GBP USD CLOSE TO WEEKLY RANGE - forex trading system rules

GBP USD CLOSE TO WEEKLY RANGE ~ forex trading system rules

The GBP USD has been moving in step with the EURO USD as both pairs decline in sync with strong gains for the Greenback across the Forex market.  Similar to the EURO USD, the Sterling pair is closing in on its Weekly Range target which lies only 120 pips away. When that area is hit in the next few days, we could see a temporary pullback or consolidation take place before the downtrend continues. On the other hand, the slow and staggered nature of the downtrend also points to the possibility of a large Range being formed in the months ahead.

Daily Chart below shows that the pair is very close to hitting its first Weekly Range target of the new downtrend.

DAILY CHART

Within a very short time after hitting this price area, we could see one of two alternate scenarios unfolding.

SCENARIO 1

• A Pullback/Small Consolidation;
• New Bearish Signal to Continue Downtrend;

If the downtrend is going to continue in the next few weeks, we could either have a temporary pullback or a small consolidation being formed. This will then give way to another bearish signal to resume the existing trend direction.

DAILY CHART

  

After resuming the trend, the currency pair will decline until the 2nd Weekly Range Target is hit.

SCENARIO 2

• A Rally that starts a Consolidation;

The slow nature of the downtrend suggests that a Consolidation could also be formed over the next few months. If this is going to take the form of a Range, then the Weekly Range target that will be hit would represent the Support boundary of that Range.

DAILY CHART

 

Only time and traders will show us what actually transpires in the next few days. However, given the manner in which currency pairs behave based on the types of candles and their Weekly Range, these are likely to be the scenarios to look out for going forward.

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255 PIPS ON OFFER FROM NZD CAD THIS WEEK - forex mutant trading system

255 PIPS ON OFFER FROM NZD CAD THIS WEEK ~ forex mutant trading system

A Large Range Setup appears to be forming on the Daily Chart of the NZD CAD that could offer us up to 255 Pips this week. The Support Boundary has already been formed at the 0,8335 area and once we see continued gains for the CAD, this will take us back to Support and complete the Resistance Boundary and the Range.

The overall setup can be seen in the graph below. The pattern of movements that have taken place in the last few months appears to indicate the formation of this large Consolidation in the days ahead.

POSSIBLE RANGE SETUP - DAILY CHART

If the pair continues to decline in the next few days, the Resistance Boundary would be formed at 0,8855 to complement the Support area at 0,8335.

RESISTANCE & SUPPORT BOUNDARIES - DAILY CHART

With a distance of 255 Pips from the current market price to the Support area, Swing Traders could realize a large trading gain once the pair gets going again. This would follow the current sideways movement now taking place on the Daily & 4 Hour Charts.

EXPECTED TRADING GAINS - DAILY CHART

PENNANT SETUP - 4 HOUR CHART

When this downtrend finally resumes, we will actually be continuing the breakout from this Pennant Setup. The Support was initially broken with a Bearish Candle and has been followed by a pull back and U-Turn as the market "tests" the broken Support. Once this is done and we start to see additional bear candles, short positions can be opened as long as our Entry and Stop Loss Placements are correctly done according to the Trade Sheet for Consolidation Breakouts from the Trading Manual...

It is fairly easy for us to spot Consolidation Setups and trade them after they have been formed across all time frames. However, the challenge has always been to spot the signs that they are being formed so that we can quickly adjust our strategies from a Trend Trading one to a Consolidation Trading strategy. 


So how do we trade this?


There are several technical factors in the currency market that tell us when these setups are being formed. Many of them relate to how long a trend has been in place before it begins to move sideways or whether we have recently broken a major Trend Line. These and many other factors that lead to these setups can be found in Section 4 Part 2 of the Manual...

As soon as you spot these factors at work on your charts, you can begin drawing the expected lines of Support and Resistance. Once the distance between these boundaries is far enough to allow for trades of between 100 and 200 Pips - comfortably - strong gains can be had as long as the trade meets the requirements set out in Part 3 of the Manual...

The key is to now wait on the appropriate signal on the Daily Chart to start taking advantage of the move to Support and the breakout from the 4 Hour Chart Pennant.

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EURO USD TRADING GAIN AHEAD OF STRONG REVERSAL - forex lines 7 trading system review

EURO USD TRADING GAIN AHEAD OF STRONG REVERSAL ~ forex lines 7 trading system review

The EURO USD provided us with a small trading gain of 46 Pips on Thursday as we took advantage of the sharp Bullish Reversal that was predicted in December 2015. The original trading target was 165 Pips but by the end of the Holding Period established for this trade this had not been hit, obligating us to close our trade for the smaller profit. During this trade, a sharp bearish pullback had threatened our Stop Loss, coming within 5 Pips of taking out our trade. 

This pullback would have tempted many to exit the trade for fear of being stopped out. However, thanks to the rule that we have of never looking at our trades while they are open, we were able to capture this trading gain as the market u-turned and rallied once more. As a result, this trade, combined with the 138 Pips from the GBP USD, has now given us a good start to 2016 with a Rate of Return of 9.4%.

The screenshot below is taken from the Private Video Analysis we did for the EURO USD in December which predicted the sharp rally. 

As can be seen from the current patterns for this pair, this was exactly what occurred in the last few days. This provided us with the trading gain as we entered at one of the Bullish Candlestick Signals.

The chart below shows our Entry Setup on the 4 Hour Chart, including the original target that was set at the Resistance Boundary of the Range.

Entry and our Stop Loss placement were done using this ABC setup - a setup that was predicted a few days earlier...

Now this is where it got interesting. For traders who choose to follow their trades, the pullback that took place after entry would have led many to close the trade as the market began reversing towards the Stop Loss.

This would have led to an unnecessary loss instead of the trading gains offered by the rally that eventually took place. The temptation to monitor our trades while they are in motion is very common. It is very natural to want to ensure that our trades are heading towards our targets without any pullbacks that threaten our Stops. While this can prevent some losses, it is a habit that can affect our long-term profitability. 

The Forex, like all markets, has a natural tendency to move in waves towards its daily, weekly, monthly and yearly targets. This reflects the changing value of currency pairs in response to changes in economic fundamentals and investor sentiment. It is therefore necessary for us to expect this for all our trades and not interfere. This is why it is crucial to adjust your platform so that you do not see the chart of the trade open nor the balance but only the tab that shows you whether the trade is still open.

Another important issue related to this trade was the Holding Period. Keeping our trades open for too short a period can curtail our profitability while having them open for too long can expose us open to unnecessary volatility. It is for this reason why a specific time period is used for each type of trade to establish a balance between these two extremes. 

When the Holding Period for this trade had ended, we had to close the trade regardless of the floating profit/loss at the time. This decision was later proven to be accurate as you can see from the pullback now taking place.

This trade highlighted many of the important things we need to succeed at trading over the long-term. These relate to the technical factors that determine our decision to execute a trade but more importantly the emotional aspects of trading - the traders Achilles Heel. 

Watching our trades can feel like the right thing to do to ensure profitability given the volatility of this market. However, this can be a serious hindrance to success if this leads to the habit of constantly closing trades before they have a chance to hit our targets. By adhering to the rule of not watching your trades and obeying the Holding Period, you will be assured of maximum gains for each trade ahead of sharp market reversals.

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More info for EURO USD TRADING GAIN AHEAD OF STRONG REVERSAL ~ forex lines 7 trading system review:

800 PIPS ON OFFER FROM GBP USD DECLINE - trading system forex octopus

800 PIPS ON OFFER FROM GBP USD DECLINE ~ trading system forex octopus

Having formed a small Pennant just below the major Resistance of a larger Pennant, the GBP USD could be headed towards the Support area some 800 Pips away. If we see a strong bearish signal below the Support of this smaller Pennant, traders can expect a big payday in the weeks ahead.


DAILY CHART- LARGE PENNANT

• Formed following the end of the safe-haven buying of US Dollars during the Financial Crisis;
• Has now pulled back to the Resistance of the Pennant following a breakout;
• Could break Support to continue the new Downtrend in favour of the USD to reflect the end of Quantitative Easing;

This downtrend has been in place since July this year after forming the high of 1,7190.


DAILY CHART - DOWNTREND

  



If this downtrend is going to continue, we will need to see a convincing bearish breakout signal following the test of the Support of this smaller Pennant.


DAILY CHART - PENNANT SETUP

 Over 800 Pips of profits would be offered during this breakout. Some traders will enter and hold their position for the entire duration of this decline, while most will take gains and re-enter according to their profit goals and holding period constraints. But given that these trends have...

1. False entry signals;
2. Pullbacks & small Consolidations;
3. Weak Stop Loss areas;

...how do you determine when to enter and where to place your Stop Loss to protect your trade from the natural waves of the market? How do you know which time frame to follow in case the trend starts to reverse unexpectedly before that Support area is hit?

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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 800 PIPS ON OFFER FROM GBP USD DECLINE ~ trading system forex octopus:

38 PIPS GONE IN 277 PIP EURO USD TRADE - forex end of day trading system

38 PIPS GONE IN 277 PIP EURO USD TRADE ~ forex end of day trading system

The EURO USD has been steadily declining over the last several weeks following the turn at the Resistance of its large Pennant Consolidation. There have been very few pauses or pullbacks in this strong downtrend that now has its sights set on the Support boundary of this Pennant, 350 Pips away. Trading these slow trends can be very profitable and with a short time remaining before that boundary is hit, the current trade opened on this pair could provide a very large return in October.

The recent pullback at the Resistance of this Pennant setup can be seen in the Daily Chart below. This large Consolidation was actually formed following the sharp gains for the USD during the period of risk-aversion related to the Financial Crisis.


DAILY CHART - PENNANT CONSOLIDATION

DAILY CHART- OPEN TRADE

To take advantage of this strong trend, entry took place shortly after the currency pair broke a Counter Trend Line (CTL) to resume the trend. The Stop Loss was placed at the Resistance of the Pennant on the 4 Hour Chart and the target set to just above the Support Line.


4 HOUR CHART

As you can see from this chart, someone could actually enter another short position now following this recent U-turn and strong Bearish Candle signal. The Stop Loss would be place above the high of this CTL break.

The strong inverse correlation between the EURO USD and the USD CHF can also be used to capture additional profits. The USD CHF is now headed to an Outer Downtrend Line in a slow steady uptrend that could provide some additional pips when that target is hit.


USD CHF - RALLY TO OUTER DOWNTREND LINE 

DAILY CHART - UPTREND 

These targets could be hit within the next two weeks and can provide large gains for the patient Swing Trader.

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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 38 PIPS GONE IN 277 PIP EURO USD TRADE ~ forex end of day trading system: