Saturday, December 29, 2012

MegaTrade101: Book Square EURGBP Cross Rate Strategy LIVE for year end 2012



This video supports our Market View Analysis dated Dec 12-22, 2012 Long Trade position for the EURGBP Cross rate and the strategies applied.
This video would likewise show equally the importance of " Timing" the settlement of the trade position, the same importance of "Timing" any trade entry in the market. Developing the skill of "market timing" takes some serious due diligence and experience in trading the market. Once executed the end-result can be seen right away. There will be instances that a price execution can be too early or too late depending on the circumstances and market conditions. A pre-calculated top or bottom can be assumed but can never be guaranteed as the market moves a reversal pattern in either direction is very difficult to forecast until it has taken shape.And on execution, whenever a mistake is identified then the proper corrective strategy can be implemented before any serious damaged is done.

Thursday, December 27, 2012

Summary Guidelines:

For Currency Trading by MegaTrade101.com:

◦Choosing the right CCY Pair to trade
◦Establish Major / Mid-term Trend & Trade Position
◦Appropriate funds to accomodate trade strategies & contingencies
◦Amount willing to expose within a certain time frame for period to cover
◦Tolerable Stop-loss in pips and / or equivalent amount
◦Realistic & Flexible Profit Objective to maximize Market potential
Advance Alternative strategies available for hedging:

Wednesday, December 26, 2012

EURGBP Counter-trade Strategies

Sunday, December 23, 2012

Cross Rate Strategy: GBPUSD vs. EURGBP

Sequential trade Review: Position Liquidation of Long GBPUSD average @1.61806 was initiated on the way lower @1.6245 dated Dec. 20 maximizing the EURGBP market potential on the way higher prior to closing of the week of Dec. 21. Counter-trade Strategies applied between GBPUSD & EURGBP cross trade. Net Long still open prior to end of the trading year where position adjustments would be made depending on market behavior. Time-flexibility considered between fundamentals & technical perspective as these are the net remaining positions for the year ending 2012 as of this writing.
Click on the EURGBP link above for a complete analysis.

Season's Greetings to all and have a wonderful Happy Holidays!


Thursday, December 20, 2012

FX: Due Diligence Analysis

Market analysts across the board have indicated that the recent Euro decline, its correlated currency pairs and crosses have provided a signal for a reversal in the making. But do they carry the same corresponding level of market conviction in their outlook? Perhaps, but regardless of the weight, what is equally important is the final outcome for every trade executed that carries a reasonable risk/reward ratio over a period of time. Moreover, a tolerable amount of loss which could be used as a market trade-test to weigh market sentiments and price conditions in protecting the gains made on a cross-trade strategy at the same time to try and maximize market potential.

In today's trading activity, analyzing the risk/reward ratio can be defined where prices are trading at. Anticipating a top or bottom of a trend can be equally challenging for any trader or chartist. By having a full understanding of the important events that are primarily in the news are equally as important whenever a comparison is made with any technical chart formation.

There is a difference in maintaining a market call and having an unbias market sentiment by equally having the flexibility of adjusting strategies whenever the need arises whenever price action is at the opposite side of a trade. Timing an execution in a market set-up based either on a simple fundamental news analysis or a technical formation, really depends on the trader’s perception and time frame of having a trade position in the market. And not simply...getting a kick from speculation! (related article)

Note: Typical chart examples are the current daily candle bar prices on the USD Index, EURUSD, USDJPY, AUDUSD and the Cross Rates.

Tuesday, December 18, 2012

Market Sentiments & Trade Position:

by MegaTrade101
The general consensus of a thinly traded market can only be viewed by the tightly-price action among the currency majors while waiting for a some reason that would dominate the market place. This is where traders obvious take is simply to stay on the sideline. Likewise for some, but not for institutional players that can simply position themselves before any market action takes place. Through a strategic process of deduction positions taken on the following has been initiated by MegaTrade101.com:

AUDUSD LONG @1.05229 executed based from a 4 hour chart formation with a double bottom price @1.0515/15 levels on the way up within a 4hour trade session interval. Trend continuation moving forward with initial objective set above the 1.0580. Meanwhile the support levels is set @1.0500 even which is a good level to place a tolerable stop in case the market turns around to the other direction.
A daily close above the 1.0580 would signify a continuation of the trend higher. Volumes/OI have indicated some relatively new speculative trades from institutional players from the interbank market. Speculative retail trades have gotten some attention but with only a limited time frame for scalping a few pips from the price swings.
For a complete analysis of the trade, please click on the link.

Forex Behavior & Analysis l

The analysis hereon is directly related to our recent article "On Prices" which defines how well a trader / chartist can identify price discrepancies and the importance of monitoring price action among selective trading platforms common used particularly in the foreign currency market.
A clear example is the registered closing and opening prices of the EURUSD, GBPUSD, the USDJPY and the EURJPY, GBPJPY crosses just to name a few. However, the recent election that took place in Japan over the weekend has made the USDJPY at the central stage of the currency market. With an opening price gap much higher @84.10 from its closing price @83.50. Although, this market swing is more correlated to a fundamental catalyst that drove the Japanese Yen at its lowest levels has pre-ordained the USDJPY to its present directional trend. The only determining factor would be the strength and breath of the currency pairs at the present time especially towards the last few trading days of the year.
Moving forward, the major crosses  ...

   

Tuesday, December 11, 2012

ON PRICES: Spreads, Accuracy & Transparency

With so many news affecting the forex market heading to the Fed's announcement & the Fiscal Cliff, that price actions are limited to a continuing price trend, but prices are moving in both directions before a resumption of the trend. The likes of the GBPJPY, EURJPY & AUDUSD to say the least.
Market price behavior has deeply affected trading activities to a point that price quotes are directly affected from the different liquidity providers that each Forex broker/dealers have compared to most interbank counter-party banks. This is where the big difference comes into play. Although, spreads can widen and decrease, it still doesn't mean that a trade could define its success. What defines a successful trade depends on the trend position, an appropriate trading amount size that could tolerate a temporary floating loss without being stopped-out or called-on before prices resumes favoring the position taken.
However, spreads among price, execution, accuracy & transparency must well be considered as the current market conditions warrants that prices quoted on-screen are truly reliable. Not that they are, but simply knowing which of the trading platforms has this ability. Almost all broker/dealers using the same modified platform commonly used like the MT4 or an equivalent upgrade would claim the effectiveness of each platform offered to clients trading in particularly the forex market.

Reinforcing Trend & Counter-trade Strategies

As the year draws closer; market sensitivity is clearly seen by the indecisiveness of price swings across the forex market where the USD weakness was relatively drawn from the Federal Reserve seen increasing the ante by as much as USD4T of new asset purchases. The USDx is working @80.09 basis point lower from the day's high marked at the 80.57, although seen as a corrective move from a more fundamentally oriented market as of today.
With the market quietly pausing during both the Asian-European sessions prior to the US market's more choppy price swings; we have seen that a more direct effect has taken place for Cable moving back higher from a registered low @1.6000 even then a recovery move took place in a slower pattern as the US market opened. Apparently, since the USD follow-through did not materialize, a trailing stop to cash-in our short-Cable on the way higher was initiated alongside a counter-trend /Trade strategy utilizing the GBPJPY as the primary currency of choice as indicated in the figure 1. Expect a daily follow-through from this reinforced Trend for the Cross Rates prior to Wednesday Fed policy report and the Fiscal Cliff.

On the tech-perspective: The GBPJPY 4hour chart formation simply showed a double bottom formation with a stronger support @131.65 and a spinning top prior to the session rally. Likewise the key price refernce for the other EURJPY cross is still at the 105.50/65 levels. That is why we have since then that both cross rates are within a "Reinforced Trend" But more importantly, disecting the time-frame within the 4hour segment would be a typical market timing developed alongside with timing the other correlated currency pairs before actual execution. In essence, its also helps when trading skills related to market timing must be part of due diligence before any trading decision can be made. Remember, nearing the end of the year's trading activity and last quarter for the year; a short-term three (3) days trading exposure would be more applicable at this time.
Clearly market participants have renewed their trades and shifted positions based primarily from the recent COT; where increased OI on both sides of the market took place with the Aussie$ taking the lead while European currency pairs were net short. However, this was prior to the expected announcement by the Fed regarding pumping up assets which drove the USDx lower while both Euro & Cable rallied to their present prices @1.2993 & @1.6108 respectively. Expect a relatively choppy price action across the board on both major pairs while the  AUDUSD and the AUDJPY remains resilient and trending higher will be dominant. Of course with some price adjustments nearing the end of the month's trading. Prices have achieve our first target at the 1.0510/15 levels as of this writing.

Friday, December 7, 2012

FX Market Perspective l

Sequential Trades leading to NFP & Unemployment Data:
On the Fundamental stand point: the doom and gloom reports on job cuts in the news wires prior to today's much anticipated NFP numbers of 146,000 jobs added and unemployment data at 7.7% (lowest since 2008) beating market expectations have finally put most naysayers to silence.
The overwhelming & unexpected data from both reports have benefited the USD and investors risk appetite. Of course, there will always be a contrary and counterpart opinion in all this pleasant reports. Which in fact, only boils down to the Fiscal Cliff and the Fed's policy on whether adding additional asset purchases would continue to boost the US economy. With the news now out of the way, the focus would be the FOMC meeting heading into next week with a better looking labor market report. Weighing market sentiments comes into play once again will head towards how the technicals would paint the charts at the closing of this week's trading.

Thursday, December 6, 2012

A Market Price Reversal...

Or a short-term trend reversal in the making...is what most traders are currently focused on. ECB President Mario Draghi's comments of a rate reduction during the press conference, have pulled the plug on the Euro's advances. The change could have came from various reasons moving forward as negative reports on the revised forecast of a 0.5% lower GDP for the year. And the recent rally above the 1.3100 levels may drag export numbers lower for the German economy that may also hurt exports. 
Although, technically the EURUSD has had some difficulty hurdling the 1.3130 levels which apparently met some profit-taking settlements from a variety of institutional investors. Currently the Euro is working @1.2967 against the USD, as of this writing. Thus, giving some relief for short-sellers who have been holding earlier positions on the short side of the Euro market. Some reluctance can be viewed as to whether this decline can find some stronger momentum as the market only has one more day for the much anticipated NFPs numbers.
The earlier report on the jobless claims came in @370k which happens to be better than expected that pushed the USDx from a registered daily low of 79.55 basis point to its current price level @80.21. Hardly a difference but enough to pullback at its present levels. This have given a better outlook for the USD moving forward as investors shifts sentiments and likewise the flow of positions from the precious metals have done the same for now. As prices for Gold have declined for the past couple of weeks, more on the levels below the USD1750.00 which also supported a gradual decline for the USD.

Tuesday, December 4, 2012

Market Analysis SRO 12.4

In the absence of any real market changer between the recent RBA interest rate cut within expectations, the ISM manufacturing data and the much anticipated Non-Farm Payroll data, the market sentiments on the GBPJPY, EURGBP & EURJPY Cross Rates reinforced trend remains resilient with the steadier prices still moving north of the charts.
From our closing analysis and insight for the US Dollar Index dated the 30th of November; we have made mention that ..." The key indicator for the opening price gap would dictate the first trading week for December." While the USDx opened lower with a price gap at the first trading day of the new month of December @79.99/00 from a month's closing price last Friday @80.25 basis point have indicated a lower signal for the USD. Which prompted the Euro & Cable prices to swing higher at the ealier Asian trading session towards the European sessions. Although, inbetween sessions, prices have had some minor session pullbacks breathing some false indication of a possible decline. However, these decline in prices are mere corrections and price adjustments that are intended to soften the relative strengths / weaknesses of the current prices related to their corresponding indices. These price adjustments is where changes are likewise made while technical divergences /convergence are created in the same manner that would provide some trade signals along the way.