Gulzaar Forex

Market Overview January 20th 2010

2010-01-21T04:24:00.002-05:00

Sorry for the long hiatus everyone! I have kept today's video short, just a very general look at the markets, and an update on a trade I just took today.

Hiatus

2010-01-19T12:04:00.002-05:00

Hello folks!
I am having a little bit of internet trouble, so I havent been able to post or trade much. The wireless dongle I bought last month gave me 300kbps download speed, which I thought was too good to be true. Unfortunately, it was! I am trying to sort it out, and once I do, I will be back on the wagon.
Those of you who bought the GBP must be smiling ear to ear!
Happy trading!

Trading Review January 11 2010

2010-01-11T12:32:00.000-05:00

Today's video focuses on two trades I spotted and took - a EUR/USD short, and a EUR/JPY long, with explanations about why I took the trade and what happened.

Outlook for week of January 11-15, 2010

2010-01-10T13:08:00.001-05:00

Hey everyone!
As promised, today's post is my very first video post! I'm really excited! Today's video is a basic look at the forex EUR/USD, the GBP/USD, the EUR/JPY, and the GBP/CHF currency pairs to see what they are doing right now and where they may go. Most currencies are either rangebound or still in a trap, so lets see how it works out.

Camtasia and SnagIt!

2010-01-08T09:50:00.000-05:00

Hello there!
I just recently downloaded Camtasia Studio and SnagIt, so hopefully, my future posts will be videos! I will post potential trades as images, and trades I actually took and profited on as videos, so I can better explain what I did and why.
The US jobs numbers were worse than expected, prompting a dollar sell-off, but it seems everything is going back to how it was. I will post pictures over the weekend, once the markets have closed. Let's see what happens!
Cheers, and have a great weekend!

Good day

2010-01-06T14:07:00.002-05:00

Hello friends!
I took a lot of trades today! Most were stopped out at break-even, unfortunately.
There was one good set-up on the EUR/JPY that I managed to score on. Price had pretty much hit support, and had begun to consolidate again after a short rise, forming a nice little trap. The USD/JPY was also looking bullish, indicating relative Yen weakness, so I took a long at the break of the trap. Result: 95 pips! I closed half of a standard lot at around 65ish, and closed 4/10ths of a lot at 95, and now I am letting one mini lot run with my stop moved to break even. Lets see how far it goes!

GBP USD

2010-01-05T15:48:00.000-05:00

Hello Folks!
Today was an interesting day. I spotted a nice short in the GBP/USD, after the break of a double-top/one-two-three pattern, as well as a signal in the shorter term charts. I shorted there, and the trade went 60 pips, and then turned around and stopped me out, although I had moved it to break-even by then.
Soon after that, there was a nice trap in the GBP/USD hourly coinciding with a signal, so I got in at the break of the trap. I'm still in said trade, lets see how it goes.
Sorry I have not been able to upload a picture today. I will do so in future posts.
Good luck!

Hiatus

2010-01-04T15:28:00.002-05:00

Hello folks!

I am really sorry I haven't been able to post for the past few months. I was traveling, then had a really busy few months in which I was not able to post much. I was, however able to keep trading. I have evolved my strategy a little bit.

Here is the updated version:

Essentially, you still have to wait for a gulzaar signal, but once you get it, dont trade from the hourly or 4 hour charts. Open smaller term charts, like a 5 minute or 15 minute, and trap price using intra-day support and resistance. Once that trap/trendline breaks, it will allow you to get in with a proportionately smaller stop loss, and will let you move the stop to break even very soon to create a risk free trade.

I will try to post very often.

Thank you for continuously visiting!

Gulzaar

A good day which could have been great...

2009-09-17T18:35:00.002-04:00

Hello folks!
My analysis was spot on today. There was a nice signal after a breakout of a range in the EUR/JPY, in which I have moved my stop-loss to 15 pips positive and am holding on to.

There was also a very nice entry on the EUR/USD(a perfect touch of the hourly 55 EMA), where my buy order was triggered. That trade went about 70 pips my way before reversing and stopping me out, again with 15 pips profit.
There was also continuing GBP weakness hinted from the EUR/GBP chart, so I decided to be a little adventurous and place a short GBP/JPY at the hourly 200 EMA. When price did reach there, all of the Yen pairs seemed to be weakening and I decided to delete the entry order before it was filled. Turns out, the trade went exactly as I had planned it. Price hit the 200 EMA on the hourly, wicked around a little - in which I would have been safe - and then fell 120 pips!
I also took a paper trade in the GBP/CHF - although I wish I had actually taken it. On the 4 hour level, it was a perfect hit of the 21 EMA, and a retest of the broken trendline from yesterdays trade. on the 15 minute chart, price fell after touching the trendline, rose a little to a level of 38.2 fib, which coincided with all of the 15 minute EMAs, then fell 150 pips without looking back! I unfortunately did not consult my indicators - there was a perfect MACD crossover.
It feels good to have been 100% right, but I wish my account balance would have been 300 $ more!
End result: Actual earned: 85 pips, could have earned 350 pips.

GBP/CHF - Another textbook trade

2009-09-16T14:50:00.002-04:00

Hello folks! Yesterday was an OK day. I tried shorting the GBP/CHF, but I got stopped out as price decided to go try the 200 EMA first(as you can see). Today, however, presented a really textbook trade. A nice breakout of the channel, and a retracment back to it, couple with a retracement of a breakout on the EUR/GBP provided a really easy no-brainer trade. To be safe, I put my order about 15 pips below the trendline. End result: 70 pips at the double bottom.
I think I have a new favorite currency!

Textbook trade

2009-09-14T14:52:00.003-04:00

Hello everyone!
There was a really nice trade a few hours into London today. Price reached the 4 hour 21 EMA, and triple bottomed in the 15 minute chart, so I placed a long and my target was around the M4 pivot, which was around the same level as previous highs. End result: 75 pips!

Simple trade plan

2009-09-10T23:28:00.003-04:00

Hello folks!
If any of you traded the New York session, there was a very nice EUR/USD pullback to the 21 EMA on the four hour chart. I unfortunately didnt take that trade because my risk/reward was not working out. Now, however, there is an interesting set up coming.
After a nice rally upwards on Tuesday and Wednesday, most of yesterday was consolidation in a range. I am waiting for a break out of the range, then a pull back, and we are set up for a nice long. Conversely, if we don't break out, I suppose you can scalp around in the range. Lets see.

Trades

2009-09-10T00:40:00.003-04:00

Hello folks!
Yesterday's EUR/USD plan worked perfectly! Had I not forgotten to put a limit order, I would have had around 85 pips! I still walked with 40 though, so not too bad.
Today I am a bit unsure about the EUR/USD. It looks poised for a pullback to the 4-hourly 21 EMA, but you never know. Wait for the actual session to see what happens and go it from there.
Today there is a very nice price trap in the GBP/JPY.
Whichever way price goes, follow. Upside target is the top horizontal line, and the downside target is the bottom horizontal line. Good luck

EUR USD BREAKOUT

2009-09-09T00:42:00.003-04:00

Hello folks!
Sorry for the delay. We seem to have had some MAJOR breakouts! Hopefully we can capitalize on some continuation.
I have drawn a price trap for the EUR/USD. Lets see where that goes. Look for a target of around 1.46ish, or the daily upper bollinger band.
As always, your thoughts are very much appreciated!

USDCAD

2009-09-02T23:38:00.002-04:00

Hello folks...Pretty straightforward trade again today. Prevailing dollar strength is suggesting longing the USD/CAD and shorts on the other dollar-related pairs. We are getting a nice signal here on the 4 hour chart.
Yesterday's trades were pretty good. I made about 70 pips on the EUR/JPY, when I was about to sleep and price was stalling, so I decided to bolt. If I stayed in it would have hit my original target another 40 50 pips away. I was also short the EUR/USD, but it was reversing on me just as I was about to hit the sack so I got out with 10 pips. Not bad I guess.
Good luck for the day, and as always, your thoughts are appreciated.

trade idea

2009-09-01T23:36:00.002-04:00

Hello folks!
Pretty straightforward trading plan today. Wait for the EUR/USD to pull back to somewhere between the 38.2 and 50.0 fib level, then short down to S1 or M1. Similar set ups in the EUR/JPY and GBP/USD. Lets see...

Stumped

2009-08-31T23:21:00.004-04:00

Ladies and Gentlemen....I'm stumped...
The market is throwing conflicting signals all over the place. I managed to squeeze around 40 pips from yesterday's GBP/USD short, but now we have double-bottomed and have once again lost direction.
Today's trade idea is a EUR/JPY short(or long).
As you can see, recent price action is suggesting further downside. BUT - the other currency pairs don't seem to be agreeing. The EUR/USD is still stuck, and can go either way. In the EUR/JPY, we have currently hit trendline support-turned-resistance, as well as the 4-hour 21 EMA, and double-topped at the 15 minute 200 EMA(at the same resistance). Now, if this resistance breaks, and price holds above it, there is a 50-odd pip long up to the hourly 200 EMA. If the resistance holds, then you can short and ride it out to see how far it goes. This may not happen until early London. Watch the EUR/USD for confirmation.
Good luck - you will need it!

Trades for Monday

2009-08-31T01:20:00.002-04:00

Hello fellow forex buffs!
Asia started with a major sell-off today! Lets see what happens. I am posting a GBP/USD trade idea.
As you can see, price has comprehensively broken a major trendline, retraced, and now is resuming downwards movement. If the selling continues, you can get in whenever price tests the hourly 21 EMA, or if the market is moving very fast, when the market tests the 15 minute 21 EMA. Wait and see. There are a good 200 pips before price reaches the daily 200 EMA, which is a reasonable profit target. I am currently short the EUR/JPY, which is also falling madly, along with the GBP/JPY. Both currency pairs should provide similar entries(21 EMA bounces).
The EUR/USD is currently struggling. Wait and watch if the hourly 200 EMA breaks or not. If it does, a pullback to the 21/55(once either has crossed the 200) should be a nice entry.
Please leave your comments, they are always appreciated. Good luck!

Trade Update

2009-08-29T16:32:00.003-04:00

Hello folks!
I got a perfect entry in the USD/CAD trade around pre-London on Friday. I had set a 30 pip stop loss, and when I woke up the next morning around midway through London(I am in the USA), I was about 50 pips positive. I then moved my stop loss to 15 pips positive(an ABSOLUTE MUST, because the market can reverse ANY TIME, so its better to walk with some profit rather than a big loss). The trade went my way for about 70 pips, before it decided to reverse. I was actually banking on continuing upside on the DOW Jones which would have created enough dollar weakness to pull my trade down to the target, but the DOW ended up losing ground, and the USD gained strength.
As you can see, I was expecting the breakout to continue upwards, but it decided to dip a little further, knocking me out. The hourly 55 EMA has still held, so there may be continued upside on Monday. We just have to wait and see.
Check back tomorrow for Monday's trade idea.

Head and Shoulders??

2009-08-27T16:34:00.003-04:00

Hello folks!
I am posting a new currency today, the USD/CAD. It seems the Commodity Dollars behave slightly better than the other currencies.
This is an hourly USD/CAD chart. We seem to be forming a very nice head and shoulders set-up. One way to get in a H&S is at the 5/8 MA cross in the chart. We already have the 5/8 cross here, but to be safe, I am going to wait for price to retrace to around the 38.2 fib level, or at least the 200 EMA. If the 200 EMA holds, I am shorting.
The EUR and GBP pairs are all giving mixed signals right now, and are still rather range bound, so I will wait and see what happens with those tomorrow. If price retraces and holds soon enough, I may short the USD/CAD midway through Asia. Lets see.

Patience

2009-08-27T07:14:00.002-04:00

Today's post is going to be extremely short, and it is about the lesson that all traders MUST learn, and that is the MOST difficult to apply:

WAIT FOR THE TRADE TO COME TO YOU! OTHERWISE YOU WILL BE SORRY!

The Gulzaar System

2009-08-24T16:50:00.000-04:00

Draw trendlines and horizontal lines as you see fit
Identify basic price movement and form a bias: long, short, or range?
Once you have a bias, look for a signal
The 21/55 EMAs have to have split after consolidation, or be at a point where they are about to cross the 200 EMA
Once the first wave is complete(in which price would have crossed the 200EMA, and the 21 or 55 at least touching it), wait for price to retrace
Draw a fib - a fib level overlapping with the EMAs is good
Draw a horizontal line where the EMA and fib overlap. Zoom out and see if that level was previously strong support or resistance.
If it is, JUMP IN!
Set your target using common support and resistance levels such as trendlines or higher time-frame 200 EMAs

BREAKOUT!

2009-08-23T18:22:00.004-04:00

Hello folks!
We have a few really nice trades setting up right now. As I am writing this, the Asian session has just about started to get underway. I'd like to highlight two trades today. One is a breakout in the GBP/USD, and one is a continuation/breakout in the EUR/JPY.
As you can see, price is approaching a strong support/resistance level that is marked by the red horizontal line. We have a trendline pushing steadily upwards too. A breakout to the upside seems likely(likely being the key word here). Another good indicator is that the hourly AND four hourly EMAs are all intertwined, so a breakout here is bound to be nice and big. Note that on the hourly and four hourly chart, price, once broken out may not come back to touch the EMA until the majority of the rally is over. If it seems so, price should be riding the 15 minute 21 EMA which would afford multiple chances for entries, so be on the look out.
As you can see, we have very nicely broken out of a trap in the EUR/JPY. I was in fact in the breakout trade on Friday which netted me a cool 130 pips. Today's plan is quite simple - wait for price to retrace. The top of the price trap is a pretty strong level, coupled with the daily central pivot, the hourly 55 EMA, and a 61.8 fib. This is the ideal level to get in - a stop loss here would be only a handful of pips. If price doesnt retrace that far, look at the 15 minute charts for better potential entries. Good Luck, and happy pipping!

Nice close

2009-08-21T14:32:00.002-04:00

One or two days back, I was really bummed about my system not working out so well. Apparently, it was because I hadn't done enough research before actually taking a trade. It is noteworthy here to say that this system that I am developing cannot blindly be followed. YOU MUST, ABSOLUTELY MUST identify trendlines, supports and resistances, and channels before you even think about taking a trade.
Today provided a few nice break-out entries and one or two continuations.
All of the dollar and yen pairs seemed to be pointing towards dollar and yen weakness, and when I opened the charts a few hours into the London session, the EUR/JPY had just tested the top of a range, and was pulling back. The 15 minute EMAs had seperated, and a 38.2 fib level was the same level as the 21 EMA. I put an entry order with a stop of around 30 pips at the fib level. Surely enough, price fell just that much, and then shot up. Profit: 120 pips!
The GBP/CHF was slowly and steadily trending downwards, and there was a bit of correction earlier which I interpreted as the result of previous divergence. Price tested the hourly 21 EMA, and I shorted with a stop just above the 55 EMA. Profit: 100 pips!
I also tried a new pair today, the USD/CAD. Since dollar weakness was across the board, I was biased to the downside. A similar set-up came in the hourly USD/CAD as the GBP/CHF. I shorted at the 21 EMA. Price did dip to around 70 pips profit, but I wasnt at the computer then and by the time I came and checked it was around 10 pips. I got out of the trade because it was Friday afternoon and New York trading was about to finish.
End result: 230 pips! Not bad!

Thoughts

2009-08-20T16:50:00.003-04:00

When I posted the last trade idea, I hadn't checked the daily charts. It seems that Monday's sell-out led the EUR/USD and GBP/USD right down to the daily 55 EMA, and the EUR/JPY and GBP/JPY right down to the daily 200 EMA.
If you were planning on shorting from the top of the pennant, don't. The markets are incredibly indecisive right now. Only a comprehensive break of the 55 EMA or the 200 EMA depending on which currency you are trading will set you up for a potential short. If it does break, then get in on the pull-back. Otherwise, wait for price to resume going up and get in on a signal then.
This image is a EUR/USD 15 minute chart. The area between the two red lines is roughly Monday's trading. If you were watching an hourly chart, there would have been no signal on Monday except one at the very start of the Asian session. The 15 minute chart, however, provided ample opportunities to get in the market very safely. If the hourly chart is moving too fast for an entry, look to the 15 minute charts for opportunities.
Wait and see what happens, and don't let the urge to just take a trade get the better of you! Patience always wins!

EUR JPY

2009-08-19T19:14:00.002-04:00

It seems that the market was too over-extended from Monday's big drop, so even though Tuesday provided many hourly signals, you would have been stopped out in each one.
In a fast moving market, the 15 minute chart will provide ample signals, as I later saw.
The EUR/JPY is setting up for a nice trade at the moment.
As you can see, there is a nice pennant forming inside the larger channel, and the top of the pennant is where the 4 hour 21 EMA is, and it has just crossed the 200 EMA. I have shorted from the top of the triangle down, and my first target is the bottom of the triangle. If there is continued downside, I will reload upon a retest of a break of the bottom of the triangle.

Confusion

2009-08-18T15:00:00.002-04:00

The markets seem to be misbehaving these two days.

Tricky Trades

2009-08-17T01:50:00.003-04:00

Hello there!
Today looks very tricky to trade. Even though we have broken a strong support on the EUR/USD and most of the other pairs, including the potential double top formation in the two Yen crosses, we are fast approaching strong levels of support on all currencies, and there is not much wiggle room at all.
The EUR/USD is the only currency I can see right now with some amount of room. To be conservative, today's signal is a retest of the trendline that you see in the picture I have uploaded. If this trendline holds, then maybe we can short down to a double bottom, depending on where the new swing low is created. If the double bottom breaks, then ride the trade as far as it is willing to go! There is a scenario where price may decide to test the daily 200 EMA, as it is about to in most other pairs, but that is still uncertain. It all depends on how far price goes.
The GPB/USD, EUR/JPY, GBP/JPY, AUD/USD, and NZD/USD are all too close to very strong supports either in the form of EMAs or trendlines. This is not to say that price will absolutely be rejected, rather, just that a nice trade is tough in such a situation. If all this support breaks, then by all means, jump in!
There is an interesting set up in the GBP/CHF 4 hour. The 21/55 is just about to cross the 4 hour 200 EMA. Wait for a retracement and a retest, and you are setting yourself up for a nice 100-150 odd pip short down to the daily 200 EMA. Lets see what happens.. Good luck!

Weekend

2009-08-16T10:37:00.003-04:00

Hello folks!
It seems the last trade idea I posted didnt really work out and price reversed soon after. However, I found an amazing NZD/USD trade on Thursday which I took, and even though I got out in 70 pips, price continued upwards for another 100 more!
Note how price dipped, came up, the 21/55 broke the 200, and price retested the 21 EMA. Plus, the level at which it tested the EMA was previous support.
I also took a small GBP/CHF trade in which I may have been stopped out because of the insane spread, but then went positive for 70ish pips.
Now, about the EUR/USD, GBP/USD, EUR/JPY, and GBP/JPY, all of them have just bounced again off of the 4 hour 200 EMA, coupled with trendline support in EUR/USD and GBP/USD, and a double bottom in EUR/JPY and GBP/JPY. I am really confused as to what the market wants to do right now. Perhaps tomorrows Asian session will give the market some direction. Check back soon for an update! I will try to put a post about 1 hour before the London session.
Take care!

EUR/USD and GBP/USD potential break-out

2009-08-11T23:49:00.004-04:00

Hello folks! Today we have a potential set up on the EUR/USD and GBP/USD. I am only going to show you one chart because the GBP chart is for all practical purposes the same as the EUR chart I am showing you.
From a quick glance at this chart, we can see that there is a nice pennant formation. This is a nice potential continuation. However, a downside break will soon run into further support as shown by the red line. Also, right in the middle of the triangle we've set up is the 4 hour 200 EMA, another strong support. All this applies to the GBP/USD as well.
My trading plan is thus: I am bearish at the moment, so I want to see a breakout to the downside, and then a slight retracement. If you look at the 15 minute charts, the 21/55 EMAs are intertwined, and when price breaks out and they seperate, that is the first part of our signal. Once price retraces and retests either EMA, get in. Profit target is the red line I have drawn, which is around 1.4030, or maybe a little less. If this plan works, the 4 hour EMAs would have reached the 200 EMA by the time price reaches the 1.4030ish level and bounces back up, setting us up for another potentially much larger trade!
Alternatively, if there is a breakout from this pennant to the upside, it will be much more difficult to gauge because the hourly and 4 hourly EMAs are one on top of the other, forming many layers of resistance. Good Luck!

I'm back!

2009-08-11T15:10:00.002-04:00

Hello all!
My exams are over! I was able to take a few paper trades here and there between studying and resting. Most of them, I am happy to say, were successful! It seems the system is working. Here is a newer, more refined version:

Draw trendlines and horizontal lines as you see fit
Identify basic price movement and form a bias: long, short, or range?
Once you have a bias, look for a signal
The 21/55 EMAs have to have split after consolidation, or be at a point where they are about to cross the 200 EMA
Once the first wave is complete(in which price would have crossed the 200EMA, and the 21 or 55 at least touching it), wait for price to retrace
Draw a fib - a fib level overlapping with the EMAs is good
Draw a horizontal line where the EMA and fib overlap. Zoom out and see if that level was previously strong support or resistance.
If it is, JUMP IN!
Set your target using common support and resistance levels such as trendlines or higher time-frame 200 EMAs

From now on, I will be posting potential signals as well as my usual rants and thoughts. Good Luck!

Exams

2009-07-27T11:43:00.002-04:00

Hello folks! I have final exams right now so I have not been able to really post much. When I'm taking a break from stuyding I occasionally check the market to see whats going on, not much else. My internet connection is still sub-par, and I am still looking for a reliable broker for these web conditions.
Today I found a good set-up on the GBP/JPY. The 21/55 had just seperated, and price had retested the 21 EMA which coincided with good support/resistance and a 38.2 fib. I took a paper trade, and I would have made about 100 pips. I am technically 'staying in the market' to wait and see how far it goes.
Thanks to all the loyal readers who check often, and my apologies that I have not been able to post that much. My exams should be over in 2 weeks, and after that I will be back to posting regularly.
Good luck and happy trading!

Some pips are better than none

2009-07-16T09:26:00.002-04:00

Hello folks. I am going to write a very short post today. I had two great entries on the GBP/USD and the EUR/JPY in the 1 hour chart. I went long on both with 50 pip stop losses, and was going to let the trade run at least to a double top from the fib. The EUR/JPY only managed to wick the top, so I stayed in, thinking I would move my stops up by the start of Wall Street trading at 9 AM EST.
Apparently, my FX platform keeps getting disconnected, so even though it somehow showed me as still in the EUR/JPY trade, and positive too, when I disconnected and reconnected it showed that my stop had been triggered.
Luckily, I was still in the GBP/USD. My actual target was the daily M4 150 pips away, but price double topped and started to crash, so I got out with 37 pips.
I had also tried to get back in on the EUR/JPY trade, but was stopped out almost immediately.
Daily result : -60 pips, and a need for a new broker:(

How Successful Traders Manage Their Trades (Part 1) - MoneyShow.com

2009-07-14T14:31:00.001-04:00

How Successful Traders Manage Their Trades (Part 1) - MoneyShow.com

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Boredom

2009-07-14T13:19:00.003-04:00

Hello folks!
The past two days have been incredibly boring. After a great Friday, Monday and Tuesday have been just sideways trading between a tight range, as you can see from the channel I have drawn.
The 21/55, my signal EMAs, have been intertwined mostly and nothing noteworthy has really been happening. Price is showing bearish divergence, and there have been talks of risk aversion, so my bias remains short, and we do seem poised to break it, but a break to the upside and I will look for long, although more cautiously. I was expecting a nice breakout and pullback at the New York open, but it wasn't meant to be. The EUR/JPY also has a similar channel and the same principles, but it was showing a bit smaller in the charts because of the HUGE candles from last week. I would prefer trading the Yen right now because people seem to be favoring the Yen more than the Dollar for risk aversion.
My trade plan is as follows: I am hoping that the channel will comprehensively break by the end of New York's session, and then we see a pull-back in the Asian session, setting us up for a short at a retest of the EMAs and a fib level for the start of the London session.
Good Luck!

Friday and Weekly Report

2009-07-11T06:42:00.004-04:00

My last post was entitled 'Rant'. I was having the worst week, but I still decided to watch the charts - and its a good thing that I did! I spotted a perfect entry on the 4-hour EUR/JPY just before the start of the London session, and I jumped right in with a stop of 50 pips, my standard.
The touch of the 38.2 fib level was right about where the 21 EMA was. My exit was at the daily M1 reversal pivot point. It was a good thing that I got out there, because price wasn't able to go any further down, as you can see by the last green candle. The end result? A cool 185 pips! I managed to gain back all of my weekly losses, plus gained a little. Weekly result: +70 pips!
See you on Monday!

Rant

2009-07-09T11:59:00.002-04:00

I have been having a few bad days. The market is rangebound, and the day I am a bull, the market falls. When I am a bear, the market rises. Quite frankly, I feel like punching a hole through the screen of my computer. Today I had a pretty good set-up. The EUR/USD was at a 61.8 fib of the last big drop, the 21/55 EMAs were about to cross into the 200EMA(4 hour), and the 55 EMA was around the same level as the 61.8 fib, which also happened to be a daily M4 reversal pivot point. My trade plan criteria was pretty much set: strong resistance, previous downtrend - Short! So I shorted with a 50 pip stop loss. Soon enough, price continues to rise, hitting another important resistance at 1.4000 - and it goes right through, stopping me out. 1.4000 was a 78.6 fib, so I thought that it was just a larger correction and my original shorting plan should stay valid. So I short again with a 30 pip stop loss. Price goes my way for 50 pips(normally, I would lock in a 15 pip profit here but I was out at the time), then shoots up and stops me out. If I am not pissed enough, if price decides to fall from here, that will be the tipping point.
End result: -80 pips, +a lot of frustration.

Rough patch

2009-07-06T15:34:00.002-04:00

Hello folks..
I'm going through a bit of a rough patch right now. I made 15 pips yesterday when I had moved my stop-loss on my short from Friday, and I lost those 15 pips and another 70 more on two failed shorts on the GBP/USD.
Today's lesson: Staying conservative and making fewer pips is much much better than being aggressive and potentially losing pips.
After a few losing streaks, I have now decided to have a strict system to follow, and to not trade unless and until the following criteria are met:

Support and resistance must be well define - either horizontally, by a pivot point, a trendline, or a high-timeframe moving average.
The 21/55 have to cross at said support or resistance - if the cross leads into the 200 EMA, all the better
Once the 21/55 has crossed, price has to retest any one of the EMAs to signal an entry
Overbought/oversold MACD and stochastics about to turn strengthen the case.

Starting tomorrow, I will start to backtest this system on my three favorite currency pairs: the EUR/USD, the GBP/USD, and the EUR/JPY. Lets see how it goes. I will try to put up screens of the backtesting in future posts.

Blunders and Saves

2009-07-01T13:26:00.005-04:00

Hello everyone..
Today's lesson : Once you make a trading plan, stick to it no matter what, even if the trade goes sour.
Since the London session began below the daily central pivot, I thought there would be some upside for the day. According to the 4-hour chart, we were at the bottom of the range, rising, and stochastics had turned and was rising too. The middle red line you see was a medium point of S & R, and by the time I got to the charts, price had broken that level and had made a swing high. I drew a fib(as you can see) and saw that the middle line and the 50.0 Fib level were about the same, so my plan was to place an entry right about there for long, all the way up to the top of the range, and perhaps even further. Anyway, when I checked my charts a few hours later, my entry still hadnt been hit, so I gave the charts another look see and saw that there was some hourly MACD divergence suggesting downside, so I cancelled my order and decided to jump in short. I was almost immediately stopped out, because price hit my original long entry, went just a little bit further down, and immediately resumed going back up. And boy, did it go up! It raced all the way up to the top of the range, and broke right through. Had I gone with my original plan, I would have made 110 pips!
Anyway, there seemed to be a bit of steam left in the move, so I got in again after a bounce off of the 15 minute 21 EMA(normal trending trade entry). Price went up, I was positive about 50 pips, when I moved my stop loss to 15 pips positive. Afterwards, traders were probably wrapping up for the day so price fell and triggered my stop. Right now, it seems to be hovering around that area.
So at the end of the day, I lost 14 pips on the first trade, and made 15 pips on the trade I should have made 115 pips on. Daily P/L - +1
Lesson learned!

I'm BACK!

2009-06-29T14:43:00.002-04:00

Hello everyone!
After a terrible week, I'M BACK! I started out last week all pumped up and ready from a great week before, only to find a rangebound market going absolutely nowhere. One or two newsreleases caused spikes here and there, which I, forgetting everything I knew about forex, tried to trade on reversals. I was stopped out every single time! After a loss of 100-120 pips, I was further shocked to find out that the software that I used to connect my mobile phone's internet to my computer had expired, so I could only see the charts but could not open any websites, thus the short 'hiatus' in posts.
Taking last weeks trades into retrospect, I made a few fundamental mistakes which I would like to share with you here. I don't exactly remember where I took them, so without the help of a visual aid I will try to explain to you as best as I can what I did wrong.

In a fast moving and trending market, I hesitated to jump in because stochastics was overbought/oversold. If you wait for stochs to fall/rise, then rise/fall again in such a fast moving, trending market, chances are you aren't going to get any entries. If price is going up, of course it will be overbought, everyone is buying! If it is falling, of course it will be oversold, everyone is selling! In a normal trend, price will ride the 21 EMA, occasionally dip to the 55 EMA if it is slowing, and then continue. If the market is moving really fast, price will only dip to the 5 EMA, then continue back on its way.
I tried to reverse at Fib levels. Again, if the market is moving fast, fibs will only barely be respected. Once price hits a fib, get back in the original direction of the trend! By all means, DO NOT try to scalp a few pips from a fib reversal. Instead, take a slightly larger, but more practical risk and get back in the original way price was going.

I tried to revenge trade. Even though my revenge trades were relatively calculated and planned, they were still extra ordinarily stupid. To trade forex, you have to be cold and calculating. Think Sherlock Holmes, NOT with your emotions.

I hope that my post helped you in avoiding these fundamental mistakes, and in improving your overall trading. Hopefully, by tomorrow, I will be trading and posting regularly again. Comments will be greatly appreciated. Good Luck!

Monday Report

2009-06-22T03:53:00.003-04:00

Hello everyone! I am not going to put up any chart pictures today, because it seems like a largely sideways market. We will just have to wait for some definitive move. The Dollar does seem poised to gain some strength, and that is what most market gurus are saying too, but we just have to wait until something happens. I have found a few small scalping trades, and I have drawn Fibonacci levels to see if they work out. There is an interesting triangle setting up in the USD/CHF too, which, although it can break either way, an upwards break would signal Dollar strength. Unless something huge happens(it's still the beginning of the London session), I am probably going to stay conservative today.
Wait and see, and good luck!

Weekly report

2009-06-21T12:52:00.002-04:00

Hello everyone!
I had a great week! I was positive 157 pips! My target is 5000 pips, which is essentially doubling my account. I am going to count in pips rather than percentages because practice accounts have to be renewed every now and then so my balance would keep getting reset.
I am uncertain about tomorrow, I guess what the Asian traders do will decide the direction of the markets. There are clues suggesting both up and down on my favorite pairs, so I will just have to wait and see.
Good Luck!

Patience is a virtue

2009-06-18T07:47:00.003-04:00

Hello everyone!
I had an excellent day yesterday! I made 80 pips on one EUR/JPY short(which I got out of prematurely, if I stayed in it would have eventually hit my target and even further down), and then I lost 15 pips on an expiremental EUR/USD scalp. +65 for the day nonetheless!
Today, when I first fired up the charts during the end of the Asian session the markets were largely sideways. At the start of the London session the EUR/USD, GBP/USD, and EUR/JPY all shot up 50-70 pips, and made a new swing high in the 15 Minute charts. I was still confused about direction because sentiment should be down(due to a falling DOW Jones), but price was going up, so I drew a fib from the swing high to the swing low and waited, thinking I would go long at support. It's a good thing I waited, because price subsequently crashed in all three pairs. The GBP/USD fell the most. EUR/USD didn't have a defined level to get in, so I thought I would go for EUR/JPY today again, because the entry was very well defined.
The resistance trendline was incidentally the same line I took yesterdays entry on. Since the DOW Jones broke an important level the day before, I expected yesterdays New York trading to be correction, and up she went! My profit target on this trade is the S1 you can see at the bottom of the chart. If you want to get in this trade, you could still theoretically do so using a smaller chart. Use your stop losses wisely, and good luck!

Good day yesterday, interesting one today

2009-06-17T07:49:00.003-04:00

Hello everyone!
I had a great day yesterday! I made a cool 55 pips!
Today we were at interesting levels in the EUR/USD, GBP/USD, and the EUR/JPY. After the dollar gained much strength throughout the New York session, the Asian session saw a bit of a retracement. A few trendlines later, I was watching to see what happens to decide on whether to go short or long. In the EUR/USD, there was a bit of room to fall from a trendline breakout. Right now we have to watch and see if the fall was just a retracement, or it was indicative of further downside.
The EUR/JPY also presented an interesting opportunity to short. It was almost like a double bottom, but the second bottom was lower than the first one, so I thought it was a safe short, since all the other pairs also looked down for the start of the day. I will admit it was a bit of an impulsive trade, but I am 45 pips positive right now, with a profit target of 100. Because I was a bit unsure, I have moved my stop-loss to a 15 pip profit, so even if the trade turns on me, I will be positive for the day.
The GBP/USD is one trade I missed today, and boy, what a trade to miss! I had drawn a trendline and was waiting to see if it held or not. If it held, it would have been a double-top/1-2-3 pattern, a nice shorting opportunity. The neckline was also very well defined. When I sat down to look at the charts, price had hit the neckline and bounced quite far up, at least 40-50 pips. I thought it was going to hold. When I checked back three hours later, there was a HUGE wick and price had fallen over 100 pips! Man!

Missed trades

2009-06-16T08:55:00.005-04:00

Hello all!
I missed a lot of trades in today's London session. In my three favorite pairs, the EUR/USD, the EUR/JPY, and the GBP/USD, we were at a very strong support level, and around about the late Asian session we had defined a low that wasnt broken. I drew a fib from the swing high to the swing low(on all three pairs) and found that the fib levels were quite inviting. I thought about going long on the EUR/USD, but I decided against it for some reason. My plan was to short once price touched a fib and reversed. Apparently, though, the fibs were quite far away and if I had gone in I would have been positive at least 100 pips in each pair!
Oh well! I guess it was actually a decent trade, seeing that the four hour stochs was severely oversold. Next time, maybe. Right now I am short again from the bounce off the 61.8 fib level in the EUR/USD, which also happens to be a strong support from before. My stop loss is a few pips above that, and I will ride the market down at least to a double bottom, and then if it continues, I will stay in until the market decides to reverse.

Successful Trade!

2009-06-15T10:35:00.007-04:00

Hello everyone! I hope you all had a wonderful weekend!
If you remember, our trading plan on Friday was to short at a break or retest of the ascending trendline. I went short, and came out positive 72 pips!
There is, unfortunately, a catch. In Friday's post I had said to close all positions for the weekend. I had a slight problem with my internet connection, and was not able to do so. The profit target was reached in today's Asia session. So I must rephrase what I said on Friday. I don't suppose price opens at a price greatly different from the previous weekend unless something major happened, so unless something like that comes up I suppose it is safe to keep a position open as long as your stop-loss can compensate for it.
For today's trading, most of London was to the downside on the EUR/USD and the GBP/USD. We are now seeing a completion of the 4-hour head and shoulders that we have been looking at for the past week, and it remains to be seen whether or not it will break. In theory, one can place a long entry at major support and get out quickly with 20-30 pips. I am going to wait and see if price can break the neckline(which also happens to be the 4 hour 200 EMA), and when it retraces, if it can sustain that break. If it does, then I am short from that resistance all the way down to the daily trendline at around 1.3444, which is the weekly S3 pivot point. I am not sure if price will fall all the way there, so if you do short, watch out for signals that price is reversing. If you see them, get out with your profits. If the market decides to continue to the downside, you can always get back in the trade.

The GBP/USD has also formed a double top. Watch and see what happens!
Good luck!

Market Watch

2009-06-12T07:39:00.004-04:00

Hello all!
When trading, have you ever thought that the market seems to have a mind of its own? That whenever you execute an order in one direction, that is the very moment the market decides to reverse? Newsflash: not only does the market have a mind of its own, but rather MILLIONS of minds of its own!
As a Forex trader, I think it is of the utmost importance to remember that the foreign exchange market is essentially just a lot of traders and hedge fund managers with huge accounts, all buying one currency and selling another. The best strategy for us retail traders, thus, is to piggyback the bigshots that move the market. That is why trading trends is easier than trading reversals.
It is currently the London session, and as I am posting the time is around 12.45 pm GMT. That means we still have a good 4 hours of the London session left, and then the whole New York session.
Today I am going to look at two currency pairs, the EUR/USD and the GBP/USD. The EUR/JPY really hasnt been doing much over the past few days.

EUR/USD:
Here we have an hourly EUR/USD chart. As you can see by the circles that I have drawn, we are still in the context of an uptrend, as seen by subsequent higher lows. What I am now waiting for is A) either for the ascending trendline to break, be retested as resistance, and then go short, or B) if the trendline holds, look for opportunities to go long. When the trendline is retested, we will essentially have made a lower high, which is the start of a new downtrend.

GBP/USD:

In the context of a 4Hour chart we are forming a huge double top. Provided we have dollar strength, a short all the way down to the neckline, or at least the hourly or 4 hourly 200 EMA is an easy trade. Remember, buy at support, sell at resistance.
Note: remember to close your trades by the end of the New York session, because it is Friday, and sometimes a new trading week starts with a major difference in price than the last close.
Good Luck!

Idea!

2009-06-11T14:28:00.002-04:00

Hello folks!
I was staring at my charts today when a brilliant idea dawned upon me, if I do say so myself. I had seen another trader write about this concept in a forum, although it was for a different trading system.
I have noticed while trading using the FXBootcamp Chart set-up that certain moving averages are respected more by price and thus carry more weight. For example, the hourly and 4-hourly 200 EMAs are much stronger levels of support/resistance as opposed to say a 15 minute or 5 minute 200 EMA.
Now, the problem when using MetaTrader4 is that it will calculate each EMA according to the respective timeframe in which it is seen. So, to help us visualize these levels in smaller timeframes(which we are more likely to look at in the course of the day), we can apply simple arithmetic to come to a solution. This will require adding 2 more EMAs to your smaller timeframe charts, so it might make them a bit messy. Having a large screen to work with would really help(my 13.3 inch Macbook barely makes the cut - I need to invest in a 22 inch monitor:)).
For a 15 Minute chart, add the following EMAs and make them whatever color you wish:

one 800 EMA(equal to the hourly 200)
one 3200 EMA(equal to the 4-hourly 200)

For a 5 Minute chart, add the following:

one 2400 EMA(equal to the hourly 200)

one 9600(phew!) EMA(equal to the 4-hourly 200)

If you want, you can do the math and add EMAs to your 1 minute charts as well, but it may make them very slow to load.
You can also do the same for all of the other EMAs, but that will make your smaller timeframe charts incredibly crowded and hard to decipher. I suggested the 200 EMA because it carries the most weight, usually.
Today was a slow(and losing) trading day for me. I doubt tomorrow will bring any major set-ups either, but I might take a few intra-day short term trades if they come up. Otherwise, we will see what next Monday brings us.
Until then, Adieu!

EUR/USD trade update

2009-06-11T10:15:00.002-04:00

Hello everyone!
I think I chose a bad few days to enter a trade. Over yesterday and today the market has been just going up and down and in no specific direction. I tried to take an aggressive entry at the 5/8 cross on the left shoulder, but apparently the market decided to turn the other way. I was positive around 70 pips at one point in time, but after that it was negative all the way. I still am in the trade as I am posting this; I am going to see if the market stops me out, and if it doesn't, hopefully the New York session will give a better result. If I am still in this trade and the market heads down, I am going to stay in until price makes a low, at which point I will get out of the trade, albeit for a small loss. I guess I will wait to see if this head and shoulders actually completes or just decides to go defunct.
Oh well..
UPDATE:
I was stopped out.

EUR/USD trade 10 June

2009-06-10T12:57:00.002-04:00

Hello everyone! It seems like the EUR/USD is going to drop after all. I wasn't sure if I was going to be on the computer or not when the trade did actually play out so I decided to put an entry order at 1.3990, a few pips below the day's central pivot point, and by the time price reached there the market would have probably decided to complete the head and shoulders pattern and possibly head even further down. My profit target is 1.3800, which is about the next major support. For this trade, I am keeping my stop-loss at 75 pips, a bit high for my taste, but I was left with no choice. Since I was putting an entry order, I have to keep a bit of space for the market to move around before actually heading in my intended direction. In fact, many times the market went a little in my direction, then reversed, stopped me out, and finally went as I had originally planned. I will do a post about this interesting little concept sometime.
I feel rather sheepish in admitting this, but the reason my stats still show negative 11 points is because I was only able to record one trade on meetpips.com, and that one trade I happened to record turned into a losing one, unfortunately. My predictions about the market's direction so far have been correct, it's just that I havent been able to be at the computer at the right moment to pull the trigger and place a trade.
Lets see how this one plays out. My profit target is just the completion of the right shoulder, and if that support breaks, I will wait for the price to retest that level as resistance before I pull the trigger again. If I am right about this trade, the head and shoulders should break in tomorrow's London session, possibly earlier, depending on how hungry our trader friends in Sydney and Tokyo are!
Lets see how it plays out - good luck fellow pippers!

EUR USD trade idea 9 June 2009

2009-06-09T09:18:00.003-04:00

Hello again!
I thought I would try uploading a picture to see if this exponentially slower internet connection could handle it. There is an interesting set-up in the EUR/USD right now. In my earlier post, I said that price was at the 38.2 Fib level of the drop since Friday, but it seems to have broken it in the 15 minute charts. Interestingly enough, the very point at which price dropped down to is a 38.2 Fibonacci level of the whole rally in price that started in late April/early May! Wow! Just for the record, a rally is a steady increase in price, whereas a sellout or a selloff is a steady decrease in price.
So my trading plan now is as follows:
We are at a sort of crossroads at the moment. Either we have done a genuine Fibonacci pull-back from the daily overall rise, and price will now continue to make higher highs and higher lows, or price will rise a little bit more before sellers step in again and push price down, creating a near-picture perfect head and shoulders pattern, at which point we would want to go short again, this time possibly all the way down to the bottom trendline that we have drawn.
I was planning on doing a post on correlation, and I will get to that in a day or two hopefully. Watch the other majors to see whether the dollar gets stronger or weaker across the board. I think the start of tomorrow's London session will confirm either of our plans.

Until then, Good Luck!

Success!

2009-06-09T08:05:00.002-04:00

Sorry for a late post folks!
Our EUR/USD trade plan worked! The pair fell down all the way to test 1.3800, which was a bit above our original prediction, but it was still a trade of a few hundred pips. Right now, we are at the 38.2 fib level of the whole drop so far, and I am waiting to see if it holds or not. If it does, I'm hopping in short for another few hundred pips!
This is going to be a very short post, because my internet has been having some problems, so I will not be able to upload chart pictures.
Good luck!

Moving Averages continued

2009-06-06T01:42:00.003-04:00

Hello!
In an earlier post(http://gulzaarfx.blogspot.com/2009/05/moving-averages.html) I had promised that I would say a bit more about moving averages, but then I was travelling and ultimately wasn't able to get around to it, so here I am with a bit more on moving averages.
As I had discussed earlier, I use 5 moving averages to trade, according to the FXBootcamp system. I have great respect for Wayne McDonnel(the founder of FXBootcamp) and the rest of his team, and I think they are exceptional at what they do and are excellent teachers. If you are able to shell out 300$ a month to subscribe to their live trading classes, then I do recommend that you join up - there is a lot they have to offer. Their website is http://www.fxbootcamp.com.
Back to moving averages: we have the 200 EMA, which is the 'big daddy', and it moves in a very smooth manner, with price only occasionally touching it when trending, or completely crossing it and going the other way when reversing. Next, we have the 21 and 55 EMA, which are used to gauge market speed by the angle of their seperation. Finally, there is the 5 EMA and the 8 SMA, which are used for potential entries and exits when they cross over.
Here, one can ask that why are 5/8 crosses more important than 21/55 crosses? Don't they both show essentially the same thing? The reason is that when trading hourly and 4 hour charts, by the time the 21/55 change direction and cross, price would have already moved a great number of pips, thereby decreasing profit potential. A 5/8 cross will be much faster and result in less lost pips, although 5/8 crosses are less reliable becuase the market tends to move in waves. A 5/8 cross couple with another indication of price slowing down, such as a pivot point or support and resistance is a good exit/entry indicator.
One of my favorite trading tricks is looking at 4 hour charts for when the 21 and 55 EMAs cross into the 200EMA, indicating a major trend reversal. These trades, when taken correctly can result in upwards of 3-400 pips, possibly even more, depending on the volatility of the currency pair and the strength of the move.
Note in this example that there was an earlier cross to the downside, but price fell right into an earlier daily trendline(the one you see at the bottom). Supposing the pair had broken the trendline there, it would have been safer to wait until the trendline was comprehensively broken and the market did a retracement to test it again. If the broken support held as resistance, we could have looked to go in. Note that there was also bullish MACD divergence, another sign not to go short. The next cross was a good one, and the bullish divergence was suggestive of a long.
I will try to put up a post on correlations tomorrow or Monday.
Have a great weekend!

EUR/USD trading plan

2009-06-05T10:44:00.004-04:00

Next week looks like an interesting one for trading.
In this post I will talk a bit about support, resistance, and divergence.
Let's take apart this trade bit by bit. As we can see from this 4 hour chart of the EUR/USD, we are currently in a well-defined uptrend(as seen by consecutive higher highs and higher lows), and we have broken the price channel, as well as the horizontal support at around 1.4050. If you draw a horizontal line in your charting software at that price and open a daily chart, you will see that 1.4050 is an important level. Now, if this bearish momentum is to continue, then the next obvious visible support is at around 1.3750-1.3800. That looks like a good target if we short this pair. Since we have only just broken support and started going down, there are two ways of confirming the new downtrend. One is that we can wait for the market to pull back and see if the broken support holds, but now as resistance. Or, if there is too much downwards pressure we can wait for a smaller pull back, possibly at a fibonacci level, then see if price continues down or otherwise.
Now for divergence. As you can see by the two black lines that I have drawn, the MACD oscillator is diverging, that is, moving away from price. Even though price is increasing, the MACD histogram is decreasing, suggesting that buyers are running out of steam and sellers may step in.
As I am doing this post, it is currently the New York session and the market seems to be pulling back. If the support level holds as resistance, look for opportunities to short!
In my next post, hopefully over the weekend, I will talk a bit about correlations.
Good luck, and have a great weekend!

NFPs!

2009-06-05T10:27:00.006-04:00

Hello everyone!
Most of the London session today was like the quiet before the storm. Both of my favorite currency pairs, the EUR/USD, and the EUR/JPY were both relatively sideways, with price bouncing around in a range of 40-60 pips.
The start of the New York session brought on the Non Farm Payroll, which was much, much better than expected. According to www.forexfactory.com, the expected numbers were around -504K jobs, but the actual figure was -345K jobs, much higher than expected, increasing dollar strength across the board.
I have uploaded an image of the EUR/JPY as well because the Dollar and the Yen usually move in tandem against other currencies. Note how there was first a slight spike in the EUR/USD to the upside, then a big sell-off. It is also interesting to note that there was a gap between the last only-London candle and the first New York candle. This is because the initial news release sparked such a strong surge in buying that the next order placed for the pair was quoted higher without an actual move in price on the chart! News releases tend to have such an effect on the market.
Over the weekend, I will try to put up a few posts about news candles and a few other tidbits. I also have a nice plan cooking for next week. Check back soon, and good luck!

EUR/USD trade

2009-06-04T15:36:00.005-04:00

Hello fellow pipsters!
Today was a good trading day turned sour for me, unfortunately.

As you may have been following, the EUR/USD currency pair was rather over-extended and a subsequent drop in price was expected. There was a textbook head and shoulders formation, and the right shoulder happened to be at the daily M3 reversal pivot point, another good short signal. I went in at 1.4166, with a stop loss of roughly 50 pips, expecting price to fall to 1.4020, which was the daily M1 pivot. When taking a pivot trade from M3, M1 is a pretty decent target most of the time. I was positive in the trade, until I got to around 70 pips positive, when I cut my stop loss back to just 10 pips. The trade continued going in my direction for another 25 or so pips, when it hit the daily S1 pivot at 1.4067, which happened to coincide with the hourly 200 EMA(the 200 EMA is considered the 'big daddy' of EMAs), as well as the 4 hour 55 EMA. This is the point where I was about 90+ pips in profit, and I should have exited here, but I was expecting continued downwards movement, and for a mere 40 pips, I decided to stay in the trade. Unfortunately, as you can see from the picture, I was stopped out for a loss of 10 pips. Positive 95 to negative 10! Anyway, today's lesson was learned. There were 3 versions of support at that level, yet I decided to continue with the trade. If I had multiple lots, I would have closed a few and let the others run with a stop at break even.
In retrospect, today's trade was textbook and a very good one at that, except I didn't quite time my exit properly, so I ended up losing.
Good Luck for tomorrow, and come back again to check for the latest in Forex trades and tips!

Hello again!

2009-06-03T08:22:00.003-04:00

Hello again everyone!
I was travelling these past few days, and I just got back and settled in. To those that were in a long Euro trade as we had discussed: WOOHOO! 300 pips!
Im watching the EUR/USD as I am typing this post, and we are making higher highs and higher lows on the hourly, and I just took a trade off of an ascending trendline. I hope to get around 100 pips. Lets see!
In my earlier post, I had discussed a bit about moving averages. Today I would like to add a few words to that, as promised.
Moving averages are like dynamic support and resistance, i.e. they will move with the market and price will often dip/rise and test them, depending on whether it is a bull or a bear market. From what I have studied, I have realized that moving averages as a form of support and resistance are more effective and more strong the higher the timeframe is. So a 4 hour moving average carries more weight than a 15 minute moving average. As price moves, it will tend to go back to test these moving averages, and if the momentum is enough, even break them.
In a 4 hour chart, if you see the 21 and 55 EMAs about to cross the 200 EMA, that usually indicates a strong change in the direction of the trend, and a properly taken trade there would result in impressive gains. Note here that the key word is properly taken. If you watch the short term charts properly and time your entry well enough, you may even suffice with a very nominal stop loss.
When you are in a fast moving market, and you feel that you have missed a trade, it is a very bad idea to jump in hoping for a few more pips. Trust me here, I have done this countless times and have lost many more times than I have won. Looking at a longer term chart in this situation can set you up for a small trade in the opposite direction. For example, if price has moved so fast that it has strayed far away from even the 5 EMA on a 4 hour or daily chart, you can look for entries to expect that price will fall back at least to touch the 5 EMA, and possibly even the 21 EMA.
In my next post I will put up some pictures of examples. Until then, Happy Trading!

Trading plan for May 29

2009-05-29T01:41:00.002-04:00

Hello everyone! I didn't get a chance today for a detailed analysis, but David Pegler of FXBootcamp has been following my two favorite pairs, the EUR/USD and the EUR/JPY for the majority of this week, so for todays post, I have just embedded his video from YouTube. I will try to finish the bit about moving averages either tomorrow or over the weekend. Good luck!

Moving Averages

2009-05-28T00:50:00.004-04:00

Hello everyone! In both the Euro pairs that we have been watching, we still seem to be bouncing around the two trendlines I showed you in my previous posts, and the market still hasn't found a definitive direction. I would watch the longer term(15 minute, 1 hour) charts for trend direction and use the shorter 5 minute or 1 minute charts to get in at either support or resistance for a long or short trade, respectively.
In this post I thought I would discuss moving averages. In techincal analysis, two types of moving averages are used: simple and exponential. A simple moving average is essentially the average price of the previous X amount of periods, or in our case, candles. An exponential moving average is essentially the same, but it would give more stress on recent periods, giving a more accurate average, because the market tends to fluctuate so much.
The FXBootcamp set-up(which I also use) consists of 5 different moving averages.

A 21 period exponential moving average(EMA)
A 55 period EMA
A 200 period EMA
A 5 period EMA
An 8 period simple moving average(SMA)

The 21 and 55 EMAs usually intersect with eachother, seperate, and then come back together. When the 21 EMA is above the 55 EMA, it is an uptrend, and the angle of seperation between the two moving averages is how fast the market moved; the greater the angle the faster the move. Likewise, when the 21 is below the 55, it is a downtrend. The 5 EMA and 8 SMA are used to determine entry and exit signals. A cross of the 5 and 8 at a strategic point is a good entry signal, and also can be used as an exit signal, provided there are other indicators that suggest getting out. The 200 EMA is called the 'big daddy,' and shows general market direction. The 21 and 55 change directions every now and then, but for the 200 to change direction means there is a major move.

I will post more on moving averages tomorrow, and I will try to get some screenshots as well so you can better understand. Good luck for tomorrow's trading!

EURJPY trade

2009-05-27T13:22:00.003-04:00

Hello everyone! There was a rising trendline in the intra-day EURJPY, and at one point that coincided with the daily M2 support reversal pivot point, so I decided to go long with a small stop loss of 30 pips. My target is between 70 pips(M3 resistance reversal pivot) or 110 pips(top of the daily trendline). Once price breaks the daily central pivot(PP), I will move my stop loss to break even, and see how it goes from there. Lets see how it plays out!
UPDATE:
The trade went in my direction for about 40 pips, so I moved my stop loss to break even. Price then decided to crash back down due to a falling DOW Jones, so I got stopped out, but at break even, so a no loss situation. The trendline may hold and price may go back up, so if any of you kept your stop losses intact you may still profit. If the trendline breaks, then you will probably get stopped out. Good luck!

Optimum trading times

2009-05-27T11:48:00.002-04:00

Hello everyone!
As you all must have read, the Forex is a 24 hour market, but that does not necessarily mean that you can jump in a trade and be successful at any time of the day. The daily Forex cycle consists of four sessions: Sydney, Tokyo, London, and New York. Sydney and Tokyo are called the Asian Session, London is called the European Session, and New York is called the American Session.
As a Forex trader, you must identify yourself as to what kind of trader you wish to be? Are you a day trader that holds positions for minutes or even seconds and then gets out with a quick profit? Or are you a swing trader that looks at hourly and four hourly charts, and holds positions for 1-3 days? If not those, then are you a position trader who will hold positions for weeks, months, possibly even years?
In my experience, I would say that day trading is possible at any point in time during the Forex cycle, because there are constantly fluctuations of a few pips here and there at any one point in time. Position traders again can trade at any point in time because they would have stop losses of upwards of 2-300 pips so that they can stay in the trade long enough without getting stopped out by a small fluctuation.
If you are a swing trader, then I would say you try to trade the end of the Asian session and the European session, because most major moves for any particular day are usually set up in the Asian session and then are executed once London money flows into the market. By the time New York money comes in, London traders are usually closing out their positions and taking home profits, effectively pushing the market a little bit back to where it originally was. This is not to say that the New York session is not tradeable, just that the London moves are more defined and in a usually easily decipherable direction. New York market movement can sometimes be a bit haphazard and difficult to trade for a retail Forex trader like you and me.
This is one of the main reasons why I post my trading plans at around 12 AM CST, because the London session is just about to start.
Hope this information helped! Good luck!

Trading for May 27, 2009

2009-05-27T00:54:00.003-04:00

Hello again fellow Pippers!
Today's trades basically just build on yesterdays trading. We still have not broken the EUR/JPY trendline that we discussed yesterday. You have to really watch the markets right now, and if we see a breakout to the upside, go long, and if we are once again rejected, then go short.
If the EUR/JPY breaks to the upside, the EUR/USD will also probably continue upwards. Look for opportunities to long there. We have a bit of a falling trendline right now, wait for a break, a slight retracement in a smaller timeframe, and then go long.
Good Luck!
UPDATE:
Sorry for such an uncertain plan yesterday. It seems the Dollar and the Yen gained strength against the Euro. Those of you that shorted either currency would have made around 100-150 pips. To the bulls among us, however, good luck! And be patient!

May 26, 2009 Trading

2009-05-26T01:09:00.004-04:00

Hello everyone! I hope you all had a great long weekend. Trading was open today but we were seeing a largely sideways market due to Memorial Day. We are looking at an interesting day tomorrow. I like to watch EUR/USD and EUR/JPY.
EUR/USD has broken important resistance and has now reached the psych level of 1.4000 and is pretty much stuck there right now, and is due for a retracement. A Fibonacci on the four hour shows a good 23.6 retracement zone(1.3800) to around where the 4 hour 21EMA is, and a 38.2 to 50.0 retracement zone(1.3700) to around where the 4 hour 55EMA is. Remember, EMAs are like dynamic support and resistance levels and price has a tendency to 'ride' the EMAs. If price continues downwards from its current level at around 1.3980, you can try to go short until price hits the target. I myself, however, will probably wait for this short term retracement to finish and then go long.

If we are seeing Euro weakness today then both EUR/USD and EUR/JPY will fall. With EUR/JPY we are approaching a strong trendline resistance and have hit it according to the daily chart, but have been rejected and started going downwards in the 4 hour. A conservative short target would be 130.00 where the next level of support is. For entries, look at smaller charts and short at resistance.
Good Luck!

UPDATE:
The EUR/USD trade worked out perfectly! Price continued to fall from the 1.4000 level we had talked about until it hit to around 1.3860, a cool 100 pip trade! That level was right around the 4 hour 21 EMA, the 23.6 Fibonacci level of the entire rise, and the daily S3 pivot point.
I was wrong, however, about the EUR/JPY target. It did fall, but I had thought that price would fall to 130.00, but it only went down to around 131.50, which happened to be the daily S2 pivot point, and the hourly 200 EMA. Those of you that went short and got out at the right time would have still made around 100-150 pips, so it's all good!

Chart Set Up

2009-05-25T00:43:00.003-04:00

Hello again fellow traders!
In my earlier post, I had provided a link for Wayne McDonnel's video on http://www.fxstreet.com/. For those of you that have the time(it is a nearly 2 hour presentation), watching the video is incredibly benificial, but for those of you that don't, I am explaining the chart set-up here:
Chart style: Japanese Candlestick Chart(color palette is personal preference, however, I find that red for bearish candles and green for bullish candles on a white background is the clearest)
Indicators: Stochastics indicator with the settings as %K period at 8,%D period at 3, slowing at 5
MACD indicator with the settings at Fast EMA21,Slow EMA55,MACD SMA8
Bollinger Bands with the settings at 20 with 2 deviations
Moving averages: 21 EMA(I color mine red), 55 EMA(blue), 200 EMA(green), 5 EMA(brown), and 8 SMA(black)

For those of you that are new to Forex, an EMA is an exponential moving average, and an SMA is a simple moving average. You can find these in the 'Indicators' menu of your preferred charting software.
If you are totally new to Forex, the folks at http://www.babypips.com/ have prepared an excellent Forex 'crash course,' available here.
I am not rewriting a whole course on Forex basics here because I feel that would be a bit like re-inventing the wheel. The folks at BabyPips and at FXBootcamp have done an exceptional job and have provided us with an easy approach to Forex basics. What I will try to do is apply what I have learned into actual trading situations and try to help you with the finer points that sort of 'go without saying' amongst the Forex professionals.
I look forward to your comments! Have a great trading week and check again soon!

Welcome!

2009-05-22T17:44:00.003-04:00

Hello everyone! This is my first post. My name is Gulzaar and I am an aspiring FOREX trader. I have been studying and trading FOREX for the past few months, and I decided that I would share my trading experiences with over budding FX traders like myself.
A little about myself and my trading style:
I am primarily a swing and intra-day trader, which means I tend to look at Hourly and faster charts, and most of my trades last between a few hours to two or three days. I use the FXBOOTCAMP chart set-up. Here are two excellent videos to watch:
http://transcripts.fxstreet.com/2008/02/monthly-webinar.html
http://transcripts.fxstreet.com/2008/02/monthly-webin-1.html
I prefer to use Metatrader 4, provided by FXPRO(http://www.fxpro.com). I like FXPRO because they provide both spot FOREX and futures charts, and I like to correlate futures with FOREX to help determine the market's direction.
About FOREX brokers, that decision is pretty much yours, however I prefer to use FXCM. In the end it boils down to a matter of personal preference.
Thats it for today, I am looking forward to an exciting trading week from Monday onwards! I will try to get a few more posts about FOREX basics done over the weekend. Have a great weekend!