Archives for December 2013

Reserve Bank of Australia is very clear that their dollar is “uncomfortably high”.  As we have been reiterating for awhile now… we want to sell any rallies and look for short setups.

After the UK and European news was out of the way, the Aussie began to fade.  An entry is taken requiring a 15 pip stop loss for a potential 47 pips to our Target 2.

Price dropped…retested yesterday’s low and continued down to our Target 1 where we exit on the retest.

Be extra careful trading this week as volumes are down for the holiday season.  This will be the last week of the trading year for us.

Good luck with your trading!

Back tomorrow if we can find a trade.

The GBP set up nicely for a short and made a sudden move to the downside.  Sterling had made a series of lower highs and as the UK session got underway, selling continued near the 1.6350 level.  This was where the European traders also began to sell it when they came on.  A 3 candle reversal pattern sets up the trade entry and price drops quickly.

After the initial drop, price does not come back to retest yesterday’s low or the Asian session low, and if it had… being closed out for a quick 15 pips would have been fine.  Price continued to drop… closing very bearishly each candle.  The trade is closed after 3 candles to avoid giving back any of the gain.  When price drops this fast without a pullback and is at or near one of our targets, take profit and don’t be greedy.

Institutional traders have been commenting on the lack of volume this week.  Next week will likely be even lighter.  This is a tricky time of year to trade, so be ultra selective in choosing your trade setups or come back in January.

The EUR hasn’t made it back up to its Oct. 25th high.  Sellers have entered near the 1.3800 level.   The options barrier is yet to be tested, but the month isn’t over.  It will very interesting to see if the 1.3832/5 level is run next week.  Stops have be building above 1.3800 for shorts.

Good luck with your trading!

Money management is paramount to trading survival.  I hope you have had a very profitable year and progressed well as traders.  Contrary to what many forex marketers will tell you, trading takes lots of time, study, dedication and experience to become good at…just like any other worthwhile profession.

Happy Holidays to everyone!!!

Back in January.

Both the AUD and NZD set up for a nice short.  The AUD quickly tested the Asian session lows as the UK session got underway and pulled back twice.  As it showed signs that it was not going higher, a short is taken with a modest stop loss of  14 pips allowing for a 3:1 Reward to Risk to our Target 2.  A series of lower highs, a classic pattern, cheap stop loss and no economic news  made for an attractive setup.

Price dropped, stalled, then dropped again to our Target 2, where we exit.

Good luck with your trading!

Lots of AUD and NZD news in the Asian session today.

Back tomorrow if we can find a trade.

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!