MP FOREX ADVISORY

Archive for the ‘Forex Trading’ Category

The EUR/USD continues its schizophrenic price action – not sure if it wants to trend up or down.  Yesterday, the pair fell more than 130 pips from a high around 1.3536 while today, it suddenly reversed courses in the European session and surged more than 150 pips from a low around 1.3384 – shattering both its daily and weekly pivot points.  The GBP/USD has been far more stable – trending upward since the beginning of the week.  We had trade signals in both the EUR/CAD and the EUR/USD since our last update, and we were unfortunately stopped out of both trades.  Our short trade in the EUR/USD was closed after a sudden spike up above the weekly pivot point early in the Asian session while our EUR/CAD trade was closed in the middle of the Eurpean session after forming a short term 1-2-3 reversal pattern, which ended up turning on us after the release of several medium impact news reports out of the Euro Zone, which ended up strengthening the pair right into the US session.  Days like this help us to realize that we need to be focused on the big picture when it comes to trading.  Losing trades and occasional drawdowns are part of any trading method; however, we are confident that the methods we employ, which have been tested extensively in both back testing and forward trading will stand the test of time.   We look forward to getting back those two trades in short order. 

Today, we made some profit on several trades in the GBP/USD as we played the tight afternoon range before the opening of the Asian session.  The EUR/USD is flirting with the 2010 low around 1.3433.  A break of that level could send this pair tumbling down to the 1.3000 level over the coming weeks.  The GBP/USD has also been under quite a bit of selling pressure since the 0:00 GMT open yesterday.  A worse than expected British CPI Report early this morning has not helped this pair.  Tomorrow, we look forward to the release of the US Core Durable Goods Report and New Home Sales.

Today, we entered trades in both the EUR/USD and the GBP/USD, netting out a small profit for the day.  Since the bottom has been falling out of both currency pairs since the open of the market yesterday afternoon, we played it safe and only rode the short side of our trade signals this afternoon.  Both the EUR/USD and the GBP/USD appear to be headed for further declines this week.  Key support levels we will be watching tonight is 1.5000 in the GBP/USD and 1.3600 in the EUR/USD.   

Yesterday, we were able to bank some profit as we traded higher than normal volume – entering 4 different currecy pairs:  the EUR/USD, the AUD/NZD, the AUD/USD, and the GBP/USD.  By far, our best trades were our short positions in the EUR/USD.  Today, we have remained on the sidelines thus far as market volatility has remained much higher than normal right into the afternoon hours.  It appears that the Euro may be poised for further declines as we head into the Japanese and European sessions.  The critical area of support in the EUR/USD is around 1.3440 – the low registered on 2/18. 

This Forex Trading System is a range trading system that is designed to capture a series of small but consistent gains during the afternoon trading hours when the market is tame and far more predictable. Most currency traders refrain from trading during the hours between 17:00 GMT and 23:00 GMT simply because the market tends to be very non-volatile and boring during these hours. However, what most traders fail to realize is that there is a tremendous opportunity in trading during this time period. In the midst of the apparent boredom of a sideways range trading pattern lies a predictability and a rhythm that should be the envy of any good speculator!  In essence, we are exchanging excitement and volatility for predictability, and predictability is far more valuable when it comes to trading.

The goal is not to be entertained by the market but rather to use it as a mechanism whereby we can generate consistent profits. Generally, the market produces consistent and predictable sine waves late in the US session and before the open of the Japanese market. We have discovered that applying this Forex system during this time period provides a literal gold mine of opportunity!

The purpose of this blog is to provide updates on a daily basis of the results of this trading system and to keep you informed of significant market events that may effect the trading.

Best wishes! -

MP Forex Advisory