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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.

September 28th, 2007 @ 4:38 am by Bogdan Parascanu

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EUR/USD Technical View

Euro printed a new high yesterday just a few points below the 1.4200 round number. It was a somewhat agitated trading session, the pair started to slip lower after it nearly touched the resistance level but at the end of the day it managed to form a green candlestick on the daily charts; so far today we haven’t seen much movement only a few points to the north side, perhaps we’re gone see some more action in the later part of the session. First target is still the 1.4200 number, and if the pair manages to clear that we need to look higher for future resistance areas. On the short side a possible rejection of the 1.4200 level will push the pair lower towards the 1.4060 support level, and if the US dollar manages to gather some strength we might even see a move closing in on 1.3930 and 1.3850 as both are very strong support areas and significant bearish targets.

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 27th, 2007 @ 7:28 pm by Sunil Mangwani

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The Pivot Point System is a technique developed by floor traders, to help ascertain where the price is relative to previous market action. It can be classified as a technical indicator derived by calculating the numerical average of the high, low and closing prices, of any currency / index / stock etc.

A look at market movement tells us that price always fluctuates between a level of support and a level of resistance. Properly identifying key support and resistance levels can improve the ability to enter, exit, and manage your trades.

The pivot point is a level at which the sentiment of the market changes. It can tell us where the sentiment of traders and investors changes, from bull to bear or vice versa.

The main advantage of this technique is that it is price-based as opposed to indicator-based. By the time most indicators generate a signal, the move is already well under way. By following this system, one can get into a trade before the indicator-following traders, and be well into the trend when a signal is just being generated on a stochastic or other oscillator.

In its basic interpretation, we can say that if the market breaks the Pivot level up, then the sentiment is said to be a bull market and it is likely to continue its way up, on the other hand if the market breaks this level down, then the sentiment is bearish, and is expected to continue its way down.

Also at this level, the market is expected to have some kind of support/resistance, and if price can’t break the pivot point, a possible bounce from it is plausible. Read the rest of this entry »

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September 27th, 2007 @ 6:36 pm by Eugene Teplitsky

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This is a video summary of the Live Forex Trading Room session on September 27, 2007.

Today’s Summary, by Sunil Mangwani:

Good day today, with several good moves and great trades. Lets start right off with continuing where yesterday’s recap left off.

The GBP/USD has been Long into a trade since yesterday, based on our Divergence strategy. The price went up and reached our Fibonacci targets exactly as we estimated. The fib ratios and systems we use are very, very effective. Price paused at the 127% fib retracement level, and went up to the 161.8% level, where we closed off our trade for a profit of about 170 points. An excellent trade.

On the intraday basis, we had another trade on the EUR/USD. We went Long at a Hidden Diverence – higher lows on price, double bottoms on stochastics. This Hidden Divergence is supported by Fibonacci Fans, and we calculate our targets based on Fibonacci Expansions. You can see the accuracy of this long move up – price stopped right at the expansion level of 127%. Another excellent trade for about 50 points.

On the intraday basis as well, on GBP/JPY we were looking at a Triangle Break. We had plotted a Triangle on the 4h charts and were waiting for a break based on our Rules of Thumb for Triangle formations. Another effective trade of about 150 points. An excellent trade for our students and instructors.

I also want to show the effectiveness of our custom FXI Pivots indicator, usable on both Daily and Weekly periods. In this case we are using it on Weekly data, and it has proven very effective. The levels of support and resistance and the range for the week give us signals to enter a trade on the EUR/CHF, for a profit of about 120 points. As one of our members put it – a “walk in the park”.

All in all, an excellent day more than compensating for several slow days.Enjoy the video and see you next time at our Live Forex Trading Room!

[youtube]http://www.youtube.com/watch?v=auDa_qJydM0[/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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