Archives for February 2016

I’m including 3 trades from 3 different days this week…as I got behind and have not posted.  I will do them in order beginning with the JPY trade from Wednesday.

A fairly quiet session in terms of economic releases.  As the US session got underway, we had further USD weakness to the JPY.  Following a 3 candle reversal setup – allowing us to enter short with a 20 pip stop loss for a potential 88 pips to our Target 2, we entered.  It took just over an hour before the Asian low was taken out , then price moved down to our Target 1 and stalled. Not willing to give back more than a few pips above Target 1, we are closed on the bounce with a very nice result.

On Thursday a nice setup was found shorting the GBP – which every one seems to be jumping on of late.

Again we have a nice reversal setup where the risk is 26 pips for a potential 138 pips to our Target 2.  As this pair is a favourite short at the moment and reversals are likely to attract additional institutional volume…price can move quickly.  The pair moved down completing its pattern and appeared to be finding buyers at the Asian session lows.  On the second bounce above the Asian lows, our profit stop is hit.

On Friday it was back to JPY trading.

A nice 3 candle reversal setup but we hesitated and waited for 2 more candles before entering long.  The risk was 24 pips for a potential 90 pips to our Target 2.  Price moved up quickly with a stronger USD sentiment and closed bullishly above the Asian session high.  We locked in profit and allowed for a retest.  As price climbed higher, we locked in more profit before being taken out at our Target 1 as price pulled back.

Overall it was great week for trading.  The markets are very active again and picking low risk high reward trades is the safest way to participate.

Good luck with your trading!

Enjoy your weekend!

Back Tuesday if we find a trade.

 

 

 

Oil is staying above the all important $30 a barrel level for the fourth day in a row.  Saudi Oil Minister Al-Naimi comments coupled with comments from Iran and Iraq led the market to sell oil today… but so far it remains above $31.

A nice short entry was found in the CADJPY requiring a 25 pip stop loss for a potential 62 pips to our Target 2.  As this set up in the U.S. overlap portion of the session a 2:1 or greater R/R is fine.

The trade moved fairly quickly and after giving up 10 pips on the second attempt to get through our Target 1 – the trade is closed just before the European close.

 

Keep an eye on the oil inventories tomorrow during the U.S. part of the session.

Lots of uncertainty regarding the topical Brexit vote.  If Britain leaves the E.U. it will have a two-fold effect.  The uncertainty is very interesting and causing lots of speculation day-by-day.  Listen for the rumours and look for the setups in both pairs.

Good luck with your trading!  Lots of speculation out there with markets moving both ways at the moment.

Back tomorrow if we find a trade.

A weaker USD on Friday coupled with a down day for the Nikkei set up a nice short in the USDJPY.   Throughout the UK session the pair could not close above yesterday’s low.  As it rolled over, we entered short late in the session… risking 21 pips for a potential 98 pips to our Target 2.  Price moved down and closed below the Asian session low before retesting the level and moving lower.

As the UK session closed, we exited the trade with nice gains for a 2 hour trade.

Enjoy your weekend!

 

 

Overall not a lot of strength to the USD today.  I had my eye on the AUD after the negative employment numbers during the Asian session but found a nice setup with the EUR.

With a 17 pip stop loss for a potential 77 pips to our Target 2 – a short is taken early in the UK session.  Price moved down to test the Asian lows…then yesterday’s low.  Price then dropped sharply and went sideways for 30 minutes before briefly reversing – hitting our profit stop for very modest gains.

There is nothing wrong with a positive trade if you have exercised your trading plan with sound money management – even if it results in a plus 1 trade.  We choose to lock in our profits as we go and use small stop losses when originating our trades along with a comfortable reward to risk  ratio.

Some trades produce minimal gains, but we never take big hits when the market moves against us… and it will.  Once you learn your lesson on that one – you will never expose your account to a large loss again!

Good luck with your trading!

Any questions…please email me.

 

Finally a trade setup that required a very small stop loss (risk) in a very volatile (risky) market that had nice potential (reward) to our daily targets.

The market as counter intuitive as it’s been this year from a trending perspective consistent with yield has been active. Correlation trading of pairs has been very consistent but the stop losses have been too rich for my tastes.  When the market is as erratic as it has been of late, it’s best to step aside and be patient until a trade sets up consistent with your trading plan.  This is not the time to compromise on reward to risk.  As retail traders, we can do this.  Institutional traders may have to enter positions that they would not normally be comfortable trading and have their stops hit and their options expire for losses.  That is a lot of pressure on them!

Today an AUD short set up requiring only a 15 pip stop loss for a potential 71 pips to our Target 2.

A number of UK and US important economic releases tomorrow…including FOMC meeting minutes after the UK close.

Good luck with your trading!

Back tomorrow if we find a trade.

 

 

These are interesting times.  Both the EUR and JPY have strengthened to the USD.  I have a hard time believing that this will last, but in the meantime the markets are telling us otherwise.  WTI  gave up the $30 level today and came close to testing its recent low before buyers stepped in.  Beware if the $27.50 area gives way.  Saudi Arabia apparently has increased its production which makes pricing interesting.

If you can find good trade setups offering appropriate reward to risk ratios, and keep your stops tight, there are profitable trades.

Today, I liked the AUD as it bounced off our downside T2 and reversed early in the US session.  The risk was 20 pips for a potential 100 pips to our upside T2. As the USD weakened across the board, the AUD moved up taking out its Asian low and continued toward yesterday’s low where it left a very wicky candle.  Not prepared to give back many pips, we tightened our profit stop and the market closed us out.

Tomorrow we begin with UK manufacturing production, followed by Janet Yellen testifying and then crude oil inventories.

Be extra careful!

Back tomorrow if we find a trade.