Michael Bridgman

As the US session got underway today the price of WTI crude oil was falling.  At the same time the CAD made essentially a triple bottom for the session and began to climb higher.  We enter the CAD long with an initial stop loss below structure.  WTI continued to move down and the CAD moved higher.

When price attempts to get above the Asian session lows – sellers enter.  WTI not coincidentally had just made its expected range for the day or what we refer to as Target 2.  A second wicky and bearish candle paints and we exit the trade.  As WTI had made its range, it is more likely to reverse than continue lower – unless a news event occurs adding further downside momentum.  My students will also note that our very simple pattern completed.

If your trading platform doesn’t provide a WTI chart, find one on the internet as the USDCAD correlation is currently very high.  This pair can be quite volatile so keep your stops and take profits tight and watch WTI’s moves along with it.

Back tomorrow if we find a trade in advance of FOMC.

Good luck with your trading!

The NZD has been in a range the past couple of weeks. Yesterday for some reason, it had a big move to the upside from the bottom of its current range. Today the Kiwi began to move up after testing its Asian session lows.  With a stop loss of 18 pips we enter long hoping for a move up to our Targets 1 and 2 (not shown on the chart – .7520 and .7539 respectively).

In trading a counter trend move it’s a good idea to keep stops tight as the retracement may end suddenly… as flows come in adding to existing positions with the trend.  Reading the candles and important price levels will help in seeing this.  The message is to keep stops tight and not to be greedy!

The wicky candles in this up move are indicative of sellers entering the market.  As the pair reaches the top of its recent range (look at the larger charts) it makes sense that position or range traders may strategically add to their shorts at these levels.  As price moves up to the Asian highs, we tighten our take profit level and as price dips, the market takes us out for modest gains.

Traders will be looking for Fed Chair Yellen’s testimony to the Senate Bank Panel on Feb. 24th for any hint of change to current forward guidance. In the meantime the Ukraine and Greece will continue to be in the headlines and for now…crude continues to trade above $50.

Enjoy your weekend and good luck with your trading!

Back Tuesday if we find a trade.

A number of trades set up this session but I especially liked the long JPY again today.

The pair is looking very bullish on the larger time frames, so we look to find our entry long on the 15 minute chart.   Price has been making a series of higher lows.  In the early part of the session price broke above the Asian session highs and pulled back a couple of times retesting yesterday’s high.  It then traded sideways with the Asian high acting as support. With little economic news on the calendar today and US treasuries moving higher, the JPY began to move up.

An entry is taken with a 16 pips stop loss and a potential 56 pips to our Target 2.  Price quickly moved up to our Target 1 which we protect as we do our Target 2 level when attained.  We moved our profit stop to Target 1 and our trade is closed the next candle.  Price subsequently moves up to our Target 2 without us.  I remain bullish on this pair and  1.2065 area will be the next important test of price in the uptrend.

This pair is heavily traded during the US session – for those that are not able to trade the early part of the UK session…it maybe a good pair to consider finding setups on.

Major news for the GBP tomorrow.  Be careful trading in advance of the BOE inflation report.

Good luck with your trading!

Back tomorrow if we find a trade.

As the UK session got underway, price poked above the Asian session highs with very shallow pullbacks, then closed bullishly above.  This classic pattern allowed for an entry with a 17 pip stop loss and a potential 62 pips to our Target 2 meeting our minimum 3:1 R/R.

As price continued upward it pauses at yesterdays high and as the US trading session began, price pushes through the NFP highs of last Friday and above our Target 2.  As price is more likely to pull back once Target 2 is reached than continue upward – we are quick to protect profits at this level and close the trade as it retraces back toward our target.

We continue to look for trades in the direction of USD strength with the best setups overall.

Good luck with your trading!

Back tomorrow if we find a trade.

An overall tone of USD weakness throughout the session.  With the Non-Farm Employment number due out tomorrow early in U.S. session, this is not a surprise as traders await the outcome of the big risk event for the week.

With crude oil moving higher throughout today’s session the CAD strengthened moving the USDCAD lower.  After a series of lower highs, an entry short is found in the U.S. session with a stop of 31 pips for a potential  86 pips to our Target 2.  As price moves down, we lock in profits.  As long lower wicks begin to appear on the candles, we tighten our take profit further – as buyers are entering.  Price is unable to penetrate our Target 2 level and as price moves up after the European close, we exit the trade.

 

We don’t trade NFP Fridays, so we will be back Tuesday if we find a trade.

Good luck with your trading and enjoy your weekend.

The EUR which has broken its recent range from last week – to the upside – set up beautifully for a short.  The 4 hr. chart by the time the UK session got underway had tipped us off.

The early part of the UK session showed a classic short set up on the 15 minute chart.  With a stop of 16 pips and a potential 130 pips to our Target 2, the reward for risk is better than 8:1.

Many of the institutional shorts are out of the market due to the recent upward move.  With this in mind, there is potential for a sudden move downward to our Targets 1 and 2 as core shorts are re-entered.    With U.S. Trade Balance and Unemployment Claims tomorrow – Non-Farm Employment on Friday, there may be no urgency to reinitiate core shorts.   It was a beautiful setup but it fizzled out.

Good luck with your trading!

Back tomorrow if we find a trade.