Protected: 500% Return in 1 Month trading the online Forex market !!!
December 30th, 2007 expert
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Trendline violation trade (27/6/07) GBPJPY +125Pips
December 28th, 2007 expert
ONLINE FOREX TRADING TOPICS: Trendline violations, leading indicators, lagging indicators, relative volatility, Exit methods, following stop
The JPY was again one of the most volatile currencies yesterday. We traded the GBPJPY as the JPY’s volatility is sometimes increased in this GBPJPY cross. Yesterdays range for the JPY was 112 pips, the EURJPY 111 pips and the GBPJPY 266 pips (Enough said).
Today’s topic is leading indictors. Most indicators are lagging indicators as they tell you what has happen in the past (eg moving averages). There are many indicators that give an indication of what is going to happen in the future. These are leading indicators.
One of the most powerful leading indicators is a straight support or resistance line. This line need not be horizontal. All that it has to do in join the tops of bottoms of turning points in the price movement and extend into the future. This extension represents possible support or resistance in to the future – therefore turning it into a leading indicator. It is also referred to as a trendline. In fact 90% of our trades use a trendline violation (Crossover) or bounce at the entry trigger.
Yesterday the GBPJPY was trending downwards quite strongly. We drew a resistance trendline over the tops of turning points on the candles to establish our resistance trendline. As the price started turning back slowly it came closer and closer to the trendline. On the strength of the buy signal on the momentum indicator (Also leading in this case) we anticipated a violation of the upper resistance line and placed an entry order just above this line and a stop at the last low. The price broke through the trendline (resistance line) and started trending upwards quite nicely. We had no target in mind for this trade so followed the price movement with a following stop that was moved to the last low every time the candle closed. We were stopped out when the price retraced giving back over 60 pips to the market. In hind sight closing the deal at +150 would not be a bad days trading.
The momentum indicator again showed good measurement of the 2 wave nature of the Forex market as discussed earlier this week.
www.Expert-4x.com is a sponsor of this free educational blog and uses many of the concepts high lighted in these postings for its daily alert services.
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Head and shoulders reversals:- GBPJPY 180 pips
December 25th, 2007 expert
Online Forex Trading concepts used: Price patterns, Head and shoulders reversal formation, using expectations for exits, momentum divergences, relative volatility of currencies.
This trade was taken from directly our subscription service this week (180 pips in one transaction). We noticed that the GBPJPY had started forming a Head and Shoulder reversal formation and was battling to break through the breakout neckline. There where no less than 5 spikes where the price tried to break through. We recommended a sell just below the neckline and a target at 180pips lower which was the expectation established by the approximate height of the channel in which the Head and shoulders formation formed. The price broke out and reached the target very quickly. The GBPJPY is the most volatile currency and these big moves are not uncommon.
Although momentum indicators tend to give unreliable signals when the currency is trending there was a particularly strong sell divergence supporting the breakout.
www.Expert-4x.com is a sponsor of this free educational blog and uses many of the concepts high lighted in these postings for its daily alert services.
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Protected: 475% return in 1 month: EURGBP 13 day transaction 22 +25pips
December 24th, 2007 expert
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Protected: 475% return in 1 month: AUD transaction 21 +73pips
December 16th, 2007 expert
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Straddle Trade example
December 14th, 2007 expert
Online Forex Trading concepts: Straddle trading, triangle, expectations, Trendlines.
The market sometimes shows signs of a possible high energy breakout, but it is not always clear which way the price will break.
Therefore instead of trying to 2nd guess the market direction one can place a buy and a sell entry order on either side of the price (straddle the price).
Whichever way the market moves it will activate one of the orders and you will be in the direction of the break.
When To Straddle Trade
*Before an announcement
*Price formation breakouts
*Periods of uncertainty
*Market openings (public holidays or weekends)
*Break of important support or resistance.
The first step is to identify a potential transaction. Below is an example of a triangle developing which sometimes provides breakout opportunities.
The next step is to determine the potential expectation on the transaction. With triangles this is normally the height of the triangle at the start of its formation.
The next step is to determine your risk (where your stop should go) so that we can determine whether the risk / return ratio and capital risk acceptable?
Buy:
Expectation 110
Risk 40
Risk / return 2.7 / 1
Sell
Expectation 110
Risk 40
Risk / return 2.7 / 1
The next step is to place sell and buy entry orders (supported by targets and stops) at the breakout points. Now the market will determine the breakout direction.
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Online Forex Trading principles
December 13th, 2007 expert
Some interesting trading perspectives are presented below. Please read them carefully as many online forex traders have found that understanding only a small number of these perspectives has dramatically changed the way they trade. Most of the points presented have cost traders a lots of money to learn the hard way. This is an opportunity of learning from others mistakes.
1. You DON’T need to know the direction the price is going to go to trade the Forex market.
This surprises many new Forex traders but straddle trading techniques will help you to have successful trades even when you are unsure of the direction the price will move.
2 The probability of a transaction being successful is dependent on the potential volatility behind the transaction. The amount of PUSH behind the move
Most traders spend 90% of their energy trying to find the direction on a move and only 10% on volatility. What’s the use of getting the direction 100% right when the move only goes for 15 pips.
3. Trade ahead of the market. Anticipate the transaction before it happens.
High probability trades with appropriate entry points can normally be anticipated well in advance and programmed trades using entry orders (waiting orders) with targets and stops can be used.
4. Knowing the rhythm and nature of the market allows you to trade appropriately.
Learn how to read the trading conditions of the FOREX market and how to take advantage of natural movement (Waves and channels) of the market. Also know when not to trade. Most Traders ignore this and try to impose a technical analysis technique on inappropriate market conditions. This is probably the biggest cause of beginner trader frustrations.
5. Have a simple trigger that will get you into the market.
Firstly know which are trading signals and what is a trading trigger.
In the end the simpler you can make your trading techniques the better. Having hundreds of indicators makes trading complicated and confusing. Having simple but effective signals makes easy to make trading decisions (Pull the Trigger)
6 Use leading indicators to warn you about a potential transaction well in advance. Most indicators are lagging and give late signals.
The Forex market is faster than other markets and you need as much advanced warning about potential moves as what you can get. Learn about leading indicators that give signals well in advance of the more traditional indicators.
7 Keep Emotions out of the trade as much as possible.
There are many ways of automating all the elements of a trade so that you don’t have to watch the screen all day long and become emotional about the outcome of the transaction (using entry orders etc.)
8 Before you trade live thoroughly back test and demo trade your technique.
Properly test and improve your strategies before going live. 90% of new traders start trading a technique that they have not personally tested. They go on the trust of what they have been told.
Testing a technique ensures that you can apply it under any conditions and that you understand it. It also gives you an opportunity to add improvements.
9 Keep your safety stops out of the traffic.
In appropriate placement of stops is a mjor cause of trading failure. In many cases an unsuccessful technique can become successful by just increasing the stop levels. Spend time finding your personal comfort level in this area. There are a number of techniques to not use stops at all.
10 Successful traders find the exit of a successful transaction is the most difficult part of trading.
Exiting transactions optimally takes experience. many ways are discussed on this glog.
11 Assume that the market will trend in the direction that it is currently going until you see conclusive proof of a possible reversal
The objective of trading is to enter a new trend and stick with it until it is over.
12 Money and risk management is essential to a long term relationship with the Forex Market
Many methods used by successful traders are presented for your consideration. I don’t make recommendations or give advice in this area but knowing the alternatives enable you consider am appropriate one your way of trading
13 Technical Analysis techniques have strengths and weaknesses. Know both. Know then to use Technical Analysis and when not.
Certain indicators only work in trending markets and others in trading markets. Some trades can be done without charts. learn as much as you can about trading.
14 A trading strategy contains the time frame traded, warning signals, trigger signals, ways of managing the transaction, way of exiting the transaction, money management approach and risk management. It is not only about the entry
Find a personal trading strategy that takes your personal circumstance into account.
15 The trading process consists of doing an environmental scan, identifying possible future transactions, entering the transaction, managing the transaction, exiting the transaction, doing a post mortem and reviewing your trading strategy.
Build competency in all these areas.
16 In general the longer term charts (Daily, 4 Hr and 1 Hr) give more reliable signals than the shorter term ones (30min, 15 min, 5 min and 1 min) which are subject to noise.
Be aware of the many scalping (short term) and position trading (longer term) strategies available to trad the Forex market. Knowing the alternatives will help you develop a personal strategy
Posted in FOREX TRADING STRATEGIES and CONCEPTS, FOREX TRADING ENTRY STRATEGIES, FOREX TRADING EXIT STRATEGIES | No Comments »
Channel trading (10/7/07) CHF +100pips
December 12th, 2007 expert
ONLINE FOREX TRADING CONCEPTS: Channel Trading, trendline violations entries, Establishing the trend direction, Exiting using targets, Automated transactions
Currencies tend to trade in channels quite consistently. Much more than many traders realise. This is also supported by the Dominant Angle theory that the price channels downward and upwards between sets of trendlines that repeat the same angle. This is discussed under another topic.
There are many ways of establishing channels but drawing straight trendlines is the simplest and most efficient. One only need 3 reference points to draw a channel as illustrated on the accompanying chart. Once 2 strong pivot points (turning points 1 and 3) have been established an extended trendline is drawn joining the 2 pivot points. This establishes one of the channel lines. The next channel line is simply drawn by drawing a line parallel to the already established trendline that touches the turning point 2. You then have a channel. The great thing about this is that this technique can be used in trending and sideways trading markets.
Way to trade this is then to find an entry point that will allow you to trade from 3 pivot point to the project 4 pivot points. Once the 4 pivot point is reached you can then trade the 4 to 5 leg and so on until there is a strong breakout from the channel which normally means a trend change or the formation of a new channel. Nice simple and effective way of trading.
As can be seen on the chart a good channel was establish for the CHF which was trading in a stepping down fashion within a channel. We missed hooking the number 3 bounce off the upper trendline (which became a channel line) so we were looking for a reason to sell the CHF. The best we could find was a trendline joining the recent lows. We placed a trendline violation sell order just below this line which was activated.
As we were trading the 3 to 4 point channel move the target became to projected bounce at point 4. We placed an automatic limit order just short of this so that our transaction would be automatically closed when the price reached this level. Fortunately it did and 100 pips were banked on this deal.
Because this was an automated deal it was also an alert on our UK alert service. For more information on the Expert-4x US and UK alert services please go to www.expert-4x.com.
www.Expert-4x.com is a sponsor of this free educational blog and uses many of the concepts high lighted in these postings for its daily alert services.
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Protected: 475% return in 1 month: GBP transaction 19 +35pips
December 11th, 2007 expert
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With the Trend trendline Bounce (6/7/07) EURJPY+120Pips
December 9th, 2007 expert
ONLINE FOREX TRADING CONCEPTS: Relative strength of currencies, Non horizontal Support trendlines, Weekend market close exit, Following stop, Triangle breakout.
Currently the JPY is one of the weakest currencies depreciating against all other major currencies (except the US$). The GBP and EUR are currently the strongest major currencies appreciating against all other currencies. This information is obtained by comparing the trends of all the major currencies compared with all the other major currencies on a monthly, weekly, daily and 4 hourly basis. A future trade of the day will feature this analysis.
We were therefore looking for any excuse to use the JPY’s weakness and the EUR or GBP’s strength to trade motivate a trade. We noticed that a strong non horizontal upward sloping trendline was giving the EURJYP strong support as it trended upwards on the 1 Hour chart. We therefore followed this trendline with a buy entry order place in a position that would anticipate an upwards bounce off this trendline. This occurred at 166.85 when the price went to retest the support line. The trade soon went positive and the next concern was that the price was trading in a triangle and that the upper triangle resistance line would bounce the price back. The stop was moved to breakeven when the price reached the 167.25 area but it soon broke through and headed north. Our target was the top of the upper channel but we decided to close the deal at the close of the weekend market as we were +120 pips at that stage, which is what we did. Sometimes a bird in the hand is worth 2 in the bush.
www.Expert-4x.com is a sponsor of this free educational blog and uses many of the concepts high lighted in these postings for its daily alert services.
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The Head and Shoulders reversal formation
December 8th, 2007 expert
Online Forex trading concepts: Price Patterns, Head and Shoulders, Channels
The Head and Shoulders formation is one of the most wellknown reversal formations known by Technical Analysts. As is shown in the chart below the Head and shoulder formation consists of a Main Head with 2 shoulders on each side. A neckline can be drawn joining the bouncing points. It is not uncommon for the price to break through the neckline and then retest it before continuing in the reversal direction. The head and shoulders can also be viewed as a change of channel formation.
The Head and Shoulders is traded by trading the breakout of the neckline and placing a stop at the top of the breakout shoulder. The target is the height of the head and shoulders.
We trade the Head and Shoulders even when the neckline is non horizontal.
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Trading support and resistance (5/7/07) GBP +60pips
December 6th, 2007 expert
Online Forex Trading Concepts:- Multiple timespans, support and resistance, stop placement, exiting strategy, channel trading.
In online Forex trading it is important to always review all time spans of all the currencies traded to establish the long term dominant trend as well as important support and resistance levels. Looking at the GBP monthly chart gave us some idea of which short term trading strategies to employ. The GBP was clearly in a upward trend for a number of years. It is however at a 15 year previous high at 2.0110 . Any previous high is a psychological barrier because one of the definitions of a upward trending market is when the price is making new highs and new lows. When it comes to a 15 year new high this is even of more importance.
There are a number of ways the market can react to this new high. The bears can try to put up a very strong fight to try to keep the price below the previous high or what often happens is that the breakout is a high volatility breakout with the price moving upwards very quickly.
From the price action after the 15 year high violation it looks like we are in for a fight with the Bears putting up strong resistance. Sometimes it is a good time to not trade on a technical basis because of this fight.
Yesterday a double resistance opportunity presented itself for a possible trade. A support trendline that been violated (and now becomes resistance at 2.0185) and the upper resistance horizontal area (at 2.0195) formed a double resistance area for a downward trade. This was a risky trade because it was against the trend but often when there is a breakout the price goes back to retest the previous resistance. This is what happened and our sell activated at 2.0180 and the price went down to retest the previous support at 2.0110. The stop was put above the previous high.
www.Expert-4x.com is a sponsor of this free educational blog and uses many of the concepts high lighted in these postings for its daily alert services.
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Protected: A return of 475% in 1 month - Entry and Exit methods used
December 1st, 2007 expert
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