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GreenForexTrading.com
ForeX-tra Gr€€n
Hello Everyone,
In this email I am going to give you my view on the market for the Asian/London sessions in the market for today, spanning Thursday the 16th to Friday the 17th of September 2010.
The swing trade for yesterday’s Asian-London-U.S. session to BUY the EUR/USD did not fill at @ 1.2955 but in the Live Forex Trading Room we adjusted our entry and the EUR/USD traded as high as 1.3110 for over 100 PIPS. This is in addition to the swing trade for the GBP/USD that has given over 100 PIPS so far...both depending on how the trade is/was managed. Yes, we are continuing to hold partials of both to continue to ring to register along the way and protecting the rest with trailing stops.
The “Monster Trade” initiations. I recommend Scaling In BUYS (0.1-0.2 contract at a time) on weakness in the EUR/USD now in the 1.310 area with an expectation that 1.333 could be reached and an order to buy could be scaled in with looser stops than usual. This trade is with the EUR/USD now with a stop around the 1.297 area and so explains continuing small position sizes. The target areas are first the daily retracements to the 1.333 area with the longer term weekly retracements in the 1.351 and 1.388 areas. NOTE: All position trade stops are HARD stops, NOT mental stops. Remember, hard stops for overnight positions, mental stops for day trades.
About Scaling In
“Scaling In” simply means breaking up the initial entry position into multiple parts and deploying them at selected intervals, instead of firing the entire trade magazine all at once. The only reason we might resort to scaling is if we have good reason to believe our expected support zone may have become obsolete.
We usually take an initial position in our expected support zone with a fairly tight stop. Obviously if we get stopped, we were early to the trade. Early is just another word for “wrong.” If stopped, we reassess and adapt to the new market reality. If we were not early, and our position shows us that we are right, then we add to that position once the trade has managed to “prove” itself by advancing out of the support zone box, raising our trailing/trading stop in the process. The two or more portions make up a full position. When we speak of scaling, it means we have become willing to break up the trade entry into two or more parts, with the first part at the very top of the expected support box and the second part within it. Rarely will we ever take a new position outside our expected support box.
ALERT!!! The market has become clearer this week. We have a head and shoulder top in the USDX with the neckline being broken at 81.5 earlier in the week and hang at this level now. The confirmed trend of the market for USD is down. With the USD’s closed under our key pivot of 81.5 and now chopping at 81.1 we will look to load up scale in fashion for continuation USDX selling. The USD daily and weekly chart here http://www.stockcharts.com/charts/gallery.html?$USD. The EUR pairs are expected to be overall weaker than the corresponding correlated GBP pairs. The topping action in the USD can also be confirmed against the bottoming action in the EUR as mirror images of each other and the EUR is showing a head and shoulder bottom with its neckline in the 1.292-1.300 area. The EUR is right at this area and a strong break has started as seen in the chart that can be seen here http://www.stockcharts.com/charts/gallery.html?$XEU. In summary, the weekly chart gave a strong retracement to 1.300 with 1.330, 1.351 and 1.388 expected in short order and loading up is recommended as given in the “Monster Trade”. Place your trades accordingly. All charts courtesy of www.stockcharts.com.
The yen fell after the Bank of Japan announced it had intervened and spent $20 billion or more to weaken the JPY. Ahh, intervention…tough to trade that one and pivot points become meaningless until market forces reassert themselves as intervention becomes revealed for the true folly in futility that it is. While a long bias still exists, with intervention in the cards and a break of the daily rising trend-line, be wary of the wash and rinse instead of a fast move that would normally be expected before the turn. Traders should heed my recommendation to avoid the JPY pairs for the time being awhile. The absolute carnage can be seen on the chart given here at http://www.stockcharts.com/charts/gallery.html?$XJY.
In the GBP/USD, we saw a nice support level being formed at the 1.5300 level, and now at 1.562 it makes sense to continue to look long at this level. The GBP as seen here, http://www.stockcharts.com/charts/gallery.html?$XBP, has broken up near the 50 and 200-day moving averages and a PPO buy signal has been triggered. Expect 1.572 and 1.600 in short order.
The US Core CPI report to be released Fri. Sept. 17, 2010 (8:30am EST) is the only report expected to factor in today’s trading session going forward.
There is no swing trade for today’s Asian-London-U.S. session other than to manage any current open positions due to the USDX hanging precariously at the neckline of a head and shoulder top...you want to be in on this one if it breaks.
That's it for today. Remember that I trade in the Live Forex Trading Room between 1am-6am Eastern Time. I will be hosting my regular 3-4 hour session and assessing and exploiting PIP opportunities as they arise.
Enjoy trading and good luck everyone!
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Mr. Green
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