RBNZ Cuts EURO NZD Drops PIPS Lie Ahead - simple forex trading system that works

RBNZ Cuts EURO NZD Drops PIPS Lie Ahead ~ simple forex trading system that works

After moving within a 400-Pip Range since the end of March this year, the EURO NZD has finally broken this boundary with a break of Support following the increase in interest rates by the Reserve Bank of New Zealand (RBNZ). The pair fell by more than 200 Pips within 24 hours of the decision to form a strong bearish candle below the Range, indicating the start of even stronger gains for the Kiwi in weeks to come.

THE RATE CUT

The RBNZ took the decision to raise the official cash rate to 3.25% from 3.00% as it seeks to stave off inflationary pressures that have begun to threaten the economy. In justifying the move, RBNZ Governor Graeme Wheeler stated that it was important that inflation expectations remain contained and that interest rates return to a more neutral level. Naturally, in an environment of homogeneous interest rate policy among the major central banks, the increase led to strong demand for the Kiwi against several of its counterparts including the US Dollar, the Aussie Dollar and the Great British Pound. Continued strengthening is expected for the Kiwi against these currencies, but the setup against the Euro appears to be very promising right now for aggressive Swing/Weekly Range traders.


RANGE BREAKOUT

Looking at the chart below, we can see the bear candle that closed below the Support level following the rate decision. This is the type of signal that traders look for to open a position for a strong breakout, especially when it is sync with the existing direction of the trend.

DAILY CHART- EURO NZD BREAKOUT

Most traders would probably starting entering short at this point, with the Stop Loss placed above the Support which would now act as Resistance to protect the trade. Entering early often gives traders a good opening price in case the market moves quickly in the expected direction. However, there is always the possibility of an unexpected reversal known as a False Breakout whenever we have a breakout signal from Consolidation. 

Given this possibility and the fact that the last candle led to the Weekly Range of the pair being reached (see Trade Manual), it would be better to wait until another bearish signal appears after a brief pause or rally that tests the Support.

DAILY CHART - EURO NZD - POTENTIAL PULLBACK TEST

This pause/test can either take the form of a rally followed by a strong U-Turn or a move sideways to form a small consolidation before breaking short. If either scenario unfolds, the ultimate target for this new downtrend would be 1,4855 -the Breakout Equivalent of the Consolidation (see Trade Manual). Along the way, several areas of past Support will be hit, allowing for short-term profit-taking as well.

Lets be patient, see what unfolds and take advantage of profitable setups when they appear.

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Twitter: @WorldWide876

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Is there anyway you can make a lot of money online with currency trading - forex currency trading system

Is there anyway you can make a lot of money online with currency trading ~ forex currency trading system

Making money online is as simple or as complicated as you make it out to be.

Yet this doesnt mean you will make money online with Forex trading straight away.Let me ask you a question,Would you walk up to Bill Gates and ask him... "How do I make money"?

Of course you wouldnt! Thats ridiculous!.However, if you wanted to make money like Bill gates does then you need to educate yourself and learn the exact skills he developed to achieve this.

And with Forex trading its exactly the same.

You dont just walk up to a successful Forex trader and ask him "how do I make money", what you do, is you educate yourself and learn how to do exactly what that trader does.

You need to learn skills. Skills are what make you money in any business endeavor, including trading Forex.

So the correct question would be:

"Which skills do I need to learn for me to make money with Forex trading?"

And here is the answer to that question:

For you to make money trading Forex, you must learn the simple (yet commonly overlooked) skill of price reading, also known as price action trading.

So lets get cracking with some Forex trading lessons!

Lesson # 1: "How do Financial Markets Move?"

All financial markets move exactly the same. They move in waves, just like the ocean does.

Within these waves, markets trend up and down over and over again.

They trend up with higher swing highs and higher swing lows.

They trend down with lower swing highs and lower swing lows.

And within these trends two very specific movements occur over and over again:

Impulsive moves and corrective moves.

So in essence, markets move in waves, waves move in trends, trends do impulsive moves and corrective moves. And thats it! This is the most powerful skill you should master, interpreting price movements based on the above explanation.

Why? Read the next lesson to find out.

Lesson # 2: "How Are Trading Systems/Methods Developed?"

All highly consistent profitable trading methods are based on the above concept.

You see, if you want to trade like a pro you need to trade with the pros. It is that simple.

So, what do pros do? They trade trends! Be it intraday or intraweek trends.

However, lets take it one step further:

Pros only trade ONE movement within a trend, and that is the impulsive move.

And guess what! All methods are based around this simple concept:

Trade the impulsive moves within a trend. Go with the institutional order flow!

And if you learn to trade like this you will automatically be able to trade any method you like, be it 123 patterns, be it Elliot waves, pullback trading, Fibonacci trading... you name it you can do it!

Lesson # 3: "So How Do I Go Trade Forex?"

1. - Learn market movement analysis to identify impulsive and corrective moves within a trend.

2. - Learn proper trade and risk management principles, irrelevant of how you trade Forex.

3. - Learn good entry and exit techniques.

Just remember, you want to learn how to get into the impulsive moves at the right time.
But you never know when a correction has been completed.

So how do you get into a low risk high probability trade when the impulsive moves start?

Well, that is where further education comes in. Just remember to ask yourself the following:

"When will the corrective move be completed and *how* do I identify this?"

If you seriously want to make money online trading Forex, and eventually with experience and determination become wealthy, then you must learn the above skills which over time will give you a hugely successful money making home based business.

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Solution to Low Currency Volatility Multiple Lot Trading - free forex trading system that works

Solution to Low Currency Volatility Multiple Lot Trading ~ free forex trading system that works

The low volatility environment in the Currency Market has made it very difficult for traders to earn at the same rate as under normal conditions. Low interest rate policies by the major central banks and investigations into market rigging have contributed significantly to the downturn in market activity. As a result, trends have been short-lived, forcing traders to either be extremely patient or find new strategies to adjust to the market. With this in mind, there is an aggressive trading option available for the traders whose main strategy is Swing Trading. This option is popularly known as Multi-Lot Trading and involves adding positions to an existing trade to maximize on the trend on its way to the final target. 

SINGLE & MULTIPLE LOT TRADING

The more conservative way to trade the larger trends is to open a single position on a currency pair and hold it until the target is hit a few days later. However, with the limited number of trends being provided by the market, single lot trading might have to take a back seat to allow room for greater returns in the same amount of time.

Lets take  a recent example of a downtrend on the 4 hour Chart to on the AUD NZD that offered 3 clear entry points during the trend. This was a  232 -Pip decline from 1,0880 on April 28, 2014 to 1,0648 on May 6, 2014.

FIGURE 1 - AUD NZD

Source: Dukascopy Swiss Forex Marketplace

In a typical trading scenario, the trader would enter short at the break of the Pennant, with the Stop Loss placed at the high of the formation. With the entry at 1,0786, this would be targeted to capture 142 Pips.

FIGURE 2 - 1ST ENTRY POSITION

Source: Dukascopy Swiss Forex Marketplace

A second lot could then be entered into upon seeing the break of a Counter Trend Line (CTL). Entry would be at 1,0756, the Stop Loss placed above the high of the formation and the pip target set at 108 Pips. The first Stop Loss would then be moved to the 2nd Stop Loss, effectively creating a single position capturing 250 Pips.

FIGURE 3 - 2ND POSITION

Source: Dukascopy Swiss Forex Marketplace

This process is then repeated when a third entry setup in the form of another CTL break appeared. Entry would be at the close of the bear candle at 1,0706 with the Stop Loss placed at the high of the setup. This 3rd position would be set to capture 48 Pips and the Stop Losses of the previous two entries placed at this 3rd Stop Loss.

FIGURE 4 - 3RD POSITION

Source: Dukascopy Swiss Forex Marketplace

After waiting patiently for 8 days, all three positions would hit their target to capture 298 Pips - double the value of a single lot entry at the start of the trend.

FIGURE 5 - CLOSED POSITIONS

Source: Dukascopy - Swiss Forex Marketplace

This is a very effective way of maximizing on the limited number of profitable trends that are available in the market at this time. The number of pips and hence the total revenue can be almost doubled, allowing monetary targets established for the Retail or Institutional Traders to be reached in a much shorter time.


CHALLENGES INHERENT IN THE STRATEGY

As simple as this strategy appears to be, there are a few important considerations that go into this trading style. Apart from requiring an aggressive but patient personality, the trader must use a strategy that correctly identifies the common exit point for each lot. This ensures that the targets arent emotionally determined and that they avoid sharp reversals in the trend as illustrated in this chart.

FIGURE 6 - SHARP BULLISH REVERSAL

Source: Dukascopy- Swiss Forex Marketplace

If a trade is held onto longer than it should by even a few pips, a sharp reversal in a short time can erode or wipe out all positions simultaneously. In this example, the reversal would take 8 hours, but on a smaller time frame where there is very little time to react, the damage can be even more emotionally and financially painful.

FIGURE 7- 30 MINUTE CHART REVERSAL

Source: Dukascopy- Swiss Forex Marketplace

Within only 90 minutes, a trade on the 30 Minute chart with an incorrectly chosen Limit can be erased if the trader took his eye off of it under the assumption that the target was farther down.

ENTRY & EXIT STRATEGY

Given this danger, trades such as these must have the right target chosen based on correct interpretation of the candles and market signals. These targets should be determined by;

1. The Weekly Range of the Currency Pair;
2. The Breakout Equivalent;

If a Currency Pair has a range of 300 Pips in a normal trend from start to finish, aiming for price points beyond this out of greed or negligence will lead to unnecessary losses. If we are talking about a breakout from a Consolidation boundary, then the distance to aim for is usually the Breakout Equivalent. Years of examples on the most liquid currency pairs revealed that these were the main tools to use to identify exit points for trades lasting several days.

There is an argument for monitoring the trades to ensure that these sudden reversals are avoided. However, this presents another set of dangers in the forms of;

• Panicking at the sight of a reversal, that proves to be only temporary;
• Looking at the floating profit and being tempted to exit early;
• Being tempted to hold on beyond the target because of the sight of the large, combined value of the trade;

The discipline to establish the target and avoid looking at the trade unnecessarily is crucial to this trading strategy. You will need to look at the trade when identifying additional entry points, but there is a detailed method of doing so that minimizes the risks involved. 

RECENT EMAIL FROM CLIENT

____________________________________________________

SUBSCRIBE TODAY

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Duane Shepherd 

(M.Sc. Economics, B.Sc. Management and Economics)

Currency Analyst/Trader

Contact: shepherdduane@gmail.com

Twitter: @WorldWide876

Facebook: DRFXTRADING 

More info for Solution to Low Currency Volatility Multiple Lot Trading ~ free forex trading system that works: