Hi, This is an update to the post earlier in the week advising my LMT Forex Followers not to trade until the current market turmoil settles down. My advice, nay insistance ! is continue to stay away. As you can clearly see in todays 4 hour Forex Chart of the aud ( I could have used loads of similar examples) price is shooting up and down within the same candle).

The wise trader simply walks away and lives to fight another day.

There is clearly no trend at the moment. These “spikes” are tearing through fx traders stop losses and will wipe out 1000′s of accounts of those who continue to trade through this extremely difficult (usually short) period of time.

The profits we have had with the LMT in the last month have been nothing less than spectacular. I have been trading Forex for over 5 years now and the current market conditions do not come along very often (thankfully).

The LMT is a trend following system that works great when there is a trend. We actually need this weeks big moves because when they settle down a new trend will start and we can catch it near the beginning and ride it a long way for BIG , low risk Profits.

The secret to successful forex trading is knowing when to stay out of the markets.I strongly recommend you leave them alone until this sorts itself out.

The beauty of forex trading is you can make money when the markets are going up or down, but not when they are going sideways.

In the current chaos and uncertainty let the gamblers fight it out amongst themselves. We the intelligent, shrewd traders will stroll back in and sweep up once the dust has settled. I keep telling you that we can get rich in forex, but slowly.

So what is going on and what started all this ?

Most of the the currencies that we are trading have just enjoyed 4 to 6 months of steady, trending movement. Had we been trading with the LMT since the turn of the year we would have made a lot of money by now. It will return, and very soon, don’t worry. Markets always trend longer term.

It is quiet normal after a period of sustained movement for the markets to stop for a “breather” whilst traders decide where the prices are going to go next. The same principle rules the stock market.

Added to this there has been a lot of fundamental news this last week or so. Gbp negative news for example, followed by $ negative. The market is now trying to decide whose economy is in the biggest mess ! Lots of pairs look as though they might be rolling over (think of an aircraft carrier turning around – a long and painfully slow manoeuver).

Lots of pairs are still on the verge of changing direction or resuming their current trend. Some are trending down on the 4 hour chart and up on the daily. The reason for this is that the trend is based upon the next time frame above. Therefore the daily chart is based on the weekly which takes ages to change.

Take a look at the following example of cable (gbp/$) on the 4 hour and daily charts respectively. The Gbp is clearly in a down trend on the 4 hour charts. Price has hit the top trend line on a number of occasions and similarly the bottom.

cable is clearly in a down trend on the 4 hour chart

cable is clearly in a down trend on the 4 hour chart

The more experienced trader could try to trade even these markets by simply selling near the top of the trend with a stop just the other size of the trend line. Vice versa for a buy from the bottom line. The problem is the size of some of the spikes will just wipe out the trade. Notice the shapes of some of the candles that have rejected.

Now look at the same currency pair on the daily chart;

cable on fx daily chart is clearly in an uptrend

cable on fx daily chart is clearly in an uptrend

 

 

 

 

 

 

 

 

 
What is extremely interesting to me is where price is now. The arrow is pointing to where the 4 hour and the daily trend lines meet. This area is critical. If price starts to go back up from here we could be at the bottom of  a major move upwards for 100′s of pips (possibly a 1000 to the top trend line).

The other option is that if price was to break & close below here we could be looking at a major change of direction. Either way there are a lots of pips to come. Don’t be hasty.Spend the next few days reading and learning as much
as you can. I will let you know when i think its safe to get back in.

This weekend I will provide you with detailed analysis of all the pairs. Where they are now and where I calculate they are going to go next.

To all our success, marc

If you would like to know more about the LMT Forex Formula Click the link Below. Those who join the LMT (low maintenace forex trading system) from this site receive regular free updates, support and advice

Want more of this? See these posts:

  • Potential 400+ Forex pips gbp Monday
  • 4th May. Gbp possible break up
  • 600+ Pips profit from Sundays Video Analysis
  • April 2009 Results + ?? Pips
  • Risk Reward in Forex

    • Tagged with: • • • • • • • • • • • • • • • • •

    Filed under: Forex Advice

    Like this post? Subscribe to my RSS feed and get loads more!