SHARP REVERSALS AVOIDED WITH ACCURATE TARGETS - forex trading pro system review

SHARP REVERSALS AVOIDED WITH ACCURATE TARGETS ~ forex trading pro system review

One of the most important aspects of profitable Currency Trading is to always establish accurate trading targets. The market can provide traders with hundreds of pips in movements on a weekly basis for consistent returns across the major currency pairs. In order to avoid unexpected reversals that could affect this success, however, these targets must strike a balance between short-term gains and long-term market uncertainty.

Many of the Currency Pairs have been aggressively breaking out of Consolidations after months of low market volatility, providing profitable breakouts in a very short period. Most of these Consolidations have also been very large which means that in general, their breakouts are expected to be significant over weeks and months. Nevertheless, there a major short-term targets that most of these pairs obey where they either pause before continuing to the long-run targets or reverse unexpectedly. 

In order to avoid the dilemma of this crossroads, my Methodology dictates that traders aim for 100-200 Pips per trade which tends to be in line with these short-term price points. The rules for these targets depend partly on the size of the Consolidation as well as the average weekly trading range of each Currency Pair.

The breakout on the GBP AUD was from a large Pennant that was formed between April and August this year. There was also a simultaneous breakout from a Range which would have added extra momentum to the trend. Given the size of the Pennant, one would have also expected the breakout to last for at least a few weeks to targets 1000 Pips away.


DAILY CHART

Instead of this large breakout, the pair only declined by a few hundred pips before U-turning sharply back above the Resistance of the Pennant.



DAILY CHART

This unexpected reversal coincided with one of these important short-term targets. Those who traded this pair to that area would have been able to keep their profits without being surprised to see the profits suddenly eroded.

A similar reversal took place with the AUD NZD that also started to breakout from a very large Consolidation setup. 


DAILY CHART

Once again, the breakout only last a few days before reversing sharply, breaking Uptrend Lines and returning to the Resistance of the Pennant. Fortunately, we were able to exit from this trade successfully ahead of this pullback. The target was originally supposed to capture over 100 Pips but the criteria of the strategy identified the start of slow down in the trend.


DAILY CHART

DAILY CHART

Given the prevalence of these reversals and a recent Consolidation breakout on the AUD USD, the exit at the short-term target may have been another good decision.


DAILY CHART

 

DAILY CHART

The reality of this market is that it has the power to both reward and to punish. Most persons who trade this market tend to make good entry decisions, but the choice of targets is one of the most difficult decisions to make. In order to be able to consistently generate long-term gains from this market, the criteria for targets need to be in line with the actual cycle of the market. This will help to curtail our emotions which will always want more from the market especially after a successful trade.

Without even reading the Trading Manual, you can become a Subscriber with the code at the end of the book and benefit from these setups sent 30 Minutes before entry. In addition to this, you will also be able to receive;

• Daily Analysis of Currency Pairs;

• Weekly Technical Analysis on Specific Topics; 

• Detailed Explanations of Trade Results;

• A Currency Trading Experience focused entirely on Making Money;

___________________________________________________________

RECENT EMAIL FROM CLIENT

____________________________________________________

SUBSCRIBE TODAY

____________________________________________________

US$120.00

Free 

 ___________________________________________

Duane Shepherd 

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

Currency Analyst/Trader

Contact: shepherdduane@gmail.com

Twitter: @WorldWide876

Facebook: DRFXTRADING 

More info for SHARP REVERSALS AVOIDED WITH ACCURATE TARGETS ~ forex trading pro system review:

200 Pip Targets Still Hit During Financial Crisis Using Methodology - 10 pips forex trading system the 3rd candle

200 Pip Targets Still Hit During Financial Crisis Using Methodology ~ 10 pips forex trading system the 3rd candle

During the infamous Financial Crisis of 2007-08 and its aftermath, many trading strategies began losing money because of the dramatic increase in market volatility. Methodologies that functioned with very few hiccups before the Crisis, were no longer profitable and could not adjust to the new scenarios that unfolded over subsequent years. Nevertheless, the methodology outlined in the Trading Manual held firm despite the market turbulence experienced during that time.

The methodology uses Price-Action patterns on the Daily & 4 Hour Charts to identify high probability trades that provide between 100 and 200 Pips. The setups that provide these opportunities exist during normal periods of market activity as well as heightened periods of volatility coinciding with safe-haven investment flows.

The European Sovereign Debt Crisis and the 2007-08 Financial Crisis stand out as strong examples of factors that lead to increased volatility. Since the formation of consolidation tends to characterize these market conditions, we can look at examples of how the strategy would have been applied to this type of setup. In each of these examples, explanations of the technical factors that would justify entry and exit are provided.

CONSOLIDATION BREAKOUTS

Consolidation and breakouts from consolidation are typical market patterns seen throughout the currency market. Consolidations are periods of indecision and low market liquidity in which traders are uncertain as to how a currency pair will be affected by a major, underlying economic factor. The larger the consolidation, the more significant is the underlying scenario that is unfolding. Whenever this issue finally comes to light in the form of a single or series of news releases, a sharp breakout at the Support or the Resistance of the consolidation will take place. The direction of this breakout will be in favour of the currency that benefits from the reaction to the news by investors and traders.

The graph below shows the large Pennant consolidation that was formed for the EURO JPY pair between July and August 2011. The Pennant coincided with one of the periods of the European Sovereign Debt Crisis in which Greece was believed to be on the brink of exiting the eurozone due to its severe fiscal and economic challenges. It was also feared that such an exit would have a ripple effect that led to other countries leaving the Union as well.

FIGURE 1- EURO JPY - DAILY CHART

In July, Greece was eventually provided with the assistance it needed to resolve its crisis and prevent contagion among other European countries. However, the market went back into crisis mode in August when European Commission President Jose Manual Barros warned that the Sovereign Debt Crisis was spreading beyond the periphery of the eurozone. Yields on government bonds from Spainand Italyrose sharply as investors demanded larger returns to lend to these countries. As a result, the European Central Bank said it would buy the government bonds of these countries to reduce their borrowing costs, amid concerns that they would be also be hit by a crisis.

Adding fuel to the fire of market uncertainty were developments taking place in the United States- the epicenter of the 2007-08 Financial Crisis. In August, Standard & Poor’s made a landmark decision to downgrade US sovereign debt from its prized AAA rating amid a political stalemate over the country’s debt ceiling. Citing a lack of confidence in the country’s ability to reach a political solution, S&P lowered its long-term sovereign credit rating and said it was pessimistic about future decision making. The historic move by S&P reflected the rating agencies’ push to become more proactive than they were during the financial crisis.

Within this context, a breakout short from the Pennant to reflect the selling of Euro and the safe-haven buying of the Japanese Yen was inevitable.  This began on September 8, 2011, with a bearish candle signal on the Daily Chart.

FIGURE 2- EURO JPY- DAILY CHART SIGNAL

As the currency pair presented this trading opportunity, entry took place immediately, with the target set for 200 Pips as per the methodology.

FIGURE 3 - EURO JPY - DAILY CHART RESULT

The target was hit after few days for 220 Pips, with slippage taking place to capture a few extra pips. This exit point also coincided with the appearance of Tweezer Bottoms, which are signals that indicate the end of a Breakout.

During this time, a Range had been formed on the Daily Chart of the USD CAD pair that also reflected the pessimistic sentiment of the market.  This Consolidation would also be broken to reflect the safe-haven buying of the US Dollar.

FIGURE 4 - DAILY CHART- USD CAD

The signal to start the breakout came on September 21, 2011 in the form of a bullish candle breaking Resistance. That signal coincided with statements from the International Monetary Fund in which it forecast slower growth in the UK and the US and warned that the Sovereign debt and banking sector problems in the euro area had proven much more tenacious than expected.

FIGURE 5 - USD CAD - DAILY CHART

Once again, entry took place on the same day of the signal, with the target of 200 Pips being set. This target was successfully hit a few days later.

FIGURE 6- USD CAD- DAILY CHART RESULT

The exit point for this trade took place at the area where consolidations normally end. This area is referred to as the Breakout Equivalent and is a concept that is applied to all consolidation types. Once this is correctly identified - based on certain parameters related to the consolidation in question- exit points for trades can be more confidently established. This allows the trader to be able to avoid the volatility and the pullbacks that normally follow the end of these breakouts.

The 2008 Financial Crisis also provided opportunities that were clear, strong and in sync with the types of setups that are targeted for trading. These setups formed part of the back-testing of the methodology and confirmed its robustness during these tail risk events. Consolidations were also formed during the early stages of the crisis, but these were much larger given the severity of the situation that was unraveling.

TRADING WITHIN CONSOLIDATION

Trades can also be executed within Consolidation boundaries instead of waiting until they are broken. To justify trading within these volatile setups, however, the distance between Support and Resistance should at least be 300 Pips. The EURO USD provided such a Consolidation, when it formed a 600-Pip Range between March and August of 2008.

FIGURE 7 - EURO USD-DAILY CHART

Read more »

AUSSIE DECLINE TO CONTINUE WITH AUD JPY FALSE BREAKOUT - forex trading system profitable

AUSSIE DECLINE TO CONTINUE WITH AUD JPY FALSE BREAKOUT ~ forex trading system profitable

The market-wide decline in the value of the Australian Dollar appears to be about to continue with the AUD JPY this week. The pair had recently attempted to break long from a large Consolidation on the Daily Chart, but has now become volatile above the Resistance boundary. If we see a strong Bearish Candle Signal that breaks below this Resistance, sharp gains for the Japanese Yen are likely to be seen over the next few weeks.

The Daily Chart below shows the Pennant setup and the short-lived Bullish breakout.


DAILY CHART - PENNANT BREAKOUT

 


We can also see that this was taking place in the context of an existing Uptrend, which should have provided additional support to that breakout.


DAILY CHART- UPTREND

 

Given the extent of the pullback to the Resistance, however, this breakout is likely to give way to a Bearish reversal in favour of the Japanese Yen. The start of this downtrend could take the form of an ABC setup (see Trade Manual) or a small Consolidation breakout. In either case, if the Bearish Candle is strong enough to break below the Resistance, we could see a decline to 94,37 at Support and then lower to the Outer Uptrend Line at 91,77.



DAILY CHART- BEARISH TARGETS

 

This decline in the Aussie Dollar would be similar to that on the AUD NZD as well as the AUD USD where a trade was recently made.


DAILY CHART - AUD NZD

DAILY CHART - AUD USD

DAILY CHART- LIVE ACCOUNT AUD USD TRADE

FXCM Charts used for Trade Signals; Trades executed on Dukascopy Swiss Forex Marketplace

As the market continues to break out of these large Consolidation setups, hundreds of Pips will continue to be on offer for the sharp trader. With the right Methodology that maximizes on these opportunities, your Trading Account will continue to grow over the Long-Run.

Become a Subscriber today and you will receive;

• Daily Analysis of Currency Pairs;

• Weekly Technical Analysis on Specific Topics; 

• Detailed Explanations of Trade Results;

• A Currency Trading Experience focused entirely on Making Money;

___________________________________________________________

RECENT EMAIL FROM CLIENT

____________________________________________________

SUBSCRIBE TODAY

____________________________________________________

US$120.00

Free 

 ___________________________________________

Duane Shepherd 

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

Currency Analyst/Trader

Contact: shepherdduane@gmail.com

Twitter: @WorldWide876

Facebook: DRFXTRADING 

More info for AUSSIE DECLINE TO CONTINUE WITH AUD JPY FALSE BREAKOUT ~ forex trading system profitable: