Forex Tips

The JPY was unable to close above its Asian session high and set up nicely for a short requiring a very small stop loss.  With a 6:1 Reward for our Risk ratio setup, this was an easy choice.  As price began to roll over during the session’s “sweet spot” once again, we enter short with a stop loss above the Asian session high requiring 6 pips for a potential 36 pips.

Protecting ourselves in advance of the US Open, we move our stop loss down to plus 1 pip and are “stress free” as the US traders begin their session.  Price moves down through the Asian low and retests it before making one last dip lower.  As buyers enter we are closed out protecting a large piece of the move for modest pips.  Whenever wicks appears above or below candles, it’s a good idea to watch price carefully and tighten stop losses or profit stops.

A very light economic news session with a disappointing German ZEW Economic Sentiment number.

Good luck with your trading!

Back tomorrow if we find a trade.

God bless Robin Williams and his family.  I will miss him!!!

The EUR continued trending downward during the UK session tagging 2 of our target areas (one is shown on the chart below – a much stronger target is not shown due to it being proprietary for my students).

The move occurred and it frequently does during the sweet spot of the session – where session trends tend to begin.  If you are interested in knowing this time – email me and I will be happy to let you know when to look for it.  This is pretty well known among European and UK institutional traders.

The session started with a false move higher and the Asian session highs not being challenged.  After price hovered near the day’s high for an hour, it finally dropped, taking out the range and closing bearishly.  We enter short with a stop loss just above the Asian high giving us a 3:1 Reward for our Risk to our Target 2. Price begins to descend and as it goes through the Asian low we move our profit stop just above the Asian session low to allow for a retest without being closed.  Price continues to drop to our Target … then begins to rise.  As this is a double target area for us, we promptly close the trade as the momentum changes.

Be very careful trading the EUR tomorrow in advance of ECB Draghi speaking.  The GBP may offer a nice entry after the UK economic news releases but these are very late, and also on Thursday the US Unemployment Claims is reported 30 minutes into the US session.

Good luck with your trading!

Back tomorrow if we find a trade.

Email  Michael@privateforexcoaching.com

If you are new to trading or a seasoned veteran, it’s a good idea to be aware of the trading range made in the previous session and the previous day.  I find the UK session to be the most productive for trading.

When price tests the previous session’s high or low (sometimes it tests both) … the Asian session high/low and yesterday’s high/low, be aware that it may pause, move above/below and retest it again. This is typical market behavior and occurs most days.  I mark these levels in the trade examples that I include each day.

I was taught (years ago) never to be a breakout trader… by one of the largest traders in the world.  Wait for price to price to break the range and pull back,  Wait one more time for price to push above/below the Asian session and then wait to be convinced of the direction that price will then move.  This breakout pull back, break out pull back is known as a “wash and rinse” and essentially is a way to stop out weak hands and accumulate volume before a larger move.  About once a week or so, going long/short as price breaks through the previous session’s high/low works, and price runs and the breakout traders are rewarded.  This will entice them to do it again and again, but about 80% of the time, it won’t work and stop losses will be triggered and weak hands will be taken out for a loss.

There are a lot of tricks for interpreting market behavior and I won’t be sharing all the tricks here, but the point has hopefully been made that trading 80% of breakouts is not a prudent trading strategy.  If price runs away…NEVER chase it…let it go and find another trade or come back tomorrow.

The GBP quickly pushed through its Asian range lows and yesterday’s low as the UK trading got underway today.  It then pulled back before pushing down once again.  At this stage we wait for a second pull back… and it pulls back within the Asian session range.  The next candle it reverses lower… closing below the Asian session low.  As price has already pulled back twice – testing the previously mentioned levels, a short is taken with a modest stop loss – giving us a 4:1 Reward for our Risk to our Target 2.  The wild card in this trade will be the US economic news releases, so we will have to tighten our stop loss or profit stop in advance.

This trade is with the current trend of the USD, at a sweet spot of the session – with time to run before the US session gets underway, the wash and rinse pattern appears to be complete and 4:1 R/R trades are somewhat irresistible when a pair is trending predictably.

I hope this helps!  Good luck with your trading!

I like summer trading although this summer’s ranges have been quite contracted.  As long as you follow your trading rules consistently, the strategies remain the same and profitable trades await your analysis and execution.

I had one of my former students – a professional trader with many years of trading experience tell me yesterday that he has just had the best 6 weeks of trading since he began trading.  I have every confidence that his trading success and consistency will continue!

Back tomorrow if we find a trade to wrap up the week as we don’t trade NFP Fridays.

If you have any questions, please send me an email and if you are interested in my course, I will be happy to answer any questions you may have over Skype.  Check the Contact Me section of my website for details.

We continue to look for any short setups on the EUR for intraday trading.  The 1.3500 level gave way last week and today we approached the 1.3400 during the UK session.

Sellers stepped in as the pair attempted to climb above the Asian session highs.  As the pair tried one more futile attempt to rise, it met further selling and a short setup was found.  After the 3rd lower high for the session, we enter short and try to get below the Asian lows allowing for a retest of this level.  We have a greater than 3:1 Reward to Risk ratio to our Target 2.  ( Target 2 is lower Blue line – the first Blue line is our Target 1 – forgot to mark it clearly on the chart today.)

Once we place our profit stop just above the Asian lows, we are stress-free and if the stop is hit we still make a bit of money.  Price does not come high enough to retest the Asian lows but moves down toward our Target 2…where we  exit with the touch downward at the Frankfurt close.

Good luck with your trading!

Back tomorrow if we find a trade.

The GBP continues moving downward after failing last week to take out  the 1.72 figure.  In advance of the retail sales number the GBP pokes above the Asian high but closes back within the Asian session range.  The reaction to the number creates an intial sell off…driving price to close well below the Asian session low.

After the news reaction we anticipate a retest of the Asian session and or yesterday’s lows.  We get exactly that. After the Asian low is rejected we await a clear reversal and find an entry at the US Open.  With a stop just above structure, we have a better than 2:1 R/R to our Target 2.

We enter short and but in advance of the US unemployment number, we move our stop loss to plus one pip. Price subsequently accommodates us closing below our Targets 1 & 2 enabling us to lock in those profits as we continue to move our profit stop down.  Price ultimately takes us out in advance of the second round of US news.

Patience pays off in trading as this set up was straightforward.  Yesterday the charts didn’t allow me any entries.  As traders we only get paid for being right.  We don’t get paid for showing up and being enthusiastic.

Good luck with your trading!

Back tomorrow if we find a trade.

After the US Core CPI number was released the NZD jumped significantly higher.  We prefer to trade the retracement after the initial reaction to the news and take the counter-trade.

We go short with a stop loss just over structure and a better than 3:1 Reward to Risk to our Target 2.

Price moved swiftly down and completely retraces the up move.  We exit the trade as price comes back up to our Target 1.

Lots of important economic news this week to keep abreast of while trading.

Good luck this week!

Back tomorrow if we find a trade.