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Andrew’s Pitchfork

November 8th, 2007 @ 2:01 am by Eugene Teplitsky

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This is a video summary of the Live Forex Trading Room session on November 7, 2007.

Today’s Summary, by Sunil Mangwani:

Out of intraday trade setups today, we traded just one. The Yen pairs were going crazy in the Asian session, and have been dropping like a stone. We managed to catch the GBP/JPY – and did not anticipate such a large move.

The Divergence was certainly there – a Bearish Divergence. We entered our Short trade based on our Fibonacci Fan levels, and price went far beyond the expected target levels. We did not ride the price all the way down, however. This trade was a good example in the room of the effectiveness of Fibonacci Fans in general, and how to use them. Read the rest of this entry »

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November 1st, 2007 @ 12:48 am by Eugene Teplitsky

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This is a video summary of the Live Forex Trading Room session on October 30, 2007.

Today’s Summary, by Sunil Mangwani:

There were a couple of intraday trades today, which we will go over before following up on the long term trades which we are into up to now.

On the GBP/CHF  we identified a Bearish Divergence, which contributed to a Short trade, as pointed out by one of our members. The price made higher highs, stochastics made lower highs, and the lower high on the stochastic was quite below the overbought level of 80. This means the momentum has been decreasing in this rally of price which gave us the second high. This signifies a change of trend. This was a nice divergence, and we went in according to our divergence trading rules.

We plotted our Fibonacci Fans, and also used other fib projections to get our targets for a technically correct and profitable trade. Read the rest of this entry »

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October 28th, 2007 @ 7:42 pm by Eugene Teplitsky

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This is a video summary of the Live Forex Trading Room session on October 26, 2007.

Today’s Summary, by Sunil Mangwani:

Lets go over the long term things first which we’ve been following. On the GBP/USD, we were looking for a breakout on the daily timeframe from a Bullish Flag Formation. Price has been moving with lots of upwards momentum, and so far has remained above the mid channel of the flag. We were expecting a breakout this week, but it has not yet taken place. We have a penetration, but not a close.

On the intraday timeframes we did have an indication that today we might not get the close that we are looking for, because we had a Bullish 1-2-3 Formation. As I always say, “give me a 1-2-3 formation, and I can give you the targets”. We plotted Fibonacci Expansions to determine our targets, and price was rejected at the 127 level, so we do expect some retracement. Today is just not the day for the breakout. Lets see how it goes. Monday we do expect strong upmoves on the GBP/USD. Read the rest of this entry »

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October 26th, 2007 @ 1:51 am by Eugene Teplitsky

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This is a video summary of the Live Forex Trading Room session on October 25, 2007.

Today’s Summary, by Sunil Mangwani:

Lets start with one of the trades we were following since yesterday’s recap – the GBP/CHF on 30 min timeframe. The trigger was a Bearish Divergence. Price made higher highs, while stochastics were giving lower highs. We consider this an aggressive “Class A” divergence. The entry for this trade was determined by certain Fibonacci Retracements, and price did go down beyond our target of 2.3940.

We also use the Andrew’s Pitchfork in different ways to confirm the entry. In this case, the price broke through the midline of the APF, and came back to retest it as a resistance. This is another strong confirmation that a downtrend is in progress. In our room we do like to twist around the technical tools available to give us better results.

Lets go over an intraday trade we ended up taking today. The GBP/JPY, one of the most popular pairs in our room, had a Long trade, though the extent was not too large. As I always say, its the technique and methodology which is always more important than the result. Read the rest of this entry »

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October 25th, 2007 @ 1:32 am by Eugene Teplitsky

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This is a video summary of the Live Forex Trading Room session on October 24, 2007.

Today’s Summary, by Sunil Mangwani:

As I always say, its the procedures and technique that are more important than the result of a trade. I know we are all here to trade and win, but ultimately its the procedure that counts more – how you go into the trade, how you analyze it, how you plan your exit. We’ll go over a few setups from today and the techniques which we used to analyze them.

Lets start off with one of the setups we managed to catch in time that is going so far in our favor.
On the GBP/CHF we were looking at a Regular Bearish Divergence, with price making higher highs, and stochastics lower highs. Based on our procedure we calculate our targets using Fibonacci projections on the last move down. So far its on a pause, but expect further moves down. Read the rest of this entry »

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October 4th, 2007 @ 2:35 am by Eugene Teplitsky

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This is a video summary of the Live Forex Trading Room session on October 3, 2007.

Today’s Summary, by Sunil Mangwani:

Two trades today worth mentioning, taken in the Live Trading Room by ourselves and our subscribers. Both based on Divergences.

I want to go over the procedures we follow in the room, and the different methods we use to confirm the price action. As I mentioned before, we do not lay too much emphasis on the indicators – we concentrate on price action. Price action is never random – it always leaves its clues, and its up to YOU to decipher them.

We noticed a Hidden Bullish Divergence on GBP/JPY 30 min charts – price was forming higher lows, and stochastics lower lows. A classical example of a Hidden Bullish Divergence. We can use a lot of different tools to confirm our trade. In this case we used an Andrew’s Pitchfork plotted in a different way. When price came down and found support at the lower line of the pitchfork, this was the signal for our entry.

For this Hidden Divergence trade, where do our targets lie? We used Fibonaci Expansions to find out. The 127% level was the area where the price stopped exactly. Many ways to skin a cat, as they say, but all of them very effective. 150 points of profit on GBP/JPY when the trade completed. An excellent trade.

The other trade which we are still in the process of observing is the CAD/USD. We have been looking at it with a Bullish bias for some time now, waiting for price to give us a confirmation. The trigger for our trade was a similar Hidden Bullish Divergence – higher lows in price, lower lows in stochastics. In this case, we used Fibonacci Fans to confirm the support level for our Hidden Divergence. It is an excellent trigger for the trade.

One of the supports for the fans was also created by a Regular Bullish Divergence. This is one of the situations where you have a lot of odds going in your favor. We advocate aggressive trades in this case – enter as soon as you get a confirmation, jump into the trade, and start taking profits. This does not mean you are not confident about your system – with an aggressive trade, you are jumping in the market, and taking your profits because you KNOW the trade is going to be good. Lock in your profits and wait for price to move further. We remain confident on this trade and expect the market to go higher, with two different Fibonacci tools giving good targets.

One thing I want to touch on before I close – on USD/JPY, we have been looking at a breakout from a Symmetrical Triangle on the daily charts. We are expecting longish moves on this pair, and were waiting for confirmations to enter into a Long trade. We will follow this pair in our subsequent recaps.
Enjoy the video!

[youtube]http://www.youtube.com/watch?v=cI6cS3fLPwc[/youtube]

Click here to view higher quality versions of our past Live Trading Room summaries on our forums.

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