This a further example of the detailed forex analysis and video that members of my forex mentor group receive BEFORE the event. This week one of the trades I was looking for on a daily forex chart was a short on the Euro/Gbp at 0.8700 (point C) because it was a monthly trend line going back to 2008 (see the second image), that trade is 100 pips in profit as I write.

There was also an excellent long trade for 60 pips profit on this pair at point D from the simple trend trading course videos. I explain below this image what the set up was and why it was a low risk, high reward entry.

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I was trading with one of my “one to one” clients who was struggling to find a trade. Here on the Euro/Ggp 4 hour chart I showed how price was clearly in an up channel and that 0.8636 was also 50% fib of the recent move and was previous support and resistance, in other words, multiple reasons why it was a good trade set up (Point D). There was big $US news due out, so we waited for the release, there wan’t so much movement on this pair so she took the trade with the stop just below 61.8% fib -you would expect the Gbp/$ & Euro/$ to react the same to $US news, however its not always the case).

So the lady was risking 20 pips for a potential 60 pip gain to 0.8700 therefore 1:3 risk reward ratio is excellent. Price could even have gone to the upper trend line but we had previously identified 0.8700 as MAJOR resistance so that was the target.

There was further “red flag” news due later in the week, Bernanke was speaking which could have driven the market but as the weekly trend line hadn’t broken since 2008 apart from spikes near to the trend line a few weeks earlier (See the image below)  I felt confident enough to take the trade. After all we were looking for 100 pips back down to 0.8600 and only needed a small stop (its sat there now as I write this).

SO a pre planned short from Sundays analysis done on a weekly chart gave 100 pips and an intra day, simple price action trade gave another 60 pips. If you were trading say $10 per pip that’s $1600 profit from making 2 trades on one fx pair!

Below is the detailed analysis that I provided for members of my forex mentor group In the video I explain at the beginning what happened the week before and why we took or left trades and then explain what I was looking for in the coming week and why. The aim of the site is to teach folks to see these set ups for themselves, not to simply blindly follow. At the end of the day if you can master this skill you have the potential to earn a substantial income now and in the future

Here is the post:

Hi, I am convinced that the Fed and Ecb are rigging the markets this year. Price on the Euro/$ continues to bounce between 1.2800 and roughly 1.3500. Each time price hits these zones either Bernanke or Draghi & co release a statement or make a comment that sends price shooting back into the zone.

Not long ago Bernanke hinted at a tapering of QE (print lots of money) which rocked the $. Then comments from Draghi reversed it. Six weeks later the Fed now say QE tapering is not likely to happen soon. As Fotis explained recently Bernanke is walking a tightrope. On the one hand he has to keep buying, more than 70% of the USA’S new debt -keep them printing presses rolling boys 🙂 and yet he is concerned that this may be fuelling a potential bubble in the stock market. The last thing anyone needs right now is a stock market crash, so the situation is unlikely to change soon.

As traders we are increasingly having to pay attention to news and particularly anything that Messrs Draghi & Bernanke are going to say. This is why last week I told you not to trade around the FOMC news AND big Ben’s subsequent speech. Had you ignored the advice then you stood a good chance of losing big style. This announcement ruined my potential trades on the $/Yen, Gbp$, Euro/$, Chf and Cad trades.

However if you had been disciplined you could simply watch from the side lines and smile as the novices got sucked in to lots of losses.

The positives from last week were that the suggested bounce trade on the Aud, the Euro/Gbp short at 0.8700, the Euo/Yen short again at 131.00 and a Aud Yen short at 93.00 all worked well, so there were winning trades to be had. Pierre also showed on Friday how price stopped AFTER the big news at his favoured pivot points. The moral of the story is that you can still pick winning trades if you are disciplined,

Having said all that I think the week ahead may be the trickiest yet and I see few opportunities to place my preferred forward orders.

Forex week ahead

Monday is a Bank Holiday in Japan so be careful with Yens, Bernanke speaks yet again on Thursday. Friday sees the start of G20 meetings and there is lots of red flag news to tip toe around. If you are new or need a refresher on how to trade around these events, see last weeks post and video. I also show in todays video how you could have used the FOMC news to make extra profit, fairly risk free (only risk was if price gapped which is very rare) on last weeks Euro/Yen long.

Gaps

There has been conflicting news out of China at the weekend which could cause the Aud to gap and I will be looking for potential gap trades on other pairs. Often this is the easiest, quickest way to make money trading forex. Its higher risk but here is a video of a live trade in the members area where I showed what I look for and how I trade them: Gaps, Live Trade Example

I prefer to place forward orders from my Sunday analysis, but I see very few of those opportunities this week. My best advice is watch 4 hour charts for intra day moves and daily candle closes IF we see breaks of major areas.

Red Flag News (especially FOMC, interest rate news & NFP)

Money & risk management: If you are already in a trade move your stop to entry or beyond if its winning, move stops nearer to price if its losing OR if you are really unsure close it. All these types of events have the potential to whip saw AND you may even see your stop being “jumped” if you are too near to current price.

Forex Week Ahead

Gbp/$: Very messy. Broke back above 1.500 but not a pair I will place forward orders on.

Areas to watch on 4 hour charts are 1.5330 for a short and then 1.500 for possible bounce back up. If price breaks below 1.500 I recommend you wait for the daily candle close to try avoid a “fake out” before shorting on a pullback. There is a lot of red flag Gbp news this week, including the Inflation letter. New Governor Carney showed last week that he was happy for the Gbp to fall, so he could use this opportunity to send a negative signal and force a bigger move down.

Euro/$: Same as Gbp. Main areas to watch are 1.330o for a short and 1.2800 to long.

Intraday 1.300o is key either a bounce back up from a 4 hour chart or an M2 break out pullback below to short, but the latter only on a daily for me.

Chf Horrible! I won’t trade it, but obvious areas to watch are 0.9600 to short and 0.9400 possible long.

Euro/Gbp: Last month price was bouncing between 0.8500 and 0.8600, now seems to be 0.8600 and 0.8700. I am interested to short the latter there again, as per last weeks analysis. I will place a forward order to long at 0.8500, seems unlikely now, but you never know 🙂

Aud: Is it going to stop at 0.9000 or not? Current price is a treble bottom on a daily. I will watch at the market open. If it gaps after negative Chinese news then that would be great. If not, same as last week look at 4 hour charts for candlestick clues to long. Final option if it breaks and closes below 0.9000 I will look on DAILY chart, candle close, for a pullback to short.

Yens: Bank Holiday Monday so be wary then

$/Yen: Broke below the all important 100.00 after the Fed news, but stopped at 50% fib and daily 55ema so 98.75 to long from 4 hour charts or if it gaps down to there. If that doesn’t happen then a break and close above 99.00 will be interesting to long too. If price closes below 98.50 on a daily I will look to short on an M2 pullback entry.

Euro/Yen: Same as last week: Multiple options once more, you could trade just this one pair this week! : Head & shoulders pattern means we may have a 900 pip move brewing here. For that to become possible we need a break and close below the neck line as explained in the video. The line is around 127.50 at the moment, will move up later in the week of course. A more aggressive entry would be to short at a break and close of 128.00, but stop to entry quickly as the trend line held 4 or 5 times in recent weeks.

Other option is a bounce back up at 128.00 or down at 131.00. Finally what if it breaks and closes above 131.00 an M2 trade. Not one for inexperienced traders, but good one to use to learn from. Go down to 4 hour charts, look at candle stick patterns, then look at what the “parent pairs” $/yen & Euro/$ are doing. Check what the $ is doing versus other pairs,Then double check any news updates. Phew, lot to take in but there are possible moves here and a perfect example of being flexible.

Aud Yen: Broke below 90.00 which is significant but I prefer the Aud or a short at 93.00 if price does a bigger pullback.

Cad: Another one ruined by FOMC but still only interested to long. 1.0340 was great after the FOMC as its previous major support and resistance and a monthly 55ema. If price simply continues up then a pullback after 1.0400 will see me long but only from a daily candle close. This pair is prone to whip sawing and not recommended for inexperienced traders. I am not interested to short, but f it drops you may consider a short below 1.0330, but nothing less than daily candle close.

New members please note: If I am looking to take a trade long, at for example 1.5000 , I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.

We are NOT a “tipping service” our aim is to teach you how to trade for yourself. For more up to the minute updates do not forget to drop by the forum

Pierre, Vassilis (Capsmart), Raa, Omar, Mary, and other experienced members will be available in the forum to give you a more up to the minute assessment & whether they see any potential trades lining up in the next few days. Many members tell me this is the best forex forum there is (no back biting & bitchiness, nor spam, that spoils most forums) and all members are happy to help new visitors. Its a great resource, USE IT: Forex Forum

To View the Video full screen, click on the square shape, bottom right hand corner.

http://www.youtube.com/watch?v=p89trx8fOYY&feature=share&list=UUh9jKEbExtwL0MnwLBeyoyQ

Author: Marc Walton