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October 4th, 2007 @ 4:11 am by Bogdan Parascanu

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EUR/USD Technical View

Euro lost some more ground on Wednesday, after it broke under the 1.4200 support line the pair tried briefly to move higher but the 1.4200 level turned into resistance after that the pair slowly started to move lower and has tested the next support level the 1.4100 round number. So far in today’s trading hours we are trading just around the 1.4100 level and the pair doesn’t seem to have that much momentum; the next support is at the 1.4060 and below that there is nothing on our charts until the previous YTD high at 1.3930. Conversely if the euro gathers some strength this area might be a good place for the bullish traders to start opening new trades and pushing the pair back up towards the YTD high at 1.4300. The markets are still at the moment because almost everyone is waiting for the ECB to announce the interest rate later today.

Resistance Levels

  • 1.4300 YTD High
  • 1.4200- round number

Support Levels

  • 1.3930 – September 13th high
  • 1.3850 – July 24th High
  • 1.3680 – April 27th High
  • 1.3550 – June 5th High

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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.

Click here to read the full article.

October 3rd, 2007 @ 4:16 am by Bogdan Parascanu

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EUR/USD Technical View

The pair moved lower on Tuesday, it broke under the 1.4200 support level and made a low at 1.4136, so far it doesn’t look like a reversal movement it appears to be just a retracement after reaching a new record high. So far today the pair is trading inside yesterday’s range and we will wait to see either if the US dollar gains some strength or if the bullish trend will resume. Looking for support and resistance zones it’s clear from the chart below that once back above 1.4200 the biggest resistance is the YTD high at 1.4300 and the most significant support area is the former YTD high at 1.3930 but that seems pretty far at this point and between the current price and that level we only have the 1.4060 level.

Resistance Levels

  • 1.4300 YTD High
  • 1.4200- round number

Support Levels

  • 1.3930 – September 13th high
  • 1.3850 – July 24th High
  • 1.3680 – April 27th High
  • 1.3550 – June 5th High

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October 3rd, 2007 @ 2:09 am by Eugene Teplitsky

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This is a video summary of the Live Forex Trading Room session on October 2, 2007.

Today’s Summary, by Sunil Mangwani:

One excellent trade, one wrong trade, and one non-conforming trade today.

Lets have a look at GBP/JPY, on the intraday charts. This is our “excellent” trade. This is the kind of Bullish Divergence on which one can take aggressive entries – its a so-called Class A Divergence, giving very strong signals with a higher low on Stochastics, starting in the oversold region, and lower lows on Price. This is an excellent confirmation that momentum has definitely changed towards the upside.

We use a double confirmation in Divergence-based trading – Fibonacci Retracement projections to give us an estimate of the targets, with a target at 161% level at 236.25. This was an excellent trade of about 95 points of profit. More importantly, this was followed up step-by-step with our money management strategies.

There are more than one ways to skin a cat, as they say – and more than one way of following money management principles, which ever methods are most comfortable for the trader. We went with the ones most comfortable with us. Profits may be less than the trade’s full potential, but we can feel confident that we are protecting ourselves from losses at every moment of the trade, and are totally in control of our equity.

The advantage of the Live Trading Room is that trades in progress are observed and managed together with our students – everyone sees what we do and hears what we think. Nobody trades alone.

Next lets go over the one trade that went wrong. On the USD/CAD, we identified a Bearish Wolfe Wave. It is a 5 point chart pattern, and the market fit the setup perfectly. We expected prices to drop to the line 1-4’s target, but it did not, and went up to stop us out. You win some, you lose some. Losses are just a part of trading, and are to be expected.

We were also looking at the USD/JPY to go Long, and on the 30 minute charts we saw a Bullish Hidden Divergence. We were expecting price to go up, but it did not yet confirm our entry of a trendline break on the upside. We expect the entry should materialize some time during the Asian or early London session on Wednesday.Enjoy the video!

[youtube]http://www.youtube.com/watch?v=wOKIii9wN5U[/youtube]

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

Click here to read the full article.

October 2nd, 2007 @ 4:30 am by Bogdan Parascanu

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EUR/USD Technical View

Euro touched the 1.4300 round number early on Monday only to be rejected and to start a move down, yesterday we approached the 1.4200 support line and today the pair broke that support and is trading just bellow it. If the US dollar has regained some strength and this will turn into a more serious retracement we are bound to start looking at the closest support levels around, the most significant support area si the former YTD high at 1.3930 but that seems pretty far at this point and between the current price and that level we only have the 1.4060 level. Looking at the daily chart below we can see that until yesterday everything looked very bullish but at this point in time the fact that we’re in overbought territory starts to put pressure on longs and adds support to the bearish side.

Resistance Levels

  • 1.4300 YTD High
  • 1.4200- round number

Support Levels

  • 1.3930 – September 13th high
  • 1.3850 – July 24th High
  • 1.3680 – April 27th High
  • 1.3550 – June 5th High

Read the rest of this entry »

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October 2nd, 2007 @ 1:50 am by Eugene Teplitsky

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This is a video summary of the Live Forex Trading Room session on October 1, 2007.

Today’s Summary, by Sunil Mangwani:

Mondays are usually slow days, since it takes a bit of time for the technicals to conform, or as we say, the dust to settle down after the weekend openings. Not many trades taken, though we did have two good ones today.

On the USD/JPY, we had an excellent Bullish Wolfe Wave on 30 minute charts, which was identified by one of our members. We were thinking of going Long on this pair, and the Wolfe Wave only reinforced our confirmation. Once price satisfied all the Wolfe Wave conditions, the expected target where price should go up to is normally the line you plot between points 1 and 4. Its very reliable. This one gave us an excellent trade of about 90 points.

The best part about Wolfe Waves is that the entries, stops, and targets are completely pre-defined. Stops should be placed below the lows of point 5, entries are taken when price allies ahead of point 5, the target, as mentioned earlier, as at break of line 1-4.

The second trade we took today is on the GBP/USD, observing a Bearish Divergence on the 4h charts. This was one trade taken as an examples of how we enter a Divergence aggressively, what are the best places for entering a divergence, what gives the confirmations, etc.. We use a lot of fibs and trendlines. This was a trade taken step by step by our subscribers. We were targeting about 50 points of profit, but it went beyond our targets, netting about 70 points.

Not a bad start for the week! Enjoy the video![youtube]http://www.youtube.com/watch?v=xzFnvDCZNtY[/youtube]

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

Click here to read the full article.

September 30th, 2007 @ 5:15 am by Bogdan Parascanu

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EUR/USD Technical View

Euro began the week slowly, almost like usual one might say, and it started printing new record highs on a daily basis for the rest of the week. Although the daily charts look a bit overbought the pair pushed higher through the resistance levels and made a new YTD high at 1.4280, so far the bullish trend seems very strong and it doesn’t appear to slow down, looking for future possible resistance levels we have only the round number that might have a psychological impact over the markets, first one is the 1.4300 followed by 1.4400. On the south side we should look at the 1.4200 as the first support area and if we have a move lower than there is past weeks low at 1.4060 as the next significant support zone. Markets overall bias is bullish and only an unexpected event seems at this point that can change that.

Resistance Levels

  • 1.4200- round number

Support Levels

  • 1.3930 – September 13th high
  • 1.3850 – July 24th High
  • 1.3680 – April 27th High
  • 1.3550 – June 5th High

Read the rest of this entry »

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September 29th, 2007 @ 1:25 pm by Eugene Teplitsky

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This is a video summary of the Live Forex Trading Room session on September 28, 2007.

Today’s Summary, by Sunil Mangwani:

Before we get into the trade setups, I want to go over a couple of very important points. We had covered several important topics this week – Money Management, Risk Management, Correct Use of Stops, Position Sizing, how much to risk in your trades, and other topics – all of these topics are designed to encourage our members to follow a trading plan and money management policies, incorporating both risk management and money management together in their trading. Without it, your trading plan is incomplete.

Incorporating money management into technical analysis and day to day trading requires taking advantage of technical systems and strategies which enable us to follow these principles. Before you take the trade, you are in control – once you pull the trigger, however, the market takes over and you are no longer in control of the outcome. Trading a game of probabilities – so you should control whatever factors you can. The only factors still in our hands after a trade is initiated are Risk Management and Money Management.

If you have watched our recaps in the past, you will find that we do not place too much emphasis on our indicators. We believe indicators are just that – indications of price behavior, and not an ultimate confirmation. We take advantage of particular characteristics of certain indicators and put them to work on particular pairs, while keeping our various Rules of Thumb in mind.

On the intraday basis, USD/JPY had a Bearish Divergence on the 1h timeframe. Price was making higher highs, stochastics giving lower highs. Use of indicators in this case is restricted only to the Stochastic Oscillator – we use it for determining the presence of Divergence. Beyond this, we do not refer to the Stochastics in this case and limit ourselves to Fibonacci numbers.

We are very big followers of Fibonacci-based tools, and price has an uncanny way of respecting these Fibonacci numbers. Believe me, it would be worth your while to study Fibonaccis. We were anticipating a movement down to the confluence of the Fibonacci Fans and Fibonacci Retracements. Price came down in an A-B-C Correction, and stopped precisely at the confluence level.

Using such technical tools gives traders the confidence that you are getting maximum profit from your trades. You are also well aware of the steps a trade is taking, enabling you to lock in your profits each step, by following your price with trailing stop.

Lets have a look at another example. On the AUD/USD we had a bullish move, triggered by a Bullish Hidden Divergence on 15m. If you are not sure what a Hidden Divergence is, I strongly suggest you study it – join us in our Live Forex Trading Room, and we will show you how to use this powerful tool.

We had a higher low, stochastics pulling down to the same level. The setup was ultimately confirmed by Fibonacci Fans, and we determined our target levels using the Fibonacci Expansions. Price stopped precisely at the 127% Fibonacci Expansion level – Fibonacci numbers really do work, and the charts speak for themselves.

On the GBP/USD, 4h charts, based on Fibonacci Fans, we were anticipating an uptrend. We were expecting Longs, and though we did not capture the entire move, we did capture a large part of the uptrend. We use the CCI in this setup only for a specific purpose – if you used the Stochastics here, you would have seen a completely overbought situation, but with CCI you can see that there is still room for further upwards momentum. Price has stopped precisely at the 161.8% Fibonacci Retracement level.

So you see, you use your indicators only as a first step. Use your Fibonacci numbers, determine the trend, wait for price to give you a confirmation, get into the trend, and believe me, you will walk away with profits.

Next let us look at a trade that did not go as anticipated. It is important to know that not all systems work all the time. There will be times when the market will move against you. We were looking at USD/CAD, anticipating some pullbacks and moves up, an uptrend channel. We did not enter as we were using our Fibonacci Fans as confirmation – if price remains within the fan levels, we would have gone long, but it has broken out and not given us the expected bullish movements, instead conforming to a bearish mode again.

Do you think we would have lost out on a Short trade waiting for a Long to happen? Possibly. But as I always say, I would rather be out of a trade wishing I was in it, than being in a trade wishing I was out of it! Staying out is also a position.

What I have covered today are the basics – the fundamental stepping stones of what we follow here in our Live Forex Trading Room – and next week we will return to cover more trades based on our techniques, more setups, and more interesting discussions.

Enjoy the video!

[youtube]http://www.youtube.com/watch?v=tPVi5IDt3Ao[/youtube]

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

Click here to read the full article.

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