Monthly Archives

February 2017

Finding a Suitable Trade Entry

By | Uncategorized | No Comments

Last week’s (Feb 20-24, 2017) FOREX WEEKLY trade idea was to sell the GBPJPY pair. Here is the full text of that trade idea:

TRADE VIEW

  • Bearish GBP
    • on weak CPI, average earnings, and retail sales last week
    • GBP was also the worse performing currency last week
  • Bullish JPY
    • Did much better than perhaps it should have last week
    • Nikkei is weak
  • Bearish USD
    • Should have done better last week

TRADE IDEA

Sell GBPJPY

 

 

 

 

 

 

 

 

 

 

 

This GBPJPY “swing trade” sell trade idea was a combination of fundamentals and technical. The 300 point stop is where the sell trade no longer made technical sense from a swing trade perspective.

The challenge for my subscribers and for traders in general is to choose an entry point and stop loss that makes sense for them (clearly, very few traders will put a trade on with a 300 pip stop loss).

Here is the price action starting from 140.05 on Friday Feb 17, 2017 at 5pm Eastern Standard Time and ending at 139.73 on Friday Feb 24, 2017 at 5pm Eastern Standard Time:

 

 

 

 

 

 

 

 

 

 

 

 

 

A quick summary of the GBPJPY price action Feb 17 close of business to Feb 24 close of business: the pair rallied on Monday and Tuesday; retraced most of the Mon-Tues rally early on Wed; rallied again through Friday morning; and then collapsed. I will show you some of the ways you could have “got on” the collapse. There was a “perfect storm” of GBPJPY sell signals on Friday. I will briefly describe them below:

  1. Fibonacci 78.6% retracement sell at 141.70

 

 

 

 

 

 

 

 

 

 

 

 

2. European breakout sell at 141.11 (essentially getting below the “Asia” low

 

 

 

 

 

 

 

 

 

 

 

 

3. Jimmy’s band sell at 141.41 (unique trading band envelope (first candle “outside” is a signal)

 

 

 

 

 

 

 

 

 

 

 

 

Getting “back to back short term sell signals (5 minute charts) is a plus for sure:

 

 

 

 

 

 

 

 

 

 

 

 

It looks even better when you add the 78.6% Fib retracement into the mix:

 

 

 

 

 

 

 

 

 

 

 

 

Especially when the 78.6% retracement is also a Gartley Pattern:

 

 

 

 

 

 

 

 

 

 

 

 

Sometimes the simple stuff can be compelling:

 

 

 

 

 

 

 

 

 

 

 

 

Or a simple 3 candle reversal (getting below the low of the last 3 candles essentially):

 

 

 

 

 

 

 

 

 

 

 

 

Of course 2 heads are better than one: big red candle and 3 bar reversal:

 

 

 

 

 

 

 

 

 

 

 

 

Lastly, some additional support (courage) from the “big picture”. Here is a unique envelope trading band on the daily chart (signals are first candles completely outside the envelope): 

 

 

 

 

 

 

 

 

 

 

 

 

Did a good job of signaling the Brexit trade as well…:

 

 

 

 

 

 

 

 

 

 

 

 

Of course everything above is isolating the best scenario; there were plenty of ways to “screw up” the GBPJPY sell trade as well

My point here is to give you some ideas on how to get bit right. I hope you enjoyed this!

How we traded and profited from the bearish UK retail sales news spike

By | Uncategorized | No Comments
  1. Did the research and determined about a 50 pip move was possible if the actual number was about 1.0 different than the consensus forecast (actual -0.3; consensus forecast 0.9 = -1.2 difference; therefore GBPUSD has a good chance of dropping 50 pips or there about. Here is our research data:

 

 

 

 

 

 

2. We use market orders with a preset maximum slippage so we either get a fill close to the price we seek or nothing is done and our orders are cancelled. Today was a good one; we were able to sell the GBPUSD pair just a few pips below the price just before the bearish news was released.

 

 

 

 

 

 

 

 

 

This is from our LIVE trading room chat:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sometimes we cant get a decent fill and miss the trade. Today we were lucky!

 

How I Found a Great USDJPY Sell Trade by Thinking Outside the Box

By | Uncategorized | No Comments

Today (Feb 15, 2017) the USDJPY pair rallied strongly following the simultaneous release of much higher than expected US CPI (inflation) and much better than expected US retail sales.

The USDJPY pair started to give up some of its news driven gains and seemed “weak”.

A great sell USDJPY trade occurred when the USDJPY pair failed to hold gains following the opening of the DOW; the pair also had its largest 1 minute “red candle” since the news over an hour earlier as well and it was making a new recent low.

No “Magic Software Signal” but a lot of common sense things all said the same thing: USDJPY wants to try lower…

A Cool Trick Using the 78.6% Fibonacci Retracement

By | Uncategorized | No Comments

Has this ever happened to you? You see a signal too late and miss the entry.

The 78.6% retracement might possibly give you a second chance to “catch the trade”.

For example, today GBPJPY gave a sell signal at 142.01 with a stop at 142.47 (46 pips risk)

A second chance to “catch the trade” occurred on the 78.6% retracement.

The 78.6% Fib retracement sell price of 142.20 happened to be the high!

With the confirmation of lower highs and touching the “upper envelope band”

Best of all the stop loss remained at 142.47 (so the risk was 27 pips instead of 46pips)

Here is an example of how to use the news to put your trade idea into action

By | Uncategorized | No Comments

Starts with a view and a trade idea (this is cut and pasted from my daily webcast; I choose one trade idea each day)

 

 

 

 

The UK CIPS services ws scheduled for release at 9:30am London Time; the GBPUSD pair had a

very tight range for the prior twelve hours; if the UK CIPS services number was worse than the

consensus forecast it could be a good time to sell the GBPUSD pair in anticipation of the expected

decline prior to the US non farm payroll later in the day.

The UK CIPS services number was worse than the consensus forecast (54.5 versus 55.8)

 

 

And that is a possible sell GBPUSD signal because it should cause some GBPUSD selling

and possibly enough selling to get a bearish GBPUSD move in motion. That is in fact

what happened:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

After the news release it was possible to sell at 1.2615 or better! The GBPUSD pair continued down another 40 pips!

In case you’re wondering about where to put the stop loss; above the price before the news was released (so above 1.2625; a small pip risk!)