Tighter ranges are seen in the majors as the holiday season approaches.  The EUR continues to trade higher and ECB President Draghi continues to voice optimism and stability.

Institutional traders continue to be buyers, but we are approaching the 2013 high, so be very cautious.  This level will likely be tested and retested… if not rejected.  It is a critical area!

Our trading style is not about prediction but of observation and following familiar setups that meet our Reward to Risk ratio criterion.  We found an upside break in the range after price had traded sideways awaiting President Draghi’s comments.  With a stop loss of only 9 pips, and no US economic news to create havoc, we enter long.  As price moves toward our targets, we vigilantly observe what it tells us at significant levels.

As soon as a big wicky candle appears, we tighten our profit stop… price fails to reach our Target 1 and we are closed out for modest gains.

Good luck with your trading!

We will be travelling tomorrow, so if there is a quick trade before I go, I will post it.

Keep stops tight and don’t be greedy.

A very late session trade set up with the JPY.  After 3 failed attempts to close above the mid Asian session level, a reversal candle is seen and a short is taken.

The Reward to Risk is greater that 2:1 to our Target 2.  We prefer 3:1 but once the US session is underway, we consider 2:1 R/R trades.

Price moved down and paused at yesterday’s low before moving down and almost reaching our Target 2. We close the trade as price reverses back up to lock in profit at Target 1.

The market has been very news sensitive this week and trading setups have not met our Reward to Risk ratio minimums.  Last week was very easy and this week is much more challenging.  We stick to our trading rules and stay on the sidelines when the setups aren’t there.

We don’t trade on NFP Fridays…back on Tuesday if we find a trade.

Good luck with your trading!

The AUD rallied with an active Asian session.

Both the AUD and NZD can be sensitive to UK and EURO zone economic news.  In advance of the UK news the AUD rallied, then sellers began to enter above the Asian session high.

This is one of my favourite setups and it required a 15 pips stop loss.  As price trends downward for the session, we anticipate riding it down to the Asian session lows – locking in our profits as we go. With the US holiday today, we don’t expect an active overlap for the latter half of the session.  A large wicky candle forms and we tighten our profit stop… as they are frequently indicative of a pending reversal.  We are subsequently closed on the minor retracement.  Faster fingers may have locked in a bit more profit.

After a frustrating week last week, this week has been much more productive with both the NZD and AUD setting up daily.

Good luck with your trading!

Back tomorrow if we find a trade.

The theme continues with the NZD and AUD continuing to set up for short trades.

Trading is extremely difficult, frustrating and tedious at times!  However, some weeks are easier than others and when themes are present, it’s a lot more fun.

You must have a system that you are confident in, keep it simple, and take the easier trade setups.  Never force a trade! Never chase a trade!

The NZD could not close above its Asian session highs and down it went.  Once again it sank with a 3 Drives Pattern, and we are stopped out at the end of the first drive.  With the US session starting, significant US economic news pending, we tighten our profit stop and are closed out.

As long as the AUD and NZD continue to drop and trade with predictability, I will keep my eye on them for short setups.  The key as always… is money management, get the risk out of the trade as soon as practical to do so, and protect profits while in the trade.  It all adds up!

It’s a major US holiday tomorrow with many Americans making it a long weekend.  Therefore expect the US sessions to be subdued.

Good luck with your trading.  Happy Thanksgiving to our US neighbours!

Back tomorrow if we find a trade.

The AUD and NZD continue to drop.  I preferred the NZD setup, but one could trade either or both pairs. There was no European news of significance and the UK news was not a big concern.

There was a  quick move up at the UK open, followed by a  reversal candle.  This was ultimately a 3 Drives Pattern, but we close at Target 2 which was so close to yesterday’s low that we anticipate the level to be tested.  With the US markets getting ready to open and significant news pending, we are happy to be done.

Get the risk out of your trades as soon as is prudent to do so.  Once you lock-in profit, the trade becomes stress-free.  Don’t be greedy…be systematic.

Good luck with your trading!

Back tomorrow if we find a trade.

Finally a trade for the week.  The Australian dollar is in a steep decline this week and the NZD typically moves in lock-step with it.  The Aussie had another very active Asian session which didn’t leave much room for a continued move downward during the UK session.  The NZD was more subdued during the Asian session which made it more attractive to short by comparison.

As the NZD continued to make lower highs and drop, an entry is found requiring a larger stop loss than we have been using lately.   The key to the trade was to get the risk out as soon as possible.  The first area to get through would be the Asian session low, followed by yesterday’s low, then on to our target levels.

We see the Asian session low get briefly retested before price bungees downward to our target zone where we are happy to get out and leave this atypical week of limited opportunity behind us.

Both the AUD and NZD are at critical levels in their descent.  The AUD continues to weaken and listening to RBA Governor Stevens, would have us believe that it will continue significantly downward with the NZD following its trend.

Good luck with your trading!

Hoping for a much better week next week.

Enjoy your weekend!