Thursday, April 30, 2009

One-Third of the Year Behind Us

There really isn't anything going on in the market that I'm in love with so I've got no trades planned at the moment. It seemed like the perfect time to stop and reflect on what has been a great 4 months for our trading accounts (presuming you've been following the trades suggested here). Through April, we are up 4,334 pips. That is better than I would have thought we'd do if you'd have asked me on January 1. But it highlights an issue I think we should discuss. Namely, the issue of losses. The run up in the first four months of the year has been wonderful, but it is unreasonable to expect that it will continue unabated. I do not have a crystal ball which tells me only which trades will win. If we continue to trade together through the year, it is inevitable that we will have a few big losers. That is just part of trading and something that every profitable trader must learn to deal with. I suggest preparing for it by reading Trading in the Zone by Mark Douglas. It is an easy read an will help you prepare for what is inevitable if you trade enough. We will be profitable at the end of the year, and I believe, based on my experience trading the methods we trade here, that our profit curve will not decrease significantly, but there will be losing trades. Best we prepare before hand.

Happy Trading!

Wednesday, April 29, 2009

Trade Result - EUR/USD +198

For the original trade idea, click here. This trade went pretty much as planned (for which we are grateful). I gave the particulars of the trade in my update last night so I won't go into that again. I will say that the importance of waiting for the close of a bar before entering a trade was reinforced on this trade. You'll note that two bars prior to our entry bar the pair looked like it was going to break downward (the 0700 EDT bar on Tuesday). I was watching this bar develop and almost jumped the gun and took the trade early (proving that I am capable of breaking my own rules - naughty me). I'm glad I didn't, and the trade worked out very well. The particulars for this trade were as follows:

Enter Long at 1.3050
Exit Position at 1.3248
Profit = +198 pips

Happy Trading!

Trade Result - USD/CHF +301

For original trade idea, click here. If you read my update of last night you know how the trade developed so I won't go into that again. Last night, after some hesitation the pair fell down to our profit target (the green base line) and we took our profits. The totals for the two positions were:

Position 1: Enter short at 1.1549
Exit at 1.1380
Profit = +169 pips

Position 2: Enter short at 1.1512
Exit at 1.1380
Profit = +132 pips

Total Profit on Trade = +301 pips. I'll take that pretty much any time the market gives it.

Happy Trading!

Tuesday, April 28, 2009

Trade Updates - USD/CHF and EUR/USD - Both are Open

There is a problem with uploading graphics to blogger, so I won't be able to post a chart with this update. We'll hope it resolves soon and I'll let you see how the trades are doing.

USD/CHF - For the original trade idea, click here. I currently have two positions open on this trade. The first I entered when the pair closed below the first blue entry line on the 15 minute chart at the end of the 0845 EDT bar. I was short the pair at 1.1549. The second position I opened when the pair closed below the second entry line at the close of the 1045 EDT bar. I was short on the second trade at 1.1512. At the moment the stop for both pairs is 1.1449 and we are close to being stopped out (but there is always hope!). Total profit for both positions if closed out at the current stop is +163 pips. I'll update when there is more news.

EUR/USD - For the original trade idea, click here. I entered this trade long at 1.3050 when the hour bar closed above the upper channel line at the end of the 0900 EDT bar. We are currently +60 if we are stopped out at the current stop loss. I'll update when there is more news.

Total for both trades if they are both stopped out is +223 pips. Not bad for a day's work!

Happy Trading!

Trade Idea - EUR/USD

The EUR/USD pair has been trading in about a 60 pip channel since yesterday mid-day EDT. This type of tight range is usually an indication of an imminent break out. I'll buy on a close above or below the defining channel lines as indicated on the chart to the right. I'll move to break even if the pair gets to +50 pips and then likely put a trailing stop on (I favor a 20 pip stop in this type of trade. Initial stop will be the other side of the channel. If the pair breaks up, the profit target will be the 800 sma. If it breaks lower, the pair will probably run into support at about the 1.2900 level, but could break through and if it does might fall as low as 1.2400 before finding any substantive support. I'll keep you posted as things develop.

Happy Trading!

Monday, April 27, 2009

Trade Idea - USD/CHF

The US Dollar/Swiss is moving up and has a couple of nice moves up over its long term trend line (the green base line). It may try to move down to the long term trend line. If it breaks through and closes below the first blue entry line on the 15 minute chat that is a sell trade for me. I'll put my stop just above the recent high (currently at about 1.1600. I may add a second position if the pair moves below the second blue entry line. This is a shorter term trade so I'll move to break even earlier, at about 30 pips of profit.

Below is a 4 hour chart showing the overall trend. The three large moves up from the base line give us an idea that the pair may move down toward it again.

Happy Trading!

Sunday, April 26, 2009

Trade Result - USD/CAD +160

I'm on the road today and tomorrow so just a brief post on this tonight. Since the last post updating this trade, this trade has risen and closed us out with a 160 pip gain.

I'll take those kind of pips any time. It made for a nice week. Hope you all got in on it.

Happy Trading!

Friday, April 24, 2009

Trade Update - USD/CAD is still open

Click here for the original trade idea. This trade is still open and currently at about +200 pips. The pair has moved down well all day and is moving toward some resistance at the 1.2000 level. If the pair gets there, I plan to exit the trade. Otherwise, I'll continue to let the trailing stop do the hard work and the trade will end when it ends. We have 160 pips locked in, so we can't do any worse than that (which is a nice feeling going into the weekend). I hope everyone has a great weekend and I'll update when there is more to report.

Happy Trading!

Thursday, April 23, 2009

Trade Update - USD/CAD

This trade is open and has moved to break even. The signal to enter this trade was given when the 1000 EDT hour bar broke the lower support line on news that the Bank of Canada would hold off implementing their "quantitative easing" policy. The pair fell off the cliff on that note and has been moving down a bit since. I did not get to check the trade until a bit after the close of the bar, so I got in at 1.2285 (a bit better than the bar's close). The pair moved to break even for me at about 1430 EDT and has edged down a bit since. The purple line is the price the pair has to hit in order to move my 20 pip trailing stop loss. I'll keep you updated as things develop.

Happy Trading!

Trade Result - EUR/USD +80

It's hard to feel too bad about making 80 pips. I've felt better though, about making fewer pips. This trade went pretty much like I expected, we just had a bit too much volatility during the day. I entered this trade on a break of the inside channel at the close of the 0700 EDT hour bar yesterday (see chart to the right). I did this because I knew I would not have the time to watch it yesterday and I suspected that if it took off it might make it to the 800 sma. I was long at 1.2955. As you can see the trade did pretty well early, moving my stop to break even at +50 pips pretty early, then did not do too much until early this morning. The pair rose enough for us to save 80 pips, hitting a high of 1.3086 just before 0700 EDT this morning before falling back and stopping us out at break even just after 0830 EDT. The pair took off again after that brief retracement and is now almost 200 pips higher than our original entry point. I hope some of you were lucky, or smart enough to stay in the trade. I was not able to watch it so I will have to be satisfied with my 80 pips. I expect that this pair may get has high as the 800 sma, which would end up being a total gain of 250 pips or better. Hats off to you, if you are still in.

Happy Trading!

Trade Idea - USD/CAD

The Dollar/Cad has been bouncing off of the 800 sma for a couple of days now. It has had a nice run up (part of which we got) and may be running out of steam. One of two things will happen (as I see it anyway), either the pair will get the strength to break out above the 800 and stay there, or it will fall through the support line I've drawn on the chart to the right. Either way, we'll be ready. I'll buy on a close above or below the descending triangle lines. I'll put my initial stop above or below recent highs or lows (depending on whether I'm long or short). I'll use the 50 pip move to break even with a 20 pip trailing stop. I'll update tonight if something happens.

Happy Trading!

Trade Update - EUR/USD

For the original trade idea, click here. If you recall, I gave two ways to trade this set up. I said you could trade the inner channel break out, perhaps for a half position, then the outer channel, for another half position. I traded the inner channel with an entire lot as my day was going to be crazy and I did not have the time to be watching the trade. I checked it at lunch time and moved to break even and put a 20 pip trailing stop on the trade. The trade is still open and I am up 60 pips so far. The purple line above the most recent highs is the line where my stop will advance another 20 pips. I'll keep you posted.

Happy Trading!

Wednesday, April 22, 2009

Hindsight on the USD/CHF Trade

On the chart to the right, note what the price did after I closed my position with a slight loss. For those who were not paying attention before, the green base line below was our profit target. The pair came down and landed square on the green base line during the 0900 EDT hour bar. Barely an hour after I closed the trade it moved in my direction 60 pips. Sigh.

Oh well, I'm sure there's a lesson in this somewhere. If I figure it out I'll tell you.

BTW, the EUR/USD trade is open and profitable. I'll report on it in the morning.

Happy Trading!

Closing USD/CHF -4

I'm going to close this trade at -4 pips. It just did not develop as I expected it to and now the risk to reward ratio is too small. We'd only have 60 pips or so of profit if it went to our target, but the stop is still 92 pips. So, I'm calling it and logging it into the books as a small loss. This may come back as a channel trade, but I'll have to take a look at that this evening to see what it looks like.

Happy Trading!

Trade Idea - EUR/USD

This pair is consolidating after a recent drop. It has been trading in a 110 pip or so channel for more than 48 bars (hour bars) now. Also, there is a channel within a channel forming (note the dashed lines). This inner channel has been forming for 12 hours with only one breach (in which case, it did not close below the sub-channel line. I will buy on a close above the upper channel and sell on a close below the lower channel. You might consider entering into a half position on a close above or below the sub channel, then filling out your position if it moves above the main channel line. I will probably trade it that way (providing I'm able to watch it while at work today). If it breaks up I will use the 800 sma as a profit target. If it breaks down, it could go as low as 1.2450. I'll keep you posted.

Happy Trading!

Trade Result - EUR/GBP +20

This trade did not go too badly. When we have this kind of pip profit, I always wonder if I should have closed the trade at +50 or +60, but then realize that if I start doing that we will lose the +300 trades as well. Anyway, this trade opened yesterday at the close of the 0800 EDT hour bar. We were short at 0.8865. After a couple of hours of sideways movement the pair moved down through our target for moving to break even and kept going down, reaching a low of 0.8811 just before 2000 EDT last night. The pair then popped back up and took us out for a +20 pip gain. Not what we'd hoped for, but a profit is always acceptable. I'm watching for another set up on this pair and will keep you posted.

Happy Trading!

Tuesday, April 21, 2009

Trade Updates - EUR/GBP and USD/CHF

For the original Euro/Pound trade idea, click here. For the USD/CHF trade idea, click here. Both of these trades are currently open short. The EUR/GBP trade has moved in the right direction and we've saved 20 pips already. The USD/CHF trade is not doing as well. After a brief flirtation with a move lower, it has moved back up and we are -20 right now. Time will tell how these work out. I'll update tomorrow with charts.

Happy Trading!

Trade Idea - EUR/GBP

As promised, here is the next Euro/Pound trade idea. We had a trade on where the pair moved up out of a wide channel (click here for that post). Then the pair stalled and formed a new, narrower channel much more to my liking. This channel is about 40 pips wide and has been forming for the last 27-28 hours. I'll buy on a close above, or sell on a close below the channel lines shown on the chart to the right. As usual with this pair, I will move to break even at +30 pips and put a trailing stop on. The initial stop loss will be the other side of the channel. I'll keep you posted.

Happy Trading!

Trade Result - GBP/JPY +340

This trade worked out very well (click here for original trade idea). It has stalled around the 800 sma and took us out on a retracement last night during the 2100 EDT hour bar. We entered this trade at the close of the 2000 EDT hour bar on Sunday the 19th. The pair fell pretty well over the next day or so until it hit resistance at the 800 simple moving average where it started bouncing around. This is not unusual as a lot of traders use the 800 as an exit for a trade and you often see trades start to struggle at the 800. The pair finally hit our trailing stop just after 2100 EDT last night. Total win was +340 pips. I'll take that any day.

This trade may be setting up for a box trade (where it bounces around the 800 several times trying to decide which direction it will go). I'm going to keep an eye on it. For now, I'm just going to enjoy the win and have some more coffee.

Happy Trading!

Trade Result - EUR/GBP +20

I'm closing this trade at +20 pips and putting a new trade idea together for this pair. You'll see why when I post the chart in the idea post. For now, let's take the 20 pips off the table and see what happens with then new set up. For the record we entered long at 0.8875 at the end of the 0300 EDT bar yesterday and closed just before 0615 EDT this morning at 0.8895. More on this pair in a bit.

Happy Trading!

Trade Update - USD/CHF

I have not opened this trade yet, even though it has moved through the blue diagonal entry line. The reason is that the move through was horizontal and not vertical. This is a danger with a steep entry line. I like to see a pair commit to move in a direction (other than horizontal) before I buy or sell. In this case, I've drawn a horizontal entry line and I'll sell on a close below it. If you have already entered, don't worry. I'd place a stop above the recent high (at about 1.1745) and wait and see. At this writing, you are up a pip or two so that's not too bad. I just want to see some more commitment from the pair before I get in.

Happy Trading!
Add Image

Monday, April 20, 2009

Trade Update - GBP/JPY is still open

This trade is still open. Since I posted this morning the Pound/Yen pair has continued to fall. We are +350 pips (approximately) at the moment and have saved 300 pips. Not a bad day when the worst you can do is make 300 pips. As you can see from the chart, the pair fell until it hit its 800 sma (simple moving average) and has been wandering aimlessly along it for the past few hours. I'll be watching this trade and will update you as things progress.

Happy Trading!

Correction

Four months ago or so I wrote a post entitled "How to Get Rich on 5 Pips a Week" (click here to read the original post). In that post I made the bold, and, as it turns out, incorrect assertion that using 10-1 leverage, 5 pips a week will turn into $1 million in 6-7 years. An astute reader (thank you, Christian), pointed out that I was way off in my math. While you can reach the million dollar mark on 5 pips a week it will take closer to 18 years, not 7, to get there (not accounting for taxes). After 7 years you'd be in the $50,000 range, still a lot of dough, but not a million by a long shot. Thanks Christian for helping me straighten that out.

Happy Trading!

Trade Update - EUR/GBP

Ok, I'm still not in love with this trade, but it is moving some, so it will do (click here for the original trade idea). The pair broke the upper channel line at the close of the 0300 EDT hour bar and I was long the pair at 0.8875. As indicated in my Trade Idea post, I moved to break even at +20 pips (just before 0400 EDT), but have not put a trailer on the trade. I'm going to wait to see what happens here. If we get to +50, I'll save 20 pips and put a 10 pip trailing stop on (I think, I'm going to wait to see how the pair is acting at that point). I'll keep you posted.

Happy Trading!

Trade Update - GBP/JPY

The Pound/Yen trade (click here for original trade idea) opened at the end of the 2000 EDT hour bar last night. I was short the pair at 146.10. The pair moved up and down a bit before hitting the +100 pip mark just after 0300 EDT this morning. I moved to break even at that point and put a 20 pip trailing stop on the trade. At this posting (just after the close of the 0500 EDT bar) the trade was +282 pips. It looks like its going to retrace somewhat, but could still turn around and head south again. I'll keep you posted.


Happy Trading!

Sunday, April 19, 2009

Trade Idea - USD/CHF

The Dollar/Swiss pair has been rising pretty steadily for a while now and has leveled off recently from a quick run up. I think it is possible that the pair will fall back to the green base line (which is still on an up trend), and then continue its rise. It is not uncommon to see a pair make a quick leap up, then consolidate a bit as traders try to decide whether they will be taking profits or not. If the market does decide to go down I'll be ready to sell the pair on a break below the blue line. You'll note that the chart below is the 15 minute chart. This may be too short a time frame for some of you to use. Don't get caught up in a trade you cannot monitor. That's bad mojo. For those of you who can watch it though, I'll be selling below the blue entry line.

The chart below shows the longer term trend on the hour chart. The longer term trend is plainly visible (marked by the green line). This is our profit target. I will put a trailing stop on it after the trade makes +30 pips and I've moved to break even (shorter time frame, lower targets). The initial stop will be in the neighborhood of 1.1700. I'll keep you posted.

Happy Trading!

Trade Idea - EUR/GBP

I'll be honest with you, I'm not really in love with this set up. But this pair has been trading sideways in an 85 pip or so channel since the middle of last week. That lack of market movement over such a long period of time gets my attention. This is the Euro/Pound pair and its moves are both less volatile and worth more per pip so I'm watching this one for signs of life. Because I'm a bit skittish, I'm going to move to break even at +20 pips, but I won't put a trailer on right away. I'll probably wait to see if it really has a move in it. Time well tell, and I'll update you as things progress.

I hope everyone had a great weekend and Happy Trading!

Friday, April 17, 2009

Trade Result - EUR/CHF +50

This pair broke out nicely early this morning (click here for original trade idea). I entered at the end of the 0300 EDT hour bar at 1.5157. The pair moved up nicely, ultimately hitting a high of 1.5240. We moved to break even quickly, before 0415 EDT, at which time I put a 10 pip trailing stop on it, and kept going until it stalled out after the 0600 EDT bar. The pair ultimately fell, stopping me out at 1.5207. If you are still in, good for you. There may be some movement up left in this pair. As for me, I'm satisfied to take my +50 pips and wait for the next set up.

Happy Trading!

Trade Idea - GBP/JPY

Yes folks, its the Pound/Yen, yet again (I'm a poet and I don't even know it!). This pair is again setting up nicely for a fall. If it closes below the blue entry line, I will sell. If it does decide to go south, it could fall down to the 800 sma, and if it breaks that, it could go to the green base line. There is still 1000 pips to be made on this pair if it decides to fall back. It could go as low as 137ish. I'll move to break even at +100 pips and have my initial stop at about 149.00. This is a big stop, so if you are trading a smaller sized account, you might want to downsize your lot size to account for it. I'll do a post one of these days to talk about trade sizing. I'll keep you posted.

Happy Trading!

Trade Update - EUR/CHF

As you can see from the chart on the right, this trade is open. (for original trade idea, click here) I entered when the pair broke up through and barely closed above the upper channel line. I was in at 1.5157. The pair moved up pretty quickly over the next hour and we moved to break even just before 0415 EDT. I put a 10 pip trailing stop on the trade and we have saved 20 pips so far. I'll keep you posted as things develop.

Happy Trading!

Thursday, April 16, 2009

Trade Idea - EUR/CHF

As you can see from the chart on the right, the EUR/CHF is in a channel and is bouncing around the 800 sma. This is usually a strong signal that a breakout is coming. I'm going to treat this like a box trade around the 800 sma and am going to buy or sell on a close below either of the channel lines, but will get out of the trade if it closes back inside the box. As this pair is less volatile than some of the others we trade, I'll move to break even at +30 pips. I'll keep you posted.

Happy Trading!

Tuesday, April 14, 2009

How I Made +130 Pips Today

First, let me say that making +130 pips in a day on a trade is not the end all, be all of existence. It is, however, a bunch of pips, and something to enjoy when it happens. I put this trade out there to show how you can look at a chart and see what the market is thinking. In this case it is the GBP/JPY, which we traded yesterday for about the same gain, but using a different thought process (click here for the set up of that trade, and here to see the results). In this trade, I was watching to see if the pair would come back up through the resistance line and into the channel. What I saw was several bounces off of the line, as if the pair just didn't have the power to stay above it. This says that the resistance line (or, alternatively, the support line) is too strong and, in this case, that the seller's were likely going to win. The chart looks like this:

I entered the trade after the 5th failed attempt on the S/R line. I was short at around 149.00 a bit before 0800 EDT this morning. The pair made another failed assault on the line, then gave up and fell 100 pips very quickly. This pair particularly, is known for these type of quick moves and is one of the reasons trading it is so popular. I stayed with the trade until it looked to be hesitating between 1030 and 1100 EDT. I exited with +130 pips in my pocket. All because I was watching the support/resistance line and paying attention.

Happy Trading!

GBP/JPY - Why I Closed the Trade

As it turns out, we did better on the GBP/JPY trade than we normally would have if we had let it run and stop out on our trailing stop. While I am pleased with that result (more pips is always better than less), I feel I should explain why I got out when I did. In this case I saw a competing trade idea developing. Below is a 15 minute chart of what I was watching on this pair. I didn't call the trade a "Trade Idea" because I didn't feel that strongly about it, but I thought it would drop below the blue line at least for a while and I didn't want to be long this pair feeling that the price would drop. So, I closed the trade. I've been in trades before where I think the pair is going to to the opposite of my position and it causes too much inner conflict. So, I try to avoid them. A simple rule is that you should only hold a trade as long as you feel it is doing, or going to do, what you originally thought it would do. When that feeling changes, close your position.


Below is how our trade worked out. Not bad. In at 147.40, out at 148.75 for +135 pips. I'll take that pretty much any day.

Happy Trading!

Monday, April 13, 2009

Trade Result - GBP/JPY +135

I'm calling this trade a winner and closing the position. I'll post more on it later, but for now, I'm out at 148.75. I just don't like the way it is moving right now. I may short it if it falls below a support line I'm watching. I'll put something up later tonight or early tomorrow morning on it. If you want to stay in, that's ok too, you might want to tighten your stops, just in case.

Happy Trading!

Trade Update - GBP/JPY

This trade is now open. Click here for original trade idea. As the chart on the right shows, this trade opened at about 0100 EDT this morning when the pair closed above the upper channel line on the hour chart. We are long the pair at 147.40. It moved up pretty well, and we moved to break even just after 0300 EDT and I put a 20 pip trailing stop on the trade. It has fallen back a bit, but we'll keep our eye on it and see what happens. I'll keep you posted.

Happy Trading!

Sunday, April 12, 2009

What I'm Watching Now

There are several good channel trades developing right now. I mean, like 10 different pairs look to be consolidating all at the same time. It's so strange that sometimes you'll go days without seeing anything trade worthy and then all the stars line up and you have 10 different trades to pick from. Weird. I'll give you a few examples of what I'm talking about.

Look at the channel for the USD/JPY. This pair has been channeling nicely since the early morning hours of Thursday, April 9. In the near term there is about 100 pips on either side of the channel until you hit resistance. Longer term, there is resistance at about 106 on the high side and 97 on the low side. This pair is not as volatile as, say, the Loonie, but it can still move.


The Dollar/Loonie has been trending slightly upward for a couple of days now. This can be a very volatile pair and I expect that it will break out of its gentle rise by either jumping up or down and a quick clip. There is significant resistance at the recent highs around 1.3000 (725 pips above the current price) and at 1.1800 (almost 500 pips below the current price) so the move could be big.


The Aussie/Dollar pair has been in a 30 pip or so channel since Thursday mid-day (EDT). One would expect that it will break up or down at some point soon. The 800 sma is about 450 pips below the bottom of the channel and there is some resistance at about 1000 pips above the upper channel. So, whichever way it goes, it could go big.

These are just a few of the trades shaping up. They are not "Trade Ideas" in the normal sense, but I might take some or all of them. In addition to these, look at the EUR/JPY, EUR/CHF and the GBP/USD. All of them look interesting. I'll keep you posted as things develop.

Happy Trading!


Thursday, April 9, 2009

Trade Idea - GBP/JPY

Here is the Pound/Yen after its latest fall:

You can see that the range is tightening. I still think this pair could fall as far as the green base line (which is currently sub-140.00). I'll sell on a break down, or buy on a break up. Both on the hour bars. Initial stops on the other side of the channel. Move to break even at +100 pips. I'll keep you posted.

Happy Trading!

Trade Result - EUR/USD +78

This trade worked out just like I thought it would. Click here for the original trade idea. You can see that the pair fell through the support line and I opened the trade at 1.3238. It went back up through the line immediately and looked like it was not going to cooperate. I had my initial stop set at 1.3340 and the pair was moving in that direction, but never really came close. The pair started falling on the 1030 EDT bar (remember that we are using 15 minute bars here) and fell steadily until it hit the green base line (our profit target). I never even had a chance to move to break even as I was in a meeting until noon. I came out, checked the trade and found that we had been stopped out by the limit order I'd put in at the profit target. So to recap, short at 1.3238, stopped out at 1.3160 for a net gain of +78 pips. Not bad.

Happy Trading!

Trade Result - EUR/GBP +30

This trade opened yesterday at the end of the 1000 EDT hour bar. I was long the pair at 0.9027. The pair went up well and almost got to break even, then fell back and moved sideways along the upper channel line. It started popping back up during the 0200 EDT bar this morning and hit break even a bit before 0400 EDT. I put a 10 pip trailing stop on the trade as it continued to move up. The pair topped out at 0.9087, then fell back and stopped us out at +30. The trade is illustrated on the chart to the right.

Happy Trading!

Trade Idea - EUR/USD

The chart to the right shows a EUR/USD set up on the 15 minute chart that I'm looking at. I'll sell the pair if it closes below the line on the 15 minute chart. The stop will go a bit above the recent high (right now 1.3335 or so). I'll move to break even on this trade at +30 and the profit target is the green base line. I'll keep you posted.

Also, the EUR/GBP trade is currently open and has, moved to break even. I've got a 10 pip trailing stop on the trade. I'll update when there is more.

Happy Trading!

Wednesday, April 8, 2009

Trade Idea - EUR/GBP

The EUR/GBP is setting up for another entry. I'm not sure whether it will move back up to the 800 sma, or break down and run from the 800, but it is likely to do one or the other. Here is what the chart looks like:


I'll buy on a close above the upper channel line on the hour chart and look for the pair to move toward the 800 sma. If it closes below the lower channel, I'll go short and look for support around 0.8850. All of the other standard rules apply for this pair. Move to break even at +30 pips. Put a trailing stop on. See where it takes us. I'll keep you posted.

Happy Trading!

Trade Update - GBP/JPY

This pair continues to trend down toward the base line and the 800 sma. Again, this is not one of the trades I'll track and add to our running total because it opened at a time when I was not able to put an entry line up on the blog in time for folks to use it. But as an educational tool it is very good for showing how prices react to trend lines and how to spot these opportunities as they arise. I plan to write more on this trade this weekend (including some mistakes I made). For now though, suffice it to say that this pair has fallen about 350 pips since this move started and it may go better than 1000 pips before it ends. We'll see.

Happy Trading

Trade Result - EUR/GBP +40

For the original trade idea, click here. This trade broke through the lower channel limit at the end of the 0800 EDT hour bar. I was in short at 0.9034 just after the close of the bar. the pair fell over the next couple of bars until I moved to break even at +30 (this is the EUR/GBP - a pip is worth more and the volatility is generally less) at about 1020 EDT. I put a 10 pip trailing stop on the trade and went about my business. The pair moved sideways for several hours before starting to fall last night. It hit its low just after 0100 EDT this morning (Wednesday, Apr. 8). At that point we'd saved +40 pips (not bad for the EuroPound). Here is what the trade looked like:

This pair is now forming a new, slightly lower channel. I'll be posting a new Trade Idea about it in a bit.

Happy Trading!

Monday, April 6, 2009

Update on the GBP/JPY

If you have been following this pair then you know that it has been falling for most of the day. It has shed about 350 pips since this morning at 0800 EDT. While I took the trade off based on the entry I posted a few days ago, I did take this trade and am up about 300 pips so far. I don't feel that I can count it in the statistics we keep on our Forex trades, but I hope that you were watching and got in when it broke resistance. The trade as it developed looked like this:

I'm still in this trade and I hope you got in as well. We knew that it would fall. It fall to 140.00 or below. This could be a big winner. I'll update how it is going as things develop.

Happy Trading!

Trade Idea - EUR/GBP

In the chart on the right you'll see that this pair is bouncing along the 800 sma on the hour chart. As we've talked about before, this is not an unusual pattern and when a pair does this it usually precedes a break out either up or down. I will open either a long or short trade on this pair if the pair closes above or below the channel lines. Instead of our usual stop loss rule, we will close the trade if the pair closes back inside the box (as opposed to our usual rule of using the other side of the channel). The reasoning behind this is that it may take several tries before the pair actually breaks away from the 800 sma and so we may enter this trade multiple times before it is successful. The one thing that is for sure is that it will break out. When? Who knows, but we'll be ready when it does. I'll keep you posted.

Happy Trading!

Trade Result - EUR/USD -14

This was actually two trades (click here to see original trade idea). The first was a "head fake" trade which opened short the close of the 0800 EDT bar on April 3. I was short the pair at 1.3401. The pair continued down for about 35 pips, then popped back up inside the triangle and pierced the upper line of the triangle taking me out at my stop loss of 1.3455 for a -54 pip loss. On the same bar that took me out of the short trade (the 1400 EDT hour bar), we entered a long trade. I was in at 1.3481 at the close of that bar. This trade did a bit better. We moved the stop loss to break even at +50 pips yesterday not long after trading opened and the pair continued to move up nicely. I'd put a 20 pip trailing stop on the trade and was eventually taken out at 1.3521 for a +40 pip gain on the long trade. The net for the two trades was -14. Here is what the trade looked like:

Better luck next time. Happy Trading!

Cancel Trade Idea - GBP/JPY

This pair has moved up an additional 350 pips since I posted my idea for a short entry. I'm taking this trade off the table and will look for a new entry.

Happy Trading!

Friday, April 3, 2009

Trade Idea - GBP/JPY

I've been watching the Pound/Yen pair for a while now and have expected it to fall sometime soon back toward its baseline (the green line on the 4 hour chart below). This pair has been moving upward in an impressive fashion from long term lows it reached back in mid-January. The recent move up of about 1300 pips in just a few days will likely retrace (at least somewhat), and I'd like to be ready to capitalize on that when it happens.

The 1 hour chart below shows a blue entry line below where the recent move up has started to level out. Now this is the GBP/JPY and there are few currency pairs as volatile so there is no guaranty that this trade will not jump wildly around and lose a bunch of pips. So if you are at all skittish, or just don't like the risk, you might want to either sit this one out, or trade a very small amount. I intend to sell on a close below the entry line on the 1 hour chart. I'll put my stop above the recent highs (currently about 148.50 is what I'm thinking) which is a HUGE stop loss. We could be talking a 300 pip stop loss! If that does not make you at least think about passing on this one then you either have a very high risk tolerance, or you are plain nuts. Anyway, I'll take the trade on a close below the line, take the huge stop loss risk, and move to break even at +100. I'll target the green baseline, which puts potential profit in the area of 1000 pips if it just fell like a stone and did not retrace and take out a trailing stop. We'll see.


Happy Trading!

Trade Idea - EUR/USD

You can tell by looking at the chart on the right that I'm a bit conflicted about how to approach this trade. There is not always just one way to enter a trade. Sometimes a set up gives you more than one alternative in getting into a trade. This pair has formed a flag or pennant at the end of the last move up. It can be viewed two ways: 1) as a channel trade with the upper and lower borders defined by the horizontal blue lines, or 2) as a converging triangle trade defined by the violet lines. There is no single best way to take this trade. You might also consider mixing the two. If you took the triangle trade (a bit riskier as you are getting in before the price closes above the recent high) on the long side, and the channel trade on the short side you'd get in a bit earlier and potentially put a few more pips in your pocket. I will probably take the triangle trade and if so, I'll put my stop loss at at least 10 pips on the other side of the opposite side of the triangle. Move to break even at +50. I'll keep you posted.

Happy Trading!

Trade Result - USD/JPY +10

This trade opened when the pair closed above the top line of the converging triangle at the close of the 1900 EDT 15 minute bar. I was long the USD/JPY at 99.72. The pair rose pretty quickly and we hit the +30 move to break even just after 2015 EDT. I put a 10 pip trailing stop on at that time because I was in the middle of something else and would not be able to check back frequently. This is not uncommon for me when I trade either at work or at home, and it is not the way to maximize profits, but it does protect pip gains and keeps you from having to watch the trade in real time. In this case, the pair rose and moved the stop up by 10 pips, then tried to gain more but just couldn't pull it off. The pair fell back to the stop and we were out with a 10 pip gain. I never regret making a profit, but I thought this pair might go higher. I expect that the 100 yen to dollar level is acting like a barrier to the rise of this pair. If it breaks that, it could go up a good bit.

Happy Trading!