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GreenForexTrading.com
ForeX forX-tra Gr€€n
Hi everyone,
NOTE: The CFTC has sued 14 Forex Broker Companies...see below for this list.
In this e-mail I am going to give you my view on the markets for Wednesday the 26th to Thursday the 27th January 2011.
We have a Monster Trade update since first recommended at 1.000.
The “Monster” Trade. Last week’s key Chinese data has passed as the key 0.985 level holds. Now the AUD/USD at 0.995 is a BUY on any daily close above 1.000. Sentiment wise, this AUD/USD is set for further gains, and the 1.000 level needs to be bested for good. With a STOP now raised to just under 0.985 and any further decline would invalidate the rationale for the trade (see below). Should the AUD/USD decline any further this trade will be closed for the time being as the AUD/USD is still expected to yield 1000 to 1500 PIPS over the next 2-3 months, maybe even sooner. Adding to existing positions is recommended as scaled in BUYS (0.2 contract at a time) on any daily close above 1.000. 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.
Why the “Monster Trade”? In the AUD/USD sideways action of recent weeks has served to further unwind the earlier overbought condition while forming a Head and Shoulder bottom continuation pattern on the 4-hour chart with the neckline coming in the 0.996 area. The interpretation of the pattern in the AUD/USD presented in the last update, which was that it is marking out an upwardly skewed bullish "running correction”, remains unchanged. All that has happened in the past few weeks is that it has reacted back across the up sloping channel to arrive at support near its rising 50-day moving average and has retested that area again. As we can see on the chart this reaction has resulted in a further easing of the medium-term overbought condition as shown by the PPO indicators, which are now neutral and working on generating BUY signals on the daily and on the weekly as long as it stays above the zero line. The noted convergence of the short-term downtrend channel earlier last month was an indication that the AUD/USD would soon break out of it to the upside to resume its advance and make new highs, which it has but seems to be consolidating in this region. The AUD is seen here, http://www.stockcharts.com/charts/gallery.html?$XAD.
I am fighting a cold right now so no fundamental take on the markets and so I will go straight to look at the charts. The USDX has carved out a very wide range bound by the 200-day moving average (DMA) and now 50-day M.A. as a new ceiling with a new weekly PPO SELL signal to back up the earlier daily PPO SELL for the dollar as seen in the USD daily and weekly chart here http://www.stockcharts.com/charts/gallery.html?$USD.
The EUR pulled away from the declining 50-day moving average and another pullback to the 50-day M.A. in the 1.33 area is increasing as much as a continuation move is possible. With the backdrop of a PPO daily BUY signal against a new weekly BUY signal all would seem clear but technically a pullback here would allow a safer entry to go long and should happen before further gains to the upside can happen. The current upside is expected to be limited to the 1.37 area before 1.41 can be seen on future dollar weakness as seen in the chart here, http://www.stockcharts.com/charts/gallery.html?$XEU. Place your trades accordingly. All charts courtesy of www.stockcharts.com.
Recent sterling strength was whacked on poor UK GDP report and will look for stabilization at the 50-day M.A. for entry for now. Cable bounced from the 200-day moving average and PPO daily BUY against a new weekly BUY signal and we could look to cautiously buy on any weakness, as seen here, http://www.stockcharts.com/charts/gallery.html?$XBP.
As shown from the quote earlier, traders should still continue to use caution in trading the yen as the JPY pairs are neutral and also bound by the 50 and 200-day moving averages. With the backdrop of a PPO daily BUY signal against a weekly SELL signal that soon looks to be a BUY, we are still in a wash and rinse scenario with a slight bullish bias for the time being as the Yen inches along the 50-day M.A. as seen on the chart given here http://www.stockcharts.com/charts/gallery.html?$XJY.
Most of this week’s remaining key reports are:
1. Thurs. Jan. 27, 2011 - (8:30am EST) US Core Durable Goods Orders and Unemployment Claims and (10:00am EST) US Pending Home Sales.
2. Fri. Jan. 28, 2011 - (5:30am) CHF KOF Economic Barometer and (8:30am) US Advance GDP.
The swing trade for today’s Asian-London-U.S. session is to SELL the EUR/USD @ 1.3727 with a STOP @ 1.3554 and a TARGET of 1.3650 for 70 PIPS
NOTE: The CFTC has sued 14 Forex Broker Companies...should you have your money with them, I strongly suggest you reconsider as the CFTC is usually very late and tend to understate the nature of problems discovered. They are:
EuroForex Development LLC, a Delaware LLC;
FIG Solutions Limited, Inc., a Delaware corporation;
ForInvest, a Delaware corporation;
FXOpen Investments Inc., a Delaware LLC;
FXPRICE, a Delaware LLC;
GIGFX, L.L.C., a Delaware company;
InovaTrade, Inc., a company with purported offices in Florida;
InstaTrade Corporation d/b/a InstaForex, a British Virgin Islands company;
InvesttechFX Technologies, Inc., a Canadian corporation located in Toronto;
J&K Futures, Inc., a company with purported offices in California and New York;
Kingdom Forex Trading and Futures, Ltd., a Nevada company;
Prime Forex, LLC, a Delaware LLC;
Wall Street Brokers, LLC, a Delaware LLC; and
ZtradeFX LLC, a Connecticut LLC.
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
Risk Warning! Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. All information posted on this website is of our opinion and the opinion of our visitors, and may not reflect current situations and occurrences. Please, use your own good judgment and seek advice from a qualified consultant, before believing and accepting and acting upon any information posted here or on this website.
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