Today's story was USD and JPY both strengthening almost equally against AUD and EUR, and to a lesser extent, GBP.
This was a little surprising as price action until London open this morning suggested that USD would continue to weaken.
As for trades taken with my strategies this week that would still be open:
1. MTFM trades long EURUSD and GBPUSD (approx 80 pips) are still in profit if open. The weekly charts are suggesting next week will have some long bias but might well be choppy. If your risk/reward profile calls for it, you might want to consider taking more profit now.
2. Today's Demand Return trades from just before the London close are still open and slightly in profit. In my opinion it would be risky to leave them open over the weekend this close to their stops. The GBP looks better than the EUR.
The weekly bars are almost all closing in their middles, suggesting a ranging and possible choppy week ahead with best trades probably being fades of the weekly highs and lows.
The exception is AUDUSD which is currently showing more downside.
This could change before NY close tonight of course but the market looks quiet now.
Friday, 31 May 2013
DEMAND RETURN Trades: EURUSD & GBPUSD Long
The earlier EURUSD long trade was stopped out.
However the zone has not been breached. GBPUSD also just entered its zone.
The last 15 minute bars were engulfing longs on both EURUSD and GBPUSD.
GBPUSD:
EURUSD:
I did not take these trades myself as I do not like to trade this close to the London close on a Friday.
DEMAND RETURN SET-UP: EURUSD Long Part 2
I entered on the long break of the inside bar off the demand zone.
The pin bar on the 200 EMA (white line) against the trade made me nervous.
Finally the large bearish engulfing bar off 1.30 and the 20 EMA (blue line) in the direction of the daily trend convinced me to exit for a small loss.
The original stop still has not been hit so if you are in this trade you could still hold on. In fact as I speak it is bouncing back strongly.
The pin bar on the 200 EMA (white line) against the trade made me nervous.
Finally the large bearish engulfing bar off 1.30 and the 20 EMA (blue line) in the direction of the daily trend convinced me to exit for a small loss.
The original stop still has not been hit so if you are in this trade you could still hold on. In fact as I speak it is bouncing back strongly.
Demand Return Set-Up: EURUSD Long
Price retraced back to 1.2977, its possible now to look for longs on the 15 minute chart.
The down move was fairly sharp so you could wait for an entry at a higher price after a bounce.
The down move was fairly sharp so you could wait for an entry at a higher price after a bounce.
LONDON OPEN - Roundup
Not much happened overnight.
There are long Demand Return set-ups on EURUSD and GBPUSD with EURUSD looking the more bullish.
Price needs to retrace to Wednesday's highs: 1.2977 for EURUSD and 1.5145 for GBPUSD.
Watch and wait for other developments.
There are long Demand Return set-ups on EURUSD and GBPUSD with EURUSD looking the more bullish.
Price needs to retrace to Wednesday's highs: 1.2977 for EURUSD and 1.5145 for GBPUSD.
Watch and wait for other developments.
Thursday, 30 May 2013
LONDON CLOSE - Roundup
A little early for a roundup, but the picture is clear by now.
As I forecast this morning, it was indeed a good day to go long against the USD, especially with EURUSD and GBPUSD.
JPY is slightly stronger but EUR is strongest of all.
This will be great news if you are still long EURUSD and/or GBPUSD from yesterday's MTFM trade with an entry at about 1.2893 on EURUSD and 1.5097 on GBPUSD. At the time of writing you would be up about 150 pips on EURUSD and 110 on GBPUSD.
The strong bullish moves in EURUSD and GBUSD will probably also give good opportunities for Demand Return trades tomorrow.
As I forecast this morning, it was indeed a good day to go long against the USD, especially with EURUSD and GBPUSD.
JPY is slightly stronger but EUR is strongest of all.
This will be great news if you are still long EURUSD and/or GBPUSD from yesterday's MTFM trade with an entry at about 1.2893 on EURUSD and 1.5097 on GBPUSD. At the time of writing you would be up about 150 pips on EURUSD and 110 on GBPUSD.
The strong bullish moves in EURUSD and GBUSD will probably also give good opportunities for Demand Return trades tomorrow.
MTFM EURUSD & GBPUSD Short 4 Hour Set-Ups
These have appeared, just at NY open.
Wait for a 15 minute candle for entry, below the low of the last 4 hours.
There is important economic news due from the USA in half an hour, so anything could happen to a trade open from then.
GBPUSD price action is better, but EURUSD bounced off last week's high, so take your pick (depending upon if a set-up comes or not).
Wait for a 15 minute candle for entry, below the low of the last 4 hours.
There is important economic news due from the USA in half an hour, so anything could happen to a trade open from then.
GBPUSD price action is better, but EURUSD bounced off last week's high, so take your pick (depending upon if a set-up comes or not).
LONDON OPEN - Roundup
Overnight the JPY has strengthened and the USD has weakened.
AUD, EUR and GBP all printed bullish engulfing bars yesterday against USD, which is a good sign for longs against USD.
If you took yesterday's first MTFM long entries on EURUSD and GBPUSD, they are still open and in profit. On EURUSD, beware of last week's high at 1.2997. This could be a good place to take partial profit or move stop to break even if your trading strategy calls for these measures.
AUD, EUR and GBP all printed bullish engulfing bars yesterday against USD, which is a good sign for longs against USD.
If you took yesterday's first MTFM long entries on EURUSD and GBPUSD, they are still open and in profit. On EURUSD, beware of last week's high at 1.2997. This could be a good place to take partial profit or move stop to break even if your trading strategy calls for these measures.
Wednesday, 29 May 2013
LONDON CLOSE - Roundup
Apologies for the lack of a post this morning.
As it turned out, today was an interesting day with a couple of good MTFM trades available to anyone watching out for them.
The story today was of the JPY strengthening and the USD weakening.
As I mentioned before, the USD has run into resistance against EUR, GBP and AUD, although the weekly highs against the last 2 were broken, EUR held.
Today EUR and GBP were fairly well placed to benefit from the USD weakening.
This morning there were MTFM set-ups on the 4 hour chart for EURUSD and GBPUSD long. By the way, when you get the same set-ups at about the same time on both of these pairs in the same direction either for or against the USD, it is a good sign.
After the set-up there were some long entries on the 15 minute chart for EURUSD:
The first entry is still open and already gave a maximum of 82 pips for a risk of about 11 pips, almost 8 to 1 reward to risk. The later entries were not so good although one of them produced a good reward ratio, but all would be stopped out now.
As a general rule, it is good to enter before the price reaches the wick of yesterday's candle if yesterday's direction is contrary to the direction you are trading in today.
Looking at GBPUSD, it is the same story as EURUSD:
Hope some of you have some EURUSD long left that you are holding onto. This is so far a second inside week inside a support zone, it is quite possible it could run up for another 200 or 300 pips or even more. Remember you only need one big winner every now and again, even if you take bread and butter partial profits.
As it turned out, today was an interesting day with a couple of good MTFM trades available to anyone watching out for them.
The story today was of the JPY strengthening and the USD weakening.
As I mentioned before, the USD has run into resistance against EUR, GBP and AUD, although the weekly highs against the last 2 were broken, EUR held.
Today EUR and GBP were fairly well placed to benefit from the USD weakening.
This morning there were MTFM set-ups on the 4 hour chart for EURUSD and GBPUSD long. By the way, when you get the same set-ups at about the same time on both of these pairs in the same direction either for or against the USD, it is a good sign.
After the set-up there were some long entries on the 15 minute chart for EURUSD:
The first entry is still open and already gave a maximum of 82 pips for a risk of about 11 pips, almost 8 to 1 reward to risk. The later entries were not so good although one of them produced a good reward ratio, but all would be stopped out now.
As a general rule, it is good to enter before the price reaches the wick of yesterday's candle if yesterday's direction is contrary to the direction you are trading in today.
Looking at GBPUSD, it is the same story as EURUSD:
Hope some of you have some EURUSD long left that you are holding onto. This is so far a second inside week inside a support zone, it is quite possible it could run up for another 200 or 300 pips or even more. Remember you only need one big winner every now and again, even if you take bread and butter partial profits.
Tuesday, 28 May 2013
LONDON CLOSE - Roundup
It was a mixed session where after all the risk currencies rose against JPY and to a lesser extent USD, there was a sharp turnaround towards the end of the session.
However in the last hour it appears there has been some return to the USD strengthening against the JPY and all the risk currencies strengthening against both.
Concerning the AUDUSD long set-up, there were 4 entries earlier, 3 of which made at least 1:1.
The price subsequently dropped below all of them, but then made another possible entry with the long break of the inside bar about 1 hour ago (the final blue highlight):
However in the last hour it appears there has been some return to the USD strengthening against the JPY and all the risk currencies strengthening against both.
Concerning the AUDUSD long set-up, there were 4 entries earlier, 3 of which made at least 1:1.
The price subsequently dropped below all of them, but then made another possible entry with the long break of the inside bar about 1 hour ago (the final blue highlight):
LONDON OPEN - Roundup
The JPY weakened overnight sharply.
Last week's AUDUSD MTFM Long set-up still has not been invalidated as the low has not been broken yet. In fact this morning there was another Long-set up with the 4 hour bar closing at 5am London time.
There have been some good long entries overnight on the 15 minute chart:
There is not much momentum there over the past few days, but we are close to a multi-year low, which was tested again this morning. There may be a double bottom formation.
Last week's AUDUSD MTFM Long set-up still has not been invalidated as the low has not been broken yet. In fact this morning there was another Long-set up with the 4 hour bar closing at 5am London time.
There have been some good long entries overnight on the 15 minute chart:
There is not much momentum there over the past few days, but we are close to a multi-year low, which was tested again this morning. There may be a double bottom formation.
Monday, 27 May 2013
WEEKLY ROUNDUP - Part 2
Last week the JPY strengthened. The USD did also but not by as much.
The JPY has been weakening for a long time and the strengthening has been sudden and sharp.
On the weekly charts, JPY closed up against everything, making new highs. Against the USD, its largest trading partner, it made a rejection engulfing candle.
All other things being equal, it seems that there is room for further JPY strengthening.
The USD also strengthened but is running into resistance. It actually fell against the EUR this week, forming an inside bar just off the significant low of 1.2750 - 1.28.
USD is also running into a multi-year high against AUD, and into a resistance against GBP in a similar way to EUR.
Therefore it could be that USD will find it hard to strengthen this coming week. A strengthening JPY technically seems more likely.
The JPY has been weakening for a long time and the strengthening has been sudden and sharp.
On the weekly charts, JPY closed up against everything, making new highs. Against the USD, its largest trading partner, it made a rejection engulfing candle.
All other things being equal, it seems that there is room for further JPY strengthening.
The USD also strengthened but is running into resistance. It actually fell against the EUR this week, forming an inside bar just off the significant low of 1.2750 - 1.28.
USD is also running into a multi-year high against AUD, and into a resistance against GBP in a similar way to EUR.
Therefore it could be that USD will find it hard to strengthen this coming week. A strengthening JPY technically seems more likely.
Sunday, 26 May 2013
WEEKLY ROUNDUP - Part 1
Tomorrow (Monday) is a public holiday in both the USA and the UK, I never trade on days that are public holidays in the UK as much of the world's forex volume is moved through London.
Tomorrow evening I will write more about last week.
Tomorrow evening I will write more about last week.
Friday, 24 May 2013
MTFM AUDUSD Long Trade 3
The 4 hour set-up is still valid.
There were 2 engulfing bars this morning giving opportunities for long entries.
I did not take the first one at it was too large.
I did not take the second one as I was waiting for a drop down to 0.9650 or below. The overall price action also looks consolidated.
Still, you never know. If you are in either trade, good luck. Remember it is a public holiday Monday in both UK and USA.
There were 2 engulfing bars this morning giving opportunities for long entries.
I did not take the first one at it was too large.
I did not take the second one as I was waiting for a drop down to 0.9650 or below. The overall price action also looks consolidated.
Still, you never know. If you are in either trade, good luck. Remember it is a public holiday Monday in both UK and USA.
Possible Trend Engulfs Long EURUSD
There is a Trend Engulfs set-up long EURUSD now.
I won't take this trade as the signal candle is too large (about 60 pips).
If it was smaller I would have.
I won't take this trade as the signal candle is too large (about 60 pips).
If it was smaller I would have.
LONDON OPEN ROUNDUP
Overnight things have corrected themselves.
EUR has been most strong with EURUSD holding up back above 1.29 so far.
JPY has also strengthened again.
AUD has been weak.
Yesterday's AUDUSD long trade steadily came off its high reached around London close yesterday and the stop was hit overnight. Since then it has rallied somewhat. If the price falls back down below to where it was yesterday morning without breaking yesterday's low, I would consider taking another MTFM long if price action warrants it.
No obvious opportunities at the moment.
EUR has been most strong with EURUSD holding up back above 1.29 so far.
JPY has also strengthened again.
AUD has been weak.
Yesterday's AUDUSD long trade steadily came off its high reached around London close yesterday and the stop was hit overnight. Since then it has rallied somewhat. If the price falls back down below to where it was yesterday morning without breaking yesterday's low, I would consider taking another MTFM long if price action warrants it.
No obvious opportunities at the moment.
Thursday, 23 May 2013
LONDON CLOSE ROUNDUP
The story today was counter trend after all.
There was a rebound against the USD and a lesser one against the JPY.
EUR, AUD and GBP have all been especially bullish against the USD.
The AUD long opportunity I highlighted this morning did play out well.
AUDUSD long is behaving nicely so far and could be one to sit tight on if you are in it.
There was a rebound against the USD and a lesser one against the JPY.
EUR, AUD and GBP have all been especially bullish against the USD.
The AUD long opportunity I highlighted this morning did play out well.
AUDUSD long is behaving nicely so far and could be one to sit tight on if you are in it.
MTFM Long AUDUSD Trade 2
I took another long entry as we got the break of the double inside bars after an engulfing pin bars (second blue highlight):
MTFM Long AUDUSD Trade
We finally had an engulfing candle that just broke so there is a long entry.
I got in a little earlier at the first touch of the 20 EMA and already took off risk.
I got in a little earlier at the first touch of the 20 EMA and already took off risk.
MTFM Set-Up Long AUDUSD
The close of the recent 4 hour bar shows something exciting happening now on AUDUSD.
This bar not only engulfed the previous bar but also made a 1 year low which itself was barely above a 2 year low.
The reaction off this level this morning has been strong and impulsive.
Looking at the daily chart of AUDUSD over the past 3 years below, we can see how the price has entered a 3 year old demand zone from which it has risen several times.
If the high of this morning is broken to the upside, we can drop to the 15 minute chart and look for long entries off inside and engulfing bar breaks in a MTFM Strategy trade.
Bear in mind that most of these trades are losers, however we have a higher than usual probability here of a move of several hundred pips if we do get a runner i.e. a huge reward to risk ratio.
This bar not only engulfed the previous bar but also made a 1 year low which itself was barely above a 2 year low.
The reaction off this level this morning has been strong and impulsive.
Looking at the daily chart of AUDUSD over the past 3 years below, we can see how the price has entered a 3 year old demand zone from which it has risen several times.
If the high of this morning is broken to the upside, we can drop to the 15 minute chart and look for long entries off inside and engulfing bar breaks in a MTFM Strategy trade.
Bear in mind that most of these trades are losers, however we have a higher than usual probability here of a move of several hundred pips if we do get a runner i.e. a huge reward to risk ratio.
DEMAND RETURN Setup GBPUSD Short
GBPUSD is in a multi-day downtrend.
In the unlikely event it returns to 1.5111 during today's London session, this would be an opportunity to look for a short on the 15 minute chart as a Demand Return trade.
In the unlikely event it returns to 1.5111 during today's London session, this would be an opportunity to look for a short on the 15 minute chart as a Demand Return trade.
LONDON OPEN ROUNDUP
The last 15 or so hours have seen dramatic moves in the FX markets.
The JPY has strengthened very strongly, the USD also has, and the AUD is very weak.
I have not had time to read the news so I won't delve into rationalisations.
After moves as strong as these you do not usually want to trade counter trend straight away.
There may be further opportunities in the direction of the big moves.
One counter trend opportunity that may arise soon comes from AUDUSD approaching a 2 year low of 95.76 - if it settles down or starts to bounce long around this level, could be a great long.
The JPY has strengthened very strongly, the USD also has, and the AUD is very weak.
I have not had time to read the news so I won't delve into rationalisations.
After moves as strong as these you do not usually want to trade counter trend straight away.
There may be further opportunities in the direction of the big moves.
One counter trend opportunity that may arise soon comes from AUDUSD approaching a 2 year low of 95.76 - if it settles down or starts to bounce long around this level, could be a great long.
Wednesday, 22 May 2013
Reconsidered EURUSD Short Trade
After some reflection, I challenged myself as to whether I was in this short for a good reward to risk, or just because I couldn't stand to miss out on a likely move down.
With a risk of 123 pips and a multi-month low only about 120 pips from entry, I couldn't really justify this trade to myself as a good trade, so I just took the opportunity to exit on my private account for a small profit of about 12 pips.
Checking my Collective2 account I saw that the trade had been entered as a buy and not a sell and was stopped for the spread. Currently unsure whether it was my error or their error.
I do believe EURUSD will sink to at least 1.28 before it hits 1.30. But then, a trader's job is not really to be right, its to be right enough early enough to make it pay. This trade was on the late side probably.
I was also influenced by the fact this was on its was looking like a Ponshada Pins set-up, in fact had surpassed it.
With a risk of 123 pips and a multi-month low only about 120 pips from entry, I couldn't really justify this trade to myself as a good trade, so I just took the opportunity to exit on my private account for a small profit of about 12 pips.
Checking my Collective2 account I saw that the trade had been entered as a buy and not a sell and was stopped for the spread. Currently unsure whether it was my error or their error.
I do believe EURUSD will sink to at least 1.28 before it hits 1.30. But then, a trader's job is not really to be right, its to be right enough early enough to make it pay. This trade was on the late side probably.
I was also influenced by the fact this was on its was looking like a Ponshada Pins set-up, in fact had surpassed it.
LONDON CLOSE ROUNDUP
Bernanke's comments have sent the USD skyrocketing. He made it clear the US will do what it has to do to keep the stock market booming as long as they feel the need to (to paraphrase).
I just went short EURUSD at the turn of the hour with a stop at 1.3005.
I do not like to trade off such a large candle but it marks such a strong sentiment that it is highly likely EURUSD is going to fall considerably further.
The trade of the day was the EURJPY long Trend Engulfs trade that I mentioned earlier. This made a maximum reward to risk already of just under 6 to 1.
The moves on other pairs have also been dramatic and it will be interesting to see what tomorrow brings.
I just went short EURUSD at the turn of the hour with a stop at 1.3005.
I do not like to trade off such a large candle but it marks such a strong sentiment that it is highly likely EURUSD is going to fall considerably further.
The trade of the day was the EURJPY long Trend Engulfs trade that I mentioned earlier. This made a maximum reward to risk already of just under 6 to 1.
The moves on other pairs have also been dramatic and it will be interesting to see what tomorrow brings.
EURUSD Long Trade Demand Return/MTFM
The 15 minute chart gave another entry (3rd blue highlight below).
I took this trade on my collective2 account but exited at 1.2875 for about a 1:1 risk/reward, unfortunately there was slippage. If it had shot right up to 1.30 I would have held on.
Fortunately in my private account I still had some of my long from the London open at 1.2918 this morning, I made it a free trade at around 1.2935 with a stop under the daily low which I did not move.
I took some more profit at R2 (1.2989), moved the stop to break even and left the rest in case this is foundation for a more prolonged move up with EURUSD.
If at 4pm London time the price is back down below 1.2953 I will exit the remainder and take a short.
I took this trade on my collective2 account but exited at 1.2875 for about a 1:1 risk/reward, unfortunately there was slippage. If it had shot right up to 1.30 I would have held on.
Fortunately in my private account I still had some of my long from the London open at 1.2918 this morning, I made it a free trade at around 1.2935 with a stop under the daily low which I did not move.
I took some more profit at R2 (1.2989), moved the stop to break even and left the rest in case this is foundation for a more prolonged move up with EURUSD.
If at 4pm London time the price is back down below 1.2953 I will exit the remainder and take a short.
MTFM Trade - EURUSD Long
The first entry has set up now on the 15 minute chart with a double engulfing bar.
I don't think a break long of this would be an A++ entry due to the pin bar at 1.2950 which is also's today R1 and yesterday's R2.
The hourly chart also looks bad.
Nevertheless it is a valid entry (second highlighted bar):
I don't think a break long of this would be an A++ entry due to the pin bar at 1.2950 which is also's today R1 and yesterday's R2.
The hourly chart also looks bad.
Nevertheless it is a valid entry (second highlighted bar):
DEMAND RETURN Update 2
I recommend moving stop to break even if you entered at around 1.2918.
The action now is bearish and if it falls this low quickly, will indicate short action.
It is always possible to look for more longs if it gets back to break even then bounces.
The action now is bearish and if it falls this low quickly, will indicate short action.
It is always possible to look for more longs if it gets back to break even then bounces.
MTFM EURUSD Trade - Long
The 4 hour bar that closed at 11am London time engulfed the previous bar (in open and close terms).
The high of that 4 hour bar has already been broken.
MTFM now drops down to the 15 minute time frame and looks for long entries off engulfing or inside bars, until the low of the day is broken.
Although the day's range is very small so far (less than 50 pips), there may not be much action until the US data and Bernanke begin at 3pm London time.
The high of that 4 hour bar has already been broken.
MTFM now drops down to the 15 minute time frame and looks for long entries off engulfing or inside bars, until the low of the day is broken.
Although the day's range is very small so far (less than 50 pips), there may not be much action until the US data and Bernanke begin at 3pm London time.
DEMAND RETURN Trade Update - Long EURUSD
I entered long on the break of the 15 minute candle highlighted below, it engulfed several previous candles. Stop Loss is the low of the price action (which is also the low of the day).
There were also engulfing candles on the 1 hour chart, and there was a Trend Engulf entry on EURJPY long which I did not take due to the bearish inside bar above where the entry was. I wish I had now but there's no use crying over spilt milk:
LONDON OPEN ROUNDUP
The market is indeed a bit clearer this morning, at least insofar as the Bank of Japan has not caused any material changes overnight.
At the moment the market is not being driven by USDJPY, but more by the risk currencies.
Looking at the daily charts, EUR is strong, GBP is weak, and AUD is choppy but on the weak side.
The pair catching my eye right now is EURUSD for several reasons.
Looking at the daily chart, the downtrend bottomed out in a strong demand zone and has produced two consecutive bullish days. We have a Demand Return set-up long (this zone is marked by the red lines) and the price has returned to 1.2903. We can search for longs on the 15 minute chart. It is also a good sign that the price so far is being held by the round number 1.29.
At the moment the market is not being driven by USDJPY, but more by the risk currencies.
Looking at the daily charts, EUR is strong, GBP is weak, and AUD is choppy but on the weak side.
The pair catching my eye right now is EURUSD for several reasons.
Looking at the daily chart, the downtrend bottomed out in a strong demand zone and has produced two consecutive bullish days. We have a Demand Return set-up long (this zone is marked by the red lines) and the price has returned to 1.2903. We can search for longs on the 15 minute chart. It is also a good sign that the price so far is being held by the round number 1.29.
Tuesday, 21 May 2013
LONDON CLOSE ROUNDUP
A ranging and confusing day.
I took a long AUDJPY trade following this morning's rejection engulfing bar, then an engulfing bar on the 15 minute chart, using the low of the price action as a stop loss. The trade moved in my favour about the same as my risk, then came down sharply. I exited at break even as by this point today's story had changed to one of renewed USD strength, as detailed in my previous post.
A ranging and confusing day.
I took a long AUDJPY trade following this morning's rejection engulfing bar, then an engulfing bar on the 15 minute chart, using the low of the price action as a stop loss. The trade moved in my favour about the same as my risk, then came down sharply. I exited at break even as by this point today's story had changed to one of renewed USD strength, as detailed in my previous post.
When the USD strength returned, there were short MTFM trades on AUDUSD and GBPUSD, shown below.
I took the AUDUSD short but exited for break even. With the sudden USD weakness that began about an hour ago, these trades were not very productive, giving rewards little more than risk, although the GBPUSD would still be open. I missed GBPUSD as I was dealing with AUDJPY.
MTFM is best traded with large take profit targets.
The market today was driven truly by USDJPY and also by GBP weakness.
The overall picture has now become less clear, with EUR and AUD making new highs against both the USD and JPY, but with action being unstable.
There will be important announcements and data coming from Japan tonight, so the market might become clearer and more tradeable tomorrow morning.
For now it is best to wait.
TRADE SET-UP UPDATE
GBPJPY MTFM strategy set up has been invalidated. On AUDJPY it is still in play, right now price is sitting on the 200 EMA in the 15 minute chart.
USD has strengthened since the London open, giving us MTFM set-ups short on EUR, GBP, and AUD against USD. Wait for the lows of the last 4 hours to break then look for entries on the 15 minute charts. Note that 4H candles closing at 9am London time produce positive trades but are not usually the most optimal. Currently GBPUSD looks the best bet, but it is right next to last week's low which is a demand zone. AUDUSD could be smoother.
GBPJPY MTFM strategy set up has been invalidated. On AUDJPY it is still in play, right now price is sitting on the 200 EMA in the 15 minute chart.
USD has strengthened since the London open, giving us MTFM set-ups short on EUR, GBP, and AUD against USD. Wait for the lows of the last 4 hours to break then look for entries on the 15 minute charts. Note that 4H candles closing at 9am London time produce positive trades but are not usually the most optimal. Currently GBPUSD looks the best bet, but it is right next to last week's low which is a demand zone. AUDUSD could be smoother.
LONDON OPEN ROUNDUP
Good morning. The story overnight is one of the USD continuing to weaken against risk currencies (e.g. EUR, GBP), and everything is strengthening against JPY.
It remains to be seen whether the strong USD trend is over or merely pausing.
AUDUSD has been on a strong run up overnight.
It could be that our trading focus will begin to shift away from USD pairs towards JPY pairs.
There were 4 hour Multiple Time Frames Momentum set ups on 4 hour bars closing halfway through the Tokyo session on AUDJPY and GBPJPY. AUDJPY looks the better bet, remember you need at least 200 pips of profit to make this strategy pay if you see a set up on the 15 minute chart for either of those this morning.
Late last night after London close I took a Demand Return trade on AUDUSD short, risking a few pips on a 15 minute engulfing bar. It did not work. Notice that although the demand zone was broken very slightly later, AUDUSD subsequently fell strongly overnight, but did not reach Friday's low which would have been the usual first profit target:
Good morning. The story overnight is one of the USD continuing to weaken against risk currencies (e.g. EUR, GBP), and everything is strengthening against JPY.
It remains to be seen whether the strong USD trend is over or merely pausing.
AUDUSD has been on a strong run up overnight.
It could be that our trading focus will begin to shift away from USD pairs towards JPY pairs.
There were 4 hour Multiple Time Frames Momentum set ups on 4 hour bars closing halfway through the Tokyo session on AUDJPY and GBPJPY. AUDJPY looks the better bet, remember you need at least 200 pips of profit to make this strategy pay if you see a set up on the 15 minute chart for either of those this morning.
Late last night after London close I took a Demand Return trade on AUDUSD short, risking a few pips on a 15 minute engulfing bar. It did not work. Notice that although the demand zone was broken very slightly later, AUDUSD subsequently fell strongly overnight, but did not reach Friday's low which would have been the usual first profit target:
Monday, 20 May 2013
LONDON CLOSE ROUNDUP
Action today was fairly quiet and somewhat choppy. The USD has continued to weaken slightly.
AUDUSD was ten minutes ago just a few ticks short of returning to its Demand Zone (Thursday's low). If it reaches the zone very soon I will look out for a price action entry on the 15 minute chart, otherwise I will leave it.
The GBPUSD outside bar short off the 200 EMA Bounce earlier today did not work out well, but did produce about 15 pips before a reversal on two double pin bars:
That's all for today.
Action today was fairly quiet and somewhat choppy. The USD has continued to weaken slightly.
AUDUSD was ten minutes ago just a few ticks short of returning to its Demand Zone (Thursday's low). If it reaches the zone very soon I will look out for a price action entry on the 15 minute chart, otherwise I will leave it.
The GBPUSD outside bar short off the 200 EMA Bounce earlier today did not work out well, but did produce about 15 pips before a reversal on two double pin bars:
That's all for today.
200 EMA BOUNCE - GBPUSD short
Earlier GBPUSD made a daily high with a large outside/engulfing bar off the 200 EMA on the 15 minute chart, as highlighted in the image below.
It would have been possible to take the short break of this bar with the 200 EMA Bounce strategy.
It remains to be seen how this trade would work out. It has yet to reach break even.
Earlier GBPUSD made a daily high with a large outside/engulfing bar off the 200 EMA on the 15 minute chart, as highlighted in the image below.
It would have been possible to take the short break of this bar with the 200 EMA Bounce strategy.
It remains to be seen how this trade would work out. It has yet to reach break even.
LONDON OPEN ROUNDUP
Good morning. A little late this morning but nothing very material has happened yet.
Action since Tokyo open has seen the USD weaken somewhat across the board, albeit with none of Friday's highs or lows being tested yet.
Monday is often a tricky day, with the market direction typically not becoming clearer until NY open, if at all.
Last night's AUDUSD Demand Return trade was not triggered yet. I am now waiting see if it gets up to 0.98 during today's London session and if so, possibly go short if the price action there is right.
The jury is still out on my decision to exit Friday's EURUSD Trend Engulf short trade for a small loss, but currently it is only 10 pips off the high of the signal bar.
Good morning. A little late this morning but nothing very material has happened yet.
Action since Tokyo open has seen the USD weaken somewhat across the board, albeit with none of Friday's highs or lows being tested yet.
Monday is often a tricky day, with the market direction typically not becoming clearer until NY open, if at all.
Last night's AUDUSD Demand Return trade was not triggered yet. I am now waiting see if it gets up to 0.98 during today's London session and if so, possibly go short if the price action there is right.
The jury is still out on my decision to exit Friday's EURUSD Trend Engulf short trade for a small loss, but currently it is only 10 pips off the high of the signal bar.
Sunday, 19 May 2013
DEMAND RETURN TRADE - AUDUSD short
We start the week with a demand return trade straight away.
AUDUSD fell strongly Thursday and Friday.
Limit short order at about 0.98 (Thursday's low) with a stop around 0.9830 (Friday's high).
I would prefer to wait for the price action at any return to the zone (between the two red lines in the picture below), but I can't keep Australian hours. Even traders have to sleep sometimes.
Friday, 17 May 2013
LONDON CLOSE ROUNDUP
We end the week today with a story of renewed USD strength in line with the trend of the last couple of weeks.
USD made new highs against JPY, EUR, AUD and GBP after some early weakness after London opened. However the counter trend could never really get going and ranges were small before NY open.
JPY action was choppy, albeit a little more clearly defined against AUD.
It is always dangerous to guess tops and bottoms but it must be noted that EUR and AUD have significant support against USD at 1.2750 and 0.96 respectively. There have been some nice AUDUSD and EURUSD shorts lately but the trend will not go on forever without a pullback.
The best trades over the last couple of days from the strategies I discuss on my website, were, firstly the Demand Return EURUSD short that I highlighted yesterday. I did not take this trade as the signal candle on the 15 minute chart was very large (37 pips). However if you had entered immediately at 1.2911 with 1.2942 as the stop you would be up by a factor of about 3 to 1 now. I prefer to enter only after price action.
Another good EURUSD short trade which I missed highlighting today was a 200 EMA Bounce trade on the 15 minute chart. At 10:15 EURUSD returned to its 200 EMA on the 15 minute chart and quickly formed a small inside doji bar. Taking the break of this short would have netted you a maximum 87 pips of profit for only 7 pips of risk (a maximum factor of 12 to 1), and the trade would still be open.
I hope some of you were long USD this week. A relaxing weekend to all and some green pips next week hopefully.
We end the week today with a story of renewed USD strength in line with the trend of the last couple of weeks.
USD made new highs against JPY, EUR, AUD and GBP after some early weakness after London opened. However the counter trend could never really get going and ranges were small before NY open.
JPY action was choppy, albeit a little more clearly defined against AUD.
It is always dangerous to guess tops and bottoms but it must be noted that EUR and AUD have significant support against USD at 1.2750 and 0.96 respectively. There have been some nice AUDUSD and EURUSD shorts lately but the trend will not go on forever without a pullback.
The best trades over the last couple of days from the strategies I discuss on my website, were, firstly the Demand Return EURUSD short that I highlighted yesterday. I did not take this trade as the signal candle on the 15 minute chart was very large (37 pips). However if you had entered immediately at 1.2911 with 1.2942 as the stop you would be up by a factor of about 3 to 1 now. I prefer to enter only after price action.
Another good EURUSD short trade which I missed highlighting today was a 200 EMA Bounce trade on the 15 minute chart. At 10:15 EURUSD returned to its 200 EMA on the 15 minute chart and quickly formed a small inside doji bar. Taking the break of this short would have netted you a maximum 87 pips of profit for only 7 pips of risk (a maximum factor of 12 to 1), and the trade would still be open.
I hope some of you were long USD this week. A relaxing weekend to all and some green pips next week hopefully.
TREND ENGULF - EURUSD short trade EXITED
I exited the trade for a small loss of about 10 pips, a little less than one-sixth of what I had risked on this trade.
I made the early exit before the stop was hit for a number of reasons:
1. I did not like the pin bar and spinning bottom 1 hour bars that immediately followed the trade.
2. The trade went in my favour just a little below 1.28 then bounced back off that number extremely quickly. The area below 1.28 is a strong demand zone for EUR and I was concerned about how the price would react down there.
3. Bernanke is beginning to speak.
4. Friday London close is coming up and the market can often do weird and wild things around this time as the big banks and hedge funds shuffle their books at the end of the week, while liquidity drops.
5. A human factor - the worry of holding a trade over the weekend and being trapped for 48 hours.
6. The trade was not an A+ trade due to the fact the bar was very long, about 65 pips. If the bar had been 30 or so pips I would have been happier to hold the trade despite all of the above.
I do think the price is quite likely to hit 1.28 again today, but once you decide a trade is really unappealing it is best to exit straight away.
There is a good argument to be made for not exiting a trade with a loss until the stop is hit. I think a trader has to be sure he is exiting for a good reason, not just because he or she does not like the tension.
I exited the trade for a small loss of about 10 pips, a little less than one-sixth of what I had risked on this trade.
I made the early exit before the stop was hit for a number of reasons:
1. I did not like the pin bar and spinning bottom 1 hour bars that immediately followed the trade.
2. The trade went in my favour just a little below 1.28 then bounced back off that number extremely quickly. The area below 1.28 is a strong demand zone for EUR and I was concerned about how the price would react down there.
3. Bernanke is beginning to speak.
4. Friday London close is coming up and the market can often do weird and wild things around this time as the big banks and hedge funds shuffle their books at the end of the week, while liquidity drops.
5. A human factor - the worry of holding a trade over the weekend and being trapped for 48 hours.
6. The trade was not an A+ trade due to the fact the bar was very long, about 65 pips. If the bar had been 30 or so pips I would have been happier to hold the trade despite all of the above.
There is a good argument to be made for not exiting a trade with a loss until the stop is hit. I think a trader has to be sure he is exiting for a good reason, not just because he or she does not like the tension.
MULTIPLE TIME FRAMES MOMENTUM - EURUSD long
A 4 hour bar has just closed, engulfing the previous bar and rejecting 1.2850.
Time to drop down to the 15 minute charts and look for long entries.
Price is hovering just on the wrong side of the 200 EMA, so its advisable wait for a breakout and pullback.
The same set-up looks likely to form on GBPUSD at the close of the next hour.
A 4 hour bar has just closed, engulfing the previous bar and rejecting 1.2850.
Time to drop down to the 15 minute charts and look for long entries.
Price is hovering just on the wrong side of the 200 EMA, so its advisable wait for a breakout and pullback.
The same set-up looks likely to form on GBPUSD at the close of the next hour.
LONDON OPEN ROUNDUP
USD has bounced back from yesterday's bad news, JPY weakness continues.
USD has made a new high already against the AUD with 0.98 now broken by AUDUSD. AUDUSD is showing every sign that it will make its way down to 0.9575 where it bottomed out last summer.
EURUSD is again testing 1.2850 and should face significant support at 1.2750.
The dynamic is again towards USD longs.
Of the trades discussed yesterday, the EURUSD demand return trade from the area of 1.2911 would be open and in profit this morning.
USD has bounced back from yesterday's bad news, JPY weakness continues.
USD has made a new high already against the AUD with 0.98 now broken by AUDUSD. AUDUSD is showing every sign that it will make its way down to 0.9575 where it bottomed out last summer.
EURUSD is again testing 1.2850 and should face significant support at 1.2750.
The dynamic is again towards USD longs.
Of the trades discussed yesterday, the EURUSD demand return trade from the area of 1.2911 would be open and in profit this morning.
Thursday, 16 May 2013
LONDON CLOSE ROUNDUP
Today was a good day to be cautious of USD longs and to look for counter trend trades later in the day.
The first few hours after the London open saw the USD top out against resistance on JPY, EUR, GBP and AUD, most notably forming a double bottom and 1 hour pin bar at 1.2850 in EURUSD.
The USD began to drift down and the countertrend was given an impetus by poorer than expected economic news from the US. More poor news followed a little later, driving GBPUSD up to 1.5320.
USD was weakest against GBP and EUR, with both providing nice price action trade entries today with a 1 hour chart pin bar on EURUSD and an engulfing bar rejecting the daily low on the GBPUSD 4 hour chart.
The USD significantly has so far failed to make a new high against JPY today.
The USD momentum of the strength we have seen lately usually takes a while to turn around, so a continued strong move against USD tomorrow is probably unlikely. GBP and EUR may have already formed significant lows against USD that might not be tested again in the coming days.
JPY action was quite choppy across the board.
Today was a good day to be cautious of USD longs and to look for counter trend trades later in the day.
The first few hours after the London open saw the USD top out against resistance on JPY, EUR, GBP and AUD, most notably forming a double bottom and 1 hour pin bar at 1.2850 in EURUSD.
The USD began to drift down and the countertrend was given an impetus by poorer than expected economic news from the US. More poor news followed a little later, driving GBPUSD up to 1.5320.
USD was weakest against GBP and EUR, with both providing nice price action trade entries today with a 1 hour chart pin bar on EURUSD and an engulfing bar rejecting the daily low on the GBPUSD 4 hour chart.
The USD significantly has so far failed to make a new high against JPY today.
The USD momentum of the strength we have seen lately usually takes a while to turn around, so a continued strong move against USD tomorrow is probably unlikely. GBP and EUR may have already formed significant lows against USD that might not be tested again in the coming days.
JPY action was quite choppy across the board.
Update - MULTIPLE TIME FRAMES MOMENTUM - GBPUSD long
The US economic news at 13:30 London time was poor for the USD.
This drove GBPUSD up through the 200 EMA on the 15 minute chart.
Price then formed a bar that was both inside and double engulfing.
Buying the break of this bar would have produced a trade that is still open, the bar was about 12.5 pips risk and has made a maximum so far of about 52 pips, a reward to risk ratio of 4.16.
Unfortunately I missed this trade due to a (thankfully rare) internet outage.
The US economic news at 13:30 London time was poor for the USD.
This drove GBPUSD up through the 200 EMA on the 15 minute chart.
Price then formed a bar that was both inside and double engulfing.
Buying the break of this bar would have produced a trade that is still open, the bar was about 12.5 pips risk and has made a maximum so far of about 52 pips, a reward to risk ratio of 4.16.
Unfortunately I missed this trade due to a (thankfully rare) internet outage.
MULTIPLE TIME FRAMES MOMENTUM - GBPUSD long
A trade set-up is beginning to form on GBPUSD.
A 4 hour bar has just closed engulfing the open and close of the previous 3 bars.
If GBPUSD continues to rise during the New York session and breaks the 15 minute chart's 200 EMA, it becomes possible to look for long trades.
A trade set-up is beginning to form on GBPUSD.
A 4 hour bar has just closed engulfing the open and close of the previous 3 bars.
If GBPUSD continues to rise during the New York session and breaks the 15 minute chart's 200 EMA, it becomes possible to look for long trades.
LONDON OPEN ROUNDUP
Good morning and welcome to the first blog post at Ponshada Forex.
The major story in the forex world continues to be the strength of the US dollar.
USD yesterday made a new multi-year high against JPY, a 6 month high against AUD, a 6 week high against EUR, and a 4 week high against GBP.
The "true" pair driving the market is USDJPY, with the world looking more bullishly upon the US economy coupled with the Japanese government and central bank's determination to inflate the yen.
USD is in an uptrend and its strength continues. However it is noticeable that yesterday the trend faltered a little, with the USD making small pin bars or spinning tops on the daily chart, the lows of which have yet to be broken, with the exception of EUR against which it is rising quite strongly.
Asian session action was quiet.
It should also be noted that USD is approaching areas with plausible resistance especially regarding EUR and AUD. However there is still some way to go before the bottoms are hit.
So today it is still advisable to seek longs on USD especially against EUR, but there may be counter trend trades setting up later. Be prepared to be cautious on any USD longs.
Good morning and welcome to the first blog post at Ponshada Forex.
The major story in the forex world continues to be the strength of the US dollar.
USD yesterday made a new multi-year high against JPY, a 6 month high against AUD, a 6 week high against EUR, and a 4 week high against GBP.
The "true" pair driving the market is USDJPY, with the world looking more bullishly upon the US economy coupled with the Japanese government and central bank's determination to inflate the yen.
USD is in an uptrend and its strength continues. However it is noticeable that yesterday the trend faltered a little, with the USD making small pin bars or spinning tops on the daily chart, the lows of which have yet to be broken, with the exception of EUR against which it is rising quite strongly.
Asian session action was quiet.
It should also be noted that USD is approaching areas with plausible resistance especially regarding EUR and AUD. However there is still some way to go before the bottoms are hit.
So today it is still advisable to seek longs on USD especially against EUR, but there may be counter trend trades setting up later. Be prepared to be cautious on any USD longs.
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