OVERALL SETUP
Currently in an Overall Uptrend;
Currently at the Outer Uptrend Line;
[B]DAILY CHART
POSSIBLE SCENARIOS[/B]
Could break short to start a new Downtrend;
Has Reached its Monthly Range;
Double Tops, Bearish Signal Given at top of strong Uptrend;
Has broken the Inner Uptrend Line;
Could Resume the overall Uptrend;
Trends can resume after hitting the Monthly Range;
DAILY CHART
Key Concepts - Trend Lines, Monthly Ranges and Double Top Signals
HIGHER TIME FRAMES FOR LONG-TERM WEALTH
HIGHER VS LOWER TIME FRAMES
Approximately 95% of Currency Traders fail, with 95% of them also trading on the Smaller Time Frames. This is either a very large coincidence or the root cause of this startling failure rate. If success from trading is to be realized, it is likely to come from a strategy based on the Larger Time Frames, where volatility is minimal and trading signals are more accurate. When trading is done using the larger charts along with the Manual, the trader will benefit from;
Predictable times for Entry and Exit;
A much simpler approach to trading without the chaos of Economic News;
New insights that surpass the recycled information in expensive Trading Systems;
Real examples of each Technical Factor explained;
Exit points that can be spotted well ahead of Statistical Indicators;
Actual step-by-step Trade Sheet instruction;
The potential to generate double-digit returns in months from a handful of trades;
Regular analysis of the most liquid currency pairs will be provided with very little attention given to financial news. Short-term Economic Data are often volatile and contradictory and have been proven to be unnecessary to trading on the Higher Time Frames.
DAY TRADING VS SWING TRADING
Although the trades on the Larger Time Frames take a longer time to reach their targets, the accuracy and larger value of their trades, more than compensate for this wait. The strange thing about trading is that a week can go by in the blink of an eye for most real world things in our lives, yet when it comes to trading, it can seem like an eternity for the average Day Trader.
As a former Day Trader myself, the mere thought of trading the Higher Time Frames was considered to be blasphemous. Eventually, however, the Day Trader, Scalper mentality became such a stressful hamster wheel that moving to the larger charts was no longer an option- it was a necessity. I had no choice but to take a longer look at the larger charts, take a few months off and develop a clear strategy with robust parameters.
TRANSITIONING TO THE HIGHER TIME FRAMES
The biggest hurdle I had to overcome was the need to know what the market was doing every single minute. Since I did not trust the market enough to hold on to a trade for several days, I cut several profitable trades short before they reached their targets. However, after finally developing the strategy that allowed me to trade the larger trends with more confidence, it became a lot easier to leave Day Trading behind for a much more consistent way of trading.
As a quick example of the greater profit potential offered on the Larger Time Frames, letās use the 11 setups that were identified with the Methodology so far this year as at June 2014. Applying it to an account with a starting capital of US$5,000 and risking 5% per trade, this is what the account would generate;
TABLE 1 - 5% RISK PER TRADE- AS AT JUNE 30, 2014
Using a very simplistic assumption that the same rate of gains and losses will be replicated for the 2nd half of the year, by December 31, 2014 the portfolio would look like this;
TABLE 2 - 5% RISK PER TRADE - AS AT DECEMBER 2014
Similarly, by June 2015 and December 2015, the returns would be;
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TABLE 3 - 5% RISK PER TRADE - AS AT JUNE 2015
TABLE 4 - 5% RISK PER TRADE- AS AT DECEMBER 2015[/B]
In other words, this strategy can provide significant gains with only a small number of trades per year, at minimal risk. High Probability Trades are more valuable than short, volatile trades and provide the Trader and Portfolio Managers with a reliable and consistent way of building Long-Term Wealth.
Realistically, I believe Currency Trading is better done with this long-term objective in mind rather than as a short-term income-generating activity. Short-Term trading is the most widely promoted way of trading and many are led to believe that this is the only way of making money. Although there may be profitable Day Traders and Scalpers out there, you are likely to have a higher percentage of successful Long-Term traders if more people made this transition.
It takes a lot of patience and practice to eventually make the change but in the long-run, the pay-off can be tremendous.
Great posts! I know how it feels to get killed by day trading for a couple of years before moving up to higher time framesā¦The worst bit is I started off trading profitably but then decided to day trade because I thought if I was able to swing trade well, then I could day trade well and make much more profitā¦I really couldnāt haha
lolā¦yepā¦that false confidenceā¦ been there, done thatā¦
Day Trading is like a hot womanā¦nice for awhile, but long-term headacheā¦
350 PIPS NZD JPY-- SHORT-TERM RALLY, LONG-TERM DOWNTREND
This pair has finally come to the end of a very strong Uptrend that began in June of 2012, reaching its peak in March of this year. As with most trend changes that are about to take place, the market goes through a period of Consolidation in the form of a Range or a Pennant before breaking out in the new direction. As these patterns are being formed, however, they can also provide setups to trade between Resistance and Support. Such an opportunity may be seen in the next few days if the 2nd Support price point is formed. Once a strong enough Bullish Candle signal appears to also break the current Downtrend Line, a rally of 350 Pips will be on offer for the sharp Swing Trader.
Looking at the figure below, we can see the current sideways movement of the pair that followed the end of the Uptrend. The Inner Uptrend Line was broken and is now hovering above the Outer Uptrend Line, indicating an imminent trend change bearish.
DAILY CHART
The chart below shows us more closely the Pennant pattern gradually being formed above this Outer Uptrend Line. The Resistance boundary has already been formed but with only one Support price point so far, a rally back to Resistance would be needed to complete the Pennant.
DAILY CHART
Such a rally would need to be started with a strong enough Bullish Candle to justify trading the mini-uptrend. This can be similar to the two previous U-turns at the 1st Support point and the 2nd Resistance point.
DAILY CHART
After this rally takes place, we could see another downtrend back to Support. If a major trend change bearish is actually going to take place for the NZD JPY, the Support boundary and the Outer Uptrend Line will be broken simultaneously. This would be similar to the trend change that occurred in April of 2013 when the Inner Uptrend Line at the time was broken along with a small Range setup.
DAILY CHART
The breakout continued until the Outer Uptrend Line was hit to then continue the overall Uptrend. The major difference between this scenario and the one currently taking place, however, is the size of the Consolidation. The larger the Consolidation being formed after a very long trend, the greater the chance of a trend change. If this is accompanied by a break of an Inner Trend Line, this probability increases even more. Assuming that we do so a completed Pennant followed by a bearish breakout, significant gains for the Japanese Yen will be expected heading into 2015.
While this trend change looks likely to take place later this year, profitable gains can be had in the short-run. If the setups and trends that are formed inside the Pennant are strong and clear, a few hundred pips can be added to your trading account over the next few weeks.
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DRFXTRADING
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300-PIP AUSSIE BREAKOUT MAY HAVE TO WAIT
This pair has recently attempted to start a breakout from a Range on the Daily Chart, with a break of a Counter Trend Line (CTL) setup below the Support. This is a common way for Consolidation breakouts to begin following a test of the Range with this CTL barrier. However, the bearish break candle was not strong enough and would need to be followed by another bear candle to convincingly start the downtrend. Nevertheless, with a break of the Uptrend Line already taking place and a False Breakout of a previous Consolidation, it is only a matter of time before the USD begins to regain lost ground against its Aussie counterpart.
We can see the CTL setup that was broken in the graph below. CTLs tend to appear at the Resistance or Support of a broken Consolidation as a way of testing these areas before the breakout begins.
DAILY CHART
Despite being a strong candle on its own, the break below the CTL was not far enough to start the breakout. The distance below the CTL normally has to be greater such as in the example below for the CAD CHF this year.
DAILY CHART- CAD CHF
Whenever the breakout is not strong enough, one of two things can take place. There could either be a False Breakout that takes us back inside of the Range or another, stronger bear candle that continues the breakout short. What could tip the balance in favour of a bearish move, however, are three technical factors;
[B][ul]
[li]The Break below the Uptrend Line;
[/li][li] The Plateauing, Sideways Movement of the Currency Pair;
[/li][li] A Previous False Consolidation Breakout;
[/li][/ul]
[/B]
It is very common for trend changes to follow False Consolidation Breakouts and periods of sideways movements. There was a Pennant setup on the left-hand-side of the chart that attempted to break long to continue the uptrend, but this was short-lived, giving way to the Range setup that we now see. These two Consolidations side by side then created a type of plateau which normally means that the momentum of the trend has been exhausted. If we add a break of a Trend Line into the mix, then a trend change is the inevitable outcome.
DAILY CHART
Once this bearish trend gets going, the target that is expected to be hit in the short-term is the 0,9000 area. This coincides with the Breakout Equivalent of the Range and is the price point at which the breakouts from Consolidations come to an end.
DAILY CHART
So long as the signals and setups on the Daily and 4 Hour Charts are strong, we can capture a large part of this expected 300- Pip decline.
[B]
DRFXTRADING
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Having broken the Outer Uptrend Line as expected, the CAD CHF is now at a bit of a crossroads. The Double Tops that were formed were strong enough to lead to the bearish break, but may not be enough to push the pair down much farther. We could see the formation of a Range that eventually leads to the start of a downtrend, but if we see a strong Bull Candle above the Counter Trend Line (CTL) the Uptrend could continue.
Daily Chart below shows the breakout that took place below the Inner and Outer Trend Lines. Supporting this breakout were the Double Tops and the fact that we had rallied by 600 Pips, exceeding the Monthly Range for this pair.
DAILY CHART
Despite this break, the Double Tops seen here were too weak to start a significant downtrend. The first part of this pattern was strong, but the weakness of the candles for the 2nd Top rendered the signal too weak.
DAILY CHART
So what can we expect at this juncture? Well one of two options.
SCENARIO 1 - CONSOLIDATION ?
Since this breakout may not take place right away, the market could go into a period of Consolidation in the form of a Range. This is typically what you will see when the Monthly Range is hit and/or a Trend Change is going to take place.
DAILY CHART- RANGE SETUP?
We would see a rally to form the 2nd Support to complete the Range followed by a U-turn to breakout bearish. The new trend would be formed as the Swiss Franc regains lost ground against the Loonie.
SCENARIO 2 - RESUMPTION OF UPTREND ?
The Uptrend could actually resume with a simple Bullish Candle and break of the Counter Trend Line (CTL). Even though we are at the Monthly Range of the currency pair, trends can also continue once the setup and signals are strong enough.
DAILY CHART
Until the market shows us its cards, letās wait on the sidelines and then take appropriate action. Get familiar with how to trade these setups and then enjoy the Pips as they roll in.
[B]___________________________________________________________
DRFXTRADING
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Hundreds of Pips in either direction appear to be possible for the next few weeks if we see strong Bullish or Bearish breakout signals. The Weekly Range has recently been hit after a very long and slow trend and has now settled above a major Downtrend Line. A convincing Bullish Candle break above Resistance would put the 0,9400 area in play, while a break short to also take out the Uptrend Line would make 0,8700 the long-term bearish target.
The currency pair has started to move within a small Range above the Inner Uptrend Line, following a rally to the 0,9100 area.
DAILY CHART
The gains for the Swiss Franc also put the pair above a major Outer Trend Line of a previous Downtrend.
DAILY CHART
As you can see, the recent uptrend was part of a break from the Inner Trend Line to the Outer Trend Line of that Downtrend. From this point, the market could either break higher for an even stronger Uptrend or break lower to resume the overall Downtrend. In continuing higher, the Daily Chart would first have to break the Resistance of its current Range setup.
DAILY CHART
The first major target would be the next Weekly Range which would be at the 0,9435 area. Short-term targets will be hit along the way as traders exit profitable positions in this new uptrend. Equally profitable targets could also be hit going short if there is a breakout bearish from this Range along with a break of the Outer Uptrend Line.
DAILY CHART
Before breaking bearish, the currency pair could actually spend a little longer in this Range to carry it closer to the Outer Trend Line. At times, trend changes that involve Consolidation breakouts tend to take place simultaneously with Trend Line breaks to make the start of the new trend even more convincing (TRADE TIP).
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DRFXTRADING
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We have been in a Range setup on the Daily Chart for some time now and with it being above the Outer Uptrend Line, a major breakout could be on the horizon. If the breakout is Bullish, then the major Resistance at 105,43 that ended the 9 month trend would be the first major target. On the other hand, the Range setup is also part of a very long period of sideways movement for the USD JPY which has broken an Inner Uptrend Line in the process. Since major trend changes are normally preceded by sideways patterns and breaks of Inner Trend Lines, a bearish bias in favour of the Japanese Yen might be the better forecast for 2014.
The current Range pattern of the pair can be seen in terms of the large Uptrend that ended in December 2013. You can see the break of the Inner Trend Line and the gradual drift towards the Outer Trend Line that has now taken the form of the Range.
DAILY CHART
Between the Support and the Resistance boundaries, the pair has been moving by 168 Pips on average inside of this Range. Most of the trends have been volatile, however, with perhaps only one of them offering a stable setup for a trade.
DAILY CHART
From here, we could see a bullish breakout that carries us back to the Resistance that ended the Uptrend and then to the Breakout Equivalent of the Range. This could last between 7 and 15 days from the start of the breakout.
DAILY CHART
On the bearish side of the coin, a break of Support would start a new, major downtrend. Trend changes often take place after a long period of market indecision in the form of these Consolidation setups. Several past Support and Resistance price points would be hit along the way, but the main target would be the Breakout Equivalent at 97,85 (See Trade Manual).
DAILY CHART
So, what direction do we take in this situation? As always, we will wait on the market to make that decision for us. Never anticipate the breakout of a major barrier by using the Smaller Time Frames nor before a clear signal from the Daily Chart is given.
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DRFXTRADING
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Consolidation has been the name of the game in the Currency Market for most of 2014 and the AUD NZD has faithfully played its role in this regard. A large 300- Pip Pennant can now be seen following a nearly 3-year downtrend that started in 2011. Within the next few days, we will see either a continuation of this pattern with a Bearish break down to Support or a Bullish move that starts a new Uptrend towards the major Outer Downtrend Line.
The strong decline in the AUD NZD started from the high of 1,3794 in March 2011 to eventually end at the low of 1,0491 in January 2014. In the process, it created an Inner and Outer Trend Line as the market accelerated in the latter part of the downtrend before ending with the current Pennant formation.
DAILY CHART
This Pennant can be seen more closely on the next chart where a small Range has also been formed at the Resistance.
DAILY CHART
At this point, the currency pair could continue to move within the boundaries of the Pennant. This would require a break of this small Range to start the downtrend that carries us to the Support area at 1,0662.
DAILY CHART
The move could take approximately 6 to 10 days and offer traders between 100-250 Pips in gains. Given that it would start with a break of a small Consolidation, however, the trend could actually move very quickly, reaching that Support target in only 3-4 days.
In the Bullish scenario, a breakout above the Resistance of the Range would start a strong breakout that sees the Aussie rally a few hundred pips heading into September.
DAILY CHART
The first target to be hit would be the Weekly Range (WR) followed by the Breakout Equivalent (BE) of the Range. This rally could also take fewer than 6 days to hit those price points and give the trader close to 150 Pips in gains. Following this stage, the market is likely to pause once more before continuing much higher to the larger target of the Outer Downtrend Line of the previous trend.
Breaks of Inner Trend Lines usually lead to moves towards Outer Trend Lines as long as the setups to start these trends are strong enough. Given the size of the current Pennant Consolidation formed over an 8-Month period, it would only be a matter of time before that Outer Downtrend Line is hit.
Bullish or Bearish, stay sharp and patient fellow traders and large profits will be yours once more.
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DRFXTRADING
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AUD NZD
A trade on the AUD NZD was executed recently as the pair started a Bullish Breakout from a Range and a large Pennant Consolidation.
DAILY CHART
The strategy generally aims to get at least 100 Pips and a maximum of 200 Pips, but there can be reasons that justify an early exit. This was one of the occasions, leading to the exit for 70 Pips.
DAILY CHART
As you can see, the market pulled back a few days later, justifying the exit.
DAILY CHART
This strategy involves a lot of patience and discipline. One of the main guidelines is that the trader should NEVER look at the charts while the trade is still open. This avoids the temptation of making emotional decisions such as exiting for small gains or losses when the market becomes slower than anticipated. Someone who did not obey this rule is likely to have done so when the market moved sideways for 6 consecutive days.
DAILY CHART
The patient trader would have benefited from the last-gasp rally that took place on the 7th Day- lucky number 7.
In any strategy, one must always obey the guidelines established. This allows you to continue to generate trading gains over the long run from this very lucrative financial market.
DRFXTRADING
This latest trade based on our Price Action, Swing Trading Methodology provided 148 Pips on the Aussie Dollar over a short 4-day period. This took our total gain to 218 Pips in 2 weeks following the 70-Pip trade on the AUD NZD pair at the start of the month (see trade above). If this rate of gains were to continue for the rest of the year, we could actually see a triple digit rate of return for 2014 when these results are combined with previous setups identified by the Methodology.
The AUD NZD was one of the last pairs that saw gains for the Aussie dollar this month. Since then, the currency began to lose value against several of the other major currencies over the last few days. It was within this context that the AUD USD trade opportunity presented itself on Thursday September 11, 2014.
The setup was a bearish break of a large Pennant formed between April and September this year.
AUD USD - DAILY CHART PENNANT
The size of the Consolidation suggested that a breakout could continue for several hundred pips in favour of the US Dollar in the months ahead. However, based on our strategy and a specific technical aspect of this setup, a short-term gain of between 100 and 200 Pips was the more prudent decision.
Entry took place at the third candle that broke the Consolidation with the target set based on the criteria established for this type of breakout. The Stop Loss was also placed at a strategy-determined area to prevent the trade from being affected by spikes along the way.
DAILY CHART TRADE SETUP
After only a few days, the target was hit. Towards the end of the trend, the market actually reversed to the entry price with a Bullish Candlestick Formation. However, a large Bearish Candle shortly followed to take out that attempted reversal and give us our reward.
TRADE RESULT
LIVE ACCOUNT RESULT
The chart patterns and candles from FXCM are used to identify the entry signals while the Dukascopy platform is used for trades on the Live Account. The Methodology utilizes the New York Candle close of the Daily Chart as the basis for the Price Action strategy, which is best provided by FXCM.
This trend was always expected to provide large gains for the trader in a short time since breakouts from Consolidations always produce sharp movements. Nevertheless, if the trader was looking at the Pip count or the Account Balance on their trading platform, chances are he/she would have started to panic at the start of the bullish reversal to the entry price. If trading was also being done on the 30 Minute Chart, that sharp bullish signal combined with the Trend Line break and the Double Bottoms may have even convinced the trader to start going Long.
30 MINUTE CHART- REVERSAL SIGNALS
The net result would have been a much smaller profit compared to that which was offered by the market. Constantly monitoring the trade and using the Smaller Time Frames will always tempt us to make decisions based on emotions and our ego despite our best intentions. Trades that are objectively analyzed and executed can be easily sabotaged by the desire to always know what is happening with the trade.
Nevertheless, this habit is understandable and expected especially if you are transitioning to the Larger Time Frames. Most of us have been taught by trading companies and brokers to trade in a way that requires us to develop this and other bad habits. We have been led to believe that trading has to be done every hour and every day in order to profitable. This frame of mind will always lead to certain practices that generate an impatient temperament in us and cause us to constantly make unwise trade decisions. The best thing to do is to persist until these habits are no longer a part of your trading.
Alternately, one could open up a separate Demo Account, practice trading on the Daily and 4 Hour Charts and compare the results with an existing strategy on the lower charts. Over time, you will see the large difference in profitability and appreciate how unnecessary it is to monitor the trade.
DRFXTRADING
The market-wide decline in the value of the Australian Dollar appears to be about to continue with the AUD JPY this week. The pair had recently attempted to break long from a large Consolidation on the Daily Chart, but has now become volatile above the Resistance boundary. If we see a strong Bearish Candle Signal that breaks below this Resistance, sharp gains for the Japanese Yen are likely to be seen over the next few weeks.
The Daily Chart below shows the Pennant setup and the short-lived Bullish breakout.
DAILY CHART - PENNANT BREAKOUT
We can also see that this was taking place in the context of an existing Uptrend, which should have provided additional support to that breakout.
DAILY CHART- UPTREND
Given the extent of the pullback to the Resistance, however, this breakout is likely to give way to a Bearish reversal in favour of the Japanese Yen. The start of this downtrend could take the form of an ABC setup or a small Consolidation breakout. In either case, if the Bearish Candle is strong enough to break below the Resistance, we could see a decline to 94,37 at Support and then lower to the Outer Uptrend Line at 91,77.
DAILY CHART- BEARISH TARGETS
This decline in the Aussie Dollar would be similar to that on the AUD NZD as well as the AUD USD where a trade was recently made.
DAILY CHART - AUD NZD
As the market continues to break out of these large Consolidation setups, hundreds of Pips will continue to be on offer for the sharp trader. With the right Methodology that maximizes on these opportunities, your Trading Account will continue to grow over the Long-Run.
How are you managing with these breakouts?
100-PIP AUD NZD TRADE
After pulling back from a short-lived breakout above its large Pennant setup recently, this pair now seems to be forming a small Range at the Resistance of that Consolidation. This created an opportunity to go long as it began to form the 1st Support point of this new setup. Entry took place using the signals on the Daily and 4 Hour Charts to provide a quick 100-Pip trade between Friday and Monday morning.
From the Daily Chart below, we can see the Pennant setup that was initially broken to start a rally in favour of the Aussie dollar. However, this would last for only a few days before the pair returned to the Resistance.
DAILY CHART- BREAKOUT & PULLBACK
The nature of the candles that had pulled back to this Resistance suggested that a small Range was going to be formed. These bearish candles were small and slow and are the type normally associated with the start of a Consolidation setup. These candles were then followed by a Bull Candle that pointed to the formation of the 1st Support area and the start of the rally to form the first uptrend of the Range.
DAILY CHART- START OF RANGE
On the 4 Hour Chart, we could see further evidence of this imminent move. Inner and Outer Downtrend Lines were being broken as the Daily Chart formed that strong Bull Candle signal. This was followed by a break of a Counter Trend Line (CTL) that pointed to the continuation of this rally.
4 HOUR CHART- BULLISH SIGNALS
Entry then took place at that Bull Candle, with the Stop Loss below the low of this U-Turn. The target was set to just below where the Resistance of this Range would be formed.
4 HOUR CHART- ENTRY SETUP
After only 20 hours of actual market activity between Friday and today, the target was hit.
4 HOUR CHART- TRADE RESULT
Confirmation that the target was correctly chosen came in the form of that large Bull Candle. These candles are strong indicators that a trend has ended and will be followed by a period of sideways movement and market indecision.
I just read through a lot of this thread and it mimics quite a lot of my approach. I guess everyone is different but I truly believe that this way of trading is suited to more people than many other approaches.
I couldnt agree with you more. In a very short time/few months and with a handful or trades, this approach can bring large returns with a small to moderate risk per trade.
What is your approach?
105 PIPS ON EURO USD LONG-TERM TRADE
As the Euro continues its slow but steady decline against the US Dollar, the current value of the short trade open on this pair is now 105 Pips out of the 277 Pips targeted. This was done within the context of the strong downtrend that began in May this year after the turn at Resistance of the large Pennant on the Daily Chart.
DAILY CHART - PENNANT SETUP
DAILY CHART - OPEN TRADE
The nearly 1400-Pip decline has provided Day and Swing Traders with many shorting opportunities along the way. This current trade, which could reach its target in a few days/weeks, was opened following the break of a Pennant on the 4 Hour Chart.
4 HOUR CHART- ENTRY SETUP
As with all breakouts short from Consolidation, the Stop Loss was placed above the Resistance. Following this entry, additional or new short positions could also have been placed at subsequent bearish signals. The Limit Order has been set to just above the Support of the larger Pennant.
4 HOUR CHART- TRADE TARGET
The trade has now been opened for 4 days and is likely to reach its target in a time period beyond the traditional Swing Trading time frame. It is also being done in a trend that is characterized by smaller Daily Candles than are normally expected for major currency pairs such as this. Major price targets that would also be expected to lead to large pullbacks are also going unnoticed in this atypical downtrend. Nevertheless, it is a trend that can be considered to be used together with existing strategies that target shorter moves with stronger Daily Candlestick signals.
Let us see how this one unfolds together with the inversely correlated USD CHF that is also moving towards its own target;
DAILY CHART- USD CHF
Happy Trading!
NFP PUSHES EURO USD TRADE UP 200 PIPS
The dreaded Non-Farm Payroll (NFP) Employment Change was released today and led to the sharp and volatile movements normally feared during this major Fundamental announcement. The employment data, which was positive for the US Labour Market, led to sharp gains of 100 Pips and 80 Pips against the Euro and Swiss Franc, respectively, within 2 hours of the release. Lucky Day Traders may have got some or even all of this movement if they had correctly guessed the short-term reaction of the market. However, those who were already in long-term trades based on the major trends of these two pairs, would have comfortably avoided this volatility on their way to even larger trading gains.
The number of persons employed in the United States increased by 248,000 in September, translating to a welcomed decline in the Unemployment Rate to 5.9% from 6.1%. The increase was also more than the forecast 216,000 and the previous figure of 186,000 for August. Naturally, the reaction to these numbers was sharp, positive and immediate for the US Dollar.
EURO USD- 30 MINUTE CHART
One could have anticipated this movement with a short position placed before the announcement, since the forecast was for an improvement in the numbers. Nevertheless, given the history of this and other currency pairs reacting in contrast to the economic data-especially for the NFP-the trader may have had some doubt about the actual direction of the market. Past trading losses from this and other fundamental data may have also increased the anxiety about trading altogether, inclusive of how much to get from the trade - 30 Pips, 50 Pips, 10 Pips?
In contrast to these difficulties, long-term traders would have already been in trades based on the larger patterns and trends on this pair. The EURO USD was always expected to continue bearish regardless of a single monthly economic data point. A wider view of the Daily Chart reveals that the pair had been in a sharp downtrend since May this year when it turned at the Resistance of the large Pennant Consolidation.
EURO USD - PENNANT CONSOLIDATION
It is within this context, that the short trade was opened as explained in the previous posts. The reaction to the news pushed the pair down even more to increase the value of the floating profit to just over 200 Pips.
DAILY CHART
Similarly, the USD CHF was also in an uptrend headed for the Outer Downtrend Line. This NFP was the final push needed to carry the trade to its target for the 115 Pip gain.
DAILY CHART
For the EURO USD, however, the target at Support is likely to take a much longer time. With 150 Pips left in this trade, we could see this area hit by the end of the upcoming week.
DAILY CHART
The larger trends and setups on the Daily and 4 Hour Charts provide bigger profits with less volatility and trading stress relative to the Smaller Time Frames. Short-term reactions to important but inconsistent Economic reports have very little bearing on the main direction and targets of the larger charts. With the greater stability and clarity of these trends, Retail Traders can therefore hold on to profitable trades for a much longer period with greater confidence that their analysis and patience will be significantly rewarded.
MAIN TECHNICAL POINTS OF METHODOLOGY
[ul]
[li] Counter Trend Lines
[/li][li]
[/li][li] Downtrend Lines
[/li][li]
[/li][li] Breakouts & False Breakouts
[/li][li]
[/li][li] Stop Loss Placements
[/li][li]
[/li][li] Weekly Ranges
[/li][li]
[/li][/ul]
76 PIPS CHF JPY - 100% RETURN BECKONS
This trade took advantage of the False Breakout on the Pennant of the Daily Chart, following a short-lived Bullish breakout. It provided a gain of 76 Pips over 4 Days as the pair returned inside of the large Consolidation on its way to the Support boundary. This latest trade was added confirmation of the accuracy of my Methodology which continues to produce above average trading gains - 4% so far on a Demo Account opened in October that now tracks my Live Account trades on its way to a 100% return.
There was an initial breakout long above the Resistance of the CHF JPY Pennant that pointed to the start of sharp gains for the Swiss Franc. It was expected to mirror the gains for the US Dollar against the Japanese Yen following a Range breakout of 700 Pips in 5 weeks.
The Pennant setup on the CHF JPY was much larger in comparison and was also in an Uptrend similar to the USD JPY. As such, when the Bull Candle breakout signal appeared above its Resistance boundary, the distance of the breakout was expected to be much greater. A Bullish Candle Signal did appear but shortly afterwards, the pair became volatile and eventually reversed below the Resistance to start the False Breakout inside of the Pennant.
With this turn and the Bearish signal given, the pair was expected to decline towards the Support of the Pennant. Entry took place at the appropriate area and the Limit set to the Near-End Value above the Support (based on my Method).
TRADE SETUP
At the end of the established Holding Period, the trade had not yet reached the Near End Value and thus had to be closed for 76 Pips instead of the targeted 100 Pips.
DAILY CHART- LIVE ACCOUNT RESULT
With this result, the Demo Account generated its first win of just handful of trades needed for a 100% over the next few months.
PROJECTED RETURN
DEMO ACCOUNT RESULT
DEMO ACCOUNT BALANCE
These upcoming trades will be credible evidence of the consistency of this strategy and its ability to provide large returns in a very short time. It will demonstrate that with High Probability trades such as this and others realized over the last 3 years, significant Long-Term Wealth is just a few clicks away.
If I may ask, what is the process by which you choose which pairs to look at/trade? if there is any such process of elimination and/or preference.