Forex Trader's Weekly Update (October 25 2010 to October 29 2010)

EUR/USD

EUR/USD's consolidation from 1.4150 extended further last week and such consolidations would likely continue further in near term. Below 1.3697 minor support will bring another fall to 38.2% retracement of 1.2587 to 1.4150 at 1.3553 and possibly below. On the upside, though, break of 1.4150 resistance will confirm that recent rally has resumed and should target medium term trend line resistance at 1.4550 next.

In the bigger picture, price actions from 1.6039 is a correction to long term rally from 0.8223 and could have finished down to 1.1875 already. Short term outlook will remain bullish as long as 1.3330 resistance turned support holds and further rally should be seen to upper trend line resistance (1.6039, 1.5143, now at 1.4572) next. Break there will target a new high above 1.6039. Though, break of 1.3330 will argue that whole rebound from 1.1875. This will also dampen this mentioned case and turn outlook bearish instead.

In the long term picture, the long term up trend from 2000 low of 0.8223 to 2008 high of 1.6039, price actions from 1.6039 are viewed as a correction only. Hence, we'd expect another high above 1.6039 eventually, after correction from 1.6039 is confirmed to be finished.

Pips Mover's Weekly Pivot Point for this week: 1.3917

Historical Levels up to date: 1.4865, 1.4675, 1.4420, 1.4090, 1.3840, 1.3600



GBP/USD

GBP/USD dropped sharply to as low as 1.5649 last week and the development suggests that rise from 1.5296 is finished. Also, considering bearish divergence condition in daily MACD. whole rally from 1.4230 might be finished too. In any case, short term outlook will remain bearish as long as 1.5877 resistance holds. Break of 1.5649 will target a test on 1.5296 support first. Though, above 1.5877 will flip intraday bias back to the upside for retesting 1.6105 first.

In the bigger picture, price actions from 1.3503 are viewed as consolidation to fall from 2.1161 only with rise from 1.4230 as the third leg. There is no clear indication that such consolidation is finished. Current rise from 1.4230 could extend to 1.7043 resistance and above. However, we'd expect strong resistance between 1.7043 and 50% retracement of 2.1161 to 1.3503 at 1.7332 and finally bring long term down trend resumption. In any case, a break of 1.4230 support will indicate that the consolidation is completed and down trend from 2.1161 is resuming for another low below 1.3503.

In the longer term picture, the corrective nature of the multi-decade advance from 1.0463 to 2.1161 as well as the impulsive nature of the fall from there suggests that GBP/USD is now in an early stage of a long term down trend. Another low below 1.3503 is anticipated after rebound from 1.3503 is confirmed to be completed.

Pips Mover's Weekly Pivot Point for this week: 1.5752

Historical Levels up to date: 1.9445, 1.8490, 1.7520, 1.6570, 1.6255, 1.5675





USD/CHF

USD/CHF's rebound from 0.9462 extended further to as high as 0.9803 last week. Considering bullish convergence condition in daily MACD, a short term bottom should be in place and strong rise is now is favor to 0.9932/1.0181 resistance zone in near term, with 55 days EMA (now at 0.9978). On the downside, below 0.9571 will flip intraday bias back to the downside for retesting 0.9462. Nevertheless, decisive break there is needed to confirm down trend resumption. Otherwise, we'd expect more consolidations first.

In the bigger picture, as noted before, the sustained break of 0.9634 low indicates that long term down trend from 2000 high of 1.8305 is resuming. While USD/CHF has made a short term bottom at 0.9462, there is no indication of medium term reversal yet. Outlook will stay bearish as long as 1.0330 resistance holds (38.2% retracement of 1.1729 to 0.9462 at 1.0328). The long term down trend is still in favor to continue towards 61.8% projection of 1.8305 to 1.1288 from 1.3283 at 0.8946, which is close to 0.9 psychological level.

In the longer term picture, the break of 0.9634 confirms that long term down trend from 2000 high of 1.8305 has resumed. There are various interpretation of the price actions. But after all, USD/CHF should be resuming the set of impulsive fall from 1.8305 to 1.1288. Hence, we'd expect next long term target to be 61.8% projection of 1.8305 to 1.1288 from 1.3283 at 0.8946, which is close to 0.9 psychological level.

Pips Mover's Weekly Pivot Point for this week: 0.9724

Historical Levels up to date: 0.9880, 1.0685, 1.0830, 1.0875, 1.1000, 1.1175



USD/JPY

USD/JPY edged lower to 80.83 last week but lacked follow through selling and recovered. In any case, outlook remains bearish as long as 81.91 resistance holds and we'd expect recent decline to resume sooner or later. Below 80.83 will target 61.8% projection of 92.87 to 82.86 from 85.92 at 79.73, which is close to 79.75 low. However, break of 81.91 will indicate that a short term bottom is formed and bring stronger rebound towards 83.15/83.97 resistance zone.

In the bigger picture, whole decline from 124.13 is still in progress and should now target 1995 low of 79.75. Also, considering that monthly MACD has crossed below signal line again, suggesting that USD/JPY is rebuilding downside momentum. 79.75 low would probably be taken out. Though, note that Japan could intervene any time to slow USD/JPY's fall and hence, the path would likely be very choppy. In any case, break of 85.92 resistance is needed to be the first sign of medium term bottoming while break of 94.97 is needed to confirm reversal. Otherwise, outlook will remain bearish.

In the long term picture, there is no indication of trend reversal yet and USD/JPY's long term down trend could still extend further to 1995 low of 79.75. We'd anticipate some strong support from 79.75 initially to bring rebound. Focus will be on whether 79.75 would hold or USD/JPY is indeed resuming the multi decade decline that started back in the 80's.

Pips Mover's Weekly Pivot Point for this week: 81.34

Historical Levels up to date: 93.50, 95.75, 98.00, 99.70, 101.35, 101.70, 103.00, 104.95, 105.50, 106.30, 107.20, 110.50



EUR/JPY

EUR/JPY dived to as low as 111.55 last week but was supported above 111.44 support and recovered. At this point, there is no confirmation of short term reversal yet and EUR/JPY's rise from 105.42 could still continue. Above 113.92 minor resistance will turn bias to the upside for 115.65. Break will target 38.2% retracement of 139.21 to 105.42 at 118.32. However, break of 111.44 will argue that whole rebound from 105.42 might be over and deeper fall should be seen t retest 105.42 low.

In the bigger picture, a medium term bottom should be formed at 105.42 already. Rebound from 105.42 is still in favor to extend further towards 55 weeks EMA (now at 119.21). Sustained break there will indicate that whole long term fall from 169.96 is finished too and will target 139.21 resistance and above. However, note that failure below the 55 weeks EMA will argue that long term down trend from 169.96 is still in progress for 100 psychological level and below before completion.

In the long term picture, up trend from 88.96 has completed at 169.96 and made a long term top there. Based on the rise from 88.96 to 169.96, we're favoring that fall from 169.96 is corrective in nature. But EUR/JPY would be contained above 88.96 key support level. We'll hold on to this view unless fall from 169.96 shows sign of acceleration.

Pips Mover's Weekly Pivot Point for this week: 113.12

Historical Levels up to date: 124.25, 126.50, 130.90, 133.25, 135.65, 138.00, 140.00, 151.95, 156.00, 156.85, 164.00





USD/CAD

USD/CAD's rebound from 0.9979 extended further to as high as 1.0371 last week before turning sideway. The development indicates that whole fall from 1.0671has completed. Hence, further rise is now in favor after finishing the consolidation from 1.0371. Above will target a test on 1.0671/5 resistance zone. On the downside, below 1.0167 will bring deeper pull back towards 0.9979 low. But we'd still anticipate strong support from parity to contain downside.

In the bigger picture, USD/CAD did get strong support from parity as we expected and the development reaffirms our view that price actions from 1.0851 are just consolidation to rise from 2007 low of 0.9056 only. Break of 1.0671 resistance will indicate that such rebound from 0.9056 is resuming for another high above 1.0851. On the downside, though, break of 0.9979 will invalidate this view and target a test on 0.9056 instead.

In the longer term picture, firstly, there is no clear indication that the long term down trend from 2002 high of 1.6196 has reversed. Secondly, the medium term fall from 1.3063 is so far looking corrective. Hence, we're slightly favoring the case that price actions from 0.9056 are developing into a long term corrective pattern.

Pips Mover's Weekly Pivot Point for this week: 1.0253

Historical Levels up to date: 0.9805, 1.0060, 1.0270, 1.0470, 1.1025, 1.1140, 1.1270, 1.0160, 1.1940, 1.2040, 1.2225, 1.2475



AUD/USD

AUD/USD continued to consolidate below 0.9998 last week and such consolidation would likely extend further this week. Below 0.9661 will bring deeper fall to 38.2% retracement of 0.8770 to 0.9998 at 0.9529 and below. On the upside, break of parity is needed to confirm rise resumption. Otherwise, risk will remain mildly on the downside.

In the bigger picture, medium term rise from 0.6008 is still in progress and has resumed the longer term up trend. In any case, outlook will remain bullish as long as 0.9220 resistance turned support holds. Current rally should extend towards 61.8% projection of 0.6008 to 0.9404 from 0.8066 at 1.0165 next.

In the longer term picture, long term up trend from 0.4773 should have resumed. We're now looking at next long term target of 100% projection of 0.4773 to 0.9849 from 0.6008 at 1.1084.



Pips Mover's Weekly Pivot Point for this week: 0.9827

Historical Levels up to date: 0.7695, 0.7870, 0.7930, 0.8000, 0.8200, 0.8350, 0.8670

Trading Psycology - Entry & Exit

One of the major problems faced by people who enter into trading and which they continue to face till they become professional traders is the difficulty that they face in choosing the right moment to enter and exit trades. I am no exception and i have faced the same situation when i started out trading and it took me close to 4-5 yrs to get to the right moment to enter/exit trades.

The trick behind entering any good trade is to cut out the emotion behind the entry. Normally what we do is that we see price rising and immediately, we are tempted into entering a long. The temptation is too strong. Guess what !! Thats exactly what the pros want you to do. Give in to emotions, give in to your temptations. They want you to trade emotionally. And the trick to be a successful trader is to do the opposite of what the pros want you to do. Why ? Cos thats what they do. They never enter on seeing rising prices.

Trading, as such, is very easy. All you need to do is to open a 1H or 4H or daily chart and you can easily see places where prices had reversed earlier and or had been well supported. All that you have to do is wait for price to reach such areas and take the trades accordingly. Its so easy on the face of it. But why do all of us struggle in doing this simple thing ? Its because of our emotions and our lack of discipline. We see a previous resistance being broken and price running up and we immediately jump into the bandwagon without noticing the simple logic that any good break will almost always be followed by a retracement back into the resistance region. We see price running up 50 pips after the break and we enter there and when there is a retrace back into the resistance region, we are down 50 pips, we get too scared and we close to escape more drawdown. Wat happens? Price simply moves up again to where we thought it would.

The key to successful trading is to control your emotions and have discipline. Wait for good entries, they are always there and will always be there. All you need to do is wait. Have patience, have discipline. You will succeed.

Forex Trader's Weekly Update (October 18 2010 to October 22 2010)

EUR/USD

EUR/USD rose further to as high as 1.4150 last week but lost upside momentum. A short term top might be in place and initial bias is cautiously on the downside for deeper treat to 1.3775 support and below. Though, we'd expect strong support from 38.2% retracement of 1.2587 to 1.4150 at 1.3553 to contain downside and bring another rise. Above 1.4150 will target medium term trend line resistance at 1.4572 next.

In the bigger picture, price actions from 1.6039 is a correction to long term rally from 0.8223 and could have finished down to 1.1875 already. Short term outlook will remain bullish as long as 1.3330 resistance turned support holds and further rally should be seen to upper trend line resistance (1.6039, 1.5143, now at 1.4572) next. Break there will target a new high above 1.6039.

In the long term picture, considering the long term up trend from 2000 low of 0.8223 to 2008 high of 1.6039, price actions from 1.6039 are viewed as a correction only. Hence, we'd expect another high above 1.6039 eventually, after correction from 1.6039 is confirmed to be finished.


Pips Mover's Weekly Pivot Point for this week: 1.3958

Historical Levels up to date: 1.4865, 1.4675, 1.4420, 1.4090, 1.3840, 1.3600


GBP/USD

GBP/USD's rise from 1.5296 resumed last week and rose to 1.6104 so far. Upside momentum remains a bit unconvincing. But after all, as long as 1.5754 support holds. Further rally is still expected. Current rise should target 61.8% projection of 1.4230 to 1.5997 from 1.5296 at 1.6388 next. Though, break of 1.5754 support will indicate that rise from 1.5296 is over and turn focus back to this support.

In the bigger picture, price actions from 1.3503 are viewed as consolidation to fall from 2.1161 only with rise from 1.4230 as the third leg. There is no clear indication that such consolidation is finished. Current rise from 1.4230 could extend to 1.7043 resistance and above. However, we'd expect strong resistance between 1.7043 and 50% retracement of 2.1161 to 1.3503 at 1.7332 and finally bring long term down trend resumption. In any case, a break of 1.4230 support will indicate that the consolidation is completed and down trend from 2.1161 is resuming for another low below 1.3503.

In the longer term picture, the corrective nature of the multi-decade advance from 1.0463 to 2.1161 as well as the impulsive nature of the fall from there suggests that GBP/USD is now in an early stage of a long term down trend. Another low below 1.3503 is anticipated after rebound from 1.3503 is confirmed to be completed.


Pips Mover's Weekly Pivot Point for this week: 1.5961

Historical Levels up to date: 1.9445, 1.8490, 1.7520, 1.6570, 1.6255, 1.5675


USD/CHF

USD/CHF's decline extended further last week and reached as low as 0.9462 before making a temporary low there and recovered. Initial bias is neutral this week and some consolidations might be seen first. But short term outlook will remain bearish as long as 0.9727 resistance holds and recent decline is still expected to continue. Below 0.9462 will target 100% projection of 1.2296 to 0.9916 from 1.1729 at 0.9349 next. However, break of 0.9727 will indicate that a short term bottom is formed with bullish convergence condition in 4 hours MACD and bring stronger rebound to 0.9932 resistance first.

In the bigger picture, as noted before, the sustained break of 0.9634 low indicates that long term down trend from 2000 high of 1.8305 is resuming. Medium term outlook will now remain bearish as long as 1.0330/0624 resistance zone holds. We'd expect further decline towards 61.8% projection of 1.8305 to 1.1288 from 1.3283 at 0.8946, which is close to 0.9 psychological level.

In the longer term picture, the break of 0.9634 confirms that long term down trend from 2000 high of 1.8305 has resumed. There are various interpretation of the price actions. But after all, USD/CHF should be resuming the set of impulsive fall from 1.8305 to 1.1288. Hence, we'd expect next long term target to be 61.8% projection of 1.8305 to 1.1288 from 1.3283 at 0.8946, which is close to 0.9 psychological level.


Pips Mover's Weekly Pivot Point for this week: 0.9591

Historical Levels up to date: 0.9880, 1.0685, 1.0830, 1.0875, 1.1000, 1.1175


USD/JPY


USD/JPY's down trend continued last week and dropped further to as low as 80.88 before making a temporary low there. Initial bias is neutral this week and we'd expect some sideway consolidation first. But upside should be limited by 82.33 resistance and bring fall resumption. Below 80.88 will target 61.8% projection of 92.87 to 82.86 from 85.92 at 79.73, which is close to 79.75 low. However, break of 82.33 will indicate that a short term bottom is formed and bring stronger rebound towards 83.15/83.97 resistance zone.

In the bigger picture, whole decline from 124.13 is still in progress and should now target 1995 low of 79.75. Also, considering that monthly MACD has crossed below signal line again, suggesting that USD/JPY is rebuilding downside momentum. 79.75 low would probably be taken out. Though, note that Japan could intervene any time to slow of USD/JPY's fall and hence, the path would likely be very choppy. In any case, break of 85.92 resistance is needed to be the first sign of medium term bottoming while break of 94.97 is needed to confirm reversal. Otherwise, outlook will remain bearish.

In the long term picture, there is no indication of trend reversal yet and USD/JPY's long term down trend could still extend further to 1995 low of 79.75. We'd anticipate some strong support from 79.75 initially to bring rebound. Focus will be on whether 79.75 would hold or USD/JPY is indeed resuming the multi decade decline that started back in the 80's.

Pips Mover's Weekly Pivot Point for this week: 81.46

Historical Levels up to date: 93.50, 95.75, 98.00, 99.70, 101.35, 101.70, 103.00, 104.95, 105.50, 106.30, 107.20, 110.50


EUR/JPY

EUR/JPY continued to engage in consolidation below 115.65 short term top last week and outlook remains unchanged. Another might be seen as such consolidations continue but downside is expected to be contained by 111.44 support and bring rally resumption. Break of 115.65 will target 38.2% retracement of 139.21 to 105.42 at 118.32 next. However, break of 111.44 will argue that whole rebound from 105.42 might be over and turn focus back to this low instead.

In the bigger picture, a medium term bottom should be formed at 105.42 already. Rebound from 105.42 is now expected to extend further towards 55 weeks EMA (now at 119.43). Sustained break there will indicate that whole long term fall from 169.96 is finished too and will target 139.21 resistance and above. However, note that failure below the 55 weeks EMA will argue that long term down trend from 169.96 is still in progress for 100 psychological level and below before completion.

In the long term picture, up trend from 88.96 has completed at 169.96 and made a long term top there. Based on the the rise from 88.96 to 169.96, we're favoring that fall from 169.96 is corrective in nature. But EUR/JPY would be contained above 88.96 key support level. We'll hold on to this view unless fall from 169.96 shows sign of acceleration.

Pips Mover's Weekly Pivot Point for this week: 113.63

Historical Levels up to date: 124.25, 126.50, 130.90, 133.25, 135.65, 138.00, 140.00, 151.95, 156.00, 156.85, 164.00


USD/CAD

USD/CAD dived further to as low as 0.9979 last week but has somewhat drew strong support from parity and recovered. Also, downside momentum is clearly diminishing with bullish convergence condition in 4 hours MACD. Initial bias is neutral first this week. Break of 1.0232 resistance will indicate that fall from 1.0671 has finished and will flip bias back to the upside for retesting 1.0675 resistance. Nevertheless, break of 0.9979 and sustained trading below parity will target a test on 0.9929 low next.

In the bigger picture, while we'd still prefer to see strong support around parity to finish off the fall from 1.0671 and consolidation from 1.0851. Break of 1.0232 resistance will reaffirm the view that 0.9929 is the medium term bottom and rise from there is not finished. Further break of 1.0671 should target another high above 1.0851. However, Sustained trading below parity will argue that 0.9929 is not yet the bottom and fall from 1.3063 could still be in progress for 2007 low of 0.9056. and fall from 1.3063 could still be in progress for 2007 low of 0.9056.

In the longer term picture, firstly, there is no clear indication that the long term down trend from 2002 high of 1.6196 has reversed. Secondly, the medium term fall from 1.3063 is so far looking corrective. Hence, we're slightly favoring the case that price actions from 0.9056 are developing into a long term corrective pattern.

Pips Mover's Weekly Pivot Point for this week: 1.0108

Historical Levels up to date: 0.9805, 1.0060, 1.0270, 1.0470, 1.1025, 1.1140, 1.1270, 1.0160, 1.1940, 1.2040, 1.2225, 1.2475


AUD/USD


AUD/USD rose further to as high as 0.9998 last week, just shy of parity, before making a temporary top there and retreated. Initial bias is neutral this week and we might seen some sideway consolidations first. But after all, there is no sign of topping as long as 0.9768 support holds. Further rally is still expected to continue to 138.2% projection of 0.8315 to 0.9220 from 0.8770 at 1.0021. Break will see further rise to medium term projection level at 1.0165. Though, break of 0.9768 will indicate that a short term top is formed and bring deeper correction.

In the bigger picture, medium term rise from 0.6008 is still in progress and has resumed the longer term up trend. In any case, outlook will remain bullish as long as 0.9220 resistance turned support holds. Current rally should extend towards 61.8% projection of 0.6008 to 0.9404 from 0.8066 at 1.0165 next.

In the longer term picture, long term up trend from 0.4773 should have resumed. We're not looking at next long term target of 100% projection of 0.4773 to 0.9849 from 0.6008 at 1.1084.

Pips Mover's Weekly Pivot Point for this week: 0.9881

Historical Levels up to date: 0.7695, 0.7870, 0.7930, 0.8000, 0.8200, 0.8350, 0.8670

Forex Trader's Weekly Update (October 11 2010 to October 15 2010)

EUR/USD

EUR/USD soared to as high as 1.4028, just inch below mentioned target of 100% projection of 1.1875 to 1.3330 from 1.2587 at 1.4042. A temporary top is in place and initial bias is neutral for some consolidations first this week. But downside is expected to be contained by 1.3636 support and bring another rise. Above 1.4028 will target medium term trend line resistance at 1.4585.

In the bigger picture, price actions from 1.6039 is a correction to long term rally from 0.8223 and could have finished down to 1.1875 already. Short term outlook will remain bullish as long as 1.3330 resistance turned support holds and further rally should be seen to upper trend line resistance (1.6039, 1.5143, now at 1.4585) next. Break there will target a new high above 1.6039.

In the long term picture, considering the long term up trend from 2000 low of 0.8223 to 2008 high of 1.6039, price actions from 1.6039 are viewed as a correction only. Hence, we'd expect another high above 1.6039 eventually, after correction from 1.6039 is confirmed to be finished.

Pips Mover's Weekly Pivot Point for this week: 1.3914

Historical Levels up to date: 1.4865, 1.4675, 1.4420, 1.4090, 1.3840, 1.3600


GBP/USD

GBP/USD edged higher to 1.6016 last week and the break of 1.5997 did suggest that rise from 1.4230 is resuming. Nevertheless, upside momentum remains a bit unconvincing. In any case, short term outlook remains bullish as long as 1.5668 support holds. Above 1.6016 will target 61.8% projection of 1.4230 to 1.5997 from 1.5296 at 1.6388 next. On the downside, break of 1.5668 will in turn indicate that rise from 1.5296 is finished and flip bias back to the downside for this support.

In the bigger picture, price actions from 1.3503 are viewed as consolidation to fall from 2.1161 only with rise from 1.4230 as the third leg. There is no clear indication that such consolidation is finished. Above 1.5996 will bring another rise to 1.7043 resistance and above. However, we'd expect strong resistance between 1.7043 and 50% retracement of 2.1161 to 1.3503 at 1.7332 and finally bring long term down trend resumption. In any case, a break of 1.4230 support will indicate that the consolidation is completed and down trend from 2.1161 is resuming for another low below 1.3503.

In the longer term picture, the corrective nature of the multi-decade advance from 1.0463 to 2.1161 as well as the impulsive nature of the fall from there suggests that GBP/USD is now in an early stage of a long term down trend. Another low below 1.3503 is anticipated after rebound from 1.3503 is confirmed to be completed.

Pips Mover's Weekly Pivot Point for this week: 1.5919

Historical Levels up to date: 1.9445, 1.8490, 1.7520, 1.6570, 1.6255, 1.5675



USD/CHF

USD/CHF dropped to as low as 0.9554 last week, breaking 2008 low of 0.9643 before turning sideway. Initial bias is neutral this week and some consolidations would be seen above 0.9554 first. But after all, upside should be limited below 0.9932 resistance and bring another fall. Below 0.9554 will target 100% projection of 1.2296 to 0.9916 from 1.1729 at 0.9349 next.

In the bigger picture, as noted before, current development suggests that long term down trend from 2000 high of 1.8305 is resuming. Break of 0.9634 will confirm this bearish case and target 100% projection of 1.2296 to 0.9916 from 1.1729 at 0.9349 next. On the upside, break of 1.0330/0624 resistance zone is needed to signal medium term reversal, otherwise, outlook will remain bearish.

In the longer term picture, the break of 0.9634 confirms that long term down trend from 2000 high of 1.8305 has resumed. There are various interpretation of the price actions. But after all, USD/CHF should be resuming the set of impulsive fall from 1.8305 to 1.1288. Hence, we'd expect next long term target to be 61.8% projection of 1.8305 to 1.1288 from 1.3283 at 0.8946, which is close to 0.9 psychological level.

Pips Mover's Weekly Pivot Point for this week: 0.9646

Historical Levels up to date: 0.9880, 1.0685, 1.0830, 1.0875, 1.1000, 1.1175


USD/JPY

USD/JPY broke intervention low of 82.86 to resume recent down trend and reached as low as 81.71 so far. Initial bias remains on the downside this week with 82.55 minor resistance intact. Current fall should now target 61.8% projection of 92.87 to 82.86 from 85.92 at 79.73, which is close to 79.75 low. On the upside, above 82.55 minor resistance will turn intraday bias neutral first. But break of 83.15 resistance is needed to be first signal of bottoming. Otherwise, outlook will remain bearish.

In the bigger picture, the break of 82.86 support indicates that USD/JPY has not bottomed yet. Whole decline from 124.13 is still in progress and should now target 1995 low of 79.75. Also, considering that monthly MACD has crossed below signal line again, suggesting that USD/JPY is rebuilding downside momentum. 79.75 low would probably be taken out. Though, note that Japan could intervene any time to slow of USD/JPY's fall and hence, the path would likely be very choppy. In any case, break of 85.92 resistance is needed to be the first sign of medium term bottoming while break of 94.97 is needed to confirm reversal. Otherwise, outlook will remain bearish.

In the long term picture, there is no indication of trend reversal yet and USD/JPY's long term down trend could still extend further to 1995 low of 79.75. We'd anticipate some strong support from 79.75 initially to bring rebound. Focus will be on whether 79.75 would hold or USD/JPY is indeed resuming the multi decade decline that started back in the 80's.

Pips Mover's Weekly Pivot Point for this week: 82.24

Historical Levels up to date: 93.50, 95.75, 98.00, 99.70, 101.35, 101.70, 103.00, 104.95, 105.50, 106.30, 107.20, 110.50


EUR/JPY

EUR/JPY edged higher to 115.65 last week but subsequent break of 113.74 minor support suggests that a short term top is formed with bearish divergence condition in 4 hours MACD. Initial bias is neutral this week and retreat from 115.65 should extend further lower. Though, strong support is expected at 111.44 support to contain downside and bring rally resumption. Above 115.65 will target 38.2% retracement of 139.21 to 105.42 at 118.32 next.

In the bigger picture, a medium term bottom should be formed at 105.42 already. Rebound from 105.42 is now expected to extend further towards 55 weeks EMA (now at 119.65). Sustained break there will indicate that whole long term fall from 169.96 is finished too and will target 139.21 resistance and above. However, note that failure below the 55 weeks EMA will argue that long term down trend from 169.96 is still in progress for 100 psychological level and below before completion.

In the long term picture, up trend from 88.96 has completed at 169.96 and made a long term top there. Based on the rise from 88.96 to 169.96, we're favoring that fall from 169.96 is corrective in nature. But EUR/JPY would be contained above 88.96 key support level. We'll hold on to this view unless fall from 169.96 shows sign of acceleration.

Pips Mover's Weekly Pivot Point for this week: 114.58

Historical Levels up to date: 124.25, 126.50, 130.90, 133.25, 135.65, 138.00, 140.00, 151.95, 156.00, 156.85, 164.00


USD/CAD


USD/CAD dived to as low as 1.0061 last week before making a temporary low there and turned sideway. With 1.0377 resistance intact, fall from 1.0675 is still expected to continue. Though, in case of another fall, we'd continue to expect strong support from around parity to contain downside and bring rebound. Break of 1.0377 will confirm that fall from 1.0671 is over and bring stronger rally towards 1.0675 resistance.

In the bigger picture, consolidations from 1.0851 is not finished yet with another falling leg in progress. At this moment, we'd still to expect strong support from parity to contain downside and finally bring rally resumption. Above 1.0675/0671 resistance zone will target 38.2% retracement of 1.3063 to 0.9929 at 1.1126 at least. However, sustained trading below parity will indicate 0.9929 is not yet the bottom and will turn focus back to this low.

In the longer term picture, firstly, there is no clear indication that the long term down trend from 2002 high of 1.6196 has reversed. Secondly, the medium term fall from 1.3063 is so far looking corrective. Hence, we're slightly favoring the case that price actions from 0.9056 are developing into a long term corrective pattern.

Pips Mover's Weekly Pivot Point for this week: 1.0130

Historical Levels up to date: 0.9805, 1.0060, 1.0270, 1.0470, 1.1025, 1.1140, 1.1270, 1.0160, 1.1940, 1.2040, 1.2225, 1.2475


AUD/USD

AUD/USD's strong rise and break of 0.9849 high confirms that long term up trend has resumed. Though, with a temporary top formed at 0.9915, initial bias is neutral this week and some sideway trading should be seen first. But downside is expected to be contained by 0.9541 support and bring another rise. Above 0.9915 will target parity and then 138.2% projection of 0.8315 to 0.9220 from 0.8770 at 1.0021.

In the bigger picture, medium term rise from 0.6008 is still in progress and has resumed the longer term up trend. In any case, outlook will remain bullish as long as 0.9220 resistance turned support holds. Current rally should extend towards 61.8% projection of 0.6008 to 0.9404 from 0.8066 at 1.0165 next.

In the longer term picture, long term up trend from 0.4773 should have resumed. We're not looking at next long term target of 100% projection of 0.4773 to 0.9849 from 0.6008 at 1.1084.

Pips Mover's Weekly Pivot Point for this week: 0.9812

Historical Levels up to date: 0.7695, 0.7870, 0.7930, 0.8000, 0.8200, 0.8350, 0.8670

Forex Trader's Weekly Update (October 4 2010 to October 8 2010)

EUR/USD



EUR/USD's up trend continued last week and rose further to as high as 1.3791. Initial bias remains on the upside this week and further rally should be seen towards 100% projection of 1.1875 to 1.3330 from 1.2587 at 1.4024, which is close to 1.4 psychological level. On the downside, below 1.3626 minor support will turn intraday bias neutral and bring retreat first. But in such case, we'd expect strong support from 1.3286 to contain downside and bring another rise.



In the bigger picture, price actions from 1.6039 is a correction to long term rally from 0.8223 and could have down to 1.1875 already. Short term outlook will remain bullish as long as 1.3 psychological level holds and further rally should be seen to upper trend line resistance (1.6039, 1.5143, now at 1.4600) next. Break there will target a new high above 1.6039.



In the long term picture, considering the long term up trend from 2000 low of 0.8223 to 2008 high of 1.6039, price actions from 1.6039 are viewed as a correction only. Hence, we'd expect another high above 1.6039 eventually, after correction from 1.6039 is confirmed to be finished.



Pips Mover's Weekly Pivot Point for this week: 1.3683

Historical Levels up to date: 1.4865, 1.4675, 1.4420, 1.4090, 1.3840, 1.3600



GBP/USD



GBP/USD edged higher to 1.5921 last week but lacked follow through buying. Subsequent volatility mixed up the near term outlook and we'll stay neutral first. On the upside, break of 1.5921 will indicate that rise from 1.5296 is still in progress for 1.5997 high. On the downside, below 1.5668 will flip intraday bias to the downside. Further break of 1.5503 support will confirm that rebound from 1.5296 has completed and turn focus back to this support instead.



In the bigger picture, price actions from 1.3503 are viewed as consolidation to fall from 2.1161 only with rise from 1.4230 as the third leg. There is no clear indication that such consolidation is finished. Above 1.5996 will bring another rise to 1.7043 resistance and above. However, we'd expect strong resistance between 1.7043 and 50% retracement of 2.1161 to 1.3503 at 1.7332 and finally bring long term down trend resumption. In any case, a break of 1.4230 support will indicate that the consolidation is completed and down trend from 2.1161 is resuming for another low below 1.3503.



In the longer term picture, the corrective nature of the multi-decade advance from 1.0463 to 2.1161 as well as the impulsive nature of the fall from there suggests that GBP/USD is now in an early stage of a long term down trend. Another low below 1.3503 is anticipated after rebound from 1.3503 is confirmed to be completed.



Pips Mover's Weekly Pivot Point for this week: 1.5807

Historical Levels up to date: 1.9445, 1.8490, 1.7520, 1.6570, 1.6255, 1.5675





USD/CHF



USD/CHF dropped further to as low as 0.9707 last week before making a temporary low there and turned sideway. Initial bias is neutral this week and some more consolidations could still be seen. But even in case of another rise, upside should be limited below 1.0108 resistance and bring fall resumption. Break of 0.9707 will target 0.9634 low next.



In the bigger picture, as noted before, current development suggests that long term down trend from 2000 high of 1.8305 is resuming. Break of 0.9634 will confirm this bearish case and target 100% projection of 1.2296 to 0.9916 from 1.1729 at 0.9349 next. On the upside, break of 1.0330/0624 resistance zone is needed to signal medium term reversal, otherwise, outlook will remain bearish.



In the longer term picture, USD/CHF continued to trade below a falling 55 months EMA. Even though it kept losing downside momentum as seen in bullish convergence condition in monthly MACD, there is no indication of reversal. Whole down trend from 2000 high of 1.8305 is still in progress for another low below 0.9634.



Pips Mover's Weekly Pivot Point for this week: 0.9773

Historical Levels up to date: 0.9880, 1.0685, 1.0830, 1.0875, 1.1000, 1.1175



USD/JPY



USD/JPY's fall from 85.92 extended further to as low as 83.15 last week but started to lose some downside momentum. While further decline cannot be ruled out, we'd maintain that considering risk of further intervention, strong support should be seen at around 83 level to contain downside. On the upside, above 83.92 minor resistance will flip intraday bias back to the upside for upper side of recent range of 82.86/85.92. However, break of 85.92 resistance is needed to confirm that rebound from 82.86 has resumed. Otherwise, we'll stay neutral first.



In the bigger picture, considering bullish convergence condition in daily MACD, fall from 94.97 might have made a medium term low at 82.86. Though, we'd prefer to see decisive break of 85.89 resistance before confirming. In such case, stronger rally should be seen to 55 weeks EMA (now at 89.77) and above. On the downside, break of 82.86 support is needed to confirm down trend resumption to 79.75 low. But even in case, we'll be cautiously looking for more sign of loss of momentum in case of further decline.



In the long term picture, there is no indication of trend reversal yet and USD/JPY 's long term down trend could still extend further to 1995 low of 79.75. However, we'd be cautious on any sign of loss of momentum and reversal on next fall. Break of 94.97 resistance will now be an important signal of trend reversal.



Pips Mover's Weekly Pivot Point for this week: 83.55

Historical Levels up to date: 93.50, 95.75, 98.00, 99.70, 101.35, 101.70, 103.00, 104.95, 105.50, 106.30, 107.20, 110.50



EUR/JPY



EUR/JPY's rally continued further to as high as 114.79 last week and met mentioned target of 114.72 resistance. While EUR/JPY has been losing some upside momentum, there is no sign of topping yet. Initial bias remains on the upside this week and sustained trading above 114.72 will target 38.2% retracement of 139.21 to 105.42 at 118.32 next. On the downside, break of 112.96 will suggest that a short term top is formed and bring consolidations first. But downside should be contained above 109.54 resistance turned support and bring another rise.



In the bigger picture, a medium term bottom should be formed at 105.42 already. Rebound from 105.42 is now expected to extend further towards 55 weeks EMA (now at 120.33). Sustained break there will indicate that whole long term fall from 169.96 is finished too and will target 139.21 resistance and above. However, note that failure below the 55 weeks EMA will argue that long term down trend from 169.96 is still in progress for 100 psychological level and below before completion.



In the long term picture, up trend from 88.96 has completed at 169.96 and made a long term top there. Based on the rise from 88.96 to 169.96, we're favoring that fall from 169.96 is corrective in nature. But EUR/JPY would be contained above 88.96 key support level. We'll hold on to this view unless fall from 169.96 shows sign of acceleration.



Pips Mover's Weekly Pivot Point for this week: 114.31

Historical Levels up to date: 124.25, 126.50, 130.90, 133.25, 135.65, 138.00, 140.00, 151.95, 156.00, 156.85, 164.00





USD/CAD



USD/CAD's break of 1.0190 support on Friday suggests that fall from 1.0671 has finally resumed. Initial bias is on the downside this week for 1.0106 support next. But still, we'd continue to expect strong support from around parity to contain downside and bring rebound. On the upside, break of 1.0230 minor resistance will turn intraday bias neutral first. But break of 1.0377 is needed to signal reversal. Otherwise, risk remains on the downside.



In the bigger picture, consolidations from 1.0851 is still in progress and rebound from 0.9929 is not ready to resume yet. But in any case, we'd continue to expect strong support from parity to contain downside and finally bring rally resumption. Above 1.0675/0671 resistance zone will target 38.2% retracement of 1.3063 to 0.9929 at 1.1126 at least, with prospect of extending further to 61.8% retracement of 1.1866. However, sustained trading below parity will indicate 0.9929 is not yet the bottom and will turn focus back to this low.



In the longer term picture, firstly, there is no clear indication that the long term down trend from 2002 high of 1.6196 has reversed. Secondly, the medium term fall from 1.3063 is so far looking corrective. Hence, we're slightly favoring the case that price actions from 0.9056 are developing into a long term corrective pattern.



Pips Mover's Weekly Pivot Point for this week: 1.0234

Historical Levels up to date: 0.9805, 1.0060, 1.0270, 1.0470, 1.1025, 1.1140, 1.1270, 1.0160, 1.1940, 1.2040, 1.2225, 1.2475



AUD/USD



AUD/USD climbed further to as high as 0.9749 last week even though it continued to lose some near term upside momentum. In any case, further rally is still expected as long as 0.9461 support holds and current rise is expected to extend further to 0.9849 high next. Break of 0.9461 support will indicate that a short term top is formed and bring deeper pull back.


In the bigger picture, medium term rise from 0.6008 is still in progress. In any case, outlook will remain bullish as long as 0.8770 support holds and further rise should be seen to 0.9849 high first. Break there will confirm that the long term up trend has also resumed and should then target 61.8% projection of 0.6008 to 0.9404 from 0.8066 at 1.0165 next. On the downside, though, note that break of 0.8770 will indicate that rise from 0.8066 is finished and turn focus back to this key support instead.


In the longer term picture, long term correction from 0.9849 has likely completed at 0.6008 already, after being supported slightly above 76.4% retracement of 0.4773 to 0.9849. Rise from 0.6008 is possibly developing into a new up trend which extend the long term rise from 0.4773. We'll continue to favor the long term bullish case as long as 0.8066 support holds and expect an eventual break of 0.9849 high.


Pips Mover's Weekly Pivot Point for this week: 0.9684

Historical Levels up to date: 0.7695, 0.7870, 0.7930, 0.8000, 0.8200, 0.8350, 0.8670

Forex Online Trading Manual

A Gift To All My Friends.........

With my googling power, I've come across a very interesting methodology in the FOREX trading. It is probably the oldest method of FOREX trading and is called PRICE ACTION approach.It is worth to give it a second look.I hope you'll find it useful. Happy trading!!!!
Price Action Trading Course by Nial Fuller

Forex Trader's Weekly Update (September 27 2010 to October 1 2010)

EUR/USD

EUR/USD rose to as high as 1.3494 last week and the break of 1.3330 resistance confirms that whole rally from 1.1875 has resumed. Initial bias remains on the upside this week and further rise should be seen towards next target of 100% projection of 1.1875 to 1.3330 from 1.2587 at 1.4024, which is close to 1.4 psychological level. On the downside, below 1.3286 support will suggest that a short term top is formed and bring consolidations. But downside should be contained by 1.3018/3158 support zone and bring rally resumption.

In the bigger picture, price actions from 1.6039 is a correction to long term rally from 0.8223 and could have finished down to 1.1875 already. Short term outlook will remain bullish as long as 1.2587 support holds and further rally should be seen to upper trend line resistance (1.6039, 1.5143, now at 1.4600) next. Break there will target a new high above 1.6039.

In the long term picture, considering the long term up trend from 2000 low of 0.8223 to 2008 high of 1.6039, price actions from 1.6039 are viewed as a correction only. Hence, we'd expect another high above 1.6039 eventually, after correction from 1.6039 is confirmed to be finished.

Forex Trader's Weekly Update (September 20 2010 to September 24 2010)

EUR/USD


EUR/USD's rally extended further to as high as 1.3158 last week before making a temporary top and retreated. Initial bias is neutral this week and we'd expect some sideway trading first. Note that the strong break of 1.2916 resistance suggests that whole pull back from 1.3330 is finished at 1.2587 already. We'd expect retreat from 1.3158 to be contained by 1.2916 resistance turned support and bring another rise. Above 1.3158 will target 1.3330 and above. However, note that break of 1.2916 will dampen this case and turn focus back to 1.2587/2643 support zone instead.



In the bigger picture, outlook is rather mixed for the moment and we'll stay neutral first. Question remains on whether medium term correction from 1.6039 is completed to 1.1875 and we have no confirmation yet. On the upside, break of 1.3330 resistance will indicate that rebound from 1.1875 has resumed and thus favor the case that EUR/USD has bottomed out. In such case, further rise should be seen to upper trend line resistance (1.6039, 1.5143, now at 1.4600). On the downside, though, break of 1.2587 support will indicate that fall from 1.5143 is still in progress for a test on 1.1639 key support. We'll see which side EUR/USD will take out before solidifying the outlook.



In the long term picture, the long term up trend from 2000 low of 0.8223 to 2008 high of 1.6039, price actions from 1.6039 are viewed as a correction only. Hence, we'd expect strong support between 61.8% retracement of 0.8223 to 1.6039 at 1.1209 and 1.1639 support to contain downside and bring another long term up trend.

Forex Trader's Weekly Update (September 13 2010 to September 17 2010)

EUR/USD

EUR/USD's recovery extends further to as high as 1.2896 last week but is still limited below mentioned 1.2921 resistance. Considering that it's near to this resistance, we'll stay neutral initially this week. As long as 1.2921 resistance holds, we'd still expect fall from 1.3330 to resume sooner or later. Below 1.2776 minor support will flip intraday bias back to the downside. Further break of 1.2587 will target 61.8% retracement of 1.1875 to 1.3330 at 1.2431 next. However, decisive break of 1.2921 will indicate that fall from 1.3330 is possibly completed and will bring stronger rally to retest this high instead.


In the bigger picture, note that EUR/USD is still limited below 55 weeks EMA (now at 1.3346) and thus, there is no indication of medium term bottoming. Whole decline from 1.6039 is possibly still in progress. Such decline is treated as correction to long term up trend and will target 1.1639 support after taking out 1.1875 low. On the upside, though, above 1.3330 will turn focus back to 55 weeks EMA and sustained trading above there will lead to further rise to upper trend line resistance (1.6039, 1.5143, now at 1.4600).


In the long term picture, considering the long term up trend from 2000 low of 0.8223 to 2008 high of 1.6039, price actions from 1.6039 are viewed as a correction only. Hence, we'd expect strong support between 61.8% retracement of 0.8223 to 1.6039 at 1.1209 and 1.1639 support to contain downside and bring another long term up trend. However, note that sustained break of 1.1209 key Fibonacci level will dampen this view and open up the case of a take on parity.

Forex Trader's Weekly Update (September 6 2010 to September 10 2010)

EUR/USD

EUR/USD's recovery extend further to as high as 1.2896 last week but is still limited below mentioned 1.2921 resistance. Considering that it's near to this resistance, we'll stay neutral initially this week. As long as 1.2921 resistance holds, we'd still expect fall from 1.3330 to resume sooner or later. Below 1.2776 minor support will flip intraday bias back to the downside. Further break of 1.2587 will target 61.8% retracement of 1.1875 to 1.3330 at 1.2431 next. However, decisive break of 1.2921 will indicate that fall from 1.3330 is possibly completed and will bring stronger rally to retest this high instead.


In the bigger picture, note that EUR/USD is still limited below 55 weeks EMA (now at 1.3346) and thus, there is no indication of medium term bottoming. Whole decline from 1.6039 is possibly still in progress. Such decline is treated as correction to long term up trend and will target 1.1639 support after taking out 1.1875 low. On the upside, though, above 1.3330 will turn focus back to 55 weeks EMA and sustained trading above there will lead to further rise to upper trend line resistance (1.6039, 1.5143, now at 1.4600).


In the long term picture, considering the long term up trend from 2000 low of 0.8223 to 2008 high of 1.6039, price actions from 1.6039 are viewed as a correction only. Hence, we'd expect strong support between 61.8% retracement of 0.8223 to 1.6039 at 1.1209 and 1.1639 support to contain downside and bring another long term up trend. However, note that sustained break of 1.1209 key Fibonacci level will dampen this view and open up the case of a take on parity.

Forex Trader's Weekly Update (August 30 2010 to September 3 2010)

EUR/USD

EUR/USD dropped further to 1.2587 but turned sideway since then. Initial bias remains neutral this week and some more consolidations would be seen first. But upside should be limited by 1.2910 resistance and bring fall resumption. Below 1.2587 will target 61.8% retracement of 1.1875 to 1.3330 at 1.2431 next. Sustained trading below there will argue that medium term decline is likely resuming for another low below 1.1875. However, break of 1.2921 will argue that fall from 1.3330 is possibly completed and will turn focus back to this resistance.



In the bigger picture, note that EUR/USD is still limited below 55 weeks EMA (now at 1.3385) and thus, there is no indication of medium term bottoming. Whole decline from 1.6039 is possibly still in progress. Such decline is treated as correction to long term up trend and will target 1.1639 support after taking out 1.1875 low. On the upside, though, above 1.3330 will turn focus back to 55 weeks EMA and sustained trading above there will pave the way to further rise to upper trend line resistance (1.6039, 1.5143, now at 1.4699).



In the long term picture, the long term up trend from 2000 low of 0.8223 to 2008 high of 1.6039, price actions from 1.6039 are viewed as a correction only. Hence, we'd expect strong support between 61.8% retracement of 0.8223 to 1.6039 at 1.1209 and 1.1639 support to contain downside and bring another long term up trend. However, note that sustained break of 1.1209 key fibonacci level will dampen this view and open up the case of a take on parity.

3 Golden Ways To Approach News Events In Forex Trading

Recently, there are a few emails asking me how do we trade news when we do not even know what’s the outcome of the news releases/fundamental reports. It’s not only just that, how are we going to handle different sources of potentially high impact news and reports that are going to hit the forex market. So below I’m going to share on how to handle those in forex trading.

I understand how frustrating it can be when there a constant stream of data/fundamental reports that is releasing every now and then, and it may hinder your decisions for your trading. Forex traders seemingly have loads of stuffs to keep track before executing their trades like countries’ economic data, who is going to speak that will affect the market etc.

Well, I’m going to give you an example here. A stock trader only has to worry about the earnings reports of a certain company, but whereas retail sales reports may be useless to them. For a forex trader, he has to worry much about interest rate change, employment and unemployment figures and some other stuffs but do not really have to worry on what the president of European Central Bank (ECB) have to say. It is possible to narrow down on the items that will have an impact on the forex market that you trade because you can choose the calendar events that that you need to focus on for a certain currency pair. You can refer to a very popular news calendar in forexfactory.com. If you are trading USD pairs, then you should look out for any orange or red coded USD news as it will affect your trade. Below are the 3 ways to approach news events.

1) Predict ahead of the news releases, speech etc. and get into position.
No one can predict where the forex market can go and what the news releases may be. So this is definitely gambling to me and I’ll never recommend this to anyone if you want to trade forex the right way.

2) Avoid the news event by waiting and not trading.
This is the best forex strategy for me when I’m a short term trader. When there is a news events coming up, I will not trade 2 to 3 hours before the news are released, this is to keep me out from unexpected results and choppy markets. Sometimes the market will be very volatile and it can only be challenging but NOT profitable for most traders. So it’s better we stay out of the unpredictable and see how the market moves after that.

3) Trading in a timeframe where intraday swings do not have much impact.
This applies to traders who are not using intraday as their strategy. Instead, they are using short swings and long swings as their trading strategy. The approach here is that when you use swing trading strategy, you will have larger stop loss and these kind of intraday swings are just small fluctuations. But of course, you have to be able to take huge stop loss and your forex trading system must be proven to be able to take in these small swings. If your system can do that, it means the news releases are already factored into your trading system.

Do Not Trade Forex Until You Read These!

I found this interesting article by a fellow professional forex trader Walter Peters that talks about the 3 Trading Weaknesses and How to Overcome Them:

Do you know what your biases are? Where are your trading weak spots? Where do you let the pips slip from your grasp?

Trading is like any other skill. Profitable trading, like bowling, cooking, planting a tree or driving a motorcycle, can be learned - by anyone. That means you too.

If you would like to become a profitable forex trader, or simply make more pips trading, find out what your weak spots are, and then work on them.

Some common weak spots are:
# 1. Trading too often.

How many times have you had a profitable week, only to give it all back at the end of the week on a few silly trades? (You wouldn’t believe how profitable most traders could be if they simply learned to wait for the ideal trade setups.)

The other common problem with frequent trading is that many traders get into revenge mode. Many traders may try to “get their money back” from a market that handed them their most recent loss. Sometimes a little perspective is all that is needed to see the markets more clearly. By sitting in the bushes until the “free money” is lying there you force yourself to become a more disciplined trader.

Recall the last time you took a trade that was an ideal setup. Remember the feeling you had – knowing that the trade had an unbelievable success rate. You probably had very little doubt that it would work out. Now, consider this: what if EVERY trade you took felt like that. This is what patience can do for you. If you learn to sit and wait for the very best trades, not only can trading become very fun, but it can become extremely profitable.
# 2. Finding it difficult to re-enter a trade.

If you find that you are often stopped out on a trade, but the trade eventually goes in the expected direction without you, you may want to work on this skill. Learning to re-enter is tricky because it may lead to overtrading, but it is invaluable in making sure that you eventually collect your profits - especially for traders who trade lower timeframe (5 minute, 10 minute, etc) charts.

Deciding to re-enter a trade is a difficult decision because you are admitting that you were wrong. By re-entering the trade you have decided that the original timing of the trade was off, and that now is the better time to get into the market.

Note that this is very different from pyramiding, or scaling into a position. A re-entry is a trade that is taken after the first trade did not go well and you have exited this original position.When pyramiding, or scaling into a position you are still holding on to your original position.
# 3. Inconsistent risk management.

If you vary your risk from trade to trade, then you may get some value from learning a risk management “trading ritual.” What I mean by this is that you go through specific steps (for example, with a spreadsheet or calculator) to determine what % of your account is at risk on the next trade. If your money management strategy is to vary the risk on each trade, that is fine, but this ritual will really help you because you will know precisely how much is at risk on each trade. This way you are more likely to stick to your plan and exit the trade if the trade goes against you. This will also help you to avoid the painful exit from the trade simply because the trade has gone against you too much - by defining your risk beforehand you are more likely to be able to sleep (if you trade longer term charts) and less likely to exit before your stop is hit because you cannot handle the excessive drawdown.

Trading is simply like learning to ride a bike or drive a car, it is a skill that anyone can learn. Some people will tell you otherwise, that only talented people who are “born to trade” can extract profits from the markets. Trading doesn’t take extreme intelligence or any superhuman gifts, it simply is hard work, just like learning to drive a car.

Walter Peters, PhD is a professional forex trader and money manager for a private forex fund. In addition, Walter is the co-founder of Fxjake.com, a resource for forex traders. Walter loves to hear from other traders, he can be reached by email at walter@fxjake.com.

Forex Trader's Weekly Update (Aug 16 2010 to Aug 20 2010)

EUR/USD

EUR/USD's sharp fall last week indicates that a short term top is at least formed at 1.3330 on bearish divergence condition in 4 hours MACD. Initial bias remains on the downside this week and break of 1.2731 support will suggest that whole rebound from 1.1875 is completed and will bring deeper decline to 1.2466 support next. On the upside, above 1.2935 will turn intraday bias neutral and bring recovery. But upside should be limited below 1.3330 and bring another fall.

In the bigger picture, while the rebound from 1.1875 was strong, it's limited below 55 weeks EMA (now at 1.3410) and reversed sharply. Break of 1.2731 support will indicate that such rebound is completed and suggest that whole fall from 1.6039 is possibly resuming. Such decline is treated as correction to long term up trend in EUR/USD and would possibly make another low below 1.1639 support before conclusion. On the upside, though, above 1.3330 will turn focus back to 55 weeks EMA and sustained trading above there will pave the wave to further rise to upper trend line resistance (1.6039, 1.5143, now at 1.4699).

In the long term picture, considering the five wave impulsive structure of the long term up trend from 2000 low of 0.8223 to 2008 high of 1.6039, price actions from 1.6039 are viewed as a correction only. Hence, we'd expect strong support between 61.8% retracement of 0.8223 to 1.6039 at 1.1209 and 1.1639 support to contain downside and bring another long term up trend. However, note that sustained break of 1.1209 key fibonacci level will dampen this view and open up the case of a take on parity.

Pips Mover's Weekly Pivot Point for this week: 1.2891

Historical Levels up to date: 1.4865, 1.4675, 1.4420, 1.4090, 1.3840, 1.3600

Trailing Stop Loss: Boost Your Profits With This Simple Method

Using trailing stops is one of the best techniques that an active trader can do to increase their profits. This trading method will allow you to reap profits will also protecting you from taking losses. This is very important as trades can turn quickly and what once was a winning trade can quickly turn into a loss if it is not managed properly. A trailing stop loss will eliminate this and allow you to leave trades open and let your profits run while simultaneously protecting you from taking a loss.

What is a trailing stop loss?

A trailing stop loss is a technique in which your stop is moved up as your trade moves into profit thereby locking in profits and eliminating the possibility of loss. This is extremely beneficial to traders because once a trade reaches this point the traders knows no matter what they will profit on the trade. The trader can then let the trade run and continue to make profits for them while also being protected from losses. This means unlimited profit potential with no chance of taking a loss. What more can a trader ask for?

How to use a trailing stop loss

If you want to implement trailing stops in your trading then its a simple as selecting it when you open a trade with your software. Most trading software gives you the ability to set stop orders that will automatically trail as your position moves deeper into profit. If you are unsure how to do this then you should consult the manual for your software or contact your broker for assistance. If for some reason your software doesn’t offer this capability built in then you can still manually trail your stop orders.

All you have to do is define the point at which you will move your stop order and also the increments in which you will move it. For example let’s say you are day trading the Eur/Usd in the forex market and your initial stop order is 20 pips away from your entry point, you could choose to move your stop order up another 20 pips for every 20 pips you move into profit. So once your position is 20 pips in profit you would move your stop order to break even and then when you reach 40 pips of profit you would lock in 20 pips of profit and so on and so forth. This is just an example as there are unlimited ways to trail your stops. How you choose to do should be based on your style of trading and risk tolerance.

A trailing stop loss provides traders with a great way to limit and even eliminate their losses while also keeping profit potential unlimited. This is a great method that is sure to help your trading once you find a way to implement it that suits your trading style. As with all new methods you should first test it out in a demo account until you figure out exactly how you want to implement it into your trading plan.

Day Trading Secrets: These Powerful Insider Tips Will Take You To The Next Level

If you are looking for day trading secrets then you have come to the right place. In this article I am going to give you some great information that is is sure to help you in your quest to become a better trader. Well without further ado here are my top 4 day trading secrets:

Dont trade after 12pm est.

The NYSE opens at 9:30 am eastern time and the bulk of action occurs within the first 2 hours of any session. Therefore if you want the best opportunity for profit then you need to be trading during this time. After the first couple of hours of trading market volatility and liquidity drop off considerably as most experienced traders exit the market. Not only does this mean less opportunity for profit but it also leaves the market more vulnerable to short term manipulation which can leave inexperienced traders with heavy losses. If you trade a market other than the U.S stock market then the same principle applies, only trade during the first 2 hours of the session.

The market always retraces.

Whenever there is a large move in the market you can bet your bottom dollar that the market will eventually retrace a portion of the move. This occurs becasue the people that have been in the move since the beginning start taking profit and also becasue of other traders that don’t think the move is sustainable begin to fade it. Both of these forces come together to push price back in the opposite direction of the move. So what does this mean for you day trading? It means that if you ever find yourself on the sidelines when a move occurs don’t fret over the missed opportunity for profit, instead just wait for the first sign that the move has run out of steam and then position yourself to trade the retracement

Only suckers trade the news.

There is no faster way to lose your money than trying to trade the news, and this is becasue of two reasons.For starters, you can’t predict the news so you have no way reliably positioning yourself before the news is released, and trust me listening to the analysts predictions on CNBC is no better than flipping a coin. Lastly, even if you were to guess correctly as to what the news will be there is no way you would then be able to predict how the market would react to it. Just becasue news is good doesn’t mean the market will go up and just becasue its bad doesn’t mean the market will go down. Oftentimes the market will react to surprising ways and many times it wont react at all and becasue of this it is a fools ambition to try to basing his trading around news releases. I’m sure you can get lucky and correctly predict what the news will be and how the market will react to it, but is that something that you can do day in and day out for any meaningful amount of time?

Always take profit.

While this may seem like common sense you would be surprised at how many new traders get this crucial point wrong. When you are in a trade and its in profit those are just paper profits, and what I mean by paper profits is that they are not real becasue you have not taken profit and therefore that money has not been deposited into your trading account. If the market for were to for whatever reason reverse direction all of your profits would be gone and you may even end up taking a loss. This is why its imperative that when you are in a trade and you have some good profits you need to bank them instead of holding on in the hope that the market will continue to move your way. This is probably the most important of all day trading secrets because at any time market conditions can change and what once was profit can quickly turn into a loss if you’re not careful.

So that’s it those are in my opinion the most important day trading secrets that new traders need to know. They are not all there is to know however as there are plenty of other little tidbits and pieces of information that will only come to you with time an experience. I’m still learning new things everyday myself in fact, the point of this article wasn’t to give you some magic day trading secrets that would turn you into a millionaire overnight, I’m afraid they don’t exist. I’m just trying to give you the information you need to become the best trader you can be. If I have helped you or you want to take issue with anything I have said then leave a comment in the box below.

By Jason Madison

Advantage Of Metatrader 4 Online Trading Platform

MetaTrader 4 is an online trading platform designed for financial institutions dealing with Forex, CFD, and Futures markets.

The platform includes all necessary components for brokerage services via internet including the back office and dealing desk.

Currently, over 100 brokerage companies and banks worldwide have chosen our solution to meet their high standards of business performance.
The MetaTrader 4 Platform has a user-friendly front-end trading interface. It provides technical analysis, charting and Expert Advisors to help you develop your own trading strategies.


Advantages

MetaTrader 4 is a solution for broker companies, banks, financial companies, and dealing centers. The main advantages of the system are:

Coverage of financial markets

The trading platform MetaTrader 4 covers all brokerage and trading activities at Forex, Futures and CFD markets.


Multi-currency basis

The system is designed on a multi-currency basis. It means that any currency can serve as a general currency used in the operation of the whole complex in any country and with any national currency.


Economy and productivity

Implemented data transfer and processing protocols are notable for their economy. It makes it possible to support several thousands of traders through a single server with the following configuration: Pentium 4 2 GHz, 512 DDR RAM, 80 GB HDD. New protocols reduce both the demands on datalink and their operational cost.

Reliability

In the case of damage to the historical data, the complex has backup and restoration systems. Also, the implemented synchronization allows to restore damaged historical databases within several minutes with the help of another MetaTrader 4 server.

Safety

To provide safety, all the information exchanged between parts of the complex is cripted by 128-bit keys. Such solution guarantees safekeeping of information transferred and leaves no chance for a third person to use it. A built-in DDoS-attacks guard system raises the stability of operation of the server and the system as a whole.

A new scheme of system working operation was created especially for DDoS-attacks resistance. With its help, you can hide the real IP-address of the server behind a number of access points (Data Centers). Data Centers also have a built-in DoS-attacks protection system; they can recognize and block such attacks. During distributed attacks at the system, only Data Centers are attacked; MetaTrader 4 Server continues its operation in regular mode. Thus, Data Centers increase the system's stability to DoS and DDoS attacks.

The implemented mechanisms of rights sharing make it possible to organize the security system with more effectiveness and to reduce the probability of ill-intentioned actions of company staff.


Multilingual support

MetaTrader 4 supports different languages, and a MultiLanguage Pack program is included into distributive packages. It provides translation of all program interfaces into any language. With the help of MultiLanguage Pack you can easily create any language and integrate it into the program. This feature of the system will bring MetaTrader 4 nearer to end-users in any country of the world.


Application Program Interfaces

MetaTrader 4 Server API makes it possible to customize the work of platform to meet your requirements. API can solve a wide range of problems:
»creating additional analyzers for finding a trend of monthly increase of traders;
»creating applications of integration into other systems;
»extending the functionality of the server;
»implementing its own system work control mechanisms;
»and do much more.


Integration with web-services

To provide traders with services of higher quality, the system supports the integration with web services (www, wap). This feature allows realtime publishing of quotations and charts on your site, dynamic tables containing contest results and much more.

Flexibility of the system

The platform possesses a wide range of customizable functions. You can set all parameters, from trade session time to detailed properties of financial instruments of each user groups.

Fundamental Forex Trading… The Forgotten Art

Traders in the forex market use two types of analysis in their trading, fundamental forex analysis and technical analysis. Technical analysis seems to be the method of choice for most traders especially since it can be used to trade effectively on smaller time frames, but traders shouldn’t underestimate the value that fundamental analysis could bring to their trading. As in the stock market, forex fundamental analysis involves looking at the intrinsic value of a investment, but countries are not like companies in that they do not have balance sheets and income statements. So, in order to determine the value of a countries currency traders have to look at the economic conditions in the country that have an affect on the valuation of its currency. In this post we are going to take a look at some of these fundamental analysis factors.

The Economic Indicators

Economic indicators are reports that are released by the government or a private organization and they form the core of fundamental forex trading. These reports are similar to the financial statements that publicly traded companies are required to file with the SEC. These reports are released at a scheduled time and since they are the only formal way to measure the strength or lack thereof of national economies if there deviate from the norm then they can cause huge swings in the value of a currency. What follows is a list of the major economic indicators used in fundamental forex analysis.

Gross Domestic Product

GDP is designed to give a broad view of the strength of a economy and represents the total market value of all goods and services produced in a country during a given year. A positive GDP means that the economy as a whole has grown in size, which is good for the currency while a negative GDP means that the economy has contracted which may signal further economic issues.

Retail-Sales

The retail-sales report is a measurement of the total receipts of all retail stores in a given country. This measurement is gathered through a diverse sampling of a nations retail establishments. This report is important because it tells traders whether or not consumers are out spending money in the economy. High retail sales indicate a active economy which bodes well for the strength of the economy as a whole and also it’s currency.

Industrial Production

This report measures the overall change in the production of factories, mines, and utilities within a nation. It also reports how closely these factories are to operating at full capacity. If the factories of a nation are operating at or near full capacity and there is also an increase in overall production then that is a sign for future economic strength.

Consumer Price Index

The CPI measures the change in the price of consumer goods. This measurement is done across 200 categories of consumer goods. When compared to exports it can be an indicator of whether or not the country is making or losing money on its products and services.

Using These Indicators

These forex fundamental analysis factors are meant to be used as a guide to the strength of an economy and by extension the potential its currency has for appreciation. These reports are a good place to start if you are trying to get a grip on fundamental forex trading. However, there are a number of other factors that play also play a role in the valuation of a currency so don’t go opening trades any trades simple because a nations GDP has risen. This post is meant to give you a quick overview of fundamental analysis in the forex market and to give you another lens through which to view your trades.

Fundamental Forex Trading: All About GDP

If you are interested in fundamental forex trading then there is one economic indicator that definitely needs to be on your watch list and that is the gross domestic product or GDP for short. The GDP reflects the value of all goods and services produced by the economy during the time frame measured; taking into account consumer spending, purchases made by the government, inventories of private companies, construction costs, and the foreign trade balance. This thorough analysis of the economic activity within a country makes the GDP an important part of forex fundamental analysis.

Unlike other indicators used in fundamental forex trading the GDP is released on a quarterly basis which makes it less prone to fluctuations as the data is gathered over a larger period of time. It is also very comprehensive as it incorporates the information from many other economic indicators and combines them with the result being the GDP. So in a sense the GDP is an indicator of economic indicators as it brings all of the data from the other major economic indicators together to provide a clear picture of the state of a country’s economy.

How To Use The GDP In Fundamental Forex Trading

For your trading you are going to want to look at the rate of growth of the GDP. It is generally believed that a annual GDP growth rate of 2.5-3.5% is best for the economy of a country. Any lower and it may indicate future trouble for the country in terms of economic growth and may even foreshadow economic contraction. If the GDP is higher than 2.5-3.5% then it may signal inflationary pressures that may hurt country’s economy and value of its currency in the long run. So, as far as fundamental forex trading is concerned if the growth rate of a country’s GDP is in the optimal range of 2.5-3.5% then there is a strong likelihood that the value of its currency will increase. Too high above or below this range may signal problems that may lead to a future decline in value of the currency.

GDP is a a great tool for any fundamental forex trader. It takes a huge amount of information and compiles it into a simple number. This makes it both easy to understand and powerful, however it is not a magic bullet. You can’t just look at the GDP, make a trade, and then having everything work out. GDP is a tool to be used in conjunction with other tools to make an informed decision.

Dear Lord, We, The Forex Traders Do Make Mistakes...Guide Us Please!

1.Day Trading and Scalping

Compared to all other types of trading, scalping is by far the hardest to master. Many amateur traders make the mistake of thinking that by trading in the very short term, they increase the probability of profiting from a trade. It's intuitive to think that small, quick trades are easier to profit from, isn't it?

In the Forex market however, the reverse is true.This is because of the volatile nature of the Forex market; market prices can fluctuate rather violently without any good reason at all. Although you risk smaller amounts of your capital when scalping, you're actually dramatically increasing the probability that your stop losses will be hit.

Although I've personally met people who are proficient scalpers, it might do you well to know that they are highly trained and experienced traders. I've never met a beginner trader who was successful at scalping. If you want to try your hand at Forex trading, do try to trade on larger time frames such as using hourly or daily charts instead. Avoid trading using minute charts at all costs!

2.Trading Breaking News

This is one of the most appealing schools of thought among the Forex trading community. Who wouldn't like to benefit from a quick 100 pip gain in less than 10 minutes?

The allure of quick, one time profits is what drives many traders to try their hand at news trading. Personally however, I would strongly discourage most inexperienced traders to news trade.

The reason is simple: the institutional traders (i.e. the big players) have all the advanced technology and knowledge in the world to beat you at this game. Their news feeds are faster, and they have their own in-house economists and currency strategists.

What do retail traders have? A top-notch desktop computer with a high-speed internet connection at best? Even their broker platforms won't be able to keep up with the volatility that occurs during news announcements. And not to mention the larger spreads that retail traders pay compared to the institutional traders.

To be a rich retail trader, you'll have to work on your strengths and avoid your vulnerabilities. News trading is definitely not for the average retail trader, so please pick your battles wisely.

3.Trading Expert Opinion

All the forex news you see looks so convincing and today, we have TV channels and lots of resources on the net but there only opinions. They won't help you win. If they did, more traders would win than they did 50 years ago and this is simply not the case - the ratio remains the same. Sure, the news sounds convincing but chances are its wrong, as it reflects the views of the majority who lose.

The traders who do this need to learn the following - markets move to perception of the news not the news itself and how far it is already discounted. Markets always crash when the news is most bullish and rally when its most bearish and trying to trade on the back of it is a waste of time.

4.Trading a Forex Robot with a Simulated Track Record

You can buy these online and they tell you that you can get rich for a few hundred bucks, you won't be surprised to learn - you can't. Most of these robots have great track records, the problem is there simulated over past data and won't help you make money - there not worth the paper there written on, we can all be rich if we know what happened and could trade it!

A Forex robot software is a software that can help you to calculate and analyze the market trend. Some common functions that can be found in the software will be predicting the possible short term trend, automatically generate buy and sell signal by analyzing the Japanese candlestick indicators etc.

However, due to the convenience of the Forex software, many people have done several mistakes that can cost them thousands of dollars. One of the great mistakes is they tend to have too much faith in the software and decided not to put a stop-loss limit, and they often trade with very little deposit left. Once the prices go against them, and the brokers call for a margin call, it will be a total disaster for them.

Another mistake that people tend to make is they left the Forex robot software alone to do all the tradings automatically without monitoring them, thinking that money will continue to roll in. This is very wrong the Forex softwares can only trade according to the trend. It is vulnarable to the sudden fluctuation due to news. The traders should monitor the chart and the news closely so to avoid any losses due to sudden fluctuation.

5.Trying to Predict Forex Prices In Advance

Prediction is another word for hoping or guessing and that won't get you far in forex trading. You can't predict forex prices in advance so don't try. Act on the reality of price change and trade the truth.

Many gurus sell scientific systems that claim they have found the formula for market movement and all you need do is follow them. If however markets did move to a scientific theory, we would all know the price in advance and there would be no market. Prices move because markets are uncertain not certain!


6.Failure To Use Stop Loss Correctly

Stops are necessary to avoid bad losses, however poorly placed stops can be just as bad. Before placing a trade the trader should consider the risk to reward ratio for the trade. The stop needs to be set with the traders money management in mind and should not be too close or too far away from the price. Traders should also consider moving their stop as the trade goes in their favor to lock in profits and reduce potential losses.

7.Over Leveraging a Small Account

You can get up to 400:1 leverage with many forex brokers and most traders think the more they leverage they use the better - but they get stopped out quickly and their accounts are soon wiped out.

When traders use a high level of leverage the returns can be astounding, but when the trade doesn’t work out the result can be catastrophic. Traders should always calculate the value of the risk they are taking for each trade and ensure that this is appropriate for their account balance. Experienced traders rarely risk more than 2-3% of their account balance on any one trade.

8.Relying Too Much On Technical Indicators

Technical indicators are great tools that assist traders to make decisions. However making decisions for trades based solely on what the technical indicators are telling us can result in large losses. By considering fundamental information together with technical information you will have a much better chance at being successful.

9.Failure To Control Your Emotion And Discipline

Forex trading is a highly volatile market. Emotions tend to run high and low, and either of those extremes can influence your trading decisions, unless you have a strategy planned in advance, and stick to it, no matter what you THINK you’re seeing at the moment. The trick to making money in the currency exchange market is to avoid making emotional decisions and follow a carefully thought out strategy that takes the current market and history into account. Letting your emotions rule your decisions can hurt your trading in several different ways. It’s the reason that most experienced traders tell beginner or novice traders that they need to develop a trading system, and stick to it no matter what. The system tells you when to buy, what to buy, when to trade and what to trade for. By sticking to your system even when you want to fly in the face of accumulated data, you’ll maximize your profits.

A trading system based on Technical analysis of historical market trends is one of the most potent tools that you can utilize if you’re just getting started in Forex trading – and many traders with years of experience continue to use their system to keep the profits rolling in. In fact, many will tell you that when their ‘gut instinct’ and their system collide, the system is almost always right.

Analysis of trends in the market will show you that the market moves in trends within overall patterns that are predictable. No trend moves smoothly in an up or down line – there are inevitable periods of time when values suddenly spiral up or down based on some outside factor. These are the times when emotion can hurt your portfolio. When a currency that you’re holding takes a sudden dip south, it’s tempting to succumb to panic trading, cut your losses and run even if your system tells you to hold on. On the other hand, it’s easy to catch the rising excitement as a trade starts increasing in value and scramble to buy more of the same. These are exactly the times to rely most heavily on your trading system. It will tell you exactly when to trade for maximum profit.