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GBP remains active

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The GBP trend is less clear this week and the referendum outcome is behind us.

With little economic news of significance for the UK, we see a reversal pattern set up long with a stop below the preceding candle – allowing a near 5:1 Reward to Risk ratio.

Price moves up to retest the Asian session low and begins to move higher.  We move our stop loss, now take profit up and no longer have any risk in the trade.  As price continues up, past yesterday’s high, we keep locking in profit.  Price moves through the Asian high but gets pushed down at our Target 1 – leaving a wicky candle.  We allow for a retest of the Asian high…moving our take profit just below this level and price comes back at us closing the trade for a very nice start to our trading week.

There are some very nice setups occurring – be selective and don’t over-trade.  Thethe currency markets are very active this month and we anticipate some very nice trending moves into year end.

Hope some of you caught the NZD.

Good luck with your trading!

Back tomorrow if we find a trade.

Beautiful up and down pattern on the AUD and quick GBP short

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If you can recognize reversal patterns setting up on a 15 minute chart, you actually have an edge over the 60 minute, 240 minute and Daily traders.  

As the UK session got underway the AUD moved down and lured in the breakout shorts.  Price reversed and closed strongly within the Asian range – well off the lows.  An entry long is taken with a stop loss below the session low.  Price makes a familiar 3 Drives pattern higher but sellers emerge just below yesterday’s high.  With the bearish wicky candle closing, we exit the trade.  As the sellers are entering and we know near the .9000 figure will find more short position traders, we await for the setup.  Two candles later we clearly have a 3 candle reversal and a short is taken with a stop loss above the session high. 
Price drops and our first goal is to complete one of our favourite patterns which involves taking out the Asian low.  If price can do this without much of a retest of the level, we may see our Targets 1 and 2 hit.  As the session winds down, we only make it to the Asian low before the retest above closes our position.
There was a very nice and quick trade early in the session with the GBP.   Initially the GBP rose in the Asian session and then began to fade.  If you look at the 240 minute chart and you know what the institutional traders are looking at – you will see that price stopped to the upside at a significant level. By the time the UK session started, price was in the middle of the Asian range – not an ideal place to take a trade… 9 times out of 10.  
However having seen where price had stopped to the upside and was now making waves to the downside with lower highs, an entry short is taken with a stop loss above the session high.  Price does not disappoint and moves quickly down to our Target 1 level…retests it and plummets through our Target 2.  We exit as price begins to bounce back as the bounce is exactly where the institutional 60 minute traders will become active… and did.
This has been an excellent week of trading.
Although the GBP has been very active and lots of fun to short of late, now that the result of the referendum is behind us, we are less inclined to think that it will go much lower from here near term. Watch the USD strength and consider the EURGBP as an alternative trade if the GBPUSD chart is looking unclear.
Please don’t waste your time using oscillators as I did in my early years of trading.  Learn instead what the BIG MONEY – the instiutional traders use and trade the same direction…with them. 
September has shown the currency markets are very active and trends going into year end appear to be setting up.  This may be a very profitable few months of trading for those that know how to trade, what to look for, how to read price, how to manage risk and how to put on appropriate position size trades.  If you are a swing trader or intraday trader and you want to learn how to capture large pieces of the moves and which pairs you should be considering trading – contact me about my course.  If you are prepared to put in the hours, you stand a good chance of being successful.  Trading is very difficult and requires hours and hours of practice.  If anyone tells you it’s easy – hold on to your wallet and run!
Enjoy your weekend!
Back Tuesday if we find a trade.
Michael  
Questions – email me at Michael@privateforexcoaching.com

GBP active before the vote

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Thursday has lots of news pending and the Scottish Independence vote will be very important to the GBP.

Today a countertrend long set up after the breakout longs were washed and rinsed.  Price makes a series of higher lows and closes above the Asian session high.  This is a countertrend trade so it’s better to take a smaller position – more like a half size position and keep the stop a little tighter than usual. In this case, a stop is placed below the most recent higher low and allowing for some wiggle room at the Asian highs.  Price likes to retest levels!

Price subsequently rises and retests yesterday’s high before moving through our Target 1.  This is countertrend trade so our confidence level is lower than if the trade is with the trend.  As price fades a few pips and comes back toward our Target 1, we exit the trade.  We are also aware that above our Target 2 is a dynamic level where institutional shorts may add to their position short trades.  We are happy to be in and out…well in advance of the referendum result, FOMC and all the other news pending tomorrow.

Higher lows and lower highs are very useful for traders to read market direction.  There is a trick to reading whether they are indicating acceleration or deceleration.  If you learn this technique it makes entries and exits easier to see in advance.

Good luck with your trading!

Back tomorrow if we find a trade.

Exceptional day for the GBP

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The Asian session was very active.  When the UK session got underway, it left little room for traders to make money trending the pairs any further to the downside.

Once you realize that a pair statistically will move only so far in a given 24 period typically… then you keep your eyes open for a reversal when a new session of traders begin their trading day.  It’s a very rare exception, when the majors will put in twice their expected range.  It does happen, but it is usually a result of a very unexpected comment by the US Fed or ECB etc, a geopolitical event, or something really unforeseen that changes the sentiment of the financial landscape.

The GBP had moved down to our Target 1 by the time the UK trading started.  A familiar and textbook trap is set luring in breakout shorts – followed by 2 higher lows.  An entry long is taken with a stop loss just below the Asian lows.  We keep this tight as US PPI is due in 30 minutes.  Price moves up and we are hoping for a reversal completion to the Asian high.  Price moves up making a series of higher lows but loses momentum at yesterday’s low.  Suddenly in the last 15 minutes of the session the GBP begins to spurt up… pushing through our targets 1 & 2, yesterday’s high and keeps going with momentum to the 1.6300 figure.  This is an exceptional move and the other majors showing USD weakness across the board.  At the first hint of weakness above the figure we clicked out and that was a beautiful move!!!

When you get one of these sudden moves, you need to know where your targets are…because vertical moves are not sustainable.  The market stops at and reverses for a reason – it is not capricious.  Learn what to look for and you will be rewarded.  If you are just guessing, you can lose your money quickly,

Good luck with your trading!

Back tomorrow if we find a trade.

Questions Michael@privateforexcoaching.com

Still preferring to short the EUR

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The EUR set up for a quick short today.  The move did not last long and and an aggressive trader could have taken a long shortly afterward, but it’s safer to trade with the trend.

A number of pairs set up at exactly the same time today, but the EUR has the best spread and is the most traded pair.  The same setup was there on the GBP, CHF (inversely) and AUD too. If you took any of the 4,  hopefully you did well.

The EUR moved quickly down and closed just under the Asian session low.  This is typically the first challenge and we expect the next candle to retest this level.  In our case, we will allow a few pips of wiggle room just above the Asian low and hope that it will then move on down to our Targets 1 and 2.  The next candle price moved up as buyers prevented the 1.2900 handle from being tested.  We exit the trade not prepared to give back any more pips.

Enjoy your weekend!

We will be back Tuesday if we find a trade.

Michael  privateforexcoaching.com

Countertrend CHF trade

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A quieter session overall with little news during the UK session to affect order flows.

Both the CHF and JPY set up for countertrend shorts.

If you are comfortable trading against the trend, ensure that your RR ratio is met, we like a 3:1 RR in advance of the US open and 2:1 afterward up to the UK close.  Make sure to keep your stops tight and take a smaller position because it is a lower probability trade.  If it fits in your trading plan execute accordingly and if it doesn’t…walk away and come back tomorrow.

Looking forward to ECB President Draghi’s comments and market reaction for tomorrow’s session.

Good luck with your trading.  Be disciplined and focused!

Back Friday if we find a trade.

Questions ???  Michael@privateforexcoaching.com