Forex Currency Trading Systems: 2013

Thursday

The Aussie Playing Field: How To Trade AUDUSD

Hello Traders,

Here is today’s Forex analysis and FX tips on how to trade the Australian Dollar versus the USD:

Aussie turnaround

The Aussie has had a turnaround quite recently most notably marked by the pinbar candle stick formation at the bottom. Ever since then the Aussie has been going sideways and has not yet managed to continue with the potential bullish reversal.

Yesterday’s candle

Yesterday’s day candle however might be the 1st signal of continuation. The day candle had a substantial body with a close very near the high, which signals decent strength to the upside. Furthermore, it is worth noting that the day candle has also engulfed price action of the previous trading day.

Confirmations

Besides the above, the currency has the following confirmations:

a) The Aussie bounced off the bottom of the sideways range

b) It has a clear close outside of the downward trend line

c) The Aussie is making higher highs and higher lows on the 4 hour chart

Warnings

However, it should also be noted that the Aussie has been ranging between the 1.02 and 1.06 levels since summer 2012. The flat 200 ema on the day chart confirms the lack of a trending mode.

Also the breakout out of the down trend on the 4 hour chart is hardly convincing when one sees a doji with a huge wick on the top of the candle.

Enough space for upside?

That being said, the main question is: does this move have space to the upside? How to trade the AUDUSD?

Yes it does, but a trader must be careful of the 4 hour exhaustion wick. The currency could retrace a bit before continuing north.

If it does break the top or give a sufficient retracement and turnaround, the Fib targets and Fib retracements nicely line up with each other. The most likely target is -0.618 and 618, where the Aussie shows a nice confluence at around the 1.04 level.

Depending on price action we will have to investigate whether the Aussie has more power and strength to continue its upward march, or whether we get the downward continuation.

Extra support

If you are looking to get extra Forex training, then it might be good to consider our LIVE TRADING ROOM. You have access to a free one day trial this Wednesday from 8am EST. Click here for all of the info. OR take a look at this link for more of our Forex services, including Forex mentoring.

Sharing

Please let us know what your opinion is of the Aussie or another currency?

We hope that the post has helped you with how to trade the Aussie. If you like the article, then we thank you for sharing this post. It is so appreciated!

Good trading!

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The Great British Pound’s Weakness in the Forex Market

The GBPUSD has been quite the sight to see since January.

Falling close to 1500 pips already in 2013, along with horrendous economic figures, many fear the UK has slipped into it’s third recession since the 08' financial crisis.

Official data released on Tuesday showed manufacturing production is down 1.5% in the UK from last month. Weak production figures have been a huge component in the economy’s weakness. Recently the Bank of England decided to not add a fresh round of QE, but in result of Tuesday’s economic figures, there are refreshed expectations of further UK quantitative easing in the near future.

“This is the penultimate nail in the coffin in terms of triple-dip – it’s pretty much game over now,” said economist Alan Clarke at Scotiabank (Reuters)

The fact alone that the UK is heading into a third recession is enough to keep investors short on the GBP.

It is also worth noting that U.K. inflation expectations are the highest since September 2008 according to “World First”.

The cause of the evident GBP weakness and the JPY weakness in the Forex Market is not just these currencies weaknesses, it’s also a result of the U.S. Dollar’s strength. Therefore, this week, with about 20 United States economic news events, we could see a lot of continued volatility in the GBPUSD and USDJPY.

View the original article here

Wednesday

United States retail sales, stock market, and value of the u.s. dollar

market In the past week the DOW Jones has been violently pressing higher and higher.

Investors and economists had their eyes glued to their computers today awaiting the much anticipated retail sales figures for February. “Will the stock market boom continue?” Some ask themselves as they hope bullish retail sales will manifest in a continued bullish market.

Both the retail sales figure and core retail sales figure were double or more than their forecast.

The general forecast across the board for Wednesday’s retail sales (and core) was a positive .05%. Retail sales figures hit 1.1% while core retail sales hit 1.0%. (Core retail sales exclude automobiles)

“It’s a positive indicator that consumers are adjusting to the higher payroll taxes and higher gasoline prices,” said Russell Price, Ameriprise Financial Inc. (Bloomberg)

It is very possible that Americans have not adjusted to high taxes yet. It’s safe to argue that many Americans haven’t made financial adjustments at all yet. Adjusting to taxes can be a process that takes some time to manifest in the market.

The EURUSD is hitting lows unseen since December.

The U.S. Dollar strength is far from invisible. Momentum could be lost in a heart beat, especially with the issues in Washington. Riding out a trend as long as you can though can be a wise thing to do.

What are your thoughts about the United States Dollar? Do you think it is odd that the U.S. stock market and the U.S. Dollar are both strong?

View the original article here

USDJPY Break & Retest?

Hello Traders!

Today’s article will be focused on the USDJPY. Needless to say, the Yen has been in a huge uptrend, so lets get this analysis starting to see if there is any power and momentum remaining. We will focus on the UJ, but the information will be also very useful for traders who trade in the EURJPY, GBPJPY, and any other cross on the JPY. So here is the free Forex advice and tips on the UJ.

USDJPY

The Yen has had rocket speed ever since October 2012. It first launched from 77 price level and in the meantime it was 30 pips shy of the 97 area. That in itself marks a 2,000 pip move. Not bad for the UJ, huh?

The entire month of February turned out to be sideways pause. But after weeks of congestion underneath the 94.50 area, the UJ’s bullishness again shows signs of revival.

Week chart

The week chart confirmed the continuation with a strong bullish close of the week candle above the 94.50 resistance zone. The close was very near the high indicating that there was no significant sell off or profit taking in that week.

The 20 ema is still showing us a good angle as well. The uptrend seems back in play.

Questions

Is the break out real or false? Will we get a retest of the prior resistance zone top? Will we square up this candle and then go or will we reverse?

All very valid questions and that is why Winners Edge is here to offer valuable Forex trading advice and a way how to learn Forex trading.

In my opinion the break out looks sustainable. Not only does the week candle have a clear close above the resistance zone and near the high of last week, there are is also full day candle above that same resistance zone.

Trend channel

The well built trend channel on 4 hour chart is an excellent indication of a well built trend.

1) The uptrend channel has a perfect angle of +/- 45 degrees. This angle translates into a perfect harmony between pip movement and time. The pace of this trend is very sustainable. Trend channels with a higher degree angle are too steep and not sustainable. Trend angles which are too shallow do not indicate sufficient strength.

2) The uptrend channel has multiple hits on all internal trend lines, which confirms the validity of the trend channel. The lower, upper and middle trend line all have tons of hits and places where the currency respected those lines.

The currency just recently respected the upper trend line and now is correcting itself downwards. The middle line of the uptrend channel could be a support area. That level corresponds roughly speaking with a retest of the top of the previous resistance zone.

Retest of resistance

The retest of the broken resistance area could definitely be retested at one point or another. There is a very decent statistical probability that this level will act as support. Why?

Many traders, big banks, and institutions are eyeing this key level and they could be looking for an entry at around that level.

Will that happen now? Maybe.

EW count

If we look at the 4 hour chart and apply a quick Elliott Wave analysis to it, then we can see that there should be still one more up move remaining to finish at least the wave 5 of wave 3.

The UJ seems to be in a wave 4 as we speak. And wave 4’s like to bounce at the 382 Fibonacci retrace level. Other bouncing areas are the 500 fib and of course the 618 fib.

The 618 Fib would be unusually deep for a wave 4 but the 618 would equal the same price level as a retest of the top of the resistance zone.

In any case the entire EW count is invalidated if the UJ would cross back into the price territory of wave 1, which is at 93.70.

After that we could still get a possible wave 4 and a wave 5.

1 hour

On the 1 hour chart we see that the -272 target of the 3 move correction could be another reason for a bounce. The lower single trend line in black could also act as support. The upper single trend line in black could act as resistance. If we do break one of these lines, especially the upper resistance line, then this could signal the continuation of the trend for one more push up.

We hope you enjoyed this Forex training and are able to use of these Forex tips of your Forex strategy trading.

Thanks for sharing and good Trading!

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Thursday

Weekly Preview on the EUR-USD-JPY Triangle

Welcome traders,

Hope you had a great weekend!

As usual, on Monday’s article I will be scanning and analyzing long-term Forex charts to see if we are able to find a directional bias for the entire week.

But before kicking off this article, I am curios and would like to ask what currencies are you looking to trade this week? Tweet us your answer and reason and we will give you our feedback!

In any case, today’s article will be focusing on Forex analysis on the majors: USD, YEN, and EURO.

USDJPY

It was exactly one week ago when the USDJPY made an enormous crash. Last week’s open saw the UJ’s price gap up and then fall 400 pips in a very impulsive manner.

The bearish move, however, has not been met with any follow through. The UJ has seen support ever since and the weekly candle actually noted a slightly bullish close.

The strong move down almost begged for continuation but the bears have not managed to wrestle back control… so far.

The currency pair is now approaching the top and it is very close to the 786 retracement level of that swing high swing low to the downside. This begs the question: “how to trade the USDJPY”?

The current area is definitely an area where potential resistance might stop the bulls… at least for the moment.

Don’t forget that this week there are economic announcements on the Euro interest rates, British Pound interest rates, Yen monetary statements and U.S. Dollar NFP figures.

But despite the busy schedule, I do think there are a couple of likely scenarios which will unfold. Continue reading to gain a perspective how to trade the USDJPY.

Potential scenarios

In my Forex trading plan I will be closely following price action behavior in this region and be looking for clues of major resistance or a break of the top and continuation. The following is the best Forex advice I can give in this difficult spot for the UJ:

1) From a technical analysis point of view, the currency could definitely show reversal signs anywhere between the 786 Fib and the top for one more correction down. The currency in that case would complete a third impulsive move down, thereby completing a bigger ABC correction for a wave 4. A break of the bottom would be the biggest confirmation.

2) However considering the strength of the uptrend, last week Monday’s 400 pip drop might be all the correcting the UJ does. Only a clear break of the top however would convince me that the long-term uptrend is back in full force.

3) Another scenario could be a prolonged sideways range in which the UJ bounces back up and down between the tops and bottoms. If it were to make a bigger consolidation zone, then at some point in the future the UJ most likely will break to the upside.

Depending on which of the 2 scenarios unfold in the upcoming weeks, I am looking for the following targets.

Targets

If the UJ does correct deeper, then a nice area of confluence would be the -0.618 target. This target nicely lines up with the 382 retracement Fibonacci level for a great confluence. It is my current expectations that at this point the UJ will continue with the bigger uptrend.

If the UJ however continues to the upside without giving a bigger pullback, then the next target to the upside is in my opinion the 100 level, which is the 500 Fib retracement level on the week chart.

I am definitively incorporating these targets into my Forex trading plan.

EURUSD

The EURUSD had a bearish day on Friday with another push lower, which broke the 1.30 support level.

The move down would normal signal an impulsive move down towards lower levels but Friday’s day candle finished with a decent size wick at the bottom. There is also divergence on the 4 hour chart and multiple divergences on the 1 hour chart. Divergences on multiple time frames should always warn traders that a potential retracement could be around the corner. So for the EURUSD I am neutral in my Forex trading strategy unless we break the bottom or top on the 4 hour chart.

Thank you so much for all the sharing – it really is great when you share this info with other traders.

Options Analysis 03/04/13

In this guest post from DayTradingZones they are providing WinnersEdgeTrading key market analysis for some futures markets plus GOOG and AAPL for options plays.

View the original article here

Wednesday

This Week’s Ultimate Trading Guide

Dear Traders,

Welcome to the today’s article. We will be focusing on many currencies so grab that cup of coffee and get ready!

I will be analyzing the likely moves of the upcoming week or 2 (depending on how fast things progress).

I think this analysis will prove to be useful for any trader who is looking to capitalize on medium swings in the market. So please continue to read how to trade the majors in the next week or 2!

Of course, it is not an easy to task to make predictions in a week which is full of high level news events, such as interest rates, monetary statements and NFP figures, so please consider this when reading.

EURUSD

The halfhearted break of the bottom and 1.30 level on Friday has seen not bearish follow through as of yet. The 1 hour divergence and especially 4 hour divergence have had their effect on the currency and the EU has been progressing up slow but surely ever since. Due to the 4 hour divergence I still favor a bigger ABC retracement up to the 1.3140 area and later on even to the 1.3250 area.

The FX advice on how to trade the majors continue next with the GBPUSD.

For the Cable I am expecting a similar corrective scenario as for the EURUSD. Considering the fact that the ERUGBP is slightly correcting itself to the downside at the moment, I might expect a bit more bullishness on the GU than the EURUSD. This will logically last until the EURGBP resumes its uptrend. Eventually I am expecting the GU to reach the 1.5250-1.53 area after which there could be a decent fall to at least the 1.49 zone and potentially even further down.

The FX advice on how to trade the majors continue next with the USDJPY:

In my opinion the USDJPY up trend is not over yet. The big question is: from where and when will it continue to the upside? A break of the top would definitely signal a continuation. In that case waiting for a retest of the broken top is always a safe play. However if the UJ would indeed be looking to correct deeper, then there is a very nice confluence between the C wave target at the -618 and the 382 retracement Fib at 88.50. This would definitely be a long I do not want miss at the 88.50 area with targets in between 98 and 100.

The FX advice on how to trade the majors continue next with the AUDUSD.

The Aussie could be either in a wave A of wave 2 of wave C, or in a wave C of wave X of wave B. In any case the likelihood of having downward corrections followed by a move up seems high. One the currency makes the third move up, there is a potential for a good return to risk swing trade with -0.97-0.98 as a likely target area.

The FX advice on how to trade the majors continue next with the EURJPY.

The EJ could make one or 2 more corrections down before continuing the uptrend. The uptrend will most likely happen at the same time as the UJ upside (barring any huge falls on eurusd). There are 2 likely candidates for the uptrend continuation; either at the -272 target and 382 retracement at +/- 117 or at the -618 target and at the 500 fib retrace at 114-114.50 area.

Of course we will keep you updated on the development of this analysis as time and price move on. The above mentioned analysis might need to change depending on price action developments in the upcoming days. But this is my expectation at the moment.

Thanks for sharing this vital piece of information with all of your trading buddies!

I wish you Good Trading!

EURGBP to Parity Part II

Welcome traders!

Today we will be again providing free Forex analysis and FX advice…

So get ready for the ride!

Yesterday we already summarized the potential FX movements in the currency market for all of the majors. The analysis is still valid for today so you can read all the details on how to trade the majors right here.

With the majors thoroughly examined, let us now revisit the EURGBP (EG) cross.

EURGBP

The last analysis dates back from a month ago (Feb 7). And the EG has been behaving exactly as predicted (except the upside target was slightly missed)! That is always good news.

The question now arises: what next? How to trade the EURGBP?

It goes without saying that the EURGBP has been in a huge up trend.

But can the trend continue? And if so, when and where? Let us take a deep look at how to trade the EURGBP.

Detailed analysis

The momentum and strength to the upside are still in force and it looks like the uptrend is far from over.

Here are the clues I am looking at:

- Clearly we have higher lows and higher highs for a long while (since summer 2012)

- The move up on the day chart was very impulsive and strong when looking at day chart candles and high MACD levels

- There is nice uptrend channel with the impulsive wave crossing from the bottom of the channel to what could be the top of the channel

- Fib targets to the upside are being respected (-1.618 of wave 1)

If we add a bit of EW analysis in the mix than we can conclude that:

- We are in a wave 4 of wave 3

- This means we should expect a wave 5 of 3, a wave 4 and then a wave 5

- Or in other words 2 more waves to the upside

Trend line

Despite the nice impulsive move up and great trend channel, the EG did break the single trend line by going sideways passively. We can conclude that:

- The EG did not find power or buying strength at expected support

- The impulsive move up is most likely over

When and where to expect up side?

When looking at the trend channel on the screenshot, the currency seems to be at the upper end of the trend channel. It also looks like the currency is in a wave 4, which are most of the time lengthy, flat and drawn out type of corrections.

Because of that I am expecting the following:

- A bounce off of the 382 Fibonacci retracement level (+/- 0.85)

- A move up from that 382 Fib to the -0.272 target (+/- .90)

- Because of the single trend line break, I expect the correction to be long (for the moment)

- Most likely there will be confluence with the middle trend line before the uptrend continues

The trade to the upside of course would be a great 500 pip move.

If I see any reversal candle stick patterns in that region I will be hunting for a long.

Of course if the top were to be broken before the 382 gets hit, then my current expectations are invalidated and the currency is most likely continuing further north. I would especially be keen on a retest of the broken top before trading it though.

This is my Forex analysis, FX prediction of the day, and my current plan on how to trade the EURGBP

Sharing

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Thanks and Good Trading!

Sunday

Bernanke affirms QE3, not seeing the “potential costs of the increased risk-taking”

It has been almost 6 months since the third round of quantitative easing began in America.

The Chairman of the Federal Reserve Ben Bernanke has not wavered on his positive outlook for the QE program.

This quantitative easing effort is one of a different breed, it provides unlimited QE to the Federal Reserve. Therefore, QE3 could go on for the next 20 years, or it could stop tomorrow.

Not only is the time frame unlimited, the amount of money the Fed can create is unlimited. Currently the Federal Reserve is buying $85 billion worth in bonds every month. This number could increase or decrease depending on the preference of the Fed. This process is to go on until the Fed thinks the job market has meet their vague “improve substantially” target.

Potential cost of QE3 downplayed “To this point we do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery and more rapid job creation,” Fed Head Mr. Bernanke said in a meeting on Tuesday. (NY Times)

They do not “see the potential costs of increased risk-taking”. Isn’t this how America got to where it is today economically? It is because we didn’t see the cost of our risk taking. Instead of looking 50 years down the road, we have looked at 4 years down the road over and over again. Therefore, our national debt is over 16 trillion dollars and doesn’t show any sign of slowing down.

The potential risk of continued quantitative easing is inflation. As the Fed creates more money, money becomes less valuable. It is simple economics. Therefore, while the bank’s Fed accounts continue to be filled up, American grocery bills may start to go up. One of the most significant caution signs of the QE3 process is that there is no defined goal. “Improve substantially” (September Meeting Minutes) is as clear as mud, yet the Fed is continuing to pursue a better job market. Hopefully Bernanke and the Federal Reserve do have some definition to “improve substantially” even though they are not sharing it with the public.

How does this influence the Forex market? The risk aversion capacity of the U.S. Dollar could be running thin. Yes, it is still to be considered a safe haven, but in the next few years (if the economy continues to go in the same direction that is going) I think it’s reputation could be so poor that it’s safe haven status could be decrepit. Therefore, if inflation would take place, or another crises like monetary situation, the value of the U.S. Dollar could significantly decrease.

Forex Trading: The Best Education You Can Have

People trade in a daily basis. Some trade their services for money, while others trade products like food, toys and other things for money. People trade to earn money to properly live their everyday lives.

This is why people work, why people put up businesses and why people trade in the financial market. Today, it’s all about money in order for you to give yourself and your family a comfortable life.

If you are considering making money aside from your day job or starting a career, you can do so by trading in Forex. Surprisingly, most people don’t understand how Forex works but are still interested to trade in this financial market. Besides, people would really want to trade in the largest, the most liquid financial market in the world.

Forex operates 24 hours a day and 7 days a week with no centralized location unlike other financial markets. It involves all the currency in the world and trillions of dollars are being exchanged everyday in this market, thus, making it the worlds largest and the most liquid financial market in the world.

The Forex market promises traders a promising way to earn money. However, Forex also has its risk and it is a fact that people lose money trading in this market. But, there are also people who became millionaires in the Forex market almost overnight. Education is the key to start trading in the Forex market. Without the proper knowledge in Forex trading, chances are you will end up losing money.

First of all, before you trade in Forex, this market is the buying and selling of currencies. In simpler terms, you, as a Forex trader, will be purchasing one kind of currency against another kind of currency. This gave Forex a trend to trade in pairs.

If you traveled to another country, chances are, you traded your currency against the local country’s currency to enable you to buy things from that country. If you did this, you have a good idea on how Forex works.

If you want to trade in this ever liquid market, you have to get the best education possible in trading currencies. A good education will enable you to trade in Forex more effectively and increase your chances of earning a considerable amount of money. It is even known that lots of people have quit their day job to concentrate in Forex trading.

Getting a good education about Forex trading will also let you increase your chances of profiting and decrease the risks involved. In getting the proper education in Forex trading, you will also learn how to read Forex charts. Forex charts are one of the most important things you should learn in order to successfully trade in the Forex market. Without this knowledge, you are doomed to fail in this very liquid market.

Expert Forex traders said that the best way to learn Forex is by actually trading in the Forex market. For this, website developers and software developers have developed a program that you can use to practice trading Forex. There are websites available that will enable you to open a dummy Forex account where you can trade in a simulated Forex market using no money at all. With this kind of software, you can really learn the way Forex works. It is also a great program to get the feel of the Forex market and you can even consider it as a stepping stone to start trading in a real account.

Thanks to the internet and the advancement in technology, everyone can trade in this financial market. Unlike in the past, only the multi-national companies and financial institutions, such as banks are allowed to participate in the Forex market.

Trading Forex is relatively easy to start. All you need is a computer with an active internet connection (high speed internet), a funded Forex account, and a trading system.

Always remember beside the fact that Forex can give you the potential to earn a lot of money, the risks involved is also equally great. So, you should first read books about Forex trading that is readily available in the internet for purchase or for download. You have to learn about the major currencies traded in the market, about leverage, and also about minimizing the risks in trading.

Friday

Forex Trading: What to Trade, When to Trade, and How to Trade

One of the best ways to earn money is trading , the largest and the most liquid trading in the world is the financial market . You can be sure that you can earn huge amounts of profit if you know how when, andwhat to trade. It is a fact that a lot of people who traded in this financial market became successful and became very rich almost overnight.As a trader, you would want to take the prospect to get lots of money and of course, set up a trading career in Forex. The Forex market, as mentioned earlier, is the largest and the most liquid financial market in the worldwide. The stock marketis different with other financial market, Forex does’t centralized location as it operates 24 hours a day at diverse locations around the world. Trades in this financial market are done from side to side an electronic network.As of the high financial requirements ,in earlier time, Forex was only limited to big worldwide corporations and financial institutions, such as banks. However, because of the advancement of the communications technology and also the existence of high speed internet, Forex in the late 90s is now available for everyone who is interested in trading in the Forex market.For a Newbie trader, Forex trading is just the buying and selling of different currencies of the world. It's looks very simple for everyone, but you must pay attention that traders and traders who have experienced a loss a large amount of money in the forex.Always rememnber in mind about a fact that in Forex probability between make a great money and lose a great money is exactky equal . For that reason, before you come into this market and trade, you should first think about a few things in order for you be successful in this money making venture.After you know how to trade currencies, you need a personal computer completed with an active internet connection, a funded Forex account and a Forex trading system. There are various websites that proffer Forex trading. You have to open and fund an account first with your chosen website if you want to start trading,. After that, you can now start trading in the most liquid market in the world.In order to keep up with the updates and change of price and prevent slippages from happening , You need to have a fast internet connection. A further thing you have to consider is that as much as possible, you should sign up in a Forex website that offer dummy accounts thus you can perform your skills and strategies in Forex trading.After you identify how to trade in the Forex market, the next thing you have to to know is what to trade. The Forex market involved different currencies from all over the world. It is also traded in forms of currency pairs. Here are the different currency pairs that you should consider trading in the Forex market:These are the the majority usually traded currency pairs in the Forex market. It is up to you to settle on which currency pair you want to trade depending on market situation. If you do it right, you may be happy your earning a large amount of income. The next and final thing you should consider is when you have to trade in the Forex market. Since the Forex market is operated 24 hours a day, you are able to trade every time you want. And, since it is the most liquid, you can get out every time you want. It is just a matter of be on familiar terms with the market condition is profitable or if it is falling.Forex traders are mostly investors who try to forecast which currency is going to raise in value and which currency will shrink in value. investors use Forex charts to spot a trend and verify when a particular currency will raise or shrink in value.Always remember that in all trades done in the financial market, you should also expect to suffer from losses. You should be prepared to deal with it and accept it. This is why you need a substantial amount of money to trade in Forex.

Forex Trading: The Best Education You Can Have

Posted by Biz Online

Trading Forex is relatively easy to start. All you need is a computer with an active internet connection (high speed internet), a funded Forex account, and a trading system.

Bernanke affirms QE3, not seeing the “potential costs of the increased risk-taking”

It has been almost 6 months since the third round of quantitative easing began in America.

The Chairman of the Federal Reserve Ben Bernanke has not wavered on his positive outlook for the QE program.

This quantitative easing effort is one of a different breed, it provides unlimited QE to the Federal Reserve. Therefore, QE3 could go on for the next 20 years, or it could stop tomorrow.

Thursday

The Swiss Cheese Trade

Hello Traders!

The market was quite quiet yesterday with the EURUSD, GBPUSD, and the Yen pairs making bigger consolidations. For today’s article I want to focus on the USDCHF currency pair.

It is not a currency I address often, but the Swissy seems to be in an interesting spot and could provide potential swing trade opportunities to both sides.

So grab your critical thinking cap and let us know in the comment sections down below what you find interesting of this analysis and what you see differently! Continue reading for the full analysis on how to trade the USDCHF.

Day chart

The USDCHF day chart is showing us that the Swissy has been in a decent down trend since the summer of 2012. The currency has been consistently making lower lows and lower highs in a downward sloping trend channel.

Currently price is parked at the top of the trend channel and the currency is close to a decision point. Will the currency break the downward trend channel or will we see a bounce of the trend channel for another leg to the downside? How to trade the USDCHF?

The conservative strategy

Of course the safest strategy is to wait for either:

a) A break of the down channel top trend line + break of the highs, followed by a hook back to the broken resistance area which should then provide support;

b) A proof of a respect for the upper trend line of the downward channel followed by a break of the last bottom on the day chart.

Once this has occurred then the currency has clearly chosen its path of least resistance and the safest trading opportunities are ready for the picking.

Trend bounce setup?

Of course some traders might see the down trend channel as a great to enter a short trade on the USDCHF using the resistance levels and the tops as bouncing area for further down side.

This trade setup normally does have value, but in this case I have strong doubts.

The day chart shows us clear double divergence on the currency pair between the 3 bottoms. Due to the divergence the currency could correct higher. A break of the trend line is definitely a very viable option.

Having said that, would I take a chance on a long in this area? No way! The resistance levels are huge and although we did have double day divergences, I am really waiting for a break of the trend line and tops before touching any trades.

4 hour channel

It is not only the day chart which is in a trending mode. The 4 hour chart also has a great channel. This trend direction however is to the upside. The angle of the trend is good.

There is just 1 important obstacle in the continuation of the 4 hour uptrend: the upper day chart down trend channel line. Once that gets broken, this well built up trend channel can continue on its path of destiny.

So we need a bit of patience but once one of the events unfolds, I think I will see a great way how to trade the USDCHF.

If you need some guidance how a trader could approach and setup a long term trading strategy for Forex, then take a look at this great article: “long-term trading strategy“.

QE3 for at least three more years?

According to Federal Reserve Chairman Ben Bernanke, the U.S. unemployment rate will probably not hit 6% until 2016.

U.S.A Globe With the promise of QE continuing until the labor market does “improve substantially”, does this mean QE3 could remain for at least three years? Here is the Fed’s statement from September: “If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability.” (Federal Reserve)

The Fed has also stated that they will keep interest rates low until unemployment reaches about 6.5%.

Unemployment claims
Thursday’s U.S. unemployment claims figure was 344K, 17K less than it’s forecast.

The Dollar is experiencing some weakness right now, but it could potentially turn around. Bernanke does speak again Friday morning.

For more information on what Bernanke spoke of the past few days, visit this article on the potential costs of risk-taking.

Wednesday

Forex Currency Trading: The Best Hours to Trade

Forex Currency Trading: The Best Hours to Trade

Maybe you are have a good job or have a good business but you want to increase your earning with extra cash , I think it’s time to you to enter the financial market . One of the financial market that gave a lot of money for a lot of people is Forex market.Another fact of the Forex market that can present you a chance to get a lot of money , Forex market trades exchanges with amount at least trillions of dollars each day. So financial market is the largest market in the world . You must know too that this is the most liquid market .
The one of the factor why Forex is the most liquid market in the world, because the operate times is 24 hours a day .
Nevertheless, beside that Forex can give a lot of earning and   convert more people to become rich, it also have a potential that most people can lose a great sum of money in a day. Forex is also a very risky market. Therefore , before entering this financial market considered yourself to think twice. You must have enough knowledge and skills before you enter this market.If you are sure want to enter the Forex trading you have to know Forex trading hours, cause Forex market operates 24 hours a day, you require to know when you should to trade. And then you must also to know how read charts , what currency pairs to trade and one or two strategy in Forex trading.Knowing Forex trading hours is significant, since that Forex market is a very lively market with lots of price fluctuations. Every minute in the Forex market counts. The value of a currency can more different with the value a minute ago. Increasing in Value and decreasing in value have similar probability.Events in Every minute so important for your achievement . As a Forex trader you have chance to enter the market several times a day. This will let you to get a number of profits after every number of trades you do and maybe even lose one if you made the incorrect trading conclusion.First of all , please always remember that life form of Forex market    at Sunday at 5 PM EST to Friday to Friday at 4PM EST and then begin again at 5 PM EST. Trading started in at New Zealand next at Australia followed by Asia, in the Middle East, Europe and ends in America. London, Tokyo and New York are the major markets with heaviest trading activities when major markets overlap.Basing from Forex trading hours, you will notice that when one market closes, another market opens. Trading in the Forex market is 24 hours a day. You will see that there will always be someone anywhere in the world who is buying and selling currencies. In the entire day volume of Forex market transaction is always high. However, it hit the highest points when the Asian market, the European market and the US market opens at the same time.
These are the Forex trading hours you have to trade in, in order to get the maximum potential trades. This are the hours that are also the most profitable. You can use as reference:
•           Australia – 7pm to 3am EST
•           Tokyo – 8pm to 4am EST•           London – 2am to 12am EST•           Great Britain – 3am to 11am EST•           New York – 8am to 4pm ESTAt the schedule above you can notice that there are two illustration where overlap on trading hours of two of the major markets. These are between Asian and European markets at 2am and 4am EST and between European and North American at 8am to 12pmWhen trading in the Forex market, these are the items you should keep in mind. Beside that you must to know how to trade and know some strategies on Forex, it is also very important knowing when the best time to trade in such very large and very liquid market.If you go behind all these, you can be in no doubt that you can earn a potentially higher profit than on other trading times.

Currrency Trading How To Trade USDCAD

Dear Traders,

In today’s blog we will be summarizing our Forex analysis on the USDCAD for you so that you have the ability to be ahead of the game.

Those who follow the USDCAD know that the currency pair has been nicely trending up recently. The US Dollar strength of course has helped fueled this surge in the all North American currency pair.

Will this up move continue? And what are the lines in the sand? All these questions will be answered in this article.

But before we start, we would like to know whether you trade the USDCAD? Write down your favorite currency pairs in the section down below.

The first step in our analysis on “how to trade the USDCAD” is the week chart..

Week chart

This chart shows us the the overall longer-term trend has been down. There is clearly evidence of downward pressure which is confirmed by the lower lows and lower highs, the basics of Forex technical analysis.

Since the summer of 2011 however, the USDCAD has been oscillating up and down within a tighter weekly range. These swings up and down seem to be building a wedge.

Most recently, the UC has been making higher highs and higher lows and even managed to break through a resistance trend line when connecting the two tops. Could this be the first indication of further up moves?

For that to be confirmed, the current move up would need to break the weekly high at around 1.0450. It is actually approaching that very high as we speak, so this entire region might act as a resistance level. Traders should be more cautious in their Forex trading plan when approaching these key levels. Why?

As the currency is approaching the top, the chances of it stalling and actually giving a retrace or reversal are increasing. The best Forex advice I can give is to keep an eye on candle stick reversal or continuation patterns to see if such a dynamic would unfold. But first let us take a look at the day chart to see if there is enough power and momentum to push through these resistance levels.

Uptrend

The day chart is confirming our suspicious of the week chart and we can clearly see a well built up trend on this time frame.

This move up has approached the 786 Fibonacci level of the last weekly swing high swing low. These are always key levels in the market and tough to break through. This information is valid for any Forex currency pair.

We can see also that the 786 Fib actually cause a day candle to form as a Doji with a slightly bigger wick at the top side than on the bottom.

Fib targets

Furthermore on the day chart we can also notice that the UC managed to take out the -618 targets of the 1st swing up and the smaller swing up of the current move. These -618 targets are also quite a substantial level in the market and the likelihood of price respecting it by either retracing or pausing is quite high. So now the question still remains “how to trade the USDCAD”?

Power and momentum

However if we look at the power of the move up on the day chart by checking the AO and looking for any divergence, we are clearly able to see that there is no sign of divergence what so ever between the 2 recent moves up.

The ADX also confirms a strong trend reading which is well above the 20-25 area. The ADX however is approaching the 50 level and that signals a danger zone as the trend might become sooner or later over extended. Read more here about the ADX.

How to trade the USDCAD

These 2 indicators could give a very good clue and indication that the up move might continue north, but probably only after the currency makes a pause or small retrace at these key Fib levels. Can it still continue a few pips? It definitely can, but the likelihood of bigger movements up seems limited. Here is my view on how the trade the USDCAD:

1) A break of yesterday’s high could signal a smaller movement up;

2) A break of yesterday’s low of the day candle might be a first indication of a correction.

Key levels

Because of the strength visible in this uptrend, a trader would definitely want to be very careful at the Fibonacci retracement level of the last swing high swing low. Either aim to take profit on any counter trend trades at the Fib levels and/or potentially even look for buying opportunities at those Fib levels (for example when candle stick reversal pattern is visible on 4 hour or day chart).

As always, Good Trading!

Forex Trading: What to Trade, When to Trade, and How to Trade

One of the best ways to earn money is trading , the largest and the most liquid trading in the world is the financial market . You can be sure that you can earn huge amounts of profit if you know how, when, andwhat to trade. It is a fact that a lot of people who traded in this financial market became successful and became very rich almost overnight.As a trader, you would want to take the prospect to get lots of money and of course, set up a trading career in Forex. The Forex market, as mentioned earlier, is the largest and the most liquid financial market in the worldwide. The stock market is different with other financial market, Forex does’t centralized location as it operates 24 hours a day at diverse locations around the world. Trades in this financial market are done from side to side an electronic network.As of the high financial requirements ,in earlier time, Forex was only limited to big worldwide corporations and financial institutions, such as banks. However, because of the advancement of the communications technology and also the existence of high speed internet, Forex in the late 90s is now available for everyone who is interested in trading in the Forex market.For a Newbie trader, Forex trading is just the buying and selling of different currencies of the world. It's looks very simple for everyone, but you must pay attention that many inexperienced traders and traders who have experienced a loss a large amount of money in the forex.Always rememnber in mind about a fact that in Forex probability between make a great money and lose a great money is exactky equal . For that reason, before you come into this market and trade, you should first think about a few things in order for you be successful in this money making venture.After you know how to trade currencies, you need a personal computer completed with an active internet connection, a funded Forex account and a Forex trading system. There are various websites that proffer Forex trading. You have to open and fund an account first with your chosen website if you want to start trading,. After that, you can now start trading in the most liquid market in the world.In order to keep up with the updates and change of price and prevent slippages from happening , You need to have a fast internet connection. A further thing you have to consider is that as much as possible, you should sign up in a Forex website that offer dummy accounts thus you can perform your skills and strategies in Forex trading.After you identify how to trade in the Forex market, the next thing you have to to know is what to trade. The Forex market involved different currencies from all over the world. It is also traded in forms of currency pairs. Here are the different currency pairs that you should consider trading in the Forex market:These are the the majority usually traded currency pairs in the Forex market. It is up to you to settle on which currency pair you want to trade depending on market situation. If you do it right, you may be happy your earning a large amount of income. The next and final thing you should consider is when you have to trade in the Forex market. Since the Forex market is operated 24 hours a day, you are able to trade every time you want. And, since it is the most liquid, you can get out every time you want. It is just a matter of be on familiar terms with the market condition is profitable or if it is falling.Forex traders are mostly investors who try to forecast which currency is going to raise in value and which currency will shrink in value. investors use Forex charts to spot a trend and verify when a particular currency will raise or shrink in value.Always remember that in all trades done in the financial market, you should also expect to suffer from losses. You should be prepared to deal with it and accept it. This is why you need a substantial amount of money to trade in Forex.

Tuesday

Where to Get Educated in Forex Trading

Posted by Biz Online

Recently the most liquid and the largest financial market in the world is Forex or Foreign Exchange. Forex is different with other financial market, the Forex market not centralized in a location. Exchanges are done through electronic network and the people entire the world can participate in the trade.Forex trading is the activity of selling and buying currencies of at least two different countries. Like most of the trades, you must to sell higher than the price you buy to make a profit in Forex. Forex is actually not so complicated . But there are some important things that must be considered in order to successfully obtain the desired profit in this very liquid financial market.Forex trading can offer such a large amount of money. The fact is anyone can become millionaire in just one night, but you alsohave to realize that despite the potential to earn large profits, there are also risk that a person can lose a lot of money in a short time as well , in Forex trading.Therefore, getting an education on Forex trading is absolutely necessary. You have to get a proper education and not just a crash-course-read-articles kind of education.If you live in the United States you easily find a particular course in trading in the financial market such as forex. These The schools are really going to give you sufficient knowledge and skills that will make you successful in the forex trading market. In addition, choose a good business schools also are important if you intend to enter the Forex market to trade.A best forex trading course will teach you how to read charts effectively and how to mark the trends. Because the ability to read Forex market charts you will be able to guess which way a currency trends heading, you can finally decide which currency should to buy or to sell. When entering the Forex Market skills of Forex market charts reading is one very important thing that must be mastered. This skill will substantially minimize the risk of losing money and maximize the chances of earning. It would be better if as soon as possible you are looking for a school that equipped real-time trading with dummy accounts and real accounts. Because experience is the best teacher, as a student you can to set dummy accounts for put into practice and also real funded accounts to trade currencies in the actual Forex market. However, the real funded accounts should be in mini Forex accounts to keep away from risking and losing a lot of money in case you made a fault in the trades.If you trade in real or dummy accounts for practice you can gain experience as another added value., You will cover a better idea on how Forex markets work when you enter the Forex market. The School usually has several different trading systems , so you can choose which system you are most like , most suitable and most convenient for you. Also, you will get a first hand feel on how to use these systems and avoid making mistakes in the real world.Due to the forex can do anyone all over the world with internet conection in real time, many people do not realize that forex requires a large amount of money to invest and also the expertise and attention. Forex has no guarantee that everyone will win; you must also realize that the forex market is a very risky investment, have sufficient skills and knowledge is essential for your success in trading in the Forex market.In addition you have to realize how risky forex market, you must also to realize that many people are suffering financially because entering the forex market without having skills and knowledge to succeed in forex. Therefore, it is very important for you to get the proper education first before you enter the Forex market.Always keep in mind, with the proper knowledge about trading Forex, the better your chances will be to profit in this financial market.There are different schools available that teaches all about the basics in Forex and allow you to experience trading in Forex with a trial account. Look for the things mentioned above and you can be sure that you will obtain all the things you need in order to start trading in the Forex market.

Forex market is waiting

forex market Federal Reserve Chairman Ben Bernanke will face Federal Reserve critics Tuesday with the U.S. Senate Banking Committee first in line. Bernanke will come under the spot light for his questionable methods of bringing growth to the U.S. economy. Wednesday Bernanke is scheduled to meet with the House Financial Services Committee.

Since 2008, the Fed’s bond buying program has tripled to $3 Trillion dollars.

Last week The Fed’s meeting minutes suggested the Federal Reserve could quench their QE soon.

In result of this, economists and investors will be paying very close attention to Bernanke’s words in the next couple days.

Will the Fed continue to buy $85 billion dollars worth of bonds per month? They said that they would until they saw “substantial improvement“.

Spending cuts approachThe reality of $85 billion in spending cuts set to come into effect on March 1st will likely be addressed in these meetings also.

The charts
The EURUSD is testing strong support levels around 1.30 and 1.297. The U.S. Dollar’s value could be greatly influenced by the meeting the next couple of days.

Learning the Ropes of Forex trading and Getting Ahead of the Game Early On

Learning the Ropes of Forex trading and Getting Ahead of the Game Early On

In this world everything needs something to pay, in the world's mountaineers climb it pay to have strategy and understanding how to climb. And in the world of forex trading it pays to know the players, the stakes and the market. In forex trading what you are looking at the trading strategies, the market trends, the value of the currency you’re trading and the factors that affect the value of your currency are extremely needed to know.

Research is Fundamental to forex trading. However as we are chatting about big topic here, a good forex trading course would be useful.

Why a Trading Course is needed

To gain success in forex trading at least you should be familiar with basic terminologies and the process of trading. So to that end A Forex trading course teaches you how to make predictions or charts of market movements as well as the right time to buy or sell a commodity.
Since forex trading is done in real time and make quick decisions on the spot, the trader must emotionally attached and standing by to handle the demands, challenges and market stress. And these, one can learn in forex trading education.

What To search for in Forex Trading Courses

Basic. a god forex trading education should include the program of the essential things in the forex market transactions like the basics on margins, types of orders and leveraging. Beside that it shoul teach the other important things as charting, basic terminologies, the type of analyses being used , leverage and the software and tools. These are essential as the trader learns when to cut back and minimize his losses as well as gain profit.

Analysis. Basic to a forex trading course is a detailed discussion on doing technical and fundamental analysis and tools. So It ought to teach you how to analyze frequent mistakes and how to avoid such mistakes at the same time.

Values. More than the basics involved and the theories, proper money management and the development of a proper trading disposition, should be taught to you by a good forex trading education. It should teach psychology too because of the possibility of going too emotional involve of the traders due to increased stakes. It is essential if the forex trading course developed added value needed in money trading, such as discipline, patience and commitment.

Experience. More people say that experience is a good teacher , yes ,absolutely right , so as a good forex courses should have spots where the student available to practice trading. Some courses have boards or live conference rooms where the trader can learn to trade in real time or, in some cases, in a simulated environment. These experiences should also have a one-on-one feedback and forums for discussion and exchange of information and lessons.

There are many online site offering courses and workshops on forex trading to those who want a better understanding and experience of the market and rules of the game. These sites have almost all of learning progam in forex trading as risk and money management , technical analysis, trading strategies, market trends and networking. There are also tutorials on the latest softwares and tools being used.

Learning the Ropes of Forex trading and Getting Ahead of the Game Early On

Learning the Ropes of Forex trading and Getting Ahead of the Game Early On

Research is Fundamental to forex trading. However as we are chatting about big topic here, a good forex trading course would be useful.

Why a Trading Course is needed

What To search for in Forex Trading Courses

GBP Weakness in the Forex Market in Result of Moody’s UK Downgrade

Up, up, and away! Says the Euro to the GBP.

Moody’s downgrade of the UK’s prestigious AAA rating was a wake up call to the United Kingdom late on Friday.
1361823607_currency_blue_pound
What Did Moody’s Say? According to Moody’s the UK has “sluggish growth which Moody’s now expects will extend into the second half of the decade”.

Another reason for the UK downgrade according to Moody is it’s increasing debt: “And, as a consequence of the UK’s high and rising debt burden, a deterioration in the shock-absorption capacity of the government’s balance sheet, which is unlikely to reverse before 2016.” (Moody’s)

The EURGBP could be on it’s way through the critical .883 level in the next week or two if this momentum continues.

forex_trading

Yen News The Yen is also hitting new Yen lows against the United States Dollar. With a new BOJ governor to be set in place soon, it is very likely for the Yen’s volatility to be high in the near future.

Rajoy filled with joy as Spain’s deficit is under 7% of GDP

Forex

Prime Minister Mariano Rajoy said the 2012 Spanish public deficit was less than 7% of the country’s GDP last year.

“In a time of recession like the one Spain is going through now, I can inform you that Spain’s public deficit was below 7 percent of GDP last year,” Rajoy stated in Madrid Wednesday.

Since 2008's economic crisis Spain’s debt has more than doubled.

Last summer a possible Spanish bailout was being talked about, but as of now it appears Spain has moved forward and could continue to improve economically.

The EURUSD is bearish so far today. According to today’s daily close there could be a decent short signal forming

The Ferrari Of The Forex Trading

Hello Traders!

Today’s focus will be on the GBPJPY! So get your reading glasses and a cup of tea for this in depth analysis! Today’s article will be a great guide for your Forex trading plan!

First, let us start with a quick recap of the majors to get an idea which direction the crosses could be headed to.

1) The USDJPY has been fighting to reach higher grounds for quite a while now but it has not been able to crack the 94.50 resistance level.

This level actually was already viewed as a potential barrier for this currency pair in this article: Yen 110?

Basically, the longer the currency stays under that high, the more likely a deeper correction on the UJ will indeed take place.

Of course a break 94.50 should clear the road for a further continuation to at least the 100 level. Read more details on the UJ in this Forex trading strategy article.

2) The GBPUSD has been indeed making that down move as we at winners edge trading were anticipating. The GU is in its 5th wave on the 4 hour and day chart. Also the Cable finds itself quite close to the weekly support areas of 1.5250-1.5350.

A bounce from this horizontal weekly support level is quite likely as it has acted as strong support in the past as well. In fact, the last time that the GU was lower than 1.5250 price level was approximately 2,5 years ago. Therefore, the chances that price will break through such an important price level are slim.

Read here more details on the GBPUSD for further Forex advice.

From this analysis we can anticipate downside continuation on the GU until we reach weekly support and downside correction on the UJ until we break the high or reach a big retracement level.

Enough discussion about the majors….

Now its time for… the Ferrari of all currencies: the GBPJPY!

Of course the daily and weekly chart both show a huge impulsive move up, just like any Yen cross.

It is interesting to note however that recently price action to the upside has halted somewhat. It seems that the GJ is making a bigger correction.

The questions are:

- Will the up trend continue?

- And if so, when and from where?

There are interesting questions. If we look at the Elliott Wave count on the day chart, the likelihood of more continuation is quite high in my opinion. Of course this analysis could change 2 weeks from now depending on the price action information we receive. But the likelihood of a wave 4 and 5 are quite high.

This of course leads us to the question, where would wave 4 end and wave 5 continue?

That question is best answered by a Fib! If we place a Fibonacci retracement on the potential wave 3, we can see that price has already retraced back to the .236 level. A 382 Fib however is considered the normal retracement level for a wave 4.

We also see 2 bottoms at the same price level (+/-139.30), which could act as support.

The wave 5 target is the double top and the -0.272, which is at 153.80. I myself will be keeping a hawks eye on price action clues that indicate a turnaround anywhere in that area.

Until we reach the 382 Fib I do think further downside corrections is possible, but one should be careful when trading against such a strong trend. The preferred trade is catching the wave 5.

Good Trading!

The ADX Trading System

Hello Traders,

I welcome you to Friday’s educational article on the ADX indicator.

The ADX is actually the abbreviated term. On some platforms you will need to search for “Average Directional Index” “Average Directional Movement Index”.

Basically the ADX is a lower case indicator which any trader can add to their chart and you should be able to find as a standard tool on all platforms. If you wonder why a trader should have the need for an indicator, you might want to take a look at the article “why use indicators” for more information.

The ADX intro

The ADX was created by Welles Wilder, who wrote about the indicator in his book of 1978 named “New Concepts in Technical Trading Systems.” His book also included work on the Average True Range (ATR), the Parabolic SAR, and RSI. More information on this in the articles “how to trade the parabolic sar indicator” and “the average true range”.

Wilder designed ADX with commodities, Forex and daily prices in mind, but these indicators can also be applied to stocks.

The Average Directional Movement Index is a great tool to have in your box of analytic “weapons”. We will discuss how to use the ADX indicator in the remainder of the article. But before we dive into the usage of the tool, let us go through the main benefits of the indicator.

Main benefit / biggest strength

The biggest added value and the ADX’s unique feature is the fact that it focuses on measuring the strength or weakness of a trend. But it can also define trend direction.

Most other indicators are only able to identify a directional bias of the market or the strength of momentum, but not both.

For example, oscillators with oversold and overbought values indicate areas in which price has overextended to one of the 2 sides. The oscillators attempt to establish which side of the market is in an extreme.

The ADX also provides a definition of a trend direction in the market. However, the ADX quantifies the strength or lack of strength of any market movement. Basically it can establish if there is a trend and if how strong has it developed so far.

The ADX therefore can be a great tool and can be a valuable indicator for your Forex trading strategy and Forex trading plan. In some cases, a trader can get the best Forex trading advice from these tools.

The indicator

Wilder calculated the directional movement by comparing the difference between two consecutive lows with the difference between the highs. The Average Directional Index indicator has 3 lines in its indicator:

1) The ADX itself

2) Minus Directional Indicator (-DI)

3) Plus Directional Indicator (+DI)

They represent a group of directional movement indicators that form a trading system. The Average Directional Index indicator does this as follows:

The ADX measures trend strength without regard to trend direction. This allows traders to identify whether there is a good environment for their trend following system or a non-trend following system.The other two indicators, Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI), identify trend direction. The upside has an edge when +DI is larger than – DI, while the downside has an edge when – DI is greater. Crosses of these two lines indicate change in the direction.

When a trader combines this two analysis, they are able to distinguish both the direction and strength of the trend in one indicator.

The value of the ADX

Wilder suggests that a strong trend is unfolding when the ADX is above the value of 25. When the value is lower than 20, it means that no trend is present and the currency is in a range bound environment. Wilders considered the zone between 20 and 25 to be in between. Many technical analysts however use 20 as the key level for ADX.

The value of the+DI & -DI

The directional movement is positive or plus when the current high minus the prior high is greater than the prior low minus the current low.
- Provided the answer to the above is positive, the Plus Directional Movement (+DM) then equals the current high minus the prior high. A negative value would mean that the +DM is zero.

The directional movement is negative or minus when the prior low minus the current low is greater than the current high minus the prior high.
- Provided the answer to the above is negative, the Minus Directional Movement (-DM) equals the pior low minus the current low. A positive value would mean that the –DM is zero.

Trading with the indicator

Wilder created a simple trading strategy and trading plan which is based on the three parts or lines of the indicator.

The first condition is connected to the value of the ADX, which should be above 25. Many traders however use 20 as the minimum value. This ensures that the currency is trending.

A long signal occurs when +DI crosses above – DI. Wilder placed his stop loss under the low of the trigger candle (day candles in his case). The trend remains in force as long as the low is not broken. A cross of +DI below – DI would not signal a change and would be treated as retracement until a low is penetrated. The trend will most likely strengthen when the ADX turns, which will confirm the trend. Once the trend is in profit, the trader can use a trailing stop method to lock in profits along the way.

The opposite is needed for a short trade setup.

Summary

The ADX is a simple yet interesting tool for making analysis. Of course it goes without saying that proper back testing should be completed by every trading on the currency or currencies which you trade before actual implementation or use of this indicator. Using other indicators as a confirmation for your analysis is always recommended as well. Using trend lines, chart patterns, Fibonacci levels and Elliott Wave are just but a few examples of technical analysis what can be used for that confirmation.

I hope that this to “how to use the ADX indicator” article has helped you and hope that it will improve your Forex trading plan and Forex trading strategy.

Questions

Last but not least, I want to ask you:

Do you use this indicator?
Do you intend to check out this indicator after reading this article?
Let us know in the comment section below!

Sharing

If you find this an interesting indicator and article, please share this information with other traders as well.
I wish you a Good Trading and a nice weekend.

Monday

Currency Trading Forex Market On Fire

Hello Traders!

The currencies are in a rage as the market loosened up on Wednesday creating massive falls on GBPUSD, EURUSD, GBPJPY and XAUUSD.

The U.S. dollar strength created massive moves after the European session had ended. During the late New York and Asian sessions the GBPUSD and EURUSD kept on falling as if there were no tomorrow.

EURUSD:
After hitting the 618 Fibonacci retracement of the last 4 hour swing down the EURUSD indeed made the fall as we predicted and has reached its -0.272 and -618 targets already at 1.3170.

The EURUSD is now at the target plus at a significant Fib level of the last move up on the day chart. This could be a potential bouncing area, please see Nathan’s video for more information.

XAUUSD:
Gold continued its massive bearish fall from the $1690 areas by falling yet another $55 last night from $1610 to $1555.

This was really an incredible move down and I closed my XAU short at my target of $1555 for a 3.5 to 1 reward to risk trade. For those of you who read the blog regularly, you know that this trade has been intensely and closely followed in these blogs from the very start of the move.

One of first articles was the “time for a golden update on gold” where the entire trade plan was spelled out from a to z. We hope that you were able to capitalize on the Forex advice and Forex trading plans connected to this fall, but if not… no probs! More Forex analysis and strategy on how to trade currencies is yet to come.

GBPUSD:
The cable fell from 1.5450 are to the 1.5280 area during the Wednesday London session. The 1.5250 area was the area of weekly support and price has not broken through the 1.5230 area since summer 2010. That all changed in the Asian session when the GU broke down another 70 pips from 1.52 to a new low of 1.5130.

Of course I was warning for the down side trend on the GU ever since mid January and most recently in “the future of the cable”.

Can the GU keep moving down? Or is the party over?

These questions are very tricky. But this is the best Forex advice I can give on how the trade the GBPUSD at the moment.

The fact that the weekly support levels at 1.5230-1.5280 have been broken is a significant event. There is no doubt in my mind about that. These levels have not been broken since the summer of 2010, which means a period of 2,5 years.

However, a break of a bottom not always constitutes an immediate follow through. And I place emphasis on the word immediate.

First of all let me start by saying the chances of the Cable continuing lower are very high in my opinion.

1) The GU has broken the bottom wedge line to the down side

2) The Cable has broken the weekly support

3) The next major bottom and expected support on the week chart is at 1.42 (1000 pips away)

But I am a bit apprehensive when this fall might occur. Why?

Because it is a typical behavioral characteristic of the GU (and many other currencies) to give a pullback after a bottom or top have been broken.

You can imagine how many traders speculated on a bounce at at the weekly support levels at 1.5250. Where would they have their stop losses? Exactly under the 1.52 level.

These stop losses are in fact sell orders to cover their initial buys.

Now that these short covering orders have been observed in the market, the selling power might die out and the a relief rally after such a massive down move (700 pips in 8 trading days or so) might occur.

In that case I would not be surprised to see a retest of the 1.5850 top.

But at the moment it is too soon to tell.

I might be wrong and the GU just keeps falling to the -1.000 target at 1.5070 or lower.

In such a situation the trader always faces a tough reality and choice: how far can a currency go? Most often it is further than we think. However I cannot ignore the fact that I remain cautious at the moment with the downside until we make a decent retracement. For now

Good Trading!

Forex Trading EURUSD Playing Field

Hello Traders,

Rise and shine, it is time to excel in a new trading day!

And the Winners Edge is here as always to provide you Forex advice and guidance.

Yesterday’s article focused on the Ferrari of the currencies: the GBPJPY. The Ferrari nick name stems from the fact that the pair makes volatile moves up and down…

Today we focus on the EURUSD as a continuation and follow-up of the earlier post in Monday’s article “this week’s EURUSD movements”.

EURUSD

Range bound: the EURUSD consolidated in a narrow sideways range for almost 2 trading days. The currency pair was not able to choose either direction and went range bound instead.

Finally in the late New York session the EURUSD made up its mind and decided to complete a retracement to upside, as mentioned in Monday’s article.

Divergence leads to revival: divergence on a 4 hour chart is not something to take lightly and always gives cause of concern. In this case it also gave steam for a bullish revival.

The EURUSD has made it all the way up to the 618 Fibonacci retracement of the last impulse.

Is it ready for a turn down? Or will the pair in fact continue with its march north?

Price action: price action on the 4 hour and day chart has been behaving quite bullish so far. The move up has not encountered any candle stick formation which would give me cause to think that the EURUSD will stop here.

Of course nothing is certain, but looking at price action, I do see a higher likelihood of a higher retrace up to the 786 or 886 Fib or all the way up to the top at 1.3518.

The 500 Fib: that top is also more or less equal to the 500 Fib of the entire move down (1.3506), which could act as a resistance level as well.

Day chart: The day chart does warn us though that the downside correction might be over as we speak. The currency could have completed an ABC down and is now ready for the next move up? So where does the upside bullishness start?

Bullishness: for me the EURUSD becomes bullish when we close above the previous high of 1.3518. That is when this currency pair is showing us higher highs and higher lows on a significant time frame. Until then the likelihood of some more downside is still present.

Conclusion: my Forex trading plan and strategy is the following: I am looking to short the EURUSD right around that 786 Fib at 1.3475 and/or at the 5oo Fib at 1.35 with a stop above the top (1.3518). Can I lose on that trade? Of course I can. No doubt about it. But to me it seems like a great reward to risk trade. Until we break that top this up move can be nothing more than a retrace and that is what I trading for. What happens if price crashes through my stop loss? I lost 50 or 25 pips and I am looking for trades on the EURUSD to the upside.

That concludes my Forex trading advice for the moment.

What are your views on this currency pair?

Don’t forget to let us know what you would like to see analyzed in tomorrow’s article!

As always, Good Trading!

Forex Currency Trading System - Weekly Heads-up

Welcome Traders to today’s overview for the upcoming week!

Hope you had a good weekend and plenty of time to do some charting. In my opinion it is never a bad moment to do analysis when the charts are standing still. It gives a good opportunity to create excellent Forex strategy trading plans.

Long-term charts

Today’s analysis will focus on the long-term charts, such as the weekly graphs, as Mondays and Fridays are never the best days for intra-day trading.

Mondays are difficult because the markets are trying to find their balance and direction after the weekend pause. Fridays are tougher because the market has already made substantial movements throughout the week.

On Monday’s I therefore like to analyze the long-term charts and identify whether or not there are any interesting swing trade setups. The EURUSD will be our first focus.

EURUSD

The EURUSD has been retracing downwards for the last 3 weeks. This retracement can be explained by the following facts:

1) The currency has completed 3 waves up

2) The currency has completed 3 waves up within the 3rd wave

3) There were 3 waves in each of the 3 waves within the 3rd wave

4) The wave 3 target hit the -0.618 target right to the pip (day chart)

The EURUSD up move was therefore completed and it was high time for a down move.

The Big Question

The big question is: how to trade the EURUSD? Is the EURUSD upward correction over and are we now at the start of a down trend? Or will we make one more upward correction before making a bigger down trend?

Let us take a look at the week and month chart for more guidance on how to trade the EURUSD and formulate a trading plan.

On the month chart we are able to see that the current month of February is still retracing January and has not yet broken its low at around 1.30. Another interesting fact is that the EURUSD had 6 bullish months in a row. A retracement of that move up only seems naturally now. However, there is something else that is even of more importance.

Monthly Wedge

The most important factor in my analysis is that there is still a high likelihood of testing the previous top on the month chart before moving down again. Why?

The last down move on the EURUSD was not able to break the pervious bottom. That created a wedge where price cannot break tops and bottoms. The EURUSD is now in its final leg of a contracting wedge. In theory this wave up can stop anywhere and at any retracement of the last move down.

But I do believe that certain areas are more likely than others.

1) The probability of the currency retesting the previous high is high

2) The probability of the currency testing the upper week/month wedge line is high

3) The probability of the currency testing the 786 Fibonacci retracement level is high

Week Fibs

When looking at the week chart, we can see that the move up did not stop at a Fibonacci retracement level of the last swing high swing low to the downside. But we are respecting the Fib targets to the upside.

Conclusion

The upside Fib level targets are so far more important than the downside retracement levels. So in that regard I do believe that the EURUSD monthly wedge would finish its upward correction. That upward correction most likely will end at a Fib level retracement such as the 786 and not half half way the 500 and 618 Fib.

Therefore when putting all the pieces of the puzzle together, I do believe that the likelihood of this down move turning out to be a correction of the up move for another leg up is high.

Up Fib

If we place a Fibonacci retracement key on the last move up, we can see that we are at the 500 Fib, plus trend line support as we speak. Another likely bouncing spot to the upside could be the 500 Fib and huge weekly bottom at 1.2670.

Another way of looking at the chart is fibbing the last wave up on the week chart, in stead of the entire double wave up. In that case we can see the the EURUSD respected the 500 Fib last week. A move down to the 618 and then up to the -618 target which equals the 786 retracement is also a likely scenario: