Market analysis and trading calls

[Forex Mind Games]

AUDUSD is forming a nice Elliott Wave bullish pattern. I believe we are currently in wave 4, which is a corrective or counter-trend wave. One thing about Elliott Wave trading is that the wave counts require constant re-adjusting. To solve this inherent issue, I prefer to use Elliott Wave trading on the daily and weekly charts. And voila! Problem "solved!!"

The daily chart below shows the wave count.

On the 4hr chart, wave 4 is obeying a falling channel. Once price breaks above the falling channel, it should be the start of wave 5. Watch carefully and wait patiently for wave 5. It can a really powerful bullish up move.

 

[Forex Mind Games]

The new playground

Similar to EURUSD, GBPUSD is also confined within the rising channel. Furthermore, there is a whole new large 500pips price area for the market makers to play within. I dubbed it as "the new playground."

The new playground is from 1.5800-1.6300. Why is this a new playground?
•There is plenty of white empty spaces between 1.5800-1.6300.
•Prices has not been seen in this area for a long time.
•Like water, prices follow the path of least resistance. And the path is between 1.5800-1.6300.
•Market makers may want to fight it out here and establish their new supports and resistances within this zone.

As long as price remains within the rising channel, we should expect a re-test of 1.6300.

 

[Forex Mind Games]

Spotted a good opportunity to place a long AUDUSD trade. If AUDUSD touches and holds onto the 3rd point of the rising channel, look to go long.

 

[Forex Mind Games]

I love small losses

I gave a live call to short EURUSD on Friday. Click on link. This trade turns out to be a loss. EURUSD slices through this resistance zone like a sashimi knife. The bulls are firmly in control this week after Wednesday German court approval on ECB bond buying and Thursday FED QE3.
http://www.forexmindgames.com/2012/09/live-trading-calls-short-eurusd.html
However, there is one important rule i wish to share. When this trade went wrong, i got out with a small loss of -35pips. I am immune to tiny losses. Tiny losses do not bother me anymore.
In the beginning of my trading career, i would not acknowledge my losses. I would not cut my losses. I would wail, cry, pray, play pretend for my losses to magically disappear. I remember this rule. The only way for any losses to disappear is to use your stop losses. The only way for any losses to be gone is to cut it when it is wrong.
Trading is a mind game. Train your mind to accept small losses.

 

[Forex Mind Games]

I love third points

Successful trader's motto: Let your profits run, cut your losses small.
In week 37 review part 1 on EURUSD, i posted on why it is vital to your trading account to keep losses small. In this post, i am sharing why it is equally vital to your trading account to let profits run.
On Wednesday 12th Sept, i gave another live call to long AUDUSD when it touches the 3rd point to form the rising channel. See link.
Forex Mind Games: LIVE TRADES - LONG AUDUSD
This trade turns out to be a correct trade. It collected more than +100 green pips. See point 3 on the rising channel.

On hindsight, i could have let my profitable long trades on 07th Sept to continue running. But hindsight is 20/20. I cannot trade on hindsight. Successful traders trade with foresight. Now, i have a new mind game to learn. I have to train my mind to let my profits run even further! Trading is a mind game.

 

[Forex Mind Games]

BOJ intervention??

In my previous preview on USDJPY, i mention of the possibility of Bank of Japan (BOJ) intervening the Yen FX markets. See link below.
http://www.forexmindgames.com/2012/08/week-33-13-17-aug-trade-previews-part-1.html
Thus far, nothing has happened yet. However, i believe the intervention is near. Remember that Central Bankers has political pressure to maintain the stability of their country's currency. Japan is a mainly export country. Think Sony, Toyota, Toshiba and Honda. Japan is a country which relies strongly on their exports, they would prefer to keep their currency weak. When the Yen strengthen too much, high-ranking government officials will voice their displeasures through the media. It is them telling the currency speculators to get out of my turf.

When the same rhetoric such as:
"Watch out and get out of the way!! I am going to do something soon!!"
is repeated multiple times by the Japanese officials, the market is fore-warned. We are the retail traders. We do not have the financial muscles to go against the markets. In the forex ocean, we are the shrimps, and we follow the whales. If BOJ does intervene, watch for a 200-300pips USDJPY bullish spike in a single day.

Potential intervention zone around 75.50-77.00. How to trade this intervention? Open a sub-account. Transfer a small amount of money to this sub-account. Highly important: you may need to hold this trade for weeks. So do ensure you have enough money in the sub-account to meet the weekend margin requirements.
Place a limit buy order anywhere from 75.50-77.00
Stop loss below 75.00
Target profit 80.00

 

[Forex Mind Games]

GBPUSD @ 1.6300 resistance

In the previous week's trade preview on GBPUSD, i already mention the possibility of GBPUSD re-testing the resistance zone of 1.6300. See link below.
Forex Mind Games: WEEK 37 (10-14 SEPT) TRADE PREVIEWS PART 2
The high for last week was set on Friday at 1.6250, about 50pips from the mentioned 1.6300 resistance zone. How was i able to call it in advance where GBPUSD is going to go? It took me about 3 years to learn this skill. I am not 100% accurate. But i am slowly improving. Trading is about understanding where price wants to go.
Let me illustrate. Imagine i have 3 children. After observing my 3 children for many years, i can make a rather excellent educated guess to how each of my 3 children will behave in certain situations. Lets say i bring to them to a zoo and the children saw a snake. Based on my past observations and my understanding of the temperament of each child, i know how each one will react to the snake. Child A got bitten by a snake before, and he will run away from one. Child B is more adventurous, he is not afraid of snakes and will stroke it. Child C is more cautious, he will hide behind my legs until he is sure the snake is friendly before touching it.
Now imagine Child A is EURUSD. Child B is GBPUSD. Child C is AUDUSD. After watching their behaviors and movements for many years, i had develop an intuitive feel for what they are going to do and where they are going to go. Train your mind to discern the movements of each currency pair you like to trade. For me, USDCAD is sort of a wild child. I have little success predicting its movements. As such, i tend to stay away from trading USDCAD.
The idea is this. Find currency pairs which you can predict the movements with reasonable ease and accuracy. And avoid those pairs where you just cannot make heads and tails of.

Short GBPUSD near 1.6300-30
Stop loss above 1.6350
First target profit 1.6000

 

[dkami]

I like ya trading style FMG it's similar to how I like to trade

I to am hoping to short @ 1.63012 after missing the nice leg up from 1.6005

Im not sure price is going to get me in @ 1.63012 because of what i see on H1,H4 price seems to be ranging

Will be watching today for possible breakout

 

[Forex Mind Games]

I like ya trading style FMG it's similar to how I like to trade

I to am hoping to short @ 1.63012 after missing the nice leg up from 1.6005

Im not sure price is going to get me in @ 1.63012 because of what i see on H1,H4 price seems to be ranging

Will be watching today for possible breakout

Until it breaks above 1.6300 convincingly. I believe the better trade is to trade the range between 1.5800 to 1.6300.

 

[Forex Mind Games]

Usdcad short

Here is the partial results of the live trading call which i gave on thursday on USDCAD. This trade is still open.
Forex Mind Games: LIVE TRADE - SHORT USDCAD
Reasons for taking this trade?
•Previous swing low 0.9800-20 on the daily chart on 30th April 2012.
•0.9800-20 should act as resistane level once USDCAD crosses below it.
•Any rebound up to re-test 0.9800-20 should be a good signal to go short.

I took partial profits and brought my stop loss to breakeven. Hope to let it run and hit my target profit price.