Hi, I have some possible 500+ pip flag pattern/triangle pattern break outs forming on a number of pairs as explained in the video.
Some of my “areas of interest” from Thursdays post worked almost to the pip on Friday. The $/Yen came to within a couple of pips of 93.40 & the Aud within 5 pips of 0.8360. Hopefully I also kept you out of losing trades on the Euro/$ & Cad amongst others.
Simple Methods to Win at Forex
I get emails everyday from members who are starting to understand my methods/teaching & more importantly are stating make $$$’s. However there are others who are struggling so this week we will do our normal analysis but we are going to concentrate on some of the more simple methods that we sometimes use. These methods are simply based on price action and support & resistance.
As soon as we have a Plan B (move beyond) set up I will do a detailed video showing you what to look for, including stops & targets. In todays video I show you potential “flag pattern” & “triangle break outs” that are forming on a number of pairs. We have had a lot of these recently with some decent successes for many 100′s of pips.
Dean is also looking to record some more break out “live” trades this week, markets permitting.
These topics are all covered in the forex strategies section of the site, so have a look there. A recent blog post, as well as todays video, covered the subject of flag patterns and can be located here: “Flag patterns everywhere”
The Plan B method, which is one of the simplest in forex, was covered in this post: “There is another way” The very next day there were over 2000 pips of movement up for grabs using this method
Personally I make most of my income from the M2 strategy because there are lots more pips to be gained from pullbacks BUT when the markets go into freefall, as recently, then this sometimes is the only way. The more patient amongst you may prefer to simply concentrate on these method and Deans break out strategy. You will have far fewer trades, but they are both easy to learn.
Gaps
We have had some huge gaps at market open in the last few months. There is a good chance that we will have more today. News & “experts” continue to keep the bad news for the euro going so anything could happen at market open. My best advice, unless you are a very experienced trader, with a strong stomach & an “adrenalin rush junkie” 
is leave this alone. Wait for the markets to open & settle down. In recent weeks I have taken some gap trades but in general I have simply waited for things to settle down around the pre London open.
The Aud & Why Everyone should Trade their “Home Pair”
I was under the impression that the Australian economy was booming. Perhaps it was, BUT as we all know booms are always followed by bust. We have a lot of Australian members including Geo who sent me an analysis paper the other day that supports his belief that its all going to explode and soon. Due to copyright laws I can’t publish the article in full but the highlights are these
Here’s a quick list of the problems facing Australia:
- High interest rates
- Low to middling economic growth
- Over dependence on China – and China is furiously putting the brakes on its economy
- Proposed extra taxes on mining companies whose share values are consequently falling
- Huge private debt problems
- Hedge funds abandoning carry trades as fast as they can
More importantly there is a real fear that the housing market is going to collapse in Australia. House prices still went up almost 20% in some states last year & there are many similarities with the housing market “bubble” that burst in the USA, and that started the current woes that the rest of the western world is suffering from.
I live 1000′s of miles away from Australia & therefore don’t have first hand knowledge, nor know the “word on the street.” This is why I recommend that you should all include at least one of your “home pairs” in your forex trading portfolio. You see the news everyday. Read the newspapers. Talk to friends & colleagues. YOU are an expert in your own economy & therefore should use this expert knowledge in your forex trading.
The Forex Week Ahead
Usually when we have had such huge moves as those seen recently, then the market will stop and gather its breath. The Euro/$ had 3 days of upward movement at the end of last week. This is the first time this month that we have seen such a pattern. Where will it go next? Your guess is as good as mine:)
For me we are still in a strong down trend & therefore I am only interested in shorting this pair. However at some point this pair is likely to rebound to a point where we will have the usual conundrum, “Is this a pull back or a reversal?” The only way to play this is wait for the market to open and then do what your charts tell you, being forever mindful of potential news releases.
Tomorrow is a fairly light news day & there are Bank Holidays In Germany, France & Canada which will affect those pairs. The big news of the day is at 14.00 hours London time, $USA existing home sales. This can be a big market mover at the best of times. Due to the European Bank Holidays this could be VERY volatile if the figures are different to those expected so be very careful not to enter trades an hour or more before this news release & moves tops tight if you are already in trades.
| M1 | The Asian session has been incredibly volatile in the last few weeks. This is not normal and will eventually settle down. Just be patient. When it works, it’s a great simple method. |
| Lmt | I can see no potential daily signals for tonight. Check your own charts/platforms and don’t take trades that are too close to recent support/resistance. |
| Gbp/$ | I am only interested to short this pair so we need a pullback. 1.4475 held again on Friday so look at market open to see if it does again. I am not too confident that it will at the moment. We could see a pullback as far as 1.4775 again this week, so its one to “decide on the day” or wait for my analysis tomorrow. |
| Euro/$ | I only want to short. Bounced off the Monthly 200ema. 1.2600 was pierced but eventually held on Friday so this will be the 1st line in the sand tomorrow. I have a sneaking suspicion that we could have a few more days of upwards movement to come so will be wary. Wait & see. |
| Chf/$ | Has broken weekly 200ema and kept going. Need a big pullback. What was very unusual last week was the lack of correlation with the Euro. That will be the first clue that some kind of normality has resumed if they start to behave! |
| $/Yen | Short. Perfect break out/pullback on Fridays daily chart. May bounce down again at 90.40 which was the trend line that broke BUT it could pullback to 91.30 which is 50% fib on the daily chart. |
| Aud/$ | I am only looking to short. The 34/55emas look likely to cross down through the 200ema tomorrow which will be a further sign of a significant reversal. This pair w
orked well on a Plan B last week and a pullback on Friday. Price also bounced off the weekly 200ema & monthly 55ema so has been behaving technically correctly, far more than the Euro. As per the above analysis I only wish to short this pair at the moment, but need a pullback if that is to happen tomorrow OR a triangle OR flag pattern break out as I show in the video.
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| Cad | Sat between daily 200ema & weekly 55ema. Need a break out either way though still favour shorts on this pair later in the week |
| Euro/Cad | Waiting until tomorrows candle close |
| Aud/jpy | Potential 700 pip flag/Triangle pattern break outs. I would prefer to catch one of those, look at the video to see where I have these lines at the moment. You need price to break & close below these lines on a 4 hour chart. However if price pulls back then I will be interested to short around 76.50 |
| Euro/Gbp | Is it going up or down? I am not sure BUT standard break out pullback says that on the weekly price has closed above the hugely important support line of 0.8650 so a pullback to there would be the place to long. I will place my stop at 0.8590. If that trade fails & price break below 0.8650 then I will look on a 4 hour chart for a break out down followed by a pullback. All explained in the video. |
| Best of Luck, Marc |
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