Hi, this is the post from my forexmentorpro service from Sunday the 21st July 2013. I explained how to trade forex around major news releases and how this time of year we usually see price in most currency pairs go into a sideways, ranging market. This is a topic I cover in the Free forex video training course which you can access here: Free Forex Training Course the difficulty is knowing when we have moved from a trend to a range which is what I explained in this post.
I prefer if at all possible to trade forex from daily charts.
Do my detailed analysis on a Sunday and then simply check for break outs, reversals and candlestick formations to place a trade and walk away.
There were winners on daily charts from the analysis you will see in the video and I finished trading for the week by Wednesday.
I never trade forex on a Friday which resulted in my missing a few winners, but bigger losers, so once again sticking to my trading plan was the correct decision.
Make rules for yourself. Create a plan. Stick to the rules and then trade that plan, THAT is how to succeed at trading. Bank and hedge fund traders have clear rules to follow and are monitored on every trade. Most retail traders do not have that extra layer of discipline and as a result many fail simply by not having sufficient self-discipline.
Here is last Sundays post and detailed video showing trade results from the previous week and analysis for the week ahead. Members of my forex mentor group get detailed analysis like this at the start of each trading day. If you want to learn to trade with pro traders then give the service a try for $1
Forex Analysis for Week Commencing 21st July 2013
Hi, a lot of members are asking if summer ranges have arrived yet? I am not sure, but there are clues on some of the pairs that we could be on for the usual mid-season slow down. However, no need to panic as I have a very simple & profitable “range trading strategy” that I will show you next week.
Many traders struggle and lose in August but I have always found that it’s a fairly easy period to trade IF you can be flexible and adapt to the changing Market pattern. The hardest part is knowing if the ranges have arrived yet or is this just a temporary pause before one final move THEN sideways markets?
In recent weeks the markets have become more nervous and prone to periods of drudgery, followed by big moves as a result of news releases. I have explained many times about being careful around news and that you should NOT trade NFP Friday nor FOMC releases, nor interest rate decisions and the following press conferences, but what about other red flag news?
Tip Toeing Around News
Last week I was trading with one of my “one to one” clients. We were looking at a potential trade on the Euro/Gbp but there was $US red flag news due. We waited for the retail sales news to come out, saw that there wasn’t a massive over reaction and then took the trade from an area that had MULTIPLE reasons (all explained at the start of todays video). The Euro/Gbp is an easier pair than some of the others in that you would expect the GBp & The Euro to react in the same way to USA news? It doesn’t always, but the reaction wasn’t huge on the pair so we took the trade.
This was a low risk, 1:3+ reward trade with a lot of reasons to take it. I would not recommend trading so close to the news if there was only one reason or there had been a big reaction. Having said that later in the week there was more red flag news that pushed this pair up to the 0.8700 area I had identified last Sunday.
0.8700 is HUGE on the Euro/Gbp. I showed how we have a 5 year old trend line that has not broken and it was previous support and resistance and a whole number, in other words multiple reasons yet again. If you were unsure you could have gone down to a 1 hour chart and seen that for approximately 20 hours price bounced around in a 20 pip range. Was it risky? EVERY forex trade is risky, BUT when you calculate a decent potential risk reward, combined with multiple reasons then on balance it was a decent trade.
The thing to note here is that Pierre, Dean, Vassilis, Fotis and myself have been trading for over 40 years between us! That is a LOT of screen time. We teach you the theory and strategies but as I have said on numerous occasions you should learn to concentrate on and master a few pairs. I show in the video some of the characteristics of one of my favourite pairs. I “know” it like I do a quirky old aunt. I know when to trade it and when to walk away. Why? Because I have spent 1000’s of hours trading it. If you really want to master forex or any skill you need to put in the time.
Sometimes I will take a trade after news because it “feels right”. Other times I will walk away because it does not. I can not teach you that, you have to learn for yourself. Do I get right all the time? Of course not.
If you do not “get it” then just leave it alone and concentrate on mastering whichever strategy you have chosen to follow. If you put in the time and master a few pairs you WILL get a “feel” for it.
This is the advice I give to trades who have not yet achieved that state: Red Flag News (especially FOMC, interest rate news & NFP) Money & risk management: If you are already in a trade move your stop to entry or beyond if its winning, move stops nearer to price if its losing OR if you are really unsure close it. All these types of events have the potential to whip saw AND you may even see your stop being “jumped” if you are too near to current price.
The forex Week Ahead
There has been a G20 meeting over the weekend and Japanese officials have reiterated that they will continue to aggressively print more money to weaken their currency. There is talk of a decisive move towards banking union in Europe (the previous 20 + meetings never came up with a decision on beggar all, so take it with a pinch of salt 🙂 There is talk of further problems with Italy & Spain and Portugal is in turmoil. All of these events could cause gaps at the market open, so I will be looking for them at the open. Here is how I trade gaps:
There is also a head and shoulders pattern on the Chf that could signal a 450 pip move so lots still going on. Here I show how to trade them: Head & Shoulders Patterns
Gbp/$: Very messy. Multiple options as per recent posts on why you need to be flexible. Looks bullish on weekly yet we are still in a down trend. I will long at 1.500 if it gets back down there, but I will not place a forward order to short at last weeks preferred area of 1.5330. Instead I will watch it on a 4 hour chart for clues for a bounce back down or If it breaks and closes above there on a daily candle I will long.
Intraday I prefer the simple channel set ups that I have been concentrating on recently. A break and close above last weeks high/daily 55ema will see me looking for a pullback to long. If it breaks and closes below that trend line I start to look for shorts. Explained in the video.
Euro/$: Could be the start of a range, but let the pattern develop a little more. If it continues to move sideways then there is a lot of support around 1.3065, multiple emas on varied time frames. Resistance is currently messy due to last weeks spikes but 1.3160 makes allowances for that.
I will long if it drops to 1.3000 again. Higher up 1.3330 is key for me. Same as Gbp look for clues as to whether to long (break and close above 1.3345 on a daily for me) or short from a 4 hour rejection.
Chf Still messy but 0.9600 to short is still my preferred entry. If it continues to drop from current position then a clear break and close below 0.9370 will see me looking for an M2 short. Daily candle close will be more conservative and might just save us from a fake out.
Euro/Gbp: I said last week “ Last month price was bouncing between 0.8500 and 0.8600, now seems to be 0.8600 and 0.8700”. And it did! I show in the video how I looked for trades on this pair last week from a channel and a monthly trend line. This week it’s a bit messier but those are still the areas. If it breaks and closes below 0.8600 on a 4 hour I will short on a pullback, explained in the video.
My target will be 0.8515 which is a daily trend line that has held since the beginning of May. If we get down there I will then look to long back up.
Aud: I prefer a pullback to 0.9400 to short for multiple reasons. If t drops again I will look to long at 0.9000 AND 0.9040 on a 4 hour as per last weeks analysis, see the video.
Yens: Could gap due to G20 comments.
$/Yen: This could be on for a huge move up and I want to catch it for a long-term hold: A long at 100.00 is the first place. If that fails I will double my stake and long it again at 98.80 for multiple reasons as per the video.
Euro/Yen: Broke and closed above the important 131.00/monthly 200ema. Lots of space above for a big move, I will long on a pull back to 131.20/monthly 200ema. Don’t be in more than one yen trade at a time until stops to entry on 1st trade
Aud Yen: Too messy, leaving alone. Prefer the other two yens.
Cad: This is another pair that could be on for 1000’s of pips movements and I want to catch it. I had a loser on here last week, but will only look to long. Bets place would be a pullback to the trend line amd weekly 200ema intersection around 1.0270 but if it doesn’t get down there I will look for clues on a 4 hour to long at 1.0330.
New members please note: If I am looking to take a trade long, at for example 1.5000 , I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.
We are NOT a “tipping service” our aim is to teach you how to trade for yourself. For more up to the minute updates do not forget to drop by the forum
Pierre, Vassilis (Capsmart), Raa, Omar, Mary, and other experienced members will be available in the forum to give you a more up to the minute assessment & whether they see any potential trades lining up in the next few days. Many members tell me this is the best forex forum there is (no back biting & bitchiness, nor spam, that spoils most forums) and all members are happy to help new visitors. Its a great resource, USE IT: Forex Forum
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Author: Marc Walton