Friday 13th November 2009

Friday's trading started with the market trending in the upward direction. A Long trade was signalled when price breached the 1.4894 Resistance line around 10:00am. Entry was at 1.4896 but the market started to reverse and we eventually got stopped-out at 1.4865 around 2:00pm for a loss of 31pips on both positions.

Thursday 12th November 2009

Thursday's trading started out in the downward direction. We were therefore primed for a Short trade and finally found a good opportunity when price breached the 1.4968 Support line around 10am. Entry was at 1.4966 and the first position was closed at 1.4941 for a profit of 25pips. The second position was also closed at 1.4941 around 3:15pm for another 25pips. I actually made 60pips on that second trade but I used a different exit strategy.

Wednesday 11th November 2009

On Wednesday, we had a good opportunity to go Long when price breached the 1.5005 Resistance line around 9am. Entry was at 1.5008 and the first position was closed less than 15minutes later at 1.5028 for a profit of 20pips. The second position was also closed at 1.5028 around 12:45pm for a profit of 20pips.

Tuesday 10th November 2009

Tuesday's trading started with an opportunity to go Long shortly before the opening of the US session. The problem however was that we had strong negative divergence on the 15minute and 1hour charts. We therefore waited for price to confirm it's upward movement after a retracement but it didn't happen.

Monday 9th November 2009

On Monday 9th November, the Eur/Usd started trending upwards and the most suitable entry was signalled during the Asian session around 3:30am. I usually don't like adding such trades to our portfolio because I know there's very little chance of people being awake at that time.

Friday 6th November 2009

On Friday, the markets didn't make any strong moves till shortly after the opening of the US session. This was no surprise since the NFP (non-farm payroll) data was scheduled to be released today. In fact, we try to avoid entering trades before the NFP is released even when it appears to be a good set-up and today was no exception.

Thursday 5th November 2009

On Thursday, the market started out drifting downwards and we went Short when price breached the 1.4824 Support line. Entry was at 1.4823 around 8:00am. The market however reversed and we finally got stopped-out at 1.4856 around 1:45pm for a loss of 33pips on both positions.

Wednesday 4th November 2009

Wednesday's trading started with the market drifting in the upward direction. We encountered resistance at the 1.4769 level and we took a Long position when that level was breached around 1:15pm. Entry was at 1.4769 and the first position was closed at 1.4817 around 4:00pm for a profit of 48pips. The second position was closed at 1.4863 around 10:00pm for a profit of 94pips.

Tuesday 3rd November 2009

We had a beautiful day of trading on Tuesday. There was a clear bearish reversal pattern coming into the London session. We went short when price breached the 1.4769 Support line around 9:00am. Entry was at 1.4766 and the first position was closed at 1.4730 for a profit of 36pips. The second position was closed at 1.4691 around 4:45pm for a profit of 75pips.

Monday 2nd November 2009

On Monday 2nd November, the market started off in the upward direction. We however did not find any suitable entry using our predefined parameters. There was also a divergence trade available around 1pm but I won't take that into account because we had a conflicting signal on the 1hour chart.

Friday 30th October 2009

On Friday, we saw clear reversal patterns on the charts of the Eur/Usd which led us to position ourselves for a Short trade. We eventually had an opportunity to go Short around 3:15pm when price breached the 1.4790 Support line. Entry was at 1.4789 and the first position was closed at 1.4756 for a profit of 33pips. The second position was closed at 1.4712 shortly after the market resumed on Sunday night for a profit of 77pips.

Thursday 29th October 2009

Thursday's trading started with strong positive divergence on both the 15minute and 1hour charts. We went Long when price breached the 1.4745 Resistance line around 10am. Entry was at 1.4746 and the first position was closed at 1.4772 for a profit of 26pips. The second position was closed at 1.4790 the next day for a profit of 44pips.

Wednesday 28th October 2009

On Wednesday, there was a strong bias in the downward direction despite the fact that we had positive divergence on the charts. We went Short when price breached the 1.4786 Support line convincingly around 12:15pm. Entry was a 1.4779 and the first position was closed at 1.4739 around 5:30pm for a profit of 40pips. The second position was closed the next morning at 1.4745 for a profit of 34pips.

Tuesday 27th October 2009

We had a bit of retracement during the Asian session but the downward trend continued during the London session on Tuesday morning. We however did not have a clear entry till about 2:30pm when price closed below the 1.4858 Support line.

Entry was at 1.4856 and the first position was closed at 1.4790 around 3:15pm for a profit of 66pips. The second position was stopped-out at 1.4833 around 8am the next morning for a profit of 23pips.

Monday 26th October 2009

On Monday, the Eur/Usd started off without any entries or identifiable trend for that matter. As we went into the US session, a Short entry started shaping up with the breaching of the 1.5018 Support. This was a very clear entry and it gave ample time for any trader (who was watching at the time) to get in.

Entry was at 1.5014 around 3:30pm and the first position was closed at 1.4997 for a profit of 17pips. The second position was finally closed at 1.4868 around 9:15pm for a profit of 146pips.

Friday 23rd October 2009

On Friday there was no clear entry. The market was ranging sideways for the most part of the day and there was no convincing breach of either Support or Resistance.

Thursday 22nd October 2009

Thursday's trading started with the Eur/Usd trending downwards. Price initially bounced off the 1.4983 Support line and then came back to close below it at 1.4982 around 7am. The first position was closed at 1.4951 for a profit of 31pips. The second position was stopped-out at entry around 11:15am.

Wednesday 21st October 2009

There was a very clear bullish pattern on Wednesday morning. We went Long as soon as price closed above the 1.4939 Resistance line around 7:45am. Entry was at 1.4940 and the first position was closed at 1.4967 for a profit of 27pips. The second position was closed at 1.4996 around 8:45pm for a profit of 56pips.

Tuesday 20th October 2009

On Tuesday, we had negative divergence on both the 15minute and 1hour charts (coming into the London session). We therefore had an idea that price was heading downwards. The problem however was finding a suitable entry point. Ideally, we would have gone Short when price broke the 1.4963 Support line but it closed at 1.4947 which was too far away.

Monday 19th October 2009

Monday's trading started with an upward trend following positive divergence on the 15minute chart. There was a breach of the 1.4906 Resistance line around 7:45am. We took a Long position at 1.4908 and the first position was closed at 1.4936 for a profit of 28pips around 8:45am. The second position was stopped-out at entry at 1:30pm.

Friday 16th October 2009

Friday's trading began with negative divergence on both the 15minute and 1hour charts. The best entry would have been around 4:00am GMT but that might have been too early for most people to catch.

The next opportunity was around 6:30am when price breached the 1.4918 Support line. We went short at 1.4913 and the first position was closed at 1.4893 for a profit of 20pips. The second position was stopped out at entry around 8:15am.

Thursday 15th October 2009

Thursday's trading started off with slight negative divergence on the 1hour chart. Price then bounced off the 1.4968 Resistance line and started heading south.

There was a good opportunity to go Short around 12:15pm when price breached the 1.4902 Support line. Interestingly, I had an intending student in my office at the time and I called the trade even before it happened.

Entry was at 1.4901 and the first position was closed at 1.4880 for a profit of 21pips. The second position was closed at 1.4880 around 1:15pm for another 21pips.

Wednesday 14th October 2009

The Eur/Usd was trending upwards this morning but because of negative divergence on the 15min chart, we we're weary of taking a long position. The nearest support line wasn't breached and so we didn't take a Short position either. We eventually ended up staying out of the markets today.

Tuesday 13th October 2009

There was an upward trend on both the 15minute and 1hour charts as we came into the London Session. We took a Long position when price closed above the 1.4793 Resistance line around 9:45am. This was a very interesting trade because we almost got stopped-out before price turned around and ended up in our favour.

Entry was at 1.4799 and the first position was closed at 1.4832 for a profit of 33pips around 11:30am. The second position was also eventually stopped-out at 1.4832 for a 33pip profit around 2:15pm.

Monday 12th October 2009

We had a bullish pattern coming into the London session and we went Long when price breached the 1.4730 Resistance line.

Entry was at 1.4734 around 10:30am and the first position was closed at 1.4760 for a profit of 26pips around 11:15am. The second position was closed at 1.4789 around 4:45pm for a profit of 55pips.

Friday 9th October 2009

Friday's trading started with clear negative divergence on the 1hr chart and a mini downtrend developing on the 15minute chart.

Price however failed to breach the 1.4708 Support level all through the London session and when it eventually did breach that level around 5:15pm, it closed too far away at 1.4687.

There was therefore no entry for us on Friday.

Thursday 8th October 2009

The first clear signal for the day came in the US session around 5:15pm when price closed above the 1.4782 Resistance line.

We went Long at 1.4783 and the first position was exited at 1.4804 for a profit of 21pips. The second position was stopped-out at entry around 6:30pm.

Wednesday 7th October 2009

There was again no clear signal signal to enter a trade today. We could have gone Long around 7:15am when price closed above the 1.4709 Resistance level but it closed at 1.4724 which was too far away.

Tuesday 6th October 2009

By the time we approached the London session this morning, the Eur/Usd had put in well over 70pips. This made us weary of going Long without any highly compelling reasons.

There was also an absence of clear reversal patterns (like negative divergence) which might have led us to take a counter-trend position. We ended up staying out of the markets yesterday.

Monday 5th October 2009

Today's trading was a good way to start the week. Coming into the London session, we had negative divergence on the 15minute chart and it coincided with significant resistance at the 1.4656 level.

Entry was at 1.4641 around 7:45am and the first position was closed at 1.4612 around 9:45am. The second position was closed at 1.4619 around 3:00pm when strong reversal signs showed up on both the 15minute and 1hour charts.

Friday 2nd October 2009

On Friday, there was no entry signal until the time for the NFP report. This isn't a strange occurrence; many times, the market acts this way in the hours leading up to a major economic release as many speculators just sit on their hands because they don't want to be caught on the wrong side of the news.

In the moments after the NFP release, the Eur/Usd headed south but found support at the 1.4480 Support level from where it began a rapid recovery in the upward direction. A good trade (though risky) would have been to enter a Buy position when price broke the 1.4576 Resistance line around 2:45pm. You would have exited the trade at 1.4635 with a profit of about 56pips (around 3:15pm).

Thursday 1st October 2009

Today, we had a downward trend coming into the London Session. There was an opportunity to go Short when price broke the 1.4628 Support and then retraced to confirm that level. The 20SMA held steady so we went short when price closed at 1.4627 around 6:45am. You could have entered earlier when price initially broke the support if you were awake at the time.

The first position was closed at 1.4605 around 7:00am for a profit of 22pips. The second position was closed at 1.4583 around 8:15am for a profit of 44pips.

Wednesday 30th September 2009

There were too many conflicting signals today so we just stayed out of the market. hmmm...

Tuesday 29th September 2009

Today's trading started off with an opportunity to go Long around 6:30am when price closed above the 1.4634 Resistance line. Entry was at 1.4640 but we had to exit both positions around 8:15am when a reversal pattern formed on the 15minute chart. Exit was at 1.4615 for a loss of 25pips.

There was a chance to Sell a little while later (8:45am) when price closed below the 1.4590 Support line. Entry was at 1.4582 and the first position was closed at 1.4547 around 11:45am. The second position was stopped-out at entry around 6:15pm.

Monday 28th September 2009

Today we had positive divergence on the 1hr chart as we came close to the beginning of the London session. There was a chance to go Long around 6:30am at 1.4600 but we waited for the upward move to prove itself before entering. Price bounced off the 1.4628 Resistance line and we entered a Long trade when price came back and closed above the Resistance line at 1.4629 around 9:45am.

The first position was closed at 1.4652 for a profit of 23pips around 12:15pm. The second position was stopped-out at entry around 4:00pm.

Friday 25th September 2009

Today's trading is starting off in a very similar manner to what we had yesterday. The Eur/Usd has been in an upward move following yesterday's strong decline during the US session. The upward move came on the heels of positive divergence and Price has bounced off 1.4698 which is a significant Resistance level. I'll be looking to go Long if price breaches this level.

We took a long trade around 7:30am when price closed at 1.4698 but we didn't quite hit our first profit target before we had strong reversal patterns (including divergence on the 15min chart) leading us to exit the positions when price closed at 1.4694 around 12:00pm.

Thursday 24th September 2009

We had a significant retracement in the Eur/Usd yesterday because of dollar-positive news from the Fed. The move took a break at the 1.4692 support line where it bounced back in the upward direction. As of 7:30am BST (London time) this morning we are yet to see if this move will be sustained.

Well, we're now approaching 8:30am and price has continued in the upward direction so far. We encountered some resistance around 1.4768 (which is a significant Resistance level). If this level is eventually breached, I would consider taking a Long position albeit in a conservative manner.

The Long trade played out conservatively just as I suspected it would. If you entered around 1.4770 (10:30am), you could have exited the first position around 1.4790 (1:45pm) with the second position closed out at entry.

There's now a downward move in play fuelled by more dollar-positive news: Jobless claims figures dropped unexpectedly for a third straight week. I'll be looking to enter a quick Short trade if the Eur/Usd breaches it's 89 SMA which could happen any moment from now (3:00pm)!

The Short trade played out excellently. If you were able to enter around the time I made the call, you'd be swimming in about 100pips by now. A good entry was at 1.4761 (a close below the 1.4768 support) following divergence and dollar-positive news. First position would have been closed out at 1.4730. The second position would still be open with stop adjusted to 1.4671.

Wednesday 23rd September 2009

There was negative divergence coming into the London session this morning. The signals weren't very clear so it would have been okay to stay out of the markets. There was however an opportunity to go short around 7:30am when price closed below the 1.4806 support line. The formation of inverted hammers on the 1hour charts around that time gave a bit of credibility to the Short trade.

Those who took that divergence trade would have entered the market around 1.4800 with a target of getting to the 1.4761 mark. Conservative traders would consider taking a portion of their profits about halfway into the move. The target was eventually hit at about 3:00pm.

Tuesday 22nd September 2009

The US session during Monday's trading saw the end of the retracement and the continuation of the upward trend. The upward move was sustained into the London session with resistance expected around the 1.4724 level.

We entered a Long position when price closed at 1.4726 around 7:30am. The first position was closed at 1.4748 for a profit of 22pips around 8:30am. The second position was closed at 1.4772 for a profit of 46pips around 3:45pm.

Monday 21st September 2009

The Eur/Usd went into a retracement on Friday and it was the first clear retracement in the strong uptrend that has defied multiple divergences on the MACD.

Coming into the London session, we had a minor downtrend with support expected around the 1.4679 level. We entered a sell position around 6:15am when price closed at 1.4676 on the 15minute chart. The first position was closed at 1.4656 for 20pips around 7:30am. The second position was closed at 1.4656 for another 20pips at 3:00pm.

Wednesday March 18

Good morning all! The chart above shows market movement for the Eur/Usd this morning. Notice the slight negative divergence coming into the London Session? This was a good enough sign to stop you from taking a Long position.

I'm considering adding a live chat to this blog so that we can take full advantage of all the resources available. Let me know what you think.

Wednesday March 11

Good morning! Hope everyone's doing great. Today's trading started with a slight positive divergence coming into the London Session. You will see the divergence clearly if you crank down to the 5 minute chart.

The positive divergence was an early warning signal that price may be headed upwards. We are therefore not surprised that price has been heading upwards so far.

Tuesday March 10

Hi everyone! Today is a good example of situations when I'm not very keen on entering the market.

The Eur/Usd had already moved about 100 pips before entering the London Session this morning. I'm usually very cautious when the currency pair I'm trading has covered a lot of ground before I have an opportunity to enter.

Also, the market looks a bit choppy and doesn't appear to be forming clear patterns around the pivot line. All the same, the trend is definately Up which means that you should ONLY look for opportunities to go Long (Buy) if you choose to trade around this time.

Friday March 06

Good morning! I got to my computer a little late today and as you can see, price was already well on its way. Usually, I don't get into trades when price has already moved this much unless there is a very clear pattern; for example, a clear retracement followed by a convincing continuation of the upward trend.

Q & A

Question:

I got a question about my MACD that doesn't look the same as yours.
My settings are High, 12, 26, 9 - what should I use?Also a Q about the time and date on chart. My chart showsFXCM server time. Does yours?And a last one for now :-) Why don't we use the pivot tool on chart?

Thank you,
Morgan

Answer:

hi Morgan,

your settings for MACD are okay. The only difference is that I use the 'Close' as my data source and not the 'High' as you stated in the question. You will however find that using the Close or the High as your data source makes very little difference to the appearance of the MACD.

The default setting for MACD on most charts is 12, 26, 9 and that's what I use. I guess the reason it looks so different is because of the different colour scheme on FXCM charts.

Important Note: I use a different charting package (not FXCM) for illustration purposes on this blog. This is simply because my FXCM charts are a bit colourful and may not lend themselves well to illustrative purposes.

Secondly, the FXCM charts (and entire platform) always show FXCM server time. This is actually okay and works fine with all our trading strategies. Please note that the charts I use for illustration on this blog always reflect the local time (which is currently GMT+1).

Thirdly, we do not use the pivot tool on the charts because I haven't found a chart where you can put the daily pivot on the 15min chart. Most charting packages only produce pivots for the timeframe you're viewing. This is why I have to manually draw the lines on my charts (using the line tool).

hope this helps!

Screenshot of FXCM chart showing MACD:

Thursday March 05

Good morning all! First off, I'd like us to take a quick look at a shot of yesterday's trading.



The screenshot above shows how effective the pivot points were during yesterday's sessions. Yesterday, the trend was Up but so far, the reverse seems to be the case for today's trading. Here's a screenshot:

Tuesday March 03

Good morning all! Sorry I didn't get d chance to post yesterday. I hope you were still able to get some practice trades though.

Today we can see a rise in the Eur/Usd starting after a divergence that occurred around 12 midnight GMT (shortly after the close of the New York Session).

Coming into the London Session this morning, you'll notice that the price has been ranging in-between the 1.2628 and 1.2679 pivot lines. We'll be watching to see if price eventually breaks out of that trading range before the end of the London Session.

Friday February 27

good afternoon! hope someone caught a short (sell) opportunity on the Eur/Usd earlier today. As you might notice, the prevalent trend was DOWN while coming into the London session and price couldn't break the Central Pivot (1.2743) to the upside. This should make you think DOWN only.

When the market is heading Downwards and there's no significant sign of weakness in the trend, don't try to go LONG (buy).

Thursday February 26

Good morning all! As you can see from the charts, we had a positive divergence while coming into the London session this morning. This gives us the inclination that price may rise (which is presently the case).

A good place to enter would be on a break of the 1.2770 Central Pivot. Price is currently testing the Central Pivot but I usually recommend that you don't jump in the first time it ticks above the pivot. It's best to wait for a slight retracement and then enter if and when price breaks through a second time.

The slight retracement usually occurs because there's bound to be some selling pressure at any significant resistance line.

One strategy that'll always help you is to enter trades close to the beginning of a new trading session. Since the London session is the most active of all, it'll be great if you can look for opportunities during that period. I aways like to catch the first proper set-up that occurs coming into the London session.

Of course, several other great opportunities abound throughout the day. The most important thing is to identify which trading period suits you best and make sure you're consistent with it. I always emphasize that the ONLY way you can get good at trading is to actually trade and do it consistently!

I hope you were able to try out some trades today. I had hoped I would get back a bit earlier but I can see there were good opportunities.

For example, check out the opportunities to go short following the divergence that occurred shortly after the opening of the London session. The first trade you could have taken would be a Short (Sell) when price closed below the 1.2861 pivot line around 8:45am GMT.

This would have been good for a quick 30 pips!

Wednesday February 25

Good Morning!

Please make sure you practice taking a trade or two based on the informaion provided in the currency trading manual. If you have any questions, do not hesitate to post them. I will be back on the blog a bit later in the day to do some analysis and answer any questions you may have.

cheers!

Tuesday February 24