not necessary.  If the trend is not down, I want out just above the bearish engulfing candle double top.

Price moves down making lower highs…then pauses at the Asian session high – no surprise there.  We protect some profit and remove all risk from the trade.  Price moves down and tests the Asian session lows – no surprise there.  Price moves further down cutting right through yesterday’s low – okay a surprise there, but no complaints.  We close the trade at Target 2.

Our targets are very accurate and I have used them for years.  Do they work every day?  No…but they are fundamental to my strategy and when the market is trending, they are awesome.

It’s been a very good week for trading.

Good luck with your trading and have a wonderful weekend!

Back Tuesday if we can find a trade.

If you are looking for some private one-on-one coaching, please contact me for details.

The UK traders pushed the EUR down and the US traders pushed it right back up.

Positive economic news numbers out of Germany and the EUR moves down.  Negative unemployment numbers out of the US, and the EUR moves up…hmmm.  I hope as traders that you do not trade based upon the economic news numbers themselves… but you must be aware of the economic news releases pending and how significant they may be to the market in terms of potential volatility.

After the news…regardless of the outcome, the intraday trends tend to set up.  Note how price could not stay above the Asian session high.  With news out of the way, the EUR started its move down.  Read what price is telling you at these critical areas.  Wait to be convinced of direction, and if the Reward to Risk meets your minimum criterion…evaluate the trade.  In this case, we can place a stop above the spike high and have a greater than 3:1 RR to our Target 2.  As price moves down and goes through the Asian session low, we anticipate that more often than not, it will want to retest this level or in today’s case, yesterday’s low as well.

Price drops further and closes at a very critical area forming a wicky candle.  This bounce back up is our clue to close.

*Note in the chart the highlighted areas where price sticks around and retests.  These levels are very important to institutional traders, so it’s wise to heed what price is telling us at them.

Back tomorrow if we can find a trade.

Good luck with your trading!

To trade or not to trade in advance of the FOMC meeting minutes?

The NZD has been trending down all week and after rising in the second hour of the UK trading session, it could not stay above the Aug 13th low.  As it tried, sellers entered and the previous hour’s range is completely taken out by a bearish candle.  This was an attractive setup and met our minimum Reward to Risk ratio of 3:1 to our Target 2. Price dropped and the trade was closed in advance of the US Existing Home Sales number… as price went through Target 2.

FOMC meeting minutes will be out shortly and the trading is likely to become active for the remainder of the week, as there is significant economic news pending each day.

Good luck with your trading!

Back tomorrow if we find a trade.