Cable's 180-pips concrete zone

This posting is for short term trading opportunities. A close above 1.58376, which is currently proving difficult to break, is the gateway to the top. Furthermore, our concrete zone for now is 1.56535 to 1.58376 (about 180 pips). If prices fails to break 1.58376, keep an eye on M15 for opportunity to short. Until the daily opens and closes outside 1.58376, the zone is still valid.

Happy trading!

Medium-term trades: The most profitable trading strategy

The most profitable, least stressful and most sustainable trading strategy is medium and long-term trades. To be successful as a medium-term trader, what you need to understand fully is TIME. The four most important periods to understand are time to BUY, SELL, WAIT and TAKE PROFIT.

I have explained medium-term trade variously in some of my previous postings. However beginning from this week, I will on a weekly basis give my views on what I consider most profitable trading options with practical examples on three currency pairs GBPUSD, GBPJPY and USDCAD.

Trading long-term is only for those who have patience. It might take days or weeks to get signal but 1st class signals yield over 1000 pips and more. I will now illustrate when to bUY, SELL, WAIT and TAKE PROFIT (TP).

Sell - When the daily RSI is around 70 in the region of major resistance
Buy - When the daily RSI is around 30 in the region of major support
TPI - Take profit when RSI reaches around 50 point mark
TP2 - Take profit when RSI drops below 35 or less
WAIT - Do not buy or sell whenever Daily RSI is between 40 and 60 point marks

I inserted in the chart ForexTrend Locator which I fing very reliable for giving buy/sell signals on the daily time charts for these currency pairs. It is most useful guide for traders who do not have proper understanding of price action. Please note that ForexTrend Locator siginals given when the daily RSI is between 40 and 60 point marks are not valid.

Based on the above analysis, here are current my view for the three pairs:

GBPUSD

The pair currently in the waiting zone for medium-term trade

GBPJPY

The pair currently in the waiting zone for medium-term trade

USDCAD

The pair currently in the waiting zone for medium-term trade

I attach the charts in support of my views on these pairs. I will update these charts whenever there are signals for either buy or sell. Please note that my postings on H4 and M15 and concrete zones are still valid for short terms trades.

Happy trading!

My current views of some major pairs

I have not been able to post for sometimes now because of my other commitments. But if you read my previous postings carefully you must have observed that most of my longterm views are usually valid for some few months.

GBPUSD
For GBPUSD I identified double tops around 1.60000 on three time frames and the price fell by about 350 pips. I also mentioned that if the daily closed above 1.60000 the next range is between 1.60000 and 1.64000

GBPUSD has since then established a 300- pips concrete area between 1.60000 and 1.63000. That is the range for now. 1.63000 is the gateway to the north 1.70000 area. It is very strong psychological area for both north and southward movements. This is an area to watch. If price successful break it then 1.60000 – 1.70000 is the next target. If price fails to break it however, then we are going back to 1.60000 and below. Price is currently in the middle of the channel.
For short term trades, we are in the middle of a channel. If you miss the trade when the price fell to around 1.59600, the best option is to wait for another signal on H4. A daily open or close above the current range (1.60000 – 163000) will signify the next direction.

For long term trades, 1.63000 and 1.60000 are the areas to watch out for to either go long or short.



AUDUSDI mentioned in my previous postings that parity 1.00000 area was a good place to start shorting AUDUSD. When the price got to to that impotant psychological level, it acted as a resistance and price fell by about 350 pips to 0.9650 area before continuing its upward movement helped by the price of gold and relative weakness of the dollar.

AUDUSD is currently trading within about 200 pips range with the support slightly above 1.0000 area and the resistance around 1.02000. The daily is at the borderline now as it is threatening to go back to 1.00000 – 1.09500 area.
For short term trades, the signals are not clear now, as we need to break out of 1.00240 and 1.00750 range to establish a clear direction. As usual our guide is the daily, we need the daily candle to open and close within any of the above range to signal the direction. Once the direction is established, H4 will provide the signal and M15 for entry as usual.

For long term trades, the trend is still up, but weekly and daily RSI are clearly indicating that we are at the very top. My advise for both longterm and shortterm traders is to short new highs on H4 chart. This is a waiting period as we are in the middle of H4 channel. The best option for a wise trade is to wait for clear signal.

USDJPY
I mentioned in my last posting that 82.00 is the crucial point at the moment. The support failed and the price fell to 80.00. 80.00 zone appears to be the bottom now. The currency is making a steady climb to the top and oscillating between 80.00 and 82.78.

For short term trades our concrete zone for now is 80.00 – 83.00 price level, a
daily open and close outside this box is an indication that the zone is no longer valid. The current sentiment is that USDJPY is closer to the bottom. Therefore the less risky trade is to look for opportunity to go long whenever H4 gives the signal using M15 for entry.
For long term trades, the most profitable trade is to go long at points closer to the bottom 80.00. A daily and weekly close above 83.00 signifies continuation of the bullish run with 86.00 area being the next major resistance area.

EURUSD
1.36800 and 1.42800 is the concrete zone for EURUSD for now. A daily open and close outside the box signifies a violation of this zone. The weekly is still in an indecision mood.

For short term trades, the best signal for how is long and H4 and M15 gave the signal for long around 1.36000 area. The best option for short term trades is long with close watch on your trades because of indecision on the high time frame and that fact that price is close to a major support.
As a mentioned earlier for long-term trades, a close outside the indecision area, will technically tell us where to go.

GBPJPY
I mentioned earlier that GBPJPY was threatening 127.00 area. Price actually touched 126.00 for 900 pips fall from the highest level of 135.00 when BOJ intervened. At 126.00 price complete the 2nd leg of the earlier fall from 145.00

GBPJPY has now moved by 600 pips from 126.00 to 133.00. The current trend is up and dragon is known for between 900-1000 pips movement and in order to complete its current move price might reach 136-136 area in the first leg and up to 145 to create a double top at 145. It is usually difficult to establish concrete zone for the dragon because of its unusual movement but the critical support and resistance area for the pair are as follows:

126 is the floor for now
130 is the first major resistance
135 -136 is the next major resistance
139-140 is an historical concrete area on the way up and down
145 is a next major resistance
149 -150 is the next major resistance

If you are trading GBPJPY you should expect every major move to be around 1000 pips broken into about 500 pips each. The areas highlighted above are where to look out for. Trading dragon is very risky and you need to be aware of this fact to be successful.

For short term trades H4 is still valid for signal and M15 for entry. Currently, the signal for long was given around 130 area and short around 133.00 area.

USDCAD
USDCAD is current creating a round bottom 0.99730. A touch of 0.99600 is possible to create a double bottom on the daily chart. Once the bottom is fully established 1.03240 is the first resistance on the way to 1.06000 area and above. If the bottom fails, then a fall to 0.93000 is possible to form double bottom on the weekly chart.

The current concrete zones for now is 0.99700 – 1.03240 with a minor resistance at 1.01440. These are the areas to watch out for.

For short term trades H4 is still valid for signal and M15 for entry. Currently, the signal for long was given around 0.99700 area and short most likely between 0.01440 – 0.02000 areas.

These are my views on the majors for now. I attach herewith relevant charts in support of these above analysis.

The big players are getting set for another crucial decision on EURUSD just like in February 2010

Trading forex is all about knowledge and a deep understanding of the market. What I want to share today is an interesting development on EURUSD concerning the interplay between fundamental and technical analyses. The big players are getting set for a crucial decision on EURUSD just like they did in February 2010.

If you look at the weekly charts, you will observed that for three straight weeks price opened and closed almost at exact points, thus forming three stars. A star on the weekly chart is a sign of expectation, a tug of war between the big players. Where you have three stars, is an indication that something very big is about to happen. What is about to happen? We may not know it, but a review of the past will give us an indication.

Now, let us look at the past. If you look carefully at the weekly chart, you will notice a similar three stars in February this year. That was the period when there was serious concern about the economy of EU countries. Specifically, the debt situation in Greece and other EU countries. At that period the technical analysis on the daily, weekly indicated that the price had reached the bottom and was ready for a reverse from around 1.35000 after falling a by over 1,000 pips from 1.51000. The To the surprise of most traders, the fear about the economic conditions of most European countries, represented by fundamental analyis carried the day. EURUSD fell to its lowest point at 1.18757 which was an additional 1545 thus making a total of about 3224 pips from its highest point in November 2009.

Now,to the present the weekly and daily clearly RIS indicate that EURUSD that around 1.40000 is the peak and that the pair is due for a reverse. However, there is fear about the state of the US economy, the apparent failure of the economic stimulus package, possible weakening of Democrats by the mid-term elections, the price of gold etc. These fears are indicated by the three weekly stars and the Euro appears a better alternative to the big players. In the light of this, the big players are most likely ready to push the pair up to 1.60000 but a trip back is to 1.18757 is not impossible. The decision is theirs. The best option for a retail trader is to follow them. We are currently at a cross-road.

The monthly RSI indicates that the price is the middle of the monthly RSI, just like it showed in February 2010. A break out of the blue box will show us the decisions of the big boys. As usual a weekly candle below or above is a signal. This is the big picture. Relevant charts are attached.

For daily players, the blue box (1.37000 - 1.41000) is our playground for now, follow the daily candle for direction, H4 for trade signals and M15 for entries.

My view on some majors

Most of the majors are at cross road at the moment. In continuation of my desire to share my views here I present my views of some of the majors today.

GBPUSD

My current view on the GBPUSD is still valid until the daily candle closes outside the box. Once that happens, the next range is clearly indicated on the chart.

USDJPY

For the USDJPY 82.00 is the crucial point at the moment. Reaction of price at this point will determine our direction. If this point hold and price successfully break 83.16, then a test of 85.00 area is possible. If 82.00 fails, then a freefall is a big possibility. Weekly is currently at an indecision mode as depicted by the current star.

GBPJPY

For the USDJPY 82.00 is the crucial point at the moment. Reaction of price at this point will determine our direction. If this point hold and price successfully break 83.16, then a test of 85.00 area is possible. If 82.00 fails, then a freefall is a big possibility. Weekly is currently at an indecision mode as depicted by the current star.

USDCAD

USDCAD is current oscillating between 1.01120 and 1.03200 areas. A touch of 0.99600 is possible to create a double botton on the daily chart.

AUDUSD

For AUDUSD my earlier analysis is still valid. Where the daily candle closes today is very crucial. A close above 0.98400 is an indication that parity is still a possibility. The most important determinant of direction of the currency now is the weekly candle and close below 0.98400 is a confirmation of a drop to at least to next support at 0.93800

EURUSD

1.38200 is a crucial point EURUSD, weekly close below or above will determine whether the bullish move will continue or the bear will take over.


In summary, the most profitable option technically for long term trade for EURUSD and AUDUSD is short, while the best option for USDCAD, USDJPY is long. For GBPJPY and GBPUSD, 127.00 and 1.60000 respectively are crucial points in determining, the next level for both pairs.

For the the short term trades, if the daily and the weekly is bearish, then you continue to go short using H4 for direction and M15 for entry.

On the other hand, where the daily and the weekly is bullish, then you continue to go long using H4 for direction and M15 for entry.

I attach the relevant charts for these above analyses.

See where we are!

Look at where the price is at the moment! The price moved above 1.60000 by about 20 pips, came down straight and closed around 1.58385 support. There is nothing better than trading within concrete zones. As I mentioned earlier, the current zone is valid until the daily candle closes either above or below the box. See the current range clearly depicted by M15 chart below.

Happy trading!

The retrace is almost complete

The retrace which started when price reached around 1.60000 in August is almost complete. I.60000 is the target now. How many days are we going to spend between 1.58385 and 1.60000? I don't know. What I know is that a daily candle above or below the box will signal the next direction.



This daily chart has been valid since August. I will update the daily chart whenever we move out of current box. The daily chart gives the trend, which is still up, the H4 gives signal of when to trade and M15 is for entry.



I have alway said it trading within the concrete zone is the best option for any retail trader who desires success. Afterall, if your Account size is $1,000.00 and you trade 0.10 lots, you only need to make $100 a month (about 100 pips/month or 5 pips/day) to grow your account by 10% monthly. If you are able to achieve this regularly within a year, you will outperform most Funds/Fund Managers.



If you have the above mindset, your success is almost guaranteed in this highly volatile endeavour.



Happy trading!

USDCHF Analysis

USDCHF is currently close to its historical low level of 0.96360 recorded in March 2008. The monthly and weekly candles however show that the pair is still descending. This could be attributable to the general weakness of USD against most major currencies. I must admit however, the pair is very tempting for long. The best option if you are trading this currency long-term is to wait for the trend reverse and follow it. A weekly candle close above 0.98963, which is a very strong support will confirm the reversal. This is an area I will be watching


For a short term trade the sell signal was given by M15 on 0.97161. The best option for short term trading is to wait for another signal sell signal on M15.

The points are clearly indicated in the charts below

Larger Picture for AUDUSD

This is the larger picture for AUDUSD. The next target for the bull is 0.98400 before a retrace is expected.

I don't trade AUDUSD regularly, but that is where I am watching for a long term trade. As you can see, I have a sell order waiting at 0.99990. This is not recommended for short-term traders. This is purely a long term trade and I am willing to wait for over 500 pips or more. This can take weeks of even months to happen so be warned.

I don't expect it to get there, but would be a pleasant surprise if it does. 0.98400 - 0.99000 is the area I will be willing to pull the trigger manually, if I see a sell signal on the weekly. At that point AUD will damn too expensive against the dollars.

These areas are obvious in the daily and weekly charts attached.

Happy trading!

Concrete Zones

I posted the charts earlier. I re-post again it to show that the analysis is still valid until the range between 1.60000 to 1-53214 is broken either way

For now price will only move to the next level if the daily closed above the resistance line at around 1.58535 or move back to where it came and close below 1.57147.

It is always better to trade within established concrete zones. That way, you will be insulated from the noisy signals all around you.

That is how I trade. The daily shows me the trend, H4 gives the signal and I use M15 to enter my trades. If you trade this way you might miss some trades, but you will only take first class trades.

Cable out of 200 pips box

Cable has broken out of the 200 pips box and appears to be heading toward the next box. Price movement is simply a matter of habits. History keeps repeating itself over and over again.



Look at the candle between between 1.57147 and 1.58534 both on the way up and down. I single H4 candle. Also look at the candle on the way down from 1.60000 which closed on 1.56396 and the current candle which took which close outside the box.



If we break the resistance at 1.58535 our next destination is most likely the next zone between 1.58535 - 1.60000. If the resistance hold however, we have landing where the candle took of from i.e. 1.57000 - 1-55000

BOJ Intervention - JPY

The intervention by the Japenese Government was an extra-ordinary event. However, if your look closely at the two H4 charts below for GBBJPY and USDJPY you will clearly see that the H4 was on a bullish move, when the intervention occurred. H4 clearly explose the move so also the current retrace. USDJPY was even more exact to the point at the point of intervention and the retrace.

GBPUSD - 200 Pips Box

I have earlier explained the benefit of daily box system. The strategy is simple, draw the box on the daily chart and go down to H4 for trend and M15 for entry. Using this system, you will be able to see price movement clearly.

I have earlier explained the benefit of daily box system. The strategy is simple, draw the box on the daily chart and go down to H4 for trend and M15 for entry. Using this system, you will be able to see price movement clearly.

We now have another 200 pips box. The RSI is a guide as to the upper and lower range of the price action within the box. Carefully observe how price behave no mather the time frame around 50 mark on RSI.





Cable has broken out of the 200 pips box and appears to be heading toward the next box. Price movement is simply a matter of habits. History keeps repeating itself over and over again.



Look at the candle between between 1.57147 and 1.58534 both on the way up and down. I single H4 candle. Also look at the candle on the way down from 1.60000 which closed on 1.56396 and the current candle which took which close outside the box.



If we break the resistance at 1.58535 our next destination is most likely the next zone between 1.58535 - 1.60000. If the resistance hold however, we have landing where the candle took of from i.e. 1.57000 - 1-55000




Happy trading!