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Monthly Archives: October 2012

Trading Update.

We did not take any trades yesterday as we did not see any decent set ups. If we do not see a high probability set up we do not trade, its as simple as that. I am not going to trade just for the sake of trading.

The object of what we do is to take as much profit from the market as possible when the odds are in our favor.

Having said that we did miss a Euro long trade by around 3 pips which was annoying, but we don’t chase trades so we let it go. We enter trades at the best possible entry point to enable us to make as much profit from the move as we can.

Some of these high probability trades will only give us around 10 pips, so we do not want to run the risk of chasing after a trade when its missed our entry by 3 or 4 pips just to try and make 5 pips. If the move reversed on us we would be playing catch up, and that’s not the way we trade.

Today was a better day. We took 2 short trades one on AUD and one on Euro, and banked 24 pips. Trades are below.

DEAL 30/10/12 Spot FX EUR/USD DFB 12971.5 12960.2 +11 pips
DEAL 30/10/12 Spot FX AUD/USD DFB 10381.8 10368.9 +13 pips

The market was not particularly good trading today. The US had very limited trading because of the hurricane Sandy, so volumes were pretty light. I don’t think this week is going to be a very good week for trading at all with the US problems. We set ourselves a weekly target of 100 pips profit. We should easily do that but i will be surprised if we get over 200 this week. We only trade 4 pairs so we are limited on what we can achieve.

I am considering adding another couple of pairs to mix, or maybe some commodities. I will keep you posted on that.

Forex Trading When The Markets Are Moving Sideways

According to most Forex rules there are 2 basic stages of market. Trending and consolidating. When the market is going up or down its trending, and when the market is going sideways its consolidating.

Now depending on what time frame you are looking at, the market can spend quite a bit of time moving sideways or consolidating. For example if you are looking at a daily chart like the chart the left you will see that the market is moving sideways.

Now every candle on that chart represents 1 day. So within each day you will have another chart pattern. You may have a consolidation pattern, or you may have a trending pattern. The point i am trying to make is the market is never really moving sideways, it is always trending, or moving up or down.

When the market is in consolidation most traders will tell you not to trade as you don’t know which way the market is going to move, and you may get caught on the wrong side of a breakout. I will agree with that 100%. But you need to qualify which time frame you are looking at before you can make a decision on whether to trade or not. I would quite happily trade a sideways moving market on a weekly, daily, and H4 time frame, or even possibly a H1 time frame, but i would not trade a sideways consolidation on anything less than H1. All time frames are made up of trends and within those trends there are trend trading opportunities.

A good way to qualify if a consolidation is OK to trade is to measure the number of pips the consolidation covers. Basically you just draw a line at the top and the bottom of the range of the consolidation, as per the above chart, and measure the pips in between. The tighter the range the more risk will be associated with trading that consolidation. You may have a H4 consolidation that covers 100 pips or more. This would be OK to trade on say a 15 min or H1 time frame, as it would be made up of many trends. Now if this consolidation was made up of a 20 or 30 pip range there would be far more risk associated to trading it, as a breakout of a tight range is more likely to happen than a breakout of a large range, and you don’t want to get caught on the wrong side of the breakout.

A good example of a consolidation not to trade would be the Asian session, or Tokyo channel as some people call it. The Asian session often is a period of consolidation for the markets and a 20 to 30 pip trading range is often seen. When the UK session then opens you will get the breakout. If you have ever tried trading the Asian session you will know exactly how unpredictable this consolidation period is.

So to recap. Trading Forex when the markets are moving sideways is quite acceptable if the consolidation covers a larger time frame, and a larger number of pips. As within those consolidations there will be many tradable trends. Stay away from consolidations on lower time frames that cover less than 30 pips.

I would just like to add that this article has nothing to do with how i trade. Its just a general Forex article to give you a bit of help and advice on what not to do. What i teach is a complete understanding of price action trading, and how to read a chart. When you can read a chart and understand price action at a professional level, you can enter and exit trades with complete confidence. I will teach you how the big boys play this game. And when you have the same level of understanding as the best traders in the world you will be able to trade like they do.

If you want to learn how to trade Forex like the big boys, please consider my training and mentoring program here.

Yesterdays Trading. 2 Trades, 62 Pips Profit.

2 trades yesterday for 62 pips profit.

The first trade of the day was EJ long at 10283 up to 10319 for 36 pips.

Second trade was AUD short at 10384 down to 10358 for 26 pips.

I was a bit of a funny day yesterday, up and down in a pretty tight range, so trading was a bit hit and miss. Any new traders that were trading yesterday would have got killed for sure.

This week the pairs have been ranging a bit more than of late, which is good for us, as we don’t like trading when the markets are going sideways, its very dangerous.

Some good numbers out of the UK on Thursday saw Cable spike up 60 odd pips. It retraced some of that move yesterday, but it finished the day quite strong, so we may have a gap up on Sunday nite open.

Euro had been moving down the last few days but finished the week quite strong. EJ had a bit of a sell off on Thursday and Friday but recovered a bit of ground yesterday afternoon. AUD does not seen to know where its going at the moment.

We have had a successful week though. 271 pips profit for the week.

I have just taken on a new student that wants to learn price action trading on the larger time frames daily and weekly charts. So that will be a nice change for me, as i am normally teaching day trading strategies.

Anyway, have a great weekend all. I will update you on trading next week. 🙂

Trade Update For Yesterday And Today.

Yesterday we had one trade long on Euro Dollar for 31 pips profit.

Today we had 3 trades AUD, EJ and Euro short for 111 pips profit.

Trades are below.

DEAL 25/10/12 Spot FX EUR/USD DFB 13017.5 12981 +36.5 Pips
DEAL 25/10/12 Spot FX EUR/JPY DFB 10438.6 10404 +34.6 Pips
DEAL 25/10/12 Spot FX AUD/USD DFB 10395.1 10355 +40.1 Pips
DEAL 24/10/12 Spot FX EUR/USD DFB 12922.4 12954 +31.6 Pips

Sorry for the short update but i am really pushed for time. I will try and give some more information on this weeks trading tomorrow or Saturday.

Have a great trading day.