Marc Waldon

Theory Into Practice

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Theory Into Practice

Theory Into Practice

Hi again from the T.I.P. team. My blog last Sunday, was focused on the FOMC minutes release and the monetary policy implications. The details of the underlying fundamentals which is the basis of our strategy can be found  here, How Forex Pros Make Pips. We share this to give trading ideas for practice purposes and to show how we reach our decisions. We are not making recommendations. We both strongly believe that understanding the market drivers and the effects of major news events gives us an important edge and this has been a turning point in our own trading. Our task is to remove as much guesswork as we can and take advantage of the predictive qualities of the fundamentals. It is a question of playing with probabilities.

Robbie and I start our discussion on a Saturday and pull together the list at the end of the week’s trading and this week we have added a few pairs but have stayed focused on Euro weakness.

The attached video addresses the technical side of our decision process;

Here are the pairs we included in this weeks strategy;

The Pairs

EURNZD

Discussed last week,  this pair we shorted last week and locked in a 1:1. We were stopped out and made the decision to re-enter at 1.4221 with a stop of 200 pips at 1.4421. It is a 1% position. As both the blog and video explain, whilst there is a lot of unpredictability and volatility in the market, the Euro is still in a weak position made a lot more precarious by the Greek situation. Various factors have effected a further leg down today, including Draghi’s comments at the ECB meeting  that QE will continue until inflation saw ‘sustained adjustment’ .

 

EURUSD

Same basis as the EURNZD in terms of Euro weakness. The differential once again favours the USD but we have to be aware of the current stall in the USD and be prepared to look for deeper entry points. . We entered this trade on the pullback to 1.07.

How Pros make pips

The levels we were watching are 1.08, 1.10 and 1.07. Details in the video

;USDCAD

BOC decision; rate unchanged and some bullish comments. CAD has strengthened on the news.  We were  planning to trade the range but not before today’s news! Now with the break to the downside (USDCAD) and the fact that this is  an oil related currency, and  the upper bounds of the crude oil range have been broken ,  we will be looking for a lower entry.

How Pro's make pips

 

NZDCAD

This has been on our radar for a while. Fundamentally we have been assessing it for a long. This one necessitates a careful monitoring of the oil market. I use the XTI/crude chart which is shown in the Sunday blog.

We entered this with a 1% position in this pair yesterday  morning on a limit order buy at 0.9360 on a daily trendline, 61 daily fib, strong S/R area and a daily 55. What Marc would call a multiple reason entry! Stops at 0.9300. This morning the chart looked bearish so we took profits at 1:1.It was very news vulnerable.

 

SS NZDCAD

We also have the USDSGD on our radar looking for a lower entry.  Watch out next week for this one!

As always please use these ideas for practice purposes only. We are not a tipping service.

Happy Trading!

Judith Waker

Robbie Stephenson

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