AUDUSD - 2011 Recommendation

AUDUSD is still on an upward trend. The Weekly trendline is in yellow colour and the daily trendline is in blue colour. The currency is current trading within it historical high. The descent has begun on the weekly chart. There is real possibility of further fall. The trading range between August 2010 to date is 1.00241 and 0.95092. In between there is a minor support at 0.98037.



The current fall on the daily is approaching the oversold territory. The recommended option for trading this currency is SELL using the daily RSI. BUY is very huge risk For clarity, I have indicated the sell zone in yellow colour on the RSI.



This is the time to WAIT. Wait until price gets back to the yellow zone to short.


Happy Trading!



See the weekly and daily charts above

GBPJPY: Trade Set-up

Trading without knowing what is happening on the weekly chart could be described as partially sighted trading. This is more important for the GBPJPY. I have earlier posted critical levels for the dragon. If you want to trade GBPJPY, learn these levels by heart and never trade in between. You can check some few posts before this to refresh your memory on these very important levels.

Let us examine our set up for GBPJPY as follows:

a) The weekly is on a bullish run for the past three weeks and has moved by about 700 pips so far

b) The weekly RSI since September 2009 has been reversing around 50 point mark

c) The daily RSI is currently around 65 point mark – it is get close to
overbought region

d) The next minor resistance is at 133 and a major at 135 area

How to trade this set-up

1. Monitor daily RSI until it reaches around 70 point mark
2. Wait for the next bearish daily candle around this area
3. GBPJPY will give you at least three daily candles or pin on a daily candle
to signal reversal
4. The top for now is 132.54
5. Monitor the next two to three daily candles.
6. 131.24 is the line on the sand now, wait for the daily to
7. Follow the train and know the first stop is at 130.00, with 126-125 area
being the next. Below 125, the possibilities are endless 123, 120, 118, 117.
8. In simple term, get ready to short and look out for at least three daily
candles or pin on a daily candle to signal time to pull the trigger.
Fortunately, yesterday’s (18/1/2001) daily candle gave us the pin.

Happy trading!

500+ Pips Trade set-up

Welcome to a new trading year - 2011. What I will be discussing this year is taking our trade to higher levels. Looking for those highly profitable set up for the major pairs. This first posting will be on the GBPUSD. The principle are simple as follows:

1. We rely of the weekly chart for the overall direction
2. The daily chart determines whether to buy or sell
3. H4 or M15 for excellent entry.

Based on the above analysis, here is the set up for a potential 500+ pips trade based on Head & Shoulder on the weekly .

a) The weekly trend is up
b) The daily RSI is getting close to 70 RSI and currently withing a possible left shoulder of Head & Shoulder on the weekly chart.
c) It took about 21 days from when the signal was given on the daily and roughly 750 pips so far.
d) The yellow area is where we are watching now. A daily open and close above 1.61140 area will invalidate our head & shoulder set-up. If this happens a second kiss of 1.63000 is possible to give us double top.

Until this happens our H&S is still valid. Furthermore the daily RSI is currently kissing 70 point mark. This means the cable is getting ripe for short. However, we need to see where the daily candle closes today.

If you are ready for a 500-pips or more trade, you can begin to short between 1.610000 - 1.630000 or the first reversal candle (bear candle on the daily). Everything is in the chart!

Enjoy your trading!

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!