The Forex week ahead
The last two weeks we have had some incredible results from the weekly charts. This week there is a potential big problem. It is a public holiday in the USA which means that a large number of traders & financial institutions will be out of the markets and as a result there will be less liquidity & therefore the potential for price spikes & markets that are more unpredictable than normal.
I have done a video from analysis off these weekly charts BUT I will update this tomorrow. Thin/illiquid markets are almost impossible to predict from a technical perspective, so it may well mean that this week that we need to concentrate on daily moves. A further point to support this theory is that there is a tremendous amount of news out this week, so our results will be influenced by a combination of technical & fundamental analysis.
To add to this situation there is a huge amount of news this week, so we will need to monitor trades more closely & check each day at candle close.
The following video shows you some potential big moves that are developing NOW on 4 hour & daily charts. Re the weekly Vidoes I have posted one in the members area to show you how to trade from weekly charts (this scares a lot of people because they think you need huge stops. It is not the case). We often catch big moves with stops no bigger than 50 pips AND you still only risk the same amount of money per trade whether your stop is 50 pips or a 100, simply reduce the amount per pip.
Last week I caught a 400+ move on the Euro Cad with only a 50 pips stop. This was predicted in last Sundays video & gained almost 500 pips which is a 1 to 10 risk reward ratio. If you would like to try our NO RISK forex mentor program simply click on the following link:
Daily Forex Analysis for 14th February. Flag Patterns Everywhere
In this second video I show you a few possible things to look for tomorrow on daily & 4 hour charts. There are lots of technical patterns developing at the moment that might give decent results trading shorter time frames.
| Gbp/$ | Looking for pullback to 1.5765/1.5800 as per the weekly analysis. This would be the best entry but I show you in the video how there is a potential flag pattern developing on the 4 hour charts. If price breaks the lower trend line around 1.5600 then we would look for a pullback and possible 370 pips move down to 1.5200. Even beter if we could catch the upper entry then there is a potential 600 pips! |
| $/Yen | Again looking to short at 90.00/90.30. Another potential 4 hour flag pattern has the bottom trend line around 89.50 tomorrow (will move up as week progresses). |
| Cad/$ | Standard break out/pullback to 1.0550 for a short or alternative is 15/20 pips below fridays low if price simply keeps going straight down. |
| Euro/Gbp | DAILY flag pattern. Price is near bottom trend line which is around 0.8660 tomorrow. Ideal entry is we could get a pullback, ideally back up to 0.8840 again, but seems unlikely. If breaks and closes below lower trend line look to trade a confirmed break out and then pullback to the line |
So much for me cutting down a bit and giving the old back a rest! Don’t forget the 3rd video in the members area that shows you how to trade the weekly charts. Be careful tomorrow, I will catch you later, marc
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Mr. Marc; question? Are you aware that flag patterns in general are low probability trades having only a 8% to 10% maximal edge of likelihood of successfully reaching the profit target vs a control group of flag patterns that fail? That is there is an overall 54% to 55% frequentist probability of any particular flag pattern reaching a projected 100% expansion price target. This means the positive edge of success vs failure is only 8%-10% (54-46)/100 = 8% Flag patterns are too low probability for me, so I'm staying on the sidelines, but thanks for the suggestions. These numbers I cite come from Thomas Bulkowski's book Encyclopedia of Chart Patterns.
Hi Fxinfidel, you are quite right that flag patterns in themselves are not to be relied upon although i do find though that the longer the time frame the more reliable they are. I would be surprised if the success rate is as low as Mr Bulkowski says, but we are using the pattern as a channel as well, so if we can sell at the top of said channel it doesn't matter if the flag works or not. thanks for your input, regards, marc
Hi Fxinfidel, you are quite right that flag patterns in themselves are not to be relied upon although i do find though that the longer the time frame the more reliable they are. I would be surprised if the success rate is as low as Mr Bulkowski says, but we are using the pattern as a channel as well, so if we can sell at the top of said channel it doesn't matter if the flag works or not. thanks for your input, regards, marc