12-29-06
EURUSD
Happy New Year.
The EURUSD continues to trade in the 1.3100 to 1.3200 range, and both the long trade at 1.3100 and the short trade at 1.3191 were entered and closed. I look for the EURUSD to trade between 1.3129 and 1.3220 for today's range.
12-29-06
GBPUSD
I passed on trading the GBPUSD yesterday at the 1.9555 area of support. The GBPUSD had a nice rally all the way up to the 1.9670 area of supply. The sell off took the GBPUSD down to the breakout area of support at 1.9583, and the GBPUSD has rallied back to the 1.9660 area again in the Asian session. The GBPUSD should find support at 1.9620 and resistance at 1.9700 which is the area that produced the sell off down to the bottom of the weekly range earlier this month. I would trade that range for today.
12-29-06
USDJPY
The USDJPY is still trading in the 1.1850 to 1.1900 range where it was trading at this time yesterday. Since it is basing close to the 1.1910 area of supply, I would pass on the short trade because the distance between the areas is too small. The range is contracting to 1.1865 and 1.1910 which is very hard to trade. If you trade that range, take profits quickly.
12-29-06
USDCHF
The USDCHF traded in a range between 1.2266 and 1.2166 yesterday. The range I would trade for today is between 1.2145 and 1.2245.
12-28-06
USDJPY
There was a pullback to the 1.1840 area mentioned yesterday as the bottom of the range for a long trade entry. If you are long, the 1.1910 area is where I would sell and reverse to a short. The target is the 1.1855 area to go flat.
12-28-06
USDCHF
There was a short trade mentioned at 1.2220 in yesterday's email that was a 10 pip loser. The long trade near 1.2145 was never reached.The USDCHF pushed past the area of supply at 1.2220, and has made a trading range between 1.2245 and 1.2266. If it sells off, it should bounce at 1.2233 and 1.2196. I would trade the 1.2266 to 1.2196 range for today.
12-28-06
GBPUSD
There was a long trade triggered yesterday morning in the GBPUSD on a pullback to the 1.9550 area. The high after entry was 1.9596. This morning, the GBPUSD has pulled back to the 1.9550 area and has bounced again. I am going to pass on trading the GBPUSD long since the 1.9550 area has been visited several times. Any rally will find sellers at 1.9610 and 1.9644.
12-28-06
EURUSD
The EURUSD traded up to a high of 1.3178 yesterday morning, and last night it traded back down to the 1.3100 area. Since I am trading the 1.3100 to 1.3191 range, the long entry at 1.3100 has been entered and the first target is 1.3150. The second target is 1.3191 to reverse to a short. Trail your stop loss close in case the 1.3150 area is today's top of the range.
12-27-06
EURUSD
Hope everyone had a nice Holiday. The EURUSD is trading in the 1.3100 to 1.3200 range for the last couple of days and you should have had a chance to enter a long trade at 1.3100. If you are long, the first target of 1.3160 has been reached and the EURUSD is retracing. I would move the stop loss to 1.3122 on the position. If the breakout area at 1.3130 holds, then the EURUSD has a chance of trading up to the 1.3200 area. If not, then the trade will be closed and the EURUSD will re-test the 1.3100 area for another long entry.
12-27-06
GBPUSD
There were no trades triggered in the GBPUSD for the last 3 days. The open of trade on Monday had the GBPUSD trading near 1.9575, and it never traded above 1.9600 for a long trade. The range I was looking for the GBPUSD to trade in was 1.9500 to 1.9644 when I sent the email out on Sunday with 1.9500 being the price I would enter a long trade. The GBPUSD got close to 1.9500 yesterday afternoon with a low of 1.9515, and has since traded back up to a high of 1.9631 today. One of the frustrations of trying to trade a 24 hour market by yourself is missing large moves like this by using limit orders that are never reached. There are two breakout areas where the GBPUSD should bounce on a sell off at 1.9580 and 1.9550. I would buy the pullback to 1.9550 for a continuation move higher. The first target is 1.9600 and the second target is 1.9644. Move the stop to even after the first target and to 1.9591 after the second target is reached.
12-27-06
USDJPY
There was no trade recommendation in the USDJPY on Sunday, but I did mention the 1.1925 area of supply. That is where the USDJPY ran out of gas yesterday afternoon. The range I would trade is 1.1840 for a long and 1.1910 for a short for the rest of today. Reverse the position at both targets.
12-27-06
USDCHF
There was a possible short entry yesterday evening at the high of the range near 1.2220. The low so far today is 1.2160. It was a trade that could have stopped you out depending on the placement of your sell stop using a 10 pip stop loss since the high was 1.2236. If you entered at 1.2119 at 2:00 PM yesterday, you were stopped out, but if you entered at 5:30 PM, your trade was a 60 pip winner. That is a fact of life in trading. I am still looking for the USDCHF to trade in the 1.2145 to 1.2220 range today. I would only enter either trade if those areas are reached.
12-24-06
GBPUSD
There was a pullback long trade entered in the GBPUSD at 1.9632 early on Friday morning. The high after entry was 1.9679. The GBPUSD sold off without reaching the 1.9700 area to enter the short trade. The GBPUSD again sold down to the low of the range near 1.9560. Any kind of bounce should stall near the 1.9644 to 1.9660 area. I am going to wait to enter a long trade near the 1.9500 area next. You can try to trade the 1.9600 area long if you lock in a profit near 1.9644 and move the stop to entry. The market will be thin and the GBPUSD could move back to the 1.9700 area where we know there are sellers. It all depends on your brokers schedule for the holidays if you will be able to participate.
Merry Christmas
12-24-06
EURUSD
There was no trade recommendation on Friday for the EURUSD. The area of supply at 1.3205 turned the EURUSD down for the second time in the last two days. The EURUSD opened up the bottom of the range to a low of 1.3106. Depending on your platform, you may not trade until next week. I am looking for the EURUSD to trade between 1.3100 and 1.3200 for a couple of days, and I would be a buyer near 1.3100 with a first target of 1.3160. I'll pass on the short at 1.3200 since it
12-24-06
USDCHF
There was a short trade from Thursday that reached the 1.2117 target on Friday for anyone who was still in the trade. The US Dollar caught the bounce at 85.33 for the second time and the USDCHF reversed to a high up near the area of supply 1.2220. The USDCHF settled near 1.2180. I expect the range for the early part of the week to be 1.2145 up to 1.2220.
12-24-06
USDJPY
The USDJPY broke out of Friday after basing near the 1.1845 area for most of the week. The 1.1880 area is the next area of supply to be absorbed. A pullback to 1.1848 should produce a bounce if the current range low at 1.1872 gives out. The next area of supply is near 1.1925.
12-22-06
GBPUSD
There was a long breakout trade at 1.9650 on Wednesday afternoon, and a short trade triggered in the GBPUSD at 1.9697 yesterday morning. The first target on the long was at 1.9697 to reverse to a short. The first target of 1.9650 on the short trade, and the second target of 1.9600 were reached and the trade was closed at 1.9570. The GBPUSD has formed an area of breakout support at 1.9620 this morning and is ready to move back toward the top of the range. You can enter a long trade at 1.9632 with a first target of 1.9697 to exit and go flat. That area of supply should cause a sell off again, but this time I will only enter a short trade with a sell stop at 1.9696 if the GBPUSD trades up to 1.9710 before reversing lower. I will exit at the first target of 1.9634. That 1.9634 area should produce a bounce the first time it is tested if you feel like trading all day today.
12-22-06
EURUSD
There was a long trade triggered in the EURUSD from the email on Wednesday afternoon at 1.3276 since it was a breakout trade that was ready to happen while I was writing the email. There was a pullback after I sent the email to 1.3175 for entry, but if you took the second pullback to 1.3175, it was a 10 pip loser since the EURUSD extended the range down to the 1.3150 area. The first target was reached at 1.3298. The EURUSD has traded in a range between 1.3206 and 1.3150 now for the last two days. It has formed the same area of breakout support at 1.3175 to buy on a pullback, and the area of supply at 1.3206 is going to be tested for the second time. I will pass on trading this small range for today. If you decide to trade the pullback to 1.3175, use a buy stop at 1.3176 once the EURUSD trades below 1.3175 and a 10 pip stop loss after entry, Your first target is 1.3206 and the second target is 1.3219. Move the stop loss to entry after the first target and to 1.3190 after the second target.
12-22-06
There was a short trade triggered in the USDCHF at 1.2203 on Thursday morning. The first target of 1.2150 was reached. If you trailed your stop tight, you may have been stopped out on the bounce to 1.2180 since I did not give specific targets past 1.2150. If you still are short, move your stop to 1.2180. The next target is 1.2117. Move the stop to 1.2151 after the 1.2117 target is reached.
12-22-06
USDJPY
The USDJPY is still in the 1.1820 to 1.1850 range. I am still not interested in trading the USDJPY.
12-21-06
EURUSD
I have to go somewhere early tomorrow morning, so I am doing the Thursday update this afternoon. The EURUSD sold down to the 1.3172 area and it is basing for a move higher. Either buy the breakout if you trade this afternoon, or the pullback to 1.3175 if the breakout happens before I finish this email. The first target is 1.3198 and the second target is 1.3219. Move the stop to even after the first target and to 1.3190 after the second target is reached. This looks to be a possible pullback to the higher EURUSD from here entry for those of us that missed the weekly bottom trade. In case it is not, trail your stop tight so that, at the very least, it is a profitable trade.
12-21-06
GBPUSD
If you were brave enough to buy the pullback to 1.9703, you got a small gain up to 1.9725 depending on the time you bought it. The buyers finally were absorbed, and the GBPUSD has moved down to the 1.9632 breakout area. It is getting ready to rally out of this area right now, but it has a fresh area of supply at 1.9697. I am going to trade long right here at 1.9650 and then I am planning to short that 1.9697 area if the GBPUSD rallies straight up to the area without basing anywhere near it. Those are my two trades for Friday.
12-21-06
USDJPY
The USDJPY is basing near 1.1850 since it finally absorbed the sellers at 1.1825. If it rallies, it has sellers at 1.1883. Since it took three days to take out the sellers at 1.1825, it may be a while to take out the supply up here at 1.1850. It could slip down to the 1.1820 area and rally back up to the higher range instead. The range is too narrow for me to trade.
12-21-06
USDCHF
No short trade at 1.2206 on Wednesday. Looks like the USDCHF is already running out of gas at 1.2188. It should bounce at 1.2150.
If it does rally up to 1.2206, I will still take the short with a first target of 1.2150. Use tight stops in case there is another bounce at 83.33 in the US Dollar Index or a big bounce in the USDCHF at 1.2150.
12-20-06
GBPUSD
The pullback trade to 1.9470 never happened yesterday. I mentioned that the GBPUSD had moved above the moving average on the 60 minute chart and a breakout trade above 1.9500 was possible. That should have been the trade I took. The move above the MA and the highest high in the trading range + 1 pip is normally the trigger I use as a way to make my trading as mechanical as possible. Find a trigger to enter your trades and stick to it. That way, you take the emotions out of the decision to enter and, over time, you are able to measure your results based on your setup and trigger. For today, I will let the GBPUSD which has already moved over 50 pips base near the area of supply at 1.9750. The breakout area at 1.9700 would be a good place to enter on a pullback if it was near the bottom of the range instead of the top. With the US Dollar near support, I would be careful if you do trade that pullback this morning. Use a buy stop at 1.9703 once the GBPUSD trades below 1.9696, and a 10 pip stop after entry. Trade small in case the bounce in the dollar is big.
12-20-06
EURUSD
As Maxwell Smart once said, " missed it by that much". I waited for the pullback that never came. I did not want to take the breakout trade at 1.3106, so I missed a great opportunity to enter the EURUSD at the bottom of the weekly range, and I passed on a breakout past the first area of supply yesterday morning. In defense of myself, I can chalk it up to the near impossibility of a single person to trade a 24 hour market for missing the weekly low at 1.3051. The pullback trade would have been the safer entry, but you need a breakout strategy in the currency markets to catch big moves like the one from yesterday. Anyway, the EURUSD will need to base near the 1.3240 area before it attempts to move higher to the next area of supply at 1.3265. It has already moved up 30 pips overnight, so that should be the range it trades in for the balance of the morning today. I will let the EURUSD base today and see if it stays up here or if the US Dollar Index bounces off the 83.33 breakout support area and brings the EURUSD down to the 1.3170 area instead.
12-20-06
The USDJPY traded in a whopping 30 pip range yesterday. Since it has based near 1.1825 for the last three days, the short trade at 1.1850 is out. The USDJPY is either going higher to trade in a 25 pip range between 1.1825 and 1.1850, or it will base here for another day.
12-20-06
USDCHF
There was no short entry at 1.2237 yesterday in the USDCHF. Once the USDCHF slipped below the 1.2212 breakdown line, it kept falling all the way down to the third target of 1.2125. If it rallies up to the 1.2212 area, I will short it. I am not interested in any long trades for the time being.
12-19-06
USDJPY
There was no short trade entered yesterday at 1.1850 in the USDJPY. The high on the day was only 1.1829. The 1.1785 breakout area was as far as the sell off went. I would still be interested in shorting the 1.1850 area as long as the USDJPY does not base above 1.1825. The 3 to 1 risk to reward on the counter trend short trade will only work if the USDJPY bases below 1.1820 using a 10 pip stop loss. The USDJPY is on the wrong end of the supply, demand curve for a long entry.
12-19-06
USDCHF
There was no trade recommendation yesterday in the USDCHF. The USDCHF traded in the 1.2193 to 1.2265 range yesterday after the area of supply at 1.2225 was absorbed. If it trades up to the 1.2237 area today, I will short the USDCHF with a 10 pip stop loss and a first target of 1.2193 and a second target of 1.2170. My third target is 1.2125.
12-19-06
GBPUSD
The GBPUSD pullback long trade at 1.9515 was triggered on Sunday evening, and the first target was reached at 1.9560 early Monday morning. If you moved your stop loss to even, and left your stop loss at even after the first target was reached, you were stopped out on the rest of the position as the GBPUSD traded down to the bottom of the weekly range near 1.9440. The GBPUSD has rebounded back to the 1.9500 area, and is above the moving average this morning. It may breakout above 1.9500, or it may stay in this range for another day. If the GBPUSD pulls back to the 1.9470 area, I will go long at 1.9570 with a 10 pip stop loss and a first target of 1.9520 and a second target of 1.9550. Move the stop loss to even after the first target and to 1.9490 if the second target is reached. The third target is 1.9600 to exit and go flat. I will trade the 1.9500 to 1.9600 trading range if the GBPUSD breaks above 1.9500 today instead of pulling back to the bottom of the current trading range.
12-19-06
EURUSD
There was no trade recommendation yesterday in the EURUSD. The EURUSD did trade in the 1.3063 to 1.3104 range as expected, and it extended the top of the range to 1.3118 and the bottom of the range to 1.3051. This range looks like it may hold again for today, but the next move at this end of the supply, demand curve is up. The 60 minute moving average has reached the trading range, so a breakout above 1.3107 is possible. That is the picture that is forming on the 180 and 240 charts. I am hesitant to trade any breakouts with the markets being thin and would prefer to buy pullbacks today. Here are the two pullbacks I will trade today. If the EURUSD pulls back to the 1.3072 area, I will go long with a 10 pip stop loss after entry and a first target of 1.3106. The second target is 1.3140. Move the stop loss to even after the first target, and to 1.3094 after the second target. If the EURUSD breaks out above 1.3107 as evidenced by a close of a candle above 1.3107 on the 180 or 240 chart, I will buy a pullback to that 1.3100 breakout area, and I will trade the 1.3100 to 1.3200 trading range going forward. My first target will be 1.3140 and the second target is 1.3170. Move the stop loss to 1.3130 after the first target. The next area of supply at 1.3200 is the third target for now.
12-17-06
USDJPY
There was no trade in the USDJPY on Friday. The last line from the email on Friday mentioned a possible sharp sell off in the USDJPY if it traded near the 1.1835 area since it has been trading in an area of supply from the weekly chart. The sell off reversed when the 1.1740 area of support was reached, and the USDJPY moved back above 1.1800 by the end of the session. Any pullbacks should find support near 1.1770 followed by 1.1712 from the 240 chart below. I would be interested in shorting a rally up to the 1.1850 area with a first target of 1.1810 and a second target of 1.1773 and a third target of 1.1712 to reverse to a long.
12-17-06
USDCHF
There was an opportunity to trade the first trade from Friday's email which was a breakout trade above 1.2155 early on Friday. The short trade at 1.2226 was also possible on the rally from the area of demand at 1.2114. I forgot to mention trading the 1.2123 - 1.2114 pullback trade, but the picture in the email from Friday shows the area. What you are looking at is a currency trying to absorb the area of supply at 1.2226 for a move higher. If there is too much supply at 1.2226, the USDCHF will sell off to the breakout area at 1.2193. I will let the USDCHF trade in this narrow range for a day or two while the moving average catches up to the trading range. I would not buy a pullback to the breakout area at 1.2193 since the area of supply at 1.2226 is so close and the USDCHF is at the wrong end of the curve for a long entry.
12-17-06
12-17-06
GBPUSD
There were two opportunities to trade the GBPUSD on Friday. Here are the trade recommendations from Friday's email:
"Enter a short trade at 1.9671 on a rally this morning with a first target of 1.9620 and a second target of 1.9570. The third target is 1.9515 to reverse to a long position. Move your stop to even after the first target and move the stop to 1.9600 after the second target is reached in case the 1.9570 area of support holds. The 1.9515 area of breakout support should be where the GBPUSD bottoms per the 240 chart if the 1.9570 area of support does not hold.
Use a buy stop to enter once the GBPUSD trades below 1.9515 and a 10 pip stop loss after entry with a first target of 1.9560 and a second target of 1.9600. Move the stop after the first target to even, and to 1.9560 after the second target. We will try to ride the GBPUSD back to the top of the range."
The area of supply at 1.9671 was not quite reached on Friday morning probably because the EURO reached the 1.3171 area of supply first. If you stuck around, you did get a chance to trade the long entry at 1.9515 a couple of times on Friday. If you are still long, follow the recommendation above again. The same thing will work if you are flat.
12-17-06
EURUSD
There was a long trade triggered in the EURUSD on Friday morning at 1.3100 which was exited at the first target of 1.3140 and the second target of 1. 3170. The EURUSD sold off after reaching the 1.3184 area of supply and resumed the move down to the weekly low. The close on Friday afternoon was just below the weekly chart low of 1.3095. The new weekly candle needs to close above the bottom support line of the chart at 1.3095 to re-enter the weekly 1.3095 to 1.3364 trading range and resume the move back to the top end of the range. It will be a slow grind since the US Dollar Index has an fresh area of demand at 83.50 to pullback to. For Sunday and Monday, I expect the EURO to trade between 1.3063 and 1.3104 with a close above 1.3095 a sign that the bottom of the range is in. I will wait for a day to allow the 60 minute moving average to cycle down to the trading range before trading the EURO long.
12-15-06
USDJPY
A short trade at 1.1780 was entered yesterday and it was exited at 1.1750 which was a place that the USDJPY had based earlier in the day. The trick to staying in the game is not to argue with the market. When areas of breakout support form, I use them as first targets if I am in a position that is counter trend to the market. If they are less than 3 to 1 risk to reward, I pass on the trade all together to reduce the risk on the trade. Even though the USDJPY has been strong, it is in an area of supply on both the daily and weekly charts which extends up to 1.1835. Watch for a sharp reversal if the USDJPY manages to rally up to the 1.1835 - 1.1850 area.
12-15-06
USDCHF
There was no trade in the USDCHF yesterday. The breakout trade above 1.2074 would have been a big winner if I had traded it. The USDCHF has built a couple of areas of support above 1.2114 as it absorbs the supply at 1.2150, and, if successful, it could rally to the next area of supply near 1.2226 from here. A breakout trade above 1.2155 with a first target of 1.2200 and a second target of 1.2226 to go flat is a possibility for this morning, as is a short trade at 1.2226 for later on today.
12-15-06
GBPUSD
A long trade in GBPUSD at the range low of 1.9600 was entered yesterday and a partial profit at 1.9640 was taken. The trade was stopped out at breakeven overnight. I am going to trade the range from the 240 chart which is a range bottom of 1.9515 and a range top of 1.9670 for today. The GBPUSD has already put in a weekly low of 1.9464 on Sunday which is a different picture than the EURUSD. Enter a short trade at 1.9671 on a rally this morning with a first target of 1.9620 and a second target of 1.9570. The third target is 1.9515 to reverse to a long position. Move your stop to even after the first target and move the stop to 1.9600 after the second target is reached in case the 1.9570 area of support holds. The 1.9515 area of breakout support should be where the GBPUSD bottoms per the 240 chart if the 1.9570 area of support does not hold. Use a buy stop to enter once the GBPUSD trades below 1.9515 and a 10 pip stop loss after entry with a first target of 1.9560 and a second target of 1.9600. Move the stop after the first target to even, and to 1.9560 after the second target. We will try to ride the GBPUSD back to the top of the range.
12-15-06
EURUSD
The selling continued yesterday in the EURUSD down to the daily chart low of 1.3128 of the 1.3128 to 1.3364 trading range, with the weekly low of 1.3095 the next target. The long trade at 1.3202 was not entered since the bids at 1.3200 moved down to 1.3184 and the EURUSD never moved above 1.3200 for the rest of the day. The EURUSD should hold the weekly low of 1.3095, and I will enter a long trade on a pullback to 1.3095. My first target is 1.3140 and the second target is 1.3170. Move the stop loss to even after the first target and we will see if the dollar rally is going to end, and the EURO is going to rally into the end of the year. I am out if any candle closes below 1.3100 with a 10 pip loss after entry. If the EURUSD does not hold the weekly low, the dollar rally will continue next week.
12-14-06
USDJPY
There was no long trade in the USDJPY at 1.1705 yesterday since the low after the test of the area of supply at 1.1740 was only 1.1710. I am waiting for a test of 1.1780 to enter a short trade. The USDJPY is in an area of weekly and daily supply. There could be a sharp sell off in the USDJPY at any time.
12-14-06
USDCHF
The was a short trade in the USDCHF triggered at 1.2074 yesterday which was closed at 1.2040. There were several tests of the area of supply yesterday to allow an entry. The retail sales report that was dollar positive was what drove the price to the area of supply for the short trade entry. This morning, the USDCHF is going to try to absorb the supply at 1.2074 again. It may rally past this area, but there are two more areas above that should kill any type of breakout. I will pass on trading the USDCHF today to see if it forms a base near the 1.2074 area to move higher.
12-14-06
GBPUSD
The GBPUSD long trade from 12-12-06 was closed yesterday at 1.9694. The range I will trade for today is between 1.9600 and 1.9713. The top of the range has already been tested this morning, so I will have to wait for a test of the bottom of the range for my next GBPUSD trade.
12-14-06
EURUSD
There was a long trade triggered in the EURUSD yesterday at 1.3240. The trade was a 10 pip loser,and the EURUSD sold down to the 1.3200 area where I originally wanted to enter. Unfortunately, I did not mention trading long if the 1.3200 area was tested in yesterday's email. The range for today in the screen shot below should be between 1.3220 - 1.3200 for support and 1.3265 - 1.3280 for resistance. That will be the range I trade for today.
12-13-06
USDJPY
There were no trades in the USDJPY yesterday. The USDJPY never sold down to the 1.1645 area to allow a long entry. The USDJPY traded in a range below the area of supply at 1.1720 all day and looks to be ready to move higher to the next area of supply at 1.1740. If the USDJPY does manage to rally up to the 1.1740 area, I would buy a pullback to 1.1705 for a long trade, but I will hold off for a short trade until the USDJPY trades up to the 1.1780 area of supply. You can short that 1.1740 area if you want the first time that the USDJPY trades up to it as long as you exit at 1.1705 which will be a fresh breakout support area.
12-13-06
USDCHF
There was no short trade in the USDCHF yesterday at my entry price of 1.2074. The high yesterday was only 1.2060 on the spike candle following the Fed decision. That area of supply at 1.2074 is still my next area to enter a short trade with a first target of 1.2005 if the USDCHF can make it past the supply between 1.2022 - 1.2040 this morning.
12-13-06
GBPUSD
The was a long trade entry at 1.9601 yesterday in the GBPUSD. There were several chances to buy at that price. The first target of 1.9645 and the second target of 1.9670 were reached. Move the stop loss on the last contract to 1.9654 in case this 1.9695 area turns into a stage 3 top. A pullback should find support at 1.9670. If the GBPUSD rallies past 1.9705 instead, move the stop loss to 1.9694.
12-13-06
EURUSD
There was no new trade in the EURUSD yesterday. The low on the spike candle after the Fed decision was 1.3210 so it miss our entry at 1.3201. Anyone long from the day before should have closed the trade at the first target of 1.3234 using the trailing stop from yesterday's email. The 1.3280 area of supply is looking like a top of the range for now and the EURUSD will either base here to move higher, or it may sell off down to the 1.3250 breakout area. I would want to open a long position if there is a sell off down to that breakout area depending on the type of sell off.
If there is a spike down to the area I would buy near 1.3250. If there is a gradual sell off down to the area, I would buy closer to 1.3240 to give me a better profit zone back to the stage 3 top breakdown area that will form at 1.3270. Depending on the entry, I would use a 10 pip stop loss and a first target on the 1.3240 entry of 1.3270. The next targets will be 1.3300 and 1.3332 to exit and go flat. Move the stop loss to even after the first target and to 1.3264 after the second target. If there is a spike down entry at 1.3250 and a close back inside the range, the first target is 1.3285.
12-12-06
USDJPY
The USDJPY continues to move higher since testing the 1.1500 area on Friday with the areas of supply along the way acting as speed bumps. The 1.1620 area of support held on Sunday, and a breakout support area between 1.1645 and 1.1620 has now formed. The 1.1720 area of supply is in the process of being absorbed this morning, but the possibility of a pullback to the 1.1645 area of demand is increasing since the MA has reached the trading range between 1.1676 and 1.1699 and is flattening out. Because of this, I would pass on trading the USDJPY until it tests both the 1.1645 breakout area and the 1.1674 breakdown area at least once. If you are interested in trading that tight range, be sure to reverse your position using buy and sell stops and use tight 10 pip stops on both trades. Watch the action the second time down to 1.1645 for a break of support. It is possible that the USDJPY may move down to the 1.1620 area and below if the dollar downtrend resumes. The next area of supply to overcome is the 1.1760 area if the USDJPY absorbs the supply and moves higher instead.
12-12-06
USDCHF
There was no trade in the last email for USDCHF. The range has been expanded to a high of 1.2090 and a low of 1.1999. Inside the range is a breakdown area of former support at 1.2040 which may turn the USDCHF lower once it is tested. A short trade at 1.2040 with a sell stop is a possible trade, but I would rather short the 1.2075 area because it will be a bigger profit zone back to the 1.2013 breakout area which will form if the USDCHF rallies higher this morning. I will hold out for a test of the 1.2074 area for my next USDCHF trade.
12-12-06
EURUSD
The EURUSD extended the range lower on Sunday to a low of 1.3129. The last line in the email from Sunday said to place a buy stop at 1.3202 to enter a long trade once the EURUSD traded below 1.3200. If you are long from 1.3202, move your stop to 1.3234 to lock in a profit on the trade. If you are flat, I would be interested in buying a pullback to the 1.3202 breakout area using a buy stop once the EURUSD trades below 1.3200. After entry, use a 10 pip stop loss and a first target of 1.3235 followed by a second target of 1.3274. Move your stop to even after the first target. It is also possible that the EURUSD will rally higher without a pullback to 1.3200. If that happens, I will buy a pullback to the 1.3260 breakout area.
12-12-06
GBPUSD
There was no trade recommendation for the GBPUSD in the last email. I would buy a pullback to the 1.9600 breakout area using a buy stop once the GBPUSD trades below 1.9600 and reverses higher. My stop loss will be 10 pips after entry and the first target will be 1.9645 followed by 1.9670.
12-10-06
GBPUSD
There was no trade Friday in the GBPUSD. It looks like the 1.9521 area is acting as a trading range bottom for now. On the 240 minute chart, the next area of breakout support is at 1.9485. The first area of supply to worry about is 1.9561. I will wait for the range to be established on Sunday and Monday before I trade the GBPUSD.
12-10-06
EURUSD
The only currency pair that I gave a NFP trade recommendation for on Friday was the EURUSD. Watching more than one pair during the release of a report like the NFP is impossible. The NFP long trade at 1.3247 was triggered on Friday shortly after the release of the NFP report at 7:30 AM Central time. The exit was at 1.3360 when the EURUSD ran into the area of supply at the top of the range and retreated. If you followed the instructions to trail the stop tight after the entry, you were fine. CNBC is claiming that their interview with our Treasury Secretary Friday morning is what caused the sell off. You knew about the area of supply at 1.3360 for the EURO and the area of demand at 82.25 for the US Dollar Index days before their interview. That is the true reason for the reversal in the dollar on Friday. The US Dollar Index hit the 82.25 area for the second time and reversed. The low for the day on the $DXY was 82.24. The rest of it is meaningless. If there was no interview, the US Dollar Index would have reversed at 82.25, or it would have extended the bottom of the range a few ticks and then reversed.
The EURUSD is in a daily area of demand at 1.3200 and the US Dollar Index is in an area of supply at 83.33. I expect the EURUSD to trade in a big range between 1.3200 and 1.3280. It may only trade in a small range between 1.3200 and 1.3240 at first since the $DXY has an area of breakout support at 82.83. It could extend the range lower to about 1.3188. I will have to wait to see where the EURUSD opens on Sunday before I can say where to enter, but if it does trade below 1.3200, use a buy stop at 1.3202 to enter a long trade with a first target of 1.3340. If the $DXY reaches 82.83, sell the EURO position.
12-10-06
USDCHF
On Friday, I mentioned being interested in shorting 1.2056 when the USDCHF traded up to it. The USDCHF rallied up to 1.2056 and sold off to a low of 1.2015. The USDCHF then rallied back up to close at 1.2048. This area of supply is big. It will take quite a bit of time to absorb all the supply in this area. I will pass on trading USDCHF on Sunday since it has support at 1.2040 and resistance at 1.2056 which is a very small range. The 240 chart below shows a clearer picture of the range for the USDCHF going forward.
12-10-06
USDJPY
On Friday, I wrote to watch for a bounce at 1.1491 on a short trade. Hope you did. The USDJPY rallied up to the 1.1638 area of supply with no pullback. The 1.1666 area of supply is fresh and should produce a sell off the first time that the USDJPY trades up to it. If the USDJPY rallies up to it on Sunday, then it should form a trading range between 1.1620 and 1.1670 if the USDJPY is going to move higher from here. If 1.1620 does not hold on the bottom, the USDJPY could fall back to the 1.1560 - 1.1550 area. I will wait to see what kind of range forms on Sunday and Monday before I trade the USDJPY again.
12-8-06
USDJPY
The USDJPY has based below the 1.1549 area of supply and has formed a breakout area of demand at 1.1526. Since the USDJPY is above the moving average on the 60 minute chart, the 3 to 1 risk to reward counter trend short trade at 1.1549 is out. The most important part of the picture of the chart below is that the low end of the range was raised up from 1.1456 to 1.1474 yesterday. If you do trade the NFP report today, watch the 1.1605 area as resistance on a long trade and watch for a bounce at 1.1491 on a short trade.
12-8-06
USDCHF
The trading range between 1.1915 and 1.1952 that I passed on trading yesterday in the USDCHF is a little wider today. The low was 1.1915 yesterday, and the top of the range was extended to 1.1972. I am going to pass on trading the USDCHF for the NFP report. I am still interested in shorting 1.2056 when the USDCHF trades up to it.
12-8-06
GBPUSD
The short trade at 1.9722 was not entered yesterday, as the best that the GBPUSD could do was a high of 1.9710 for the day. I would be careful with the NFP report trade because the areas of supply and demand on the chart below are both fresh. In other words, you may enter and have a violent reversal and a large loss if the spike up hits 1.9723 or the spike down hits 1.9572 and you enter in the direction of the spike. I have seen that happen many times. I will pass on trading the GBPUSD for just that reason. Use the areas I have marked off as places to take profits if you do try to trade the NFP report.
12-8-06
EURUSD
There was no trade in the EURUSD yesterday. The EURUSD never reached the 1.3334 supply area before selling back down to the bottom of the range, so the pullback trade at 1.3215 was negated. The area of supply at 1.3324 made the pullback trade a less than 2 to 1 risk to reward entry which is why I wanted to see the EURUSD trade up to 1.3334 before I would buy a pullback to 1.3315.
Today is the NFP report which has the potential to cause wild swings, and will probably cause both a spike higher into the areas of supply at 1.3314, 1.3324, 1.3334 and 1.3360 and possibly a spike lower to the area of demand at 1.3247. None of the areas of supply are fresh. The area of demand at 1.3247 is fresh, and I would be interested in a possible long trade if the EURUSD spikes down to that 1.3247 area and then reverses higher. Watch for a spike candle that closes off the low and above 1.3247 before your long entry and set a stop just below the low of that spike candle. Keep trailing your stop as each level of supply is approached. The next area of supply to worry about is 1.3385 which is not very far above the 1.3360 area. Tighten your stop loss up to avoid a whipsaw once that 1.3385 level is visited. A drop below 1.3360 would be where I close the long trade.
12-7-06
EURUSD
Yesterday we missed our long entry at 1.3247. The area near 1.3247 has quite a bit of demand since the buyers in the area were willing to pay up to 1.3254 to buy EURUSD in the auction process. Anyone who trades with buy and sell stops will often miss these trades, but I will make a note that the 1.3247 area is a very good place for a long entry in the future. This morning, the EURUSD is working on forming a breakout area at 1.3215. If the 60 minute candle closes above 1.3215, it will be an area to buy on a pullback for a move to the top of the range at 1.3362. I would buy the pullback if the EURUSD can trade up to 1.3334 before the pullback.
12-7-06
GBPUSD
The GBPUSD long trade from 12-5-06 was exited at 1.9719 yesterday. The sell off extended the big trading range lower to 1.9614. The big trading range is 1.9814 to 1.9614. There are several small areas of breakout demand and breakdown supply inside the big range to trade between today. This morning, the GBPUSD is back above 1.9700 and has an area of supply at 1.9723 and another area near 1.9750 ahead of it.
Since we are back to range trading, I will enter a short trade at 1.9722 with a sell stop once the GBPUSD trades above 1.9730 as long as it does not trade above 1.9740 first. If that happens, I will short the higher area of supply near 1.9750 instead. If the GBPUSD reaches 1.9750, I will enter the short trade at 1.9748 with a sell stop. My target to cover the short will be the breakout area of demand at 1.9670. The 1.9670 would be a good area to enter a long trade if the area of supply at 1.9723 is reached on a spike higher. It is also possible that the GBPUSD will base just below the 1.9700 area in which case the short trade at 1.9723 is out, and the 1.9750 short will have a target of 1.9693 as a place to cover. For now, the next long will be at 1.9670.
12-7-06
USDCHF
The breakout long trade in the USDCHF happened early yesterday morning. The entry price was 1.1934 which was 1 pip above the moving average, and the exit was at the 1.1983 breakdown area. That 1.1983 area has been tested three times this week and was where we entered a short trade on Monday when it was tested the first time. The small trading range is narrowing and it is nowhere as large as the small trading range in the GBPUSD. The breakout area of demand at 1.1915 and the new breakdown area of supply at 1.1952 is too narrow of a range to trade for me. You are welcome to trade it. I will wait for a day to see if the range is extended. It is possible that the bounce in the dollar may be over if the bottom of the range is extended below 1.1879. The reverse will be true on a move past 1.1983. Since the breakdown area at 1.1952 has formed, I am leaning toward another move down in the dollar resuming.
12-7-06
USDJPY
The short trade at 1.1550 was missed yesterday when the USDJPY ran out of gas at 1.1536. I hope we get another shot at it, but it is not looking like that will happen any time soon. I am not interested in a long trade since the area of support at 1.1450 has been tested twice already and there is a new breakdown supply area at 1.1500. You are welcome to trade that range today, but I will pass.
12-6-06
GBPUSD
A long trade was entered yesterday at the 1.9690 area and it will be closed out if the GBPUSD closes below 1.9720. With the dollar in daily support, I will hold off on any long trades in the GBPUSD for a few days to see what kind of bounce the dollar gets.
12-6-06
EURUSD
The EURUSD is still in the same range as yesterday between 1.3362 and 1.3294. The area of supply inside the range between 1.3320 and 1.3334 may turn the EURUSD down to extend the bottom of the range. I see that the US Dollar Index came into an area of support on a daily chart at $82.25 which may lead to a significant bounce for the dollar. I will hold off on any long trades until the 1.3250 area in the EURUSD.
12-6-06
USDJPY
The USDJPY had a big bounce yesterday at the 1.1450 area. There is an area of breakout demand at 1.1472 that formed inside the big range between 1.1550 and 1.1450. That will be the first target for now on the short trade at 1.1550 unless another area forms higher in the range.
12-6-06
USDCHF
No trade in USDCHF yesterday. With the dollar being in an area of daily demand and the moving average close by, the next trade should be a breakout trade in the USDCHF above 1.1932 with a first target of 1.1983 and a second target of 1.2022.
12-5-06
GBPUSD
The GBPUSD long trade on a pullback to 1.9802 never happened on Sunday, since the GBPUSD opened at 1.9785 on my platform. The vertical movement has stopped for the time being and the GBPUSD is trading in a range between 1.9734 and 1.9814. I am going to wait until the range is extended lower to the 1.9690 breakout to enter a long. My first target will be 1.9755 an the second target will be 1.9814.
12-5-06
USDJPY
No short trade in the USDJPY yesterday at 1.1606. The USDJPY traded in a range between 1.1580 and 1.1550 and formed a stage 3 breakdown area at 1.1548. I will look to short the 1.1550 area if the USDJPY can trade down to the 1.1450 area before it bounces. The thin market makes the distance between the areas of supply and demand and the profit zone more important.
12-5-06
USDCHF
The USDCHF short trade at 1.1983 was entered on 12-4-06. The trade was exited at 1.1930. With the EURUSD and GBPUSD reverting to trading in trading ranges I decided to exit the trade as soon as the other pairs came into support. The next place I will enter a short trade will be at 1.2056. The first target will be 1.1980. That range trade may be exited at any time like the one from yesterday. Trail your stop after entry since this market is thin, and the currency funds will be taking profits during the month. That means they will buy dollars aggressively for any reason.
12-5-06
EURUSD
The first trading day of December for me was mixed. The EURUSD opened the day higher and hit the area of supply near 1.3360. The bounce at 1.3325 never happened, so the long trade was stopped out -10 pips. The EURUSD is trading in a range between 1.3335 and 1.3290 so far this morning. If the 60 minute candle closes below 1.3315, the EURUSD will possibly extend the trading range lower to the breakout line at 1.3271. I will wait for the range to extend to the 1.3250 breakout area to enter a long since the areas between the buyers and sellers are narrowing. Since we are in a range again, my first target on the long trade will be 1.3315 and the second target will be 1.3335.
12-3-06
EURUSD
Sorry for missing Friday, but I had issues due to the snow storm. The EURUSD is close to the 1.3400 area of supply that extends up to the old high of 1.3666. The first place I would watch for selling to come in is between 1.3377 and 1.3420. I would use that pullback as an opportunity to enter a long at 1.3325. My first target would be 1.3420 followed by 1.3480. I would hold the last contract for a run up to the old highs with a wider stop to avoid being taken out again.
12-3-06
GBPUSD
The move higher in the GBPUSD has been amazing. The question is do we take a breakout first thing this afternoon, or do we wait for a
pullback to 1.9802 to happen after the breakout. The answer may be academic depending on what time your platform opens for trading.
If it is like last Sunday, the GBPUSD could open 50 pips or more higher at 4:00 PM Eastern time with the traders from 1:00 PM pushing it up.
The pullback to 1.9802 will be where I next enter a long trade in GBPUSD with a first target of 1.9850 and a second target of 1.9900.
We will try to hold the last contract with a wide stop loss since the areas of supply above are from 14 years ago. I am more concerned with the currency funds selling to lock in yearly gains.
12-3-06
USDJPY
The last email was on 11-30-06 due to the snow storm. Here is what it said to do and what happened:
11-30-06
"USDJPY
The short trade was finally entered at 1.1650 and the first target was reached at 1.1610. Let's move the stop loss on the other two contracts to 1.1630. This should be safe in case the USDJPY tries to rally past 1.1620. If it does rally past 1.1620, it will try to absorb the supply at 1.1650 again. If the area of supply at 1.1620 turns the USDJPY lower, take a profit at 1.1578 and move the stop loss to 1.1610 on the last contract."
The short trade was exited on 11-30-06 at the 1.1578 profit target and closed at the 1.1610 trailing stop. The USDJPY rallied up to the 1.1637 breakdown line on 12-1-06 and collapsed down to 1.1500.
I would be interested in shorting the breakdown area of supply at 1.1606 if the USDJPY can rally up there. My first target will be 1.1535 and the second target is 1.1500. Move the stop loss to entry after the first target is reached, and to 1.1551 if the second target is reached. Watch out for currency funds booking profits. Use a 10 pip stop loss after entry, and try to enter with sell stops once the price touches the breakdown line.
12-3-06
USDCHF
The last time I sent an email on USDCHF was on 11-30-06. I mentioned an area of demand at 1.2040 inside the big trading range between 1.2000 and 1.2100 that could produce a bounce. That bounce at 1.2040 did happen, but as soon as the USDCHF hit the 1.2072 breakdown area, it was look out below. Unfortunately, I did not mention taking a short trade at 1.2072 in the first email, but I did mention it to the traders in the forex chat room later that morning. There has been no let up in the selling of the USDCHF since, and no other pullbacks to enter a short since the start of the recent move down. I would enter a short trade at 1.1986 if the USDCHF manages to rally up to that breakdown area. The first target is 1.1900 and the second target is 1.1850. Use a 10 pip stop loss after entry and a sell stop to enter the trade after the USDCHF trades above 1.1983.
11-30-06
GBPUSD
The long trade from 1.8944 was closed yesterday at 1.9447. I would be interested in re-establishing the long position on a pullback to 1.9485.
11-30-06
EURUSD
The long trade from 1.2944 was closed yesterday at 1.3147. I would be interested in re-establishing the long position on a pullback to 1.3170 after the EURUSD rallies past 1.3250.
11-30-06
USDJPY
The short trade was finally entered at 1.1650 and the first target was reached at 1.1610. Let's move the stop loss on the other two contracts to 1.1630. This should be safe in case the USDJPY tries to rally past 1.1620. If it does rally past 1.1620, it will try to absorb the supply at 1.1650 again. If the area of supply at 1.1620 turns the USDJPY lower, take a profit at 1.1578 and move the stop loss to 1.1610 on the last contract.
11-30-06
USDCHF
The breakout trade above 1.2115 failed and was stopped out for a 10 pip loss. There is a breakout area inside the big trading range at 1.2040 that may turn the USDCHF higher on a sell off this morning. If a bounce does happen, that would mean the range is starting to narrow.
11-29-06
GBPUSD
Let's move the stop loss for the GBPUSD on the last contract to 1.9447. The total gain from our entry at 1.8944 is 503 pips if we are stopped out.
11-29-06
EURUSD
Let's move the stop loss for the EURUSD to 1.3147 on the last contract. The total gain from the entry at 1.2960 is 183 pips if we are stopped out.
11-29-06
USDJPY
The USDJPY is sitting on breakout support at 1.1569. If it reaches 1.1650, it is a short. Use a 10 pip stop loss and a first target of 1.1610 and a second target of 1.1570. Move the stop loss to even after the first target. If the USDJPY slips below 1.1564, move the stop loss to 1.1574 on the rest of the position.
11-29-06
USDCHF
The sell off in the dollar continued yesterday but the pace has slowed.
The bottom of the trading range in the USDCHF was extended yesterday to 1.2012.
This makes the big trading range 1.2012 up to 1.2115. I will trade a breakout out of the top of the range at 1.2116.
11-28-06
GBPUSD
The GBPUSD ran into the area of supply at 1.9448 on Sunday, and it has been trading in a range between 1.9448 and 1.9307 for the last two days. Depending on your platform, you may have been able to participate in the run up to 1.9448 if your platform opened for trading at 1:00 PM Eastern time. If the GBPUSD can rally past 1.9404, move your stop to 1.9370 to lock in another 101 pips on the last contract. You may want to use the moving average at 1.9355 as a trailing stop since it has reached the trading range. That usually means the move higher could be stalling.
11-28-06
EURUSD
The EURUSD has traded in a range between 1.3160 and 1.3085 for the last two days. This has allowed the moving average on the 60 minute chart to catch up to the trading range. You may want to use the moving average as a trailing stop in case the up move is stalling out. The moving average is currently at 1.3113. A rally past 1.3160 would allow us to move the hard stop loss to 1.3100 so that we can continue to trail the up move.
11-28-06
USDJPY
The USDJPY looks like it is going to attempt to rally above the 1.1628 resistance area. If that happens, the areas of demand at 1.1630 is too close to the area of supply at 1.1650 for a short trade. Pass on trading this pair until the profit zone opens up.
11/28/06
USDCHF
The USDCHF has traded in a range between 1.2114 and 1.2029 for the last two days. It may continue to trade in this range for another day since the EURUSD and GBPUSD both came into areas of supply that have stopped the up moves for the time being. A break above 1.2114 would be a sign that the down move is over for now, and it would be a legitimate breakout long trade since the price will be above the moving average on the 60 minute chart.
11-26-06
GBPUSD
A week ago Friday, the GBPUSD traded down to a low of 1.8834. The high this past Friday was 1.9350. That is over 500 pips in a week.
If you are trading spot forex, you need to catch a few trend type moves like this to make your year. As a matter of fact, the large currency funds are counting on a year end trend type move to make their year since their performance this year has been very poor.
If the professionals are having a bad year, I suspect that the average spot forex day trader is too.
I would be careful entering this late in the move in case the funds all look for the exits at once.
The last entry I posted for GBPUSD was 1.8944 on 11-19-06. The first and second targets were reached.
I have been trailing the stop loss on the last contract since that entry.
I intend to ride out the remainder of the trend move with this last contract by using a wide stop loss until the GBPUSD runs into an area of supply
large enough to stop the up trend. Move the stop loss to 1.9269 on the last contract to lock in 325 pips. If the GBPUSD rallies past 1.9350, move the stop loss to 1.9306. The next area of supply is 1.9450.
11-26-06
USDCHF
I never entered a short position in the USDCHF last week. I like to enter short trades on pullbacks to breakdown areas, and when a strong trend move happens, you run the risk that there will not be any pullbacks. I always like to know my risk before entering any trade, and pullbacks give you the opportunity to define that risk. Prior to the sell off, the USDCHF traded in a tight range between 1.2400 and 1.2450 for most of the week and our last trade was actually a counter trend long trade at 1.2410. The USDJPY did pullback to the 1.1822 breakdown area giving us an opportunity to participate in the dollar sell off. The long positions in the EURUSD and GBPUSD were entered on pullbacks to breakout areas.
There will not be any more counter trend trades in the USDCHF until the moving average on the 60 minute chart catches up to the middle of the trading range. That would take about a week of trading in a very narrow trading range. There are no areas of demand on the higher time frame charts that would cause that type of horizontal action until 1.1622. Watch for a bounce at 1.2015 which was the low on 6-9-06 this year and 1.1920 which was the year low on 5-19-06. I am riding the dollar downtrend with long positions in the EURUSD and GBPUSD for now, but I will look to short
a retrace to 1.2221 as long as the risk to reward is at least 2 to 1 at the time of entry.
11-26-06
USDJPY
The sell off in the USDJPY from 1.1822 to a low of 1.1556 has not been as big as it has in the USDCHF. I did not participate in either short trade.
The moving average on the 60 minute chart is at the top of the 1.1611 to 1.1560 trading range. The USDJPY has a good chance of trading in a
trading range for the first part of the week. It is over 20 pips from the low of the range, so a long trade from the bottom of the range is out.
I am not interested in a breakout trade since the next area of supply is very close.
I would be interested in shorting the USDJPY if it can reach 1.1628 as long as it does not base above 1.1585 before reaching 1.1628.
Use a sell stop at 1.1627 once the USDJPY trades above 1.1628 and a 10 pip stop loss after entry. The first target will be the 1.1560 area.
If the USDJPY bases between 1.1580 and 1.1600, I will short the 1.1650 area instead with a first target of 1.1600.
11-26-06
EURUSD
Hope everyone had a nice Thanksgiving.
The EURUSD ended the week near 1.3100. The last place that the EURO based below 1.3100 was near 1.3070. If you are still long from 1.2943, move your stop loss to 1.3063 to lock in 120 pips on the last contract from this trade. The next area of supply is near 1.3156.
If you are looking for an entry, you have to be willing to risk over 30 pips for a stop loss if you buy right here. We have been talking about the possibility of a strong trend trade developing in the currency markets for a month now and with the 1.2943 entry in the EURUSD and the 1.8944 entry in the GBPUSD, we are in good shape to ride it as far as possible.
11-24-06
USDJPY
The USDJPY is down to 1.1570 this morning which is the bottom of the August to November range from the weekly chart.
The USDJPY has not been as weak as the USDCHF so the moving average is not that far away from the trading range.
I would not try to range trade the USDJPY. I want to see the 60 minute moving average catch up to the USDJPY before I trade this pair again.
11-24-06
USDCHF
I see an area of demand on the 240 minute charts between 1.2091 and 1.2065 that should slow the fall in the USDCHF.
I am playing the fall in the dollar with a long EURUSD and GBPUSD position. The safest place to enter a USDCHF short is 1.2221 which is a long way from here. There is a downtrend type move in the dollar over the last 36 hours, so a long trade in USDCHF is out of the question until the moving average has a chance to catch up.
11-24-06
GBPUSD
The GBPUSD is trading over 1.9300 this morning after a huge move. Move the stop loss to 1.9259 on the last contract.
11-24-06
EURUSD
I did not send out an email to everyone yesterday due to the Thanksgiving holiday. I posted a quick note on my blog to buy the pullback to 1.2943 yesterday. Here is the address for the blog so you can check it from home in the future if you wish:
http://forexsd.blogspot.com/2006/11/eurusd-11-23-06.html
There has been a huge move in the EURUSD to a high of 1.3084 this morning.
If you are long from yesterday, hold the last contract. Move the stop loss to 1.3050.
11-23-06
GBPUSD
The GBPUSD is basing between 1.9130 and 1.9150. If the GBPUSD rallies above 1.9150 and the 60 minute candle closes above 1.9150, move the stop loss on the last contract to 1.9131.
I would like to let this last contract from our entry at 1.8944 go as far as possible, so the stops are going to be wide going forward.
Have a nice Holiday,
Steve
11-23-06
EURUSD
I was planning to take today off for the holiday.
The EURUSD rallied up to the 1.2970 area. The last place that it based was at 1.2943. I would buy a pullback to 1.2943. Use a 20 pip initial stop loss. The first target is 1.2966 and the second target will be 1.2980. Move your stop loss to even after taking the first profit.
More tomorrow.
11-22-06
USDCHF
Here is a small lesson about trading using supply and demand. It is important because it distinguishes supply and demand from support and resistance. Unlike the person who trades using support and resistance, I believe that each time price visits an area of demand, the odds of
a trader looking to buy at that price are reduced. The trader who uses support like pivots or moving averages expects that support to be stronger each time the price trades there. I have heard that some traders believe that a trendline is not significant unless it is tested at least 3 times, for example. I am looking for the highest odds, lowest risk trade I can take. I will only trade the first time and possibly the second time that a price visits an area of supply or demand. If I do trade the second time it has to be a trade that is going with the short term trend. Let's look at an example.
In the email from yesterday, I mentioned trading the USDCHF long at 1.2410 and taking a partial profit near the 1.2440 area. That 1.2410 area of demand produced a small bounce up to 1.2430 the first time it was tested at around 10:00 AM Central. The second time that the USDCHF traded down to the 1.2410 area, the bounce went up to 1.2425. Each time that the USDCHF traded near the area of demand the number of willing buyers was reduced until there were only sellers left and the USDCHF traded below 1.2400. I would have only traded long at 1.2410 the first time since the short trend in the USDCHF since Friday has been down.
This morning the USDCHF is bouncing off the 1.2378 area of support. Once the last buyer buys in that area the next area of demand is near
1.2350 followed by 1.2300. I would prefer to wait until one of those areas of demand produces a bounce up to the 1.2410 area to take a short trade since the areas of demand at 1.2378 and 1.2350 have been visited once already this month.
11-22-06
USDJPY
I am listening to CNBC explain why the dollar is down this morning. I believe that the USDJPY is down because it finally came into the area of supply at 1.1822. I only wish it would have done that on Monday. If there is a retracement to the 1.1778 area, I will short it.
11-22-06
GBPUSD
The GBPUSD rally continues without any pullbacks to our trailing stop. Move the stop loss on the position to 1.8969. If the GBPUSD can rally past the 1.9026 area of supply, sell one contract and move the stop loss to 1.9020 on the last one.
11-22-06
EURUSD
It looks as if the EURUSD is going to test the 1.2900 area of supply which has stopped every rally since May, 2006. In fact, the last time the EURUSD closed above 1.2900 was in June, 2006. The range from yesterday's email was 1.2805 to 1.2830, and this morning the EURUSD has extended the range up to the 1.2865 area of supply. Along the way, the EURUSD has based near 1.2845 and 1.2825 which should be areas of breakout support to buy on pullbacks. If the EURUSD continues to rally past the 1.2865 area, 1.2865 will be another area to buy on a retracement for a move higher. At this point, I will buy a pullback to the 1.2845 area if the EURUSD retraces instead of breaking out.
11-21-06
USDJPY
The USDJPY rallied up from the 1.1758 area on Sunday, but it never quite reached the 1.1822 area to enter the short trade from yesterday's email. The high on the day was 1.1817. This will be a problem for anyone using limit orders to enter their trades. On the way higher, the USDJPY based between 1.1794 and 1.1782. This breakout area will be support on a pullback until the demand is absorbed. Since the supply at 1.1822 is so close to the demand at 1.1794, I will pass on the 1.1822 short trade for today. I will wait to short the 1.1845 area.
11-21-06
USDCHF
There was no trade entered on the USDCHF on Sunday or Monday.
The USDCHF slipped below the small area of support at 1.2430 on Monday morning and found support at 1.2402. It is basing near this area of supply at 1.2430 this evening. I will pass on trading the USDCHF until the range opens up to at least 1.2410 to 1.2485.
If you do trade that range, take a partial profit near the 1.2440 area on either a long trade from below or a short trade from above.
11-21-06
GBPUSD
On Sunday, the pullback to 1.8944 long trade was entered. The high since entry was 1.8986. It was also possible to enter this pullback trade
on Monday. Move the stop loss on the remaining position to 1.8942. and once the GBPUSD breaks past 1.8981, move the stop loss to 1.8955.
11-21-06
EURUSD
Both long trades from yesterday's email were triggered. On Sunday, the EURUSD traded down to 1.2817 and then rallied to 1.2845.
On Monday, the EURUSD pulled back to 1.2830 and again rallied to a high of 1.2851. Today, the areas of supply and demand are between 1.2805 and 1.2830. I'll pass on trading today until the range widens.
11-18-06
USDJPY
There was no trade in the email on Friday. Had we still been long, we would have use the moving average on the 15 minute chart as a trailing
stop and the last exit would have been at 1.1825. Once again, the large area of supply on the US Dollar Index daily and weekly charts is what stopped the dollar rally and forced the sell off in the dollar currencies including the USDJPY which had been the strongest.
It was not the economic data. If the sell off had been due to the release of the economic data at 7:30 AM on Friday, why did it take an hour after the release to start selling off, and why have I been able to tell you that there is a ton of supply on those charts for the last 3 emails? The areas of supply and demand are on the charts and when the price trades near an area where there are more sellers than buyers, like it did on Friday it will sell off. If you trade without knowing where these areas are, make sure you use a tight stop. Don't buy and hope.
If the USDJPY rallies from here, I'm a seller at 1.1822. My first target will be 1.1780. If it trades lower from here, the range will be 1.1758 to 1.1700 once the breakout support areas at 1.1726 and 1.1715 are absorbed. I would short the 1.1758 area the first time that the USDJPY retraces to it.
The 240 chart below shows the range in a much clearer picture.
11-18-06
USDCHF
On Friday, the area of supply I have been mentioning between 1.2500 and 1.2538 stopped the USDCHF rally in it's tracks.
Before that happened, the breakout support area at 1.2485 produced a nice bounce up to the 1.2529 level once the area of supply at 1.2500 was absorbed.
I have a problem with buying when the currency is near a large area of supply because the end result is usually what you see on the 2 charts below which is why I passed on the long trade near 1.2485 on Friday. The 240 minute chart below shows that the small breakout area between 1.2340 and 1.2332 stopped the sell off and produced a minor bounce on Friday. Once the USDCHF drops below 1.2430, it will be an area of supply with a breakdown line at 1.2430. The 1.2378 breakout support area is the next place that the USDCHF should bounce. The small range will be 1.2378 to 1.2431. You could also see another bounce up to the 1.2485 area if this small area of support at 1.2431 holds. That would be a good place to enter a short. The area of demand at 1.2431 would be the first target.
11-18-06
GBPUSD
There were no official trades in the email from Friday, but I did say you could trade the 1.8850 - 1.8901 range. Hope you did.
The areas of supply up to 1.8950 have been absorbed. There already was a breakout of the small range between 1.8944 and 1.8932 on Friday afternoon and the area of supply near 1.8966 was touched once on Friday morning. The next area of supply is between 1.8988 and 1.9026.
I will either buy the first pullback to 1.8944, or I will buy the breakout of the next range that forms up near the 1.8966 - 1.8988 supply area for a target of 1.9026.
11-19-06
EURUSD
No trades on Friday. The areas of supply between 1.2788 and 1.2840 have been absorbed and the EURUSD is basing between 1.2815 and 1.2830. The first area of supply is near 1.2865. Either the EURUSD will breakout on Sunday or Monday, or it will drift down to the 1.2814 area first.
I would trade long in either case with a first target of 1.2765 to sell one contract. Move the stop to even after the first target. If the EURUSD stalls near the 1.2865 area and falls below 1.2850, close the trade. We will buy the pullback to the 1.2830 breakout area to re-establish the long position.
