Finding the edge in FX Trading

EUR/USD forecast

2011-01-06T10:49:00.000+08:00

Been some time since I did a forecast.

On the weekly chart, the EUR appears to be in a consolidation. It is trading in the middle of the bigger down trend.

On the daily chart, EUR is in an uptrend but it has been consolidating over the last couple of weeks between 1.3440 and 1.2970. Got to look at the price action build up to see where it would be heading as it is currently near the up trend line support.

Market could continue to range till this Friday's NFP release, which could give the market some direction.

Forecast for the week - 19 Jul 2010

2010-07-18T22:37:00.000+08:00

The EUR hit a high of 1.3006 by the end of last week and then fell to close the week at 1.2925. At the same time, it formed a doji. This could be a reversal signal.

For the coming week, would be good to try to sell the EUR with target around the 1.2700 regions.

EUR continues to head south

2010-05-16T12:03:00.000+08:00

It seems like nothing can help stop the EUR from falling. Not even the bail out package for Greece. EUR/USD simply continues to fall under the influence of gravity.

EUR/USD closed the week at 1.2380, after falling from above 1.30 regions. The EUR is not the only pair that was falling, the GBP/USD was also falling. The USD/JPY was still indecisive to which direction it wants to go.

USD/JPY formed a star for the week, ending with a short rally up to 92.32, after hitting the week's low of 91.79.

EUR/USD: I would still favour to short this pair. Possible entry @ 1.2600 regions or 1.2450 regions. EUR could test 1.2329 and if this is broken, then we could see EUR go below 1.20.

USD/JPY: Probably continue to consolidate. However, I would try to go short if it retraces up to 92.50-93.00 regions. I feel this pair will fall to 90.80 regions before moving up. 93.00 should provide some resistance.

Forecast - 3 May

2010-05-01T20:43:00.000+08:00

The EUR bounced up after hitting a low of 1.314 and closed the week at 1.3313. The technical outlook seems to be recovering but fundamentals may further delay the upward recovery of the EUR/USD.

From the Weekly chart, there's still a possibility of the EUR testing 1.2990 before turning up. Personally, I feel that this is likely to happen given the problems the EU are having now.

On the Daily chart, the EUR is still in a down trend.

In the coming week, EUR could test 1.3200 before going up again.

Good to look for shorts if EUR goes up to 1.3450 regions. Any open shorts should tighten stop loss in case the EUR shoots up to 1.3450 regions before continuing its journey down to 1.3200 or even 1.2990.

EUR bounces higher for the week of 19 Apr to 23 Apr

2010-04-25T21:33:00.000+08:00

The EUR/USD traded higher for the week. It recovered from the bottom of 1.3201 and closed the week at 1.3376. This is probably a small recovery and whether or not this recovery can be sustained, it will depend on what happens in Greece.

The EUR still looked weak and could potentialliy drop to 1.2995 regions.

Resistance is still strong at 1.3600 and the immediate resistance at 1.34 looked to be tested in the coming week ahead.

NFP release on 2 Apr 2010

2010-03-30T21:58:00.003+08:00

It's been some time since I made a trade. This week should see the market do some consolidation and wait for the release of the US Non-Farm Payroll data before showing any new direction.

On the weekly chart, EUR broke below 1.3350 and dropped to 1.3267. If EUR falls below this bottom with the release of NFP data, we could see the EUR fall to 1.2990 regions before moving up again.

Would wait for NFP release to see which direction the market is heading before making any trades.

No trades if you are not clear on the direction of the market.

EUR - 25 Jan 09 to 30 Jan 09

2010-01-24T18:43:00.002+08:00

The EUR/USD came down to my predicted target region of 1.4020 - 50. It then rebounded to close last week's trading at 1.4140.

For the coming week, the EUR/USD could move back up to the regions of 1.4300 to 1.4400 before turning back down again.

Good to try to long EUR/USD around 1.4100 - 30 with a tight stop loss. If not, wait patiently to try to short the EUR/USD around 1.4300-50.

EUR heading down?

2010-01-20T09:35:00.003+08:00

The EUR dropped below 1.4300 this morning as I type this. It looks quite probable that the EUR is likely to continue to retrace and my 1st target would be around 1.4020.

Let the market tell you where it is heading. Do not chase it. Be patient.

Would be good to look for long entries around 1.4020 with controlled stop loss.

It's been a long time.

2009-11-23T23:30:00.002+08:00

Yep. Have not been posting my thoughts on the forex market. Like the experts say .. don't trade when confused or when you are not ready. That's very true.

When you are not mentally prepared to trade, then you are leaving your trades to chance. And chance are that you will lose money. How true too!

Will get back to posting some of my thoughts on the forex markets when I see the current market more clearly.

Stay tuned.

EUR Long entry - Trade Journal

2009-02-21T17:02:00.003+08:00

The EUR fell to my predicted retracement levels of 1.2557 and rebounded. Though I missed the perfect entry (as I forgot to place an order to long the EUR at 1.2570), I managed to long the EUR at 1.2584.

As of the time of posting this trade journal, the EUR has closed the week at 1.2835. Not a bad entry, as the EUR has never come near my stop loss since the entry was made.

Have taken partial profit and moved my stop loss to breakeven. For the coming week, could retrace to 1.2720 - 1.2775 regions, before continuing its push to higher levels. Try to look for long entry around this region or if EUR breaks 1.2883. The EUR has potential to reach 1.3200 - 1.3250 regions.

EUR outlook

2009-02-20T11:12:00.002+08:00

EUR has dropped below the previous anticipated support level of 1.2700 and now trades around 1.2650 regions, after dropping to a low of 1.2512. On the daily chart, it has forms a doji and then surged up to a high of 1.2759 without breaking 1.2800.

Still holding the view that EUR is bottoming out soon. Recommend to try to find long entry around 62% retracement levels of the range of 1.2512 and 1.2759.

EUR outlook - 16 Feb to 20 Feb 2009

2009-02-15T22:04:00.002+08:00

For the past week, EUR has been trading between 1.3093 and 1.2721. On the daily charts, it has been in a consolidation for the past week.

Obama has gotten his stimulus package approved and i think the EUR would respond by moving up, as long as the support at 1.2700 holds. An upward trend would be confirmed if the price manages to break 1.3100.

If the up move is confirmed, then the projected target would be 1.3500 regions.

Testing times for EURlong traders

2009-02-02T23:10:00.002+08:00

EUR has been testing the patience of long traders for the past few weeks. The EUR has been making new lows and I am one of those long traders who got knocked out of my trades, each time I went long on retracements. Thankfully I had my stop loss to limit my losses.

EUR dropped to a low of 1.2706 today (2 Feb), and bounced up to trade around 1.2826 (as I type this blog). I am currently long on the EUR when it triggered my long order at 1.2805.

Should the low of 1.2706 holds, we should see the EUR rise up to around 1.3350 to test the last resistance (pincer top).

It's been a while ...

2009-01-19T22:22:00.002+08:00

since I last traded in Dec 08. Not that I have stopped. It is just that due to all the holidays, the market has been either flat or unpredictable. Hence I chose to stay out of the market.

Now that 2009 has arrived, I will be looking forward to getting more profitable trades under my belt and I hope to increase my trade size too. As usual, I will try not to rush into any trades, but to wait patiently for the trade opportunity to present itself.

Wishing all FX traders a Happy Pipping Year ahead !!!

FX Trading - Journal 19 Dec 08

2008-12-19T20:10:00.003+08:00

It's been a month since I last traded (from my last post on 20 Nov 08). Looking at the charts, I saw that I have many missed opportunities to make some money on the EUR/USD. However, those were just missed oportunities ... better than lost monies on hasty trades (chasing the markets).

On 18 Dec, I finally made my trade to short the EUR. The EUR shot to a high of 1.4719 (surpassing my own prediction of 1.4300 - 1.4350. I then went down to the 30min charts and saw that it was doing a BKO downward move. Based on what I have learnt from the PowerWave course, I shorted the EUR and did my projection to take profit at 1.3950 ( which happened to be a 32.8% retracement on the daily chart of a move from 1.2388 to 1.4719). THe market revealed itself according to what I have anticipated.

Summary of the EUR short trades (2 in total):

Trade #1:
Entry: 1.4471
Initial Stop loss: 1.4502
Trade closed at 1.4441 (when the EUR retraced to hit my trailing stop loss).

Profit: +30 pips.

Trade #2: When the EUR went down again after hitting my trailing stop loss, I looked for re-entry to short the EUR.

Entry: 1.4379
Initial Stop loss: 1.4409
Take profit target: 1.3950
Trade closed at 1.3950 on 19 Dec 08.

Profit: +429 pips.

Trade #2 was closed when the EUR dropped downwards and hit my target price.
What a trade!!! PowerWave rocks.

Trade Journal - 20 Nov 08

2008-11-20T22:25:00.005+08:00

The US Unemployment claims came in higher than expected. This has caused the USD/JPY to fall upon the announcement of the numbers.

On the day chart, USDJPY is currently in a down trend of the current wave (starting from a high of 100.54. I am expecting the USDJPY to fall to 92.80 - 94.20 regions, where I think the USDJPY will pause and then start to move up.

I shorted the USDJPY when the Unemployment Claims figures was announced.

Short entry: 95.31
Target price: 92.90

As I type this journal, USDJPY is currently trading at 94.68. I am using a manual trailing stop loss. Hope the USDJPY will drop to my target price.

21 Nov 08 -
Sigh!! The JPY shot up to 96.23 just past midnight and took out my trade by hitting my stop loss. Then it started its sharp fall to a low of 93.54 at around 5.30am (Singapore time). That was how volatile the market is. Thankfully I adjusted my stop loss to lock in some profits when I went to bed. This just shows the importance of having stop loss in every trade.

Summary of my JPY trade:
Short Entry: 95.31
Trailing Stop Loss: 94.73

Profit/loss: +58 pips.

Important principles a novice trader need to know

2008-11-15T14:19:00.002+08:00

What's the first things a novice trader needs to know to survive in the "jungle" (the market).

1. The market is always right. Never think that the market is wrong. Never go against the market. Let the market tell you what it is doing. Respect the market. - How many times have we entered a trade thinking that we made the right trade and yet the market goes against us? Then we always blame the market, but ourselves.

2. Never rush into a trade or over trade. Never enter trades when you are not in the right fame of mind - For those of us holding full-time jobs, the mind just gets too tired to think by the end of the day. Sometimes we are just too eager to trade, 'cos we want to catch every move in the market.

3. Always enter trades with predetermined stop loss (Good money management strategies). Have predetermined profit targets, if possible. If not, trail with manual stop loss adjustment.

Trading is about staying in the market long enough to make a profit. ie. capital preservation is important. Of course, having a good trading plan will always go a long way in ensuring you do not over trade, and that your capital is preserved.

EUR/USD - 14 Nov

2008-11-14T22:14:00.003+08:00

The EUR/USD has reached a high of 1.2856 on 13 Nov 08. Since then, it has started to come down. In fact it has retraced to 1.2611 (between 50% and 66% retracments) today.

I managed enter a long trade on the EUR at 1.2630. Using the PowerWave, I am projecting a target price of around 1.3050, if the EUR starts to move up from 1.2611. Long views to be abandoned for the moment if EUR falls below 1.2611 as it will drop further to test 1.2450.

Update on 15Nov:
This trade was closed when the price came back down from near 1.2800 (around 3-4am SG time) and hit my trailing stop loss. The EUR rose to a high of 1.2797 at about 3-4am and then nosedived in the last hour to close the week at 1.2690.

A summary of my EUR/USD long trade:
Entry: 1.2630
Trailing Stop Loss: 1.2660 (shifted just before I went to bed)
Profit/Loss: +30 pips.

FX Forecast - 12 Nov 08

2008-11-12T23:22:00.003+08:00

EUR/USD

EUR has been testing the patience of traders looking to long the EUR this week. EUR broke below the 1.2650 support (which I identified as a recent support), and it fell to a low of 1.2482 and currently trades at 1.2522 (as I type this blog). Would still be holding my view of longing the EUR as long as the support at 1.2329 holds. Initial targets for long trades are 1.3440 regions and 1.4400 regions.

USD/JPY

JPY has started to turn down from the top of 100.54. It is currently trading at 96.20 (as I type this). I predict that this drop will bring the JPY to 94.20 regions before the JPY will turn upwards again.

EUR outlook - Technical analysis (11 Nov 08)

2008-11-11T21:49:00.002+08:00

On the daily chart, the EUR is in a consolidation phase. It looks like it is forming a triangle pattern. A breakout in either direction is imminent and it could happen soon ... probably within this week.

I am of the opinion that the EUR will break up, since the EUR has come down a long way from the high of 1.6035. Furthermore, prices are also near the uptrend trendline drawn from the bottom at 1.2329.

Would look for long entries as long as price does not fall below 1.2650. Alternatively, if price breaks above 1.2800, the EUR would shoot up. 1st target would be 1.3297. If EUR breaks 1.3297, then the next target would be 1.4450 regions.

EUR long entry triggered - 4 Nov 08

2008-11-04T21:06:00.004+08:00

Today, the EUR moved down and triggered my long at at 1.2550, which was between 66% to 80% retracement of the last upward move from 1.2330.

Entry price: 1.2550
Initial Stop loss: 1.2485
Current Stop loss: 1.2685 (to lock in profits)

Target Price: 1.3480 (to be reviewed as the market progresses)

EUR has since move back up to 1.2824 (as I type this trade log). Stop loss has now been shifted to 1.2685 to lock in profits.

It feels good to be on the right side of the trade (after staying on the sidelines for some time). Furthermore, the entry price was a very good.

6 Nov: This trade was closed when the EUR retraced downwards and hit my trailing stop loss @ 1.2950. It was still a good trade for me. This trade closed with a 400 pip profit for me.

Another week gone

2008-11-01T23:37:00.002+08:00

Now to look forward to another exciting week ahead.

The EUR/USD seems to have found some support around 1.2330, after prices move up from the pincer bottom and reached a high of 1.3297, before closing the week at 1.2742. This closing price also falls between the retracement levels of 50% to 66%.

For the coming week, I would be looking to catch long on the EUR for a target price of about 1.3200, as long as 1.2330 holds as support.

USD/JPY closed the week at 98.49, after hitting a high of 99.69. Would be looking to pick long between the regions of 95.30 and 93.90.

Markets are falling like there's no bottom

2008-10-24T23:50:00.002+08:00

Have not traded since my last post as I could not bring myself to commit to a trade. When I finalliy did enter a trade to long the EUR (thinking it has bottomed), the market once again sold off due to fears of a recession. In the end, lost some pips. Sigh ... perhaps I was to eager to enter the market. I would have made money if I had shorted the EUR instead, but I wasn't sure how much further the EUR will weaken against the USD. Well , the market is ALWAYS right.

Nonetheless, I will have to wait for a clearer sign to enter long in the EUR.

Another crazy week ...

2008-10-11T23:00:00.002+08:00

Another week is over ... what a crazy week. The forex markets have been reacting very wild to fundamental news, making it very difficult for a technical trader like me, esp. when I am still a novice trader.

There's no clear direction for the EUR.

GBP closed the week with a doji with slow stoch. in the over sold regions. A reversal is probable, though not definite. If it does reverse, it could retrace up to around 1.7400 to 1.7720 regions before turning down again.

JPY could be reversing soon. If it does retrace upwards, it could go back up to 101.30 to 103.00 regions before turning down again, where I think it will test 97.00.

Missed opportunities.

2008-10-06T21:33:00.002+08:00

The markets have been erratic lately. So I decided to stay out until there is some clear direction in the forex markets. The markets have been reacting to the US Govt's bail out news but I did not feel comfortable banking my trades on such news. Though I have missed some good profits, but I have learnt that I should not trade hastily, or to chase the markets.

Never think that the market is wrong.
Never trade when you are confused about the market.
Never trade without a stop loss.

Some of the principles I use for my trading which I picked up from fellow traders.

Forex Forecast - 27 Sep 08

2008-09-27T15:34:00.002+08:00

EUR/USD - This pair has moved up from the low of 1.3882 since 11 Sep. It reached a high of 1.4866 and has since retraced down to close the week at 1.4612. For the following week, I would expect the to continue to fall to 1.4469 to 1.4341 regions. Look for opportunity to long this pair in these regions with potential target exit near 1.5200 to 1.5250 regions.

Forex Forecast - 7 Sep 08

2008-09-07T21:32:00.004+08:00

What a week !! Most of the pairs fell against the USD. EUR closed the week @ 1.4248, JPY closed @106.96, GBP closed @ 1.7626.

Outlook for the coming week ...

EUR - EUR formed a doji to close the week on the daily charts. If it can break the top @ 1.4347, we could see the EUR move back up to 1.4700 regions. Going below 1.4196, we could see the EUR fall to 1.3920 regions.

JPY - This pair is still in a bearish trend, technically. However, we could see the JPY retrace to about 108 first before moving down to about 105.

GBP - If GBP breaks above 1.7743, we could see the GBP retrace to 1.84 before moving down again. Going below 1.7535, we could see GBP testing 1.6870.

Disclaimer: These are purely my own views of the market. You are solely responsible for your own trade losses/profits if you decide to follow these forecasts.

FX Forecast - EUR/USD

2008-09-03T22:28:00.002+08:00

Today the EURUSD dropped to new low of 1.4385, surpassing the previously projected low of 1.4660 region.

It is not wise to chase the market to try to enter short for the EUR now. Should wait for a reversal signal to try to catch a long entry for the EUR. Should the EUR start to retrace upwards, we are looking at the EUR to potentially rise up to 1.5150-1.5200 regions.

What a week ...

2008-08-31T21:22:00.004+08:00

The market has been very "wild" lately. EUR looked to be bottoming out, but it plunged lower instead ... killing traders who longed the EUR. Similarly for the GBPUSD. This plunge was likely due to better than expected fundamental news for the USD.

I guess I was luck that I did not manage to enter any trade to long the EUR.

For the coming week, would be looking for opportunity to long the EUR if the support @ 1.4570 holds. Going below 1.4570, we could see the EUR test 1.4450 regions.

For JPY, if support @ 108.12 is broken, we could see JPY going down to 105.50 regions. Then we could see the EUR start to move up.

Trade Journal - 19 Aug 08

2008-08-21T22:54:00.003+08:00

The EUR could be bottoming out ... hence I looked for opportunities to long the EURUSD. On the 30 min chart, I saw the potential BKO and I made my entry when market broke the BKO.

Entry: 1.4705
SL: 1.4620 (This was later shifted to 1.4705, when the price went to 1.4805)

Result: THis trade was closed at breakeven when EUR retraced back down to 1.4670 regions after hitting a high of 1.4805.

Sigh ... should not have adjusted my SL to breakeven so soon ... Now the EUR is trading at 1.4885 as I am typing this trade journal ... SIGH.

Now I wil have to look for another opportunity to long the EUR again with the target price around 1.5300.

Cell Group

2008-08-19T22:23:00.002+08:00

Attended another forex PowerWave cell group to brush up on my PowerWave and to get the latest update on the wave count. I must say, counting waves is a lot harder than it seems. However, if we get the basics right, spoting the wave is as easy as ABC.

The market has been erratic last week and a lot of us have lost track of the wave. It was a good thing that I attended this cell group. Learnt a new "pattern" for wave counting and after that saw the light at the end of the tunnel !!! Suddenly, the wave was there again.

Now to exercise some patience to wait for the right moment to enter the market and ride the wave.

Trade Journal - 14 Aug 08

2008-08-14T22:59:00.005+08:00

Today, I shorted the USDJPY at 109.51 after seeing that the JPY has retraced to near 110 regions. Felt that it should start to turn south soon.

Entry: Short @ 109.51
SL: 109.88
Target: 107.90

Result: JPY decided to move up instead of down and took out my trade. Ended with a 37 pip loss.

Some views on AUD/USD. This pair formed a doji star on 13 Aug. It looks like it could stop going down further. Would look to catch a bottom shadow (PowerWave) to go long. If it does retrace up, I think we could be looking at around 0.9400 before it continues the downward move.

(Afternote: AUD/USD ended the week with another doji. Looks like the market is still not showing any direction yet. )

Week of 4 Aug - 8 Aug

2008-08-10T23:10:00.003+08:00

Well, another week gone. Did not enter a lot of trades this week. The only trade I had was shorting the USDJPY. The USDJPY made an unexpected bull run and I ended with a 30 pip loss. Thanks to lessons on money mgmt, I survived to trade another day.

Some personal views ...

USDJPY - Looks like it will continue to go up to at least 110.86, before we can see any weakness in the USDJPY.

EURUSD - This pair looks like a soaring bird which has its wings suddenly clipped off. Fell like a rock from the sky. I don't think the bear run is over just yet. It closed the week at 1.5017. It could retrace in the coming week, since it has been falling without any retracement the entire week.

Trade Journal - 6 Aug 08

2008-08-06T21:37:00.004+08:00

My short order on the USD/JPY was triggered @ 108.45 as the JPY continues to rise. I was of the opinion that JPY will test the previous high of 108.57 before turning down.

Looks like JPY is not ready to turn down yet as it now shoots past 109.00 (as I write this journal). Luckily I had my stop loss in place ... ended up with a loss of 30 pips.

My opinion on USD/JPY -
At the rate the JPY is rising, I think the JPY could continue up to around 110.00 (psychological resistance) before turning down. Going beyond 110.00 could see JPY test 110.85.

Entry: 108.45
Stop Loss: 108.75

Result: -30 pips

PS: The market is always right ... be in its good books and you shall stand to gain.

Trade Journal 29 Jul 08 - Itchy Fingers

2008-07-30T22:32:00.002+08:00

Stupid me .. itchy fingers, trigger happy. Never follow the setup rules for the strategy and never wait for reversal signs. Longed the EUR too early and ended with a 21 pip loss. Deserved to lose money on this trade. Thought the EUR would rebound after a sharp drop of more than 100 pips, but it dropped further after I made the entry and took me out at my stop loss.

Entry: Long at 1.5616 with SL at 1.5695

Result: -21 pips

Trade Summary for week ending 25 Jul 08

2008-07-26T17:05:00.003+08:00

Well, not much entries made this week. Only had one trade order triggered. That's the shorting of USD/JPY @107.90. The JPY went to a low of 106.57 before rebounding strongly to end the week at 107.88.

Luckily my trailing stop loss, which was hit, ensured that I got out of this trade with a 65 pips profit. Not bad.

Trade Journal - 24 Jul 08

2008-07-24T22:40:00.004+08:00

My order to short USD/JPY @ 107.90 was triggered. JPY looks to have formed a top and should be turning down. This trade is still open as of this posting.

Will wait to see if there's potential for JPY to fall to test 104.00 again.

Afternote (25 Jul): The JPY continued to strengthen during the Asian market, after failing to breach 108.00. Stop loss has been adjusted to lock in some profits. Targeting to exit this trade near 104.00.

Result: Stop loss was triggered. Trade was closed with a profit of 65pips.