Live trades - by Forex Mind Games

O sleeping EURUSD beauty! When are you waking up? Which direction are you going? Are you going out with Mr Bull or the Mr Bear?

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This slumber of yours is causing many traders to be sleepy and not watch EURUSD attentively. At the point of maximum drowsiness, EURUSD will break out. And when it does, it may go onto a fast and furious trending mode.

So here are my 2 scenario analysis for the bulls and bears.

Scenario #1 (Mr Bull)
For the bulls to prevail, this has to happen.

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Scenario #2 (Mr Bear)
For teddy bear to win, this is the possible situation.

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This USDCAD trade looks promising. There may be a possible bounce from the support zone. I am willing to risk playing with a larger position size on this trade. As the risk to reward ratio is very favourable at 1 is to 5.

LONG USDCAD around 0.9800-20
Stop loss below 0.9780
Target profit 1.0000


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Quote from post 34
"AUDUSD
LONG 1.0440-70
Stop loss below 1.0400"

In post 39 you went in with smaller stop. I know it's easy in hindsight to say that you didn't trade your plan and it's meant a loss but I'm curious as to why the change of heart? (I'm also mindful that trading your plan may have resulted in a slightly bigger loss if price reaches 1.04)

Part of my curiousity is that whilst I'm bearish in the medium term on this pair I am still expecting another push to at least attempt a test of 1.06 in short term.

I was mindful that RBA make a statement on friday that it will rather cut interest rates than intervene directly in the forex market. This cause a sell-off of AUDUSD for that whole day. When i enter my long trade, AUSUSD had already drop by 80-100pips. This indicates that it was a bearish friday. That explains why i went in with a smaller stop and smaller position size.

When i go long, i look to see whether it is a bullish day or bearish day. If it is a bullish day, i enter with normal position size. If it is bearish, i tend to stay out. Or i wish to enter due to my trading plan, it will be with a smaller position size.

Looking at the daily chart. There is a huge bearish candlestick. When i see that, i decided to go in with a smaller size. Hope my explanation helps.

thanks!

Preview #3

This is part 3 of my trade previews for this week. For this trade, i am looking at GBPJPY. GBPJPY is now touching a down trendline from the daily chart. Will it break above the down trendline? Or will the trendline hold? This is my trading plan.

LONG GBPJPY around 122.80-123.20
Stop loss below 122.80
Target profit #1 125.00
Target profit #2 127.00

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EURUSD has broken above the important resistance zone of 1.2440. Looks like EURUSD is going to follow scenario #1.

EURUSD 1.2500 is a important level to watch for today. Reasons are outlined below.

1. It is a psychological resistance round number. Humans love round numbers, such as 10, 1000 or 1.2000. The more zeros the better. Therefore 1.2500 is also another type of psychological round number

2. There is supposedly market talk of a double-no-touch option barrier of 1.2000-1.2500. Traders who sold the DNT option barrier will be defending the 1.2500 price level.

3. There could be large sell orders at 1.2500. Banks, major instituitions, hedge funds, i.e. the large players, could be looking to sell EURUSD at this price.

If the supply at 1.2500 could be overcome, i am expecting EURUSD to go to 1.2600-30 region.

According to my analysis, I believe the potential high for today could be around 1.2615-30. Lets see if my prediction is accurate.

Price now at 0725GMT is 1.2565.

It would be good to take some of your profits on your long positions at this price. And move up your trailing stops.

I will share on friday why i make this prediction to call the top.

I believe the current uptrend for this week is just a retracement. In the larger view of time, the overall trend for EURUSD is still bearish. The debt crisis is still unsolved. Greece, Spain and Italy are in a mess. The yields for their 10 year bonds are extremely high, which reflect the market's non-confidence in their economy. All in all the euro-zone is fundamentally weak.

Look at my chart. We are about to hit a long term resistance at the downtrend channel line for the 4th time. What are the chances of EURUSD breaking out of this down trend? I do not know. But i believe plenty of long term traders are placing their sell orders right around point 4. Watch the price action at this critical junction.

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I am still holding onto a small percentage of my long position from 1.2270. However, i have tighten up my trailing stop. As i believe the upside is limited for EURUSD.

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Slightly frustrating week for me on the AUDUSD. It has not been trending and is moving in a yo-yo manner. Up down up down. The yo-yo movement is clearly evident on the 1 hour chart. It is hard to trade when prices move like roller coasters, up one moment, down the other moment.

On the daily chart, i do see a wave 4 on the Elliott Wave Count. According to Elliott Wave theory, wave 4's are especially prone to exhibit choppy behaviours. This might explain why we are seeing the yo-yo pattern on the 1 hour chart.

Some technical traders love Elliott Wave. Others dismiss it as mumbo-jumbo hocus pocus. To each their own. Elliott Wave requires constant adjusting of the wave count. Therefore i only use Elliott Wave on my daily and weekly charts. And i will only use it when necessary and when i see a clear wave count. I will post a daily chart to show the Elliott Wave Count soon.

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One of my best weeks trading GBPUSD. My bias for GBPUSD was on the bullish side. And i was expecting GBPUSD to finally break above the 1.5780-1.5800 pivot zone by this week. I woke up at 5am on monday morning to trade the monday opening! Why my bullish view? See daily chart below. What do we see on the daily chart?

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1. There is a bullish trendline.
2. Price touches the trendline 3 times.
3. There are 3 higher lows.

The price action is telling us that the buyers are stronger than the sellers. Each time the price drops to a lower level, there are strong demand. And the buyers buy up and push up the price.

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Here are my trading results for GBPUSD. This is one key to successful trading. Always keep your losses small or at breakeven, always let your profits run. Trading is a mind game.

Finally a breakout on GBPUSD!! This 1.5780-5800 resistance zone has been a major pivotal point since Nov 2011. Will the bulls be able to hold onto their victory? I am cheering for the bulls this week.

If price retraces to re-test the 1.5780-5800 level, i am expecting strong demand to appear. The strong demand should push GBPUSD up and continue on its bullish trend.

LONG GBPUSD @ 1.5780-5800
Stop loss below 1.5750
Final target profit 1.6300

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AUDUSD is forming a nice Elliott Wave bullish pattern. I believe we are currently in wave 4, which is a corrective or counter-trend wave. One thing about Elliott Wave trading is that the wave counts require constant re-adjusting. To solve this inherent issue, I prefer to use Elliott Wave trading on the daily and weekly charts. And voila! Problem "solved!!"

The daily chart below shows the wave count.

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On the 4hr chart, wave 4 is obeying a falling channel. Once price breaks above the falling channel, it should be the start of wave 5. Watch carefully and wait patiently for wave 5. It can a really powerful bullish up move.

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Guys, what do you think of my latest discovery? Pretty powerful order flow analysis for the AUDUSD, i believe. It may help us to fine-tune our entries to buy & sell aussie.

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What a week we had last friday with Bernanke's speech at Jackson hole eh? The volatility was extreme, up and down 60pips within minutes.

For this coming week, it is a tough call. I do not know whether to be a bull or bear. The price action is calling for both directions!! Why? Lets begin with the daily chart. The daily charts shows a bearish price action.

On the daily chart, we see:
1. Price action is bearish with a clearly defined falling channel with 3 confirmed points
2. Price is touching potential point 4 for this week
3. Pivot zone resistance from 15th Jan 2012 at 1.2650

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On the 4hr chart, we see:
1. Price action is bullish with a rising channel with also 3 confirmed points
2. 1.2420-40 could be a new support zone

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So what is the key to this dilemma? I think the key battle may be 1.2650.

Bull traders:
1. Price must break above and stay above 1.2650
2. Price to stay within 4hr rising channel
3. Price to touch rising channel to form point 4 to create a 4th higher low in order to break above 1.2650

Bear traders:
1. Price fails to break above 1.2650
2. Reversal patterns such as double top or head and shoulders to form on 1hr or 4hr chart
3. Price must not form a point 4 on 4hr rising channel
4. Price must break out from the 4hr rising channel

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I present to you my latest findings on the order flow of AUDUSD. Remember that currencies are the lifelines of the global economy. People buy and sell currencies all the time. If i wanted to travel to London to watch the 2012 Olympics, i would change my local currency into British pounds. Which means i would buy GBP and sell SGD. Basic supply and demand.

We individuals do not have the power to move the currencies by 1 pip. So who does? It is the multinational companies such as IBM, Apple, BMW, Samsung and others. Central banks can manipulate their countries' currencies. But they do it infrequently, although when they do it, it causes huge spikes. Witness BOJ intervening to weaken the YEN in 2011. Look up the daily chart of USDJPY and find the obvious one day spikes. It is the handicraft of Japan's central bank. Hedge funds can and also shift currencies to a certain extent. But their main aim is speculation and to make profits.

The main factor in currency movement is this. Watch the order flow by the multinational corporations. Every month, whether it is the beginning or the end of each month, they buy and sell currencies. Why? Because they need to settle their monthly accounts. They need to hedge their positions. They need to repatriate their profits. They need to pay their suppliers. They need to collect payment from their customers. Every month, every quarter, every year end, they have to tabulate their profits and losses into their balance sheets. And a host of other reasons.

To illustrate my findings, see the AUDUSD chart. Now locate the places where price makes a major turn. The tops and bottoms are located mostly on the month-end or month-start. It is not a coincidence. It is order-flow.

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I hope you understand the importance of order-flow now. Many traders talk on fundamental analysis (FA) and technical analysis (TA) when looking at the markets. I present to you the third analysis, order-flow analysis (OFA). Learn it well and you will become a more successful trader. Trading is a mind game.

i like your charts and the way you look at the possibilities,

any thoughts on cable,after the friday releases,the fact the previous high wasnt breached suggests a possible short side,we have price support at 15778,previous months highs,.

for me a close above 15908 buy

below 15778 sell,

that leaves a 130 pip range should we stagnate waiting a trigger either way

Very interesting theory on order flow analysis. I certainly think it has some merit but suspect it too early to be conclusive without knowing what else was happening around those times and without looking for similar patterns in other pairs. Unfortunately as I only trade AUDUSD and am only a part time trader I hope you don't mind if I leave it to you to investigate and present on others pairs, I can do it but it would be a while before I get the time.