Market's Price Behavior 5.31

Understanding & Knowing how it works! 

The recovery of the US Dollar have was renewed and accelerated after stronger Chicago PMI numbers. Today's economic reports were obviously mixed. Meaning that the Fed would remain on its path to taper-off asset purchases for the year.

The recovery in the USD was likewise supported by the upward revision of the University of Michigan's Consumer Confidence index. Although, the preliminary numbers showed that consumer sentiment improved significantly in May. But the other story affecting the euro today were Bank of Italy Governor Visco's comments on the potential for another rate cut which affected the EURUSD more than the disappointing umeployment data earlier during the European session.

As the Euro dropped to as low as 1.2943 after the statements; affecting the EURGBP cross rates to move lower as well @0.8527. Although, a slight recovery did occur after the news, but the USDx recovered from its lows @83.00 levels and currently working its price back up to the all important levels @83.50 basis point. Meanwhile, the EURGBP cross have likewise recovered from a low @0.8527 and is currently @0.8550 to this writing. Click to continue

Degree of Trading Difficulty & Volatility

The degree of trading difficulty has taken toll even amongst the best hedge funds portfolio managers like Louis Bacon of Moore Capital Management. Where he has decided to lessen his company's trading capital exposure due to dried-up Market liquidity taking place and the degree of trading exposure in placing a huge structured trading strategy of their portfolio in the current market conditions. 

With a higher degree of expectations every year after a posting  contrast with his previous success of 18.3% since inception, a 1990 and 1992, return of 86 and 45 percent was some of the highlights. But contrary to the previous year down by 2% and currently a 0.35% as of June this year 2012.

Although, Mr Bacon does not trade a huge portion in the FX market; but this has shown that a substantial amount of value in trading confidence in the market proves the overall degree of trading difficulty have gradually been increasing alongside the volatility of market price fluctuations. Once more "what is the percentage of a potential & profitable trade?" comes into question with the current market conditions. What trade tools are applicable and practical to increase the degree of trading successfully in the market today? These are the vital questions that needs to be addressed before any trading decision should be made which we would likewise be discussing in our next article.

For now, after a gruelling trading 2 weeks of daily up and down market swings experienced particularly with the Euro and the Sterling Pound last Aug 02-03; where market prices have traded within a wider-trading range before and after Mario Draghi's remarks. Not to mention the inability of the FED, ECB & the BOE to do more to justify a quantitative easing actions which the market participants were so eager to anticipate & speculate the need to take action. At the same time some analysts have started their interest in challenging ECB President Mario Draghi to make good and follow-through his strong comments of preserving the Euro currency last week.

The two (2) day market price movement of the Euro with short-covering actions by sellers have led the market squeeze of the EURUSD, GBPUSD and spilled-over on the USDCHF.  Market capitulations would gather pace with increase volatility and major market price swings towards the next trading weeks to follow. No new catalyst to spur any dramatic price action for the week as market investors wait out for stocks to continue its rally after its corrective moves.

On the technicals;...pls. continue 

Counter-Trade Strategies l & ll Settled & Booked

UPDATE: Counter-trade Strategies l & ll executed from these market view trade analysis have been settled & booked prior to the closing trade as of today the 7.05.12

Target levels for the GBPUSD at 1.5510 first objective; GBPJPY at market current market value 123.90 and GBPCHF at the 1.5045/50 has been achieved. This is a considerable amount from the end-result of the ECB rate cut and a day before the NFP figures release. We'll be watching the market movements from hereunto as the strategies successfully implemented would provide us a trading break for the time being. Please refer to the market view analysis and sequential trades listed below. Or visit our website for a detailed report.

Counter-trend Strategies: GBPCHF vs. GBPJPY

Suffering its biggest,one-day loss the US Dollar (Index) settling at the 81.60 basis point levels; majority of which was due to the outcome of the EU xummit. Although, some of the reports today from the US Manufaturing numbers which proved to be lower than what the US Manufacturing figures are expected have given the USDx a pause from its recovery at the opening of the North American session.

The wider uncertainty in the long run that these troubles is not immediately going anywhere have prompted investors and traders reluctant in creating short positions at the beginning of the thrid (3rd) quarter of the year. The overall fear that a financial crisis may well be spreading across the global market is still up in the air. A review of the bigger picture, yields are still at its record lows, a sluggish economy with a fractional growth rate and major banks capital requirements are needed to extend liquidity in the market place the very core foundation of a bear market entering in the 2nd half of the year.

Speculation and institutional hedgers do weigh heavier as volatility may increase inspite of the lesser volumes traded daily. And with the upcoming 4th of July celebration the market would likely be all over the place in both directional play of price action taking advantage of some players not present in the opening trading week where the EU debate this Monday is expected. Subsequently by Wednesday's 4th of July celebration trading break for the stock market and the ECB meets Thursday followed by Friday's NFP numbers expect the market to be actively traded in the European and Asian trading sessions.

For the past couple of weeks now, we have applied a short-term exposure trading primarily the cross rates with a couple of majors and using the futures market for the USD Index. A counter trend position at the middle of the week's trading between the Asian and European markets and closing out at the end of the week's trading in New York.
Please continue for complete details at: http://megatrade101.com/megatrade101/market-view 

Technical Perspective: EURUSD as of 4.20

The Euro vs. USD price action has been at a standstill without any real clear direction. Much of which is fundamentally oriented with what has been happening with Europe especially with Spain in the limelight. The fear of contagion has not left much room for the Euro even to move in either direction. The bias sentiment from most analyst is still bearish.

The 1.2850 -1.2990 trading support levels has been constant despite most traders outlook of breaking a low remains in place. The technical recovery can be seen right after touching the 1.2985 and due to the buying divergence created from this low; plus some short covering did emerged after breaking the 1.3000/25 initial support. have made it possible. Alongside with the USDx coming back to the 80.18 basis levels gave enough momentum for the EURUSD to move higher. However, the USD moving in both directions then heading lower, have given enough room for the Euro to keep pace with the GBPUSD higher. The end of the week's closing price for these majors are critical to re-establish a clear trend but expect to have a continuation of increased volatility more with the EURJPY & GBPJPY cross rates.

Correlation Analysis - Majors & Cross Rates

Other than China's GDP report on Friday; the main highlights would be both the European & US Consumer Price and the US University of Michigan's Confidence figures for April. Which maybe expected to be within expectations and friendly to the US Dollar continuation for a recovery. Although, analyst would not undermine the lack of a follow through from the confidence after a few consecutive positive numbers from the previous months. A significant number would be the catalyst that would trigger a rally back higher for the US Dollar Index.

The behavioral pattern has been identified with daily lows couple with lackluster trading before a wide price fluctuation would occur between the last two trading days for the past weeks. The price swings from high to low of the USDx is forming within a symmetrical triangle prior to a break upwards. The two trading weeks of April is a make or break cycle pattern mostly known for by experienced traders especially in the financial futures 3 months forward market correlated with the Forex Spot market movements. A deeper due diligence should be considered as market weighs influential to both markets whenever trading the Foreign Currency market. Please follow: On the Technicals perspective at http://megatrade101.com/ 

FOREX: USDx 1st Qtr- April Analysis by MegaTrade101

Technical Perspective: CABLE VS. USD

The weakness of the GBPUSD came with an abrupt decline last week after touching the 1.5990 major resistance trend line. This is considered to be a major correction on the daily as renewed selling pressure came from the USD rally beyond the 79.50 basis level and sustained it higher at the current price of 79.80. Again, the key prices to watch would be first the USDx market movements, the next level of support for the GBPUSD is at the 1.5640/50 range with an expected daily and session to session correction no higher than the 1.5820/80 levels. And probable extensions at the 1.5520/40 levels that may likewise serve as a trend line support for the weekly chart formation. Some consolidation would be found at these levels as the Euro & the USDx may find some levels of support and resistances between net ling and short traders readjusting positions at the continuation of the second week of trading activities. A weekly chart formation of these prices is still higher from its previous low at the 1.5230 last 01.13.12. Thus making these prices within the interim rising channel; well within a major trend lower.

Market Analysis - SRO 2.28

Amidst the up coming reports as listed below, the volatility from the previous week have led investors, institutions and speculative traders amongst main-street investors alike winding down market actions.

EURO as of Feb 28, 2012

Despite of some good news from the housing sector did very little to further push the USD above its recent declines. The USDx measured at the 78.50 basis point level is still vulnerable for a continued decline especially coming from a low of 78.20 levels and the unexpected rally of the S&P last Friday.The crucial statements that would be watched would be the statements of Fed Chairman Ben Bernanke towards the end of the week.

Meanwhile,the Euro's resiliency to hold above the 1.3250 - 1.3360 range is symbolic contrary to the other reports between Greece sustain conditions and the G20's meeting held in Mexico in maintaining and likewise supporting a stability of the financial markets through the IMF. Although, traders who has also maintained their bias bearish opinion have indeed suffered from its rally specially after coming from a 1.2970 extension low and currently working at the 1.3430 corrective move. On the Technical side, the Euro and the GBPUSD is well in line with the USDx move which targeted its 1st objective reaching a low of 78.20 not too far off from our price call at 78.05/10 levels. For a complete report click on the link: http://megatrade101.com/megatrade101/market-view

USDX continues its weakness!

With reference to our Feb. 01, 2012 market outlook and analysis of the USDx the objective for the downside would be in the range of 77.95-78.05/10 where the USD may find some level of support. Breaking the more important 78.80 is crucial. As mentioned that as long as the USDx for the weeks ending the 17th &  24th of February 2012; would not close above and beyond the levels of 79.50-80.10 basis point. Then the directional trend lower would have to continue. Please refer to our USDX Down market analysis dated the 1th of February. The effective technical tools applied in the above chart are the FIBONACCI RISING FAN & retracement, channel resistance / support, STOCH/ RSI COMBINATION & MOVING AVERAGES on a daily CANDLESTICK CHART. including a series of analysis and positions taken in the market from January 26 has led to the finality of the trades made.

Technical Perspective: GBPJPY

GBPJPY Cross as of Feb. 06, 2012

On the Technical perspective; the GBPJPY started of with the GBPUSD initial price reversal at 117.53 low; with a higher bottom at 119.55 serving as a good support, likewise a double bottom price level within a rising channel. The GBPJPY is a 2nd cross rate currency pair that has very market potential which has been shadowing the GBPUSD on its 1st leg of a price reversal. While breaking its trendline resistance and its current working price of 121.15 is above the 21WK-MA of 120.85 as shown of this candle chart of the GBPJPY on a Daily formation. The MACD is now on a positive tone after the movement while the cross awaits some follow through from the GBPUSD. Its initial attempt to its previous high of 121.85 may find some temporary resistance unless a USDJPY recovery would out pace the GBPUSD on the way up. A market behavior of the GBPUSD correlation with the Japanese Yen vs. the USDX would be the primary focus for the coming weeks ahead.

Forex Volatility Increases Squeezes GBPUSD Trade

Review & Analysis: Increase Volatility

The contagion and ill-effects of the European crisis still haunts the financial and stock market in spite of the short lived relief of the political change of the interim governments in Greece and Italy. Meanwhile, the general sentiment which was fueled with fears amid political instability prior to and thereafter in Greece and Italy; not to mention the weak fundamentals from the trade deficit widening in the U.K. Which prompted the European majors to continue to head south of the charts. While the continued demand for the USD as primary & safety currency choice supported the US Dollar Index to hold above the 77.05 levels.

As early as the American trading sessions on Monday, have started and all through out the entire mid-trading sessions, the market price behavior particularly the GBPUSD have been really 'squeezed' with volatility and price extensions lower. Which have given back the gains that it had made from the previous day's trading. The obvious bull and bear spreads were traded heavily between major institutional players with at least 150-200pips in both directions for the past couple of days. Swing and day speculative traders would have found this extremely dangerous as more market capitulation were seen along the entire trading sessions.

GBPUSD Daily

The GBPUSD established trading range is between 1.5850 - 1.6160 inclusive of extensions from October 26, 2011. The wide range and consolidation period shows the ectreme uncertainty of bull and bear trades struggling to dominate the market especially with the movements of the past closing and opening days of the trading week. But the increase market shift of prices can change at any given notice coming towards the mid-end of the week's trading.

Currently, the GBPUSD is at the lower band of the support at 1.5883. Almost all traders and investors have concluded that even with the partial political resolution in Europe, it still does not change the fact that these countries in Eurozone would be heading to recessionary period for a longer period. Thus, the fundamentals would be for the European majors to be in the defensive. For more information about this review and analysis please visit out website at http://www.megatrade101.com/  

FX Timing USDJPY - Unilateral Intervention

With the GBPJPY - Pound vs. Yen Cross Rate

The unilateral intervention by the Bank of Japan could never have been timed better from their previous market interventions. As other central banks supported BoJ intervention during the Tsunami / Nuclear disaster; today's move was triggered more towards market's over speculation as they have claimed that distorts with the economic fundamentals. The spike, as we termed it, then and now have been pricing in the 79.18/50 high and is maintaining at this levels.

The trading culture of Asian traders/strategist particularly the Bank of Japan has been known for their intervention skills of timing the market participants at the least expected time. Although, there is no real pattern that can be pin-pointed as to when such actions would be done, it is merely based on speculation as other traders would. However, with the length of trading experience these could be narrowed down with the kind of market behavior and price movement that currency pairs shows. 

With that said, the GBPJPY was amongst the least expected cross rate pairs to move in closest line and correlation with the Japanese Yen. And obviously was not in the radars or market limelight during this time. This is simultaneously traded with the EURGBP cross rate as a cross trade from our long position as of the Oct 10 market view analysis. By following the sequential market analysis from October 10 to the 31th would provide a better understanding of our trade outlook and strategies applied.

As the Euro has been the dominant market moving pair due to the back and forth crisis between the sovereign debt and the US economy. Currently, the GBPJPY was the preferred pair even comparing it with the EURJPY, as most have stayed away from a bias bull market for the Euro especially with the G20 meeting thereafter.

Opening with the new month of November, overlay with the opening of the wee and closing day for the October month now stands to be volatile by the time US institutional players would come in after this Halloween weekend. The surprising move is what we have been anticipating and with some good choices between these currency pairs the GBPJPY couldn't have been a better choice. Please refer to our previous market view analysis dated 10.27 - Mid-Week Analysis.

  

Market Tight Squeeze - Forex Majors & Cross Rates

As speculative traders/ investors of European majors have been squeezed with the roller coaster ride between institutional participants. With the markets ability to find bull and bear spreads where the volatility index continuously increasing daily; the battle between bull and bear traders in Europe have tighten their grip with investors in the North American sessions even after the Fed willingness to stay its course for rates lower until 2013. 

Renewed Bond purchases have been the norm for the market investors contrary to the S&P's downgrade for the US; thus pushing the USDX to another rally after touching a 73.82 low and currently reaching a 74.75 lower high compared with the previous 3days high of 75.38. However, what is equally important is the ability of the USDX to stay above the 74.40-75.10 range for the week ending Aug.12 and the coming weeks ahead. These are the key levels to watch for the US Dollar Index; while the Gold prices is currently making a new high at the USD1797.87 as of this writing.

Apparently, with the Dow turning south from a positive tone earlier have been a contributory factor whereas investors shift funds as the continued uncertainty continues. Meanwhile, to top is all is the current concern on French banks as concerns on their huge debt and raised concern by the credit rating of the country which led to bank shares to plunge in double percentage figures.

The EURUSD and GBPUSD are currently headed lower the same manner where they came from a positive tone and is at 1.4195 and 1.6175 respective levels. Other than their technical outlook; as most have noted that the daily price movements have been a roller coaster with gains and loss attributed tot he continued volatility of the market. These conditions are not for those players with a minimal tolerance levels and scalping opportunities may well be left alone for the time being. Wide price swings may be attractive for others but as we always say...the market will always be there. These are exceptional trading times and to out class these market conditions takes a considerable due diligence and strategies in place.

However, maintaining our bias sentiment further confirms the Intermediate Trend for the European majors and cross rates is still bearish. Timing market entries and exits may take a higher degree of trading skills and experience as the wild price fluctuations will trigger most stop loss as easy as it would do with profit taking. 

Further gains for Yen and Swiss Franc in value is seen as it has been making from the start of the week. Even after the BoJ intervention needless to say. Would not be surprise to retest lower price levels for USDJPY rates as well. As the Swiss Franc already have done so. Lagging indicators on these market rates would not be as suitable with heavier fundamentals weigh in more than technicals. Of course, other wise risk appetite is bigger than playing a smart market well with these current conditions. Stay clear temporarilyy and wait for a good market timing on better conditions.   

Market Timing resolves Trading Difficulty

The degree of trading difficulty for the Foreign Exchange Market for the past few weeks have been gradually increasing together with the kind of volatility we can see on the price action alone. From a thinly traded market during short holiday trading from the fourth of July weekend have been at a steadier pace of volume increases and momentum build-up / declines as prices narrowly gain and looses its gains, as it quickly did within two to three day spreads. With other traders / analyst caught in between the haggling reports from the rippling contagion crisis in Europe, causing the prices relatively to move in both directions on a day to day basis. Although, the trend still remains intact during the end of the trading week, where the trend is still well identified for the European currency pairs including the cross rates. And with minor corrective movements as we go along the way.

With this week's thin market reports on both sides of the continent; the obvious market sentiments from the previous trading weeks would be the same, until any real serious fundamental would point otherwise. With price action within a wider trading range; the degree of having a successful trade would depend on a properly executed market timing on entry and exit strategies. However, the risk tolerance should be well defined in advance, as this market would not be suitable for short term trades that barely have enough for a negative tolerance while maintaining the respective positions. As wide price fluctuations can easily trigger a stop on both sides of the trade. This also goes the same way with having an appropriate amount of funds to risk for a wide and volatile market. If not, please do not even bother to consider any risk in exchange for the thrill of winning big, which may eventually turn in to a total loss of trading capital.

However, the relative trading analysis of timing the market weighs more in any successful trade. A trade decision to go long or short for a certain period of time needs to be well defined. Using the shorter time frames for entry and exit strategies would be appropriate. And segregating the charts into a daily, weekly & monthly basis should be able to determine the overall position and not the other way around. As everyone knows that each and every technical tool being used in most trading platforms are lagging indicators that portrays the action after the fact. Staying ahead of a lagging indicator would surely improve the winning ratio in every trade.

Knowing how to calculate these indicators forward/backwards outside of the embedded chart indicators; the likes of the simplest and commonly used trading tool like the Relative Strength Index (RSI), Moving Average Convergence /Divergence and George Lane's Stochastics would be very useful to know. This certainly would be a way of staying ahead of the competition; so to speak with other market participants when trading actively in the market place. By the time most traders would be coming in the market from their confirmation, you would then be coming out of the market ahead of the pack.

Although, the orientation of each trader and investor differs from one another. And knowing where one's comfort level of risk appetite and tolerance can only be enhanced by improving one's skills in trading by due diligence studies and obtaining the right information from reliable resources.

FX Confirms Price & Trend Reversal

The catalyst igniting the USD rally for investors flight to quality investments and position adjustments were simply derived from the EU crisis where its ripple effects on the stocks, combined with the political rampaged of protesters fueled the EURO go move much lower than most have expected. However, the mixture of reports from the US side didn't do much to help from the start. That is why we have mentioned before that the market's condition and behavior has been more on the fundamentals on the EU sovereign debt crisis again that has been taken the limelight from the market.

Although, the yellow metal has had a roller coaster ride from its low price levels of USD1,510 - 1,540.00 trading range adding to the turmoil of the market participants. Especially with the recent report from the COT whereby a majority of open interest for long Euro may obviously been scrambling towards the exits as prices continued to move lower back down to the 1.4180 and 1.6180 respectively for the GBPUSD.

Meanwhile, the USDX has garnered enough momentum from its recent correction of 74.38 and is currently at the 75.50 bp as of this writing. True enough, the price reversal was indeed the first signal where the initial bottom for the USDX is now at the 73.15 -74.20 range levels called from our recent market view analysis dated the 07th of June 2011. And this was initiated with a speculative trade short on the EURGBP and GBPUSD. Simultaneously, hedged with along USDCHF at the 0.8378 levels. this has been a strategy to be able to maximize the market's potential on both directions of the trade. Although. a bit more expensive to maintain as increasing risk appetite were made based simply on a pre-calculated risk factor where the USD was too close from its all time low levels. Please refer to market view analysis dated on the above date of the 07th of June for a complete report on our website.

Do expect that the rest of the week's trading towards the month end would be a bit more favorable for USD bullish players with wider fluctuations for the currency pairs from hereunto. A long as the USDX would maintain its levels above the 75.05-50 basis points plus other fundamentals favoring a flight to quality position trades against the Euro then expect a build=up of momentum, increase in open interest and volumes in the next few weeks of trading activity. Of course, there will never be any real guarantees whenever one deals with the volatile currency market. Exercise caution and sound financial advise before taking such risk.

Strategic Forex Trading - SRO

Just for the record! A summary, Review & Outlook Ahead

The amazing truth of the matter, is that when the Forex market made that slight recovery on the USDX at 75.50bp; the EURUSD headed lower with prices coming back to its original trend higher was the real limelight. The corrective movement, as we mentioned on our April 16 video ' 8 Forex Technical Trading Tools & Analysis thru 4-22' on Youtube and a follow-up market view analysis dated the 18th of April ' Major Correction within a Major Trend' mentioned that it was just a short-lived correction that we expected and could more likely be a buyers trap. Well, it did turn out to be one.

Although, that corrective move was considered to be a major correction coming from a 1.4520 high and down to a low of 1.4155 for the EURUSD from 04-14 to 04-18 respectively for three consecutive days. Thereafter, the registered high was at 1.4647 on the 21th of April. Which is a three day up move from a three day down corrective move. A retreat from the highs made some significant statements that that a selling divergence between the Relative strength and momentum indicators on those high prices met some forced liquidation from earlier bear positions holding on until they threw in the towel. In other words some market capitulations from sellers in the market. However, these would not be entirely be seen in the market except knowing how the market prices have behaved by following the price page indicator. On a technical perspective by comparing the divergences between the higher prices with the relative strength and momentum indicators should provide you with the signal. Although, by having a keen analytical eye and training can this be achieved. Which apparently, other traders and analysts were calling it a possible reversal. Of course its always after the fact. . . easier said than done! right?

Meanwhile the GBPUSD did the same exact scenario that dropped to 1.6165 from a high of 1.6250 which is a slight correction. However, that particular higher curve we mentioned from our video plus the idiosyncrasy of the Sterling Pound of making a double top candlestick formation was a false indication that would only move upwards. And registered a high just about 1.6600 vs. the USD. The lower closing at 1.6510-15 levels was merely because of the shortened and thin closing trading sessions for Good Friday.

For a complete market view report of this article and the continuing market outlook; pls. visit http://www.megatrade101.com/

Trade with Confidence!

Trading the Foreign Exchange market is not as easy as some would claim, may they be professional traders, investors and even money managers of every level and sophistication. Having a better understanding of this market would take years to achieve as it is influenced by so many fundamental and technical factors. Specially for those who have incorporated electronic trading and algorithm formulas into their trading systems.

What makes trading the markets more challenging and interesting is the fact that the challenge of winning and loosing in the market is what makes most serious traders and investors tic, so to speak. The feeling of winning and making money is more often the real reason why people continue to trade despite of loosing more thereafter. And when they do lose it is the stubbornness of making back what was lost and keeping it.

How much one has kept after all the trades can only be called a real winner. It is not the total number of trades done on both sides of a winning trade and a loosing one. As long as the overall net gain has been saved and made use for other investments can only be called a successful investor.

The number of countless trading robots, expert advisor, trading software out there could not even be counted upon as newer ones will always come out to claim that their systems are the best and delivers the bottom line trades. These systems may hold true to their words only at a given period of time, but may not be able to hold true in the long run. As some may have forgotten the best formulas ever written and used by Long Term Capital has failed them leading to one of the worst trading cases in history.

Again, trading can only best suit each individual investor depending on the outlook by which one is satisfied with their investments. Knowing when to trade, not to trade, stop any lose and simply take a profitable trade is one of the basic elements as everyone who reads this blog would say. . . " tell me something I don't already know. "

Money management has all its principles and practises that needs to be followed. Trading the Foreign Exchange market has a few lessons of its own.

Namely:

1. Allocate an appropriate amount of funds which would be invested from your overall portfolio.

2. Having the right orientation of the market, the intricacies of trading FX from reliable sources and proper due diligence can only help make a sound decision.

3. Be independently aware of market conditions, choice of currencies to trade including their correlation ship, trading range, point value /amount of exposure, time table within a trade plan.

4. A trade plan that consist of entry /exit levels, risk tolerance price / point willing to take, alternative strategies available even before entry, profit potential and stop loss of any trades.

5. Opportunities will always be present in the market. what is equally important is to wait for potential trends that may provide a well worth investment contrary to the risk involved. there are 4 quarters in a year, 3 months in a quarter and 4-5 weeks in a month. Choose and determine your trades and discipline.

6. Percentage trading will always provide a better way of trading any market. Having a net gain from an arbitrary hedge strategy to manage risk and absorb wild fluctuations and increased volatility will help maintain, sustain and protect from unexpected fundamental reports or news that may influence the market on its own.

7. Learn to keep what you have made and wait for the next trading opportunity!

8. Take control of your own trades! It is not in the trading platform, software or the broker-dealers that offer FX dealing services that makes you win or lose. As spreads makes every broker-dealer, counter-party earn their revenue from other than making certain that every position done are equally matched, rolled over, swap and netted out on every closing session to avoid further risk in the market.

9. Learn to trade how interbank trading does their trades through different strategies available. Although, retail FX trading has its own limitations that can only be found by trading with the interbank market. However, not everyone may be qualified to do so.

10. Due diligence, Research and constant studies are necessary while making trading decisions. And never be influenced with other brokers opinions and market outlook as many have failed and many were right at times. Any decisions made should always be your own!

Developing a Sense of Market Timing I

With the recent US jobs data, most of the traders in Wall Street would normally take a pause before any major reports are released. And as some have made it a point to trade from a confirmation with a volatile market and have generated a certain degree of success. For others the percentage of loss is greater as they try to simulate the same scenario with the Foreign Exchange market. But what is the ratio and probability of success versus a loss for the regular / retail investors turned traders for that matter. Quite an expensive price to pay!

In the exchange, we do have a mix of traders, market makers, institutional managers trading for client's accounts as well as their own. The viability of having access to certain information sometimes called in the stock market as the whisper numbers that circulates around purely on speculative basis.

Developing a sense of timing could either be both on a fundamental or technical stand point. More often than not is a technically motivated trader where numbers are plug-in on a trading system that would simply try to trade for itself. but the numbers and position is till derived from the trader / investor who wants either to buy or sell at a certain price. Most trades made are on short term basis that goes for 10-50 pips in between trades.

An application to maximize potential profits could be taken from a well developed trade plan that uses the basis of 4 sequential charts from an hourly, daily, weekly and monthly charting analysis. When all three out of four are in line then the probability of a profitable trade is more likely to happen. Using the hourly charts as entry and exit strategy application is more advisable rather than using them for positioning. The various time frames are geared to provide different signals that may be detrimental to the final trade, so it is equally advisable to implement at all time a time separator line that distinctively identify the time element involve in any such trades. Time management in proper positioning is vital too.

Monitoring prices for longer periods may also be contributing to misconceptions and misunderstanding of the market prices and its behavior. A certain correlation ship amongst the currency majors may also be best used in developing your sense of market timing as the ripple effects on the pairs are quite common. so the Technical tools accessible are only has good as the person's application in the trading process. If others are successful by using a combination of technicals, there is still no guarantee that the same will happen.

There is no " one size fits all " scenario. By having mentors and advisers along the way without having to worry about commission rebates or cash backs then one may be in better hands.

Good Luck and Best of trading for the week ahead!

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FTX is the " Forex Traders Exchange Network "

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