The AUD set up nicely during the Asian session for a short in the UK session.  There was very little news to be concerned about until the US economic news releases.  This is one of my favourite setups.  Had price moved down all the way to the Asian session low, than it would have been one of my favourite results too.

My students often comment that I give too many tips away in the blog.  Having said that...here I go again.  Currency pairs have a tendency to move a certain amount in a given day.  Once they have moved this amount, the probability of them exceeding it further, dwindles rapidly.  Can a pair move 20 or 30 pips above what it normally does on a given day...yes absolutely.  Is it likely to...no.  Currency trading is not an exact science, but probability and statistics are very applicable.  On very exceptional days, a pair may double its usual range and we see this now and then.  It's not the norm though.

The AUD exceeded its range during the Asian session by approximately 20 pips.  Think about it...how are the UK traders going to make money on the AUD, if it has already exceeded its range?  The answer is... they will likely reverse it and push it the other direction.

We see a quick rejection of a break above the Asian session high which affords us a very reasonable stop.  My intention is to aim for 3 pips for every pip that I'm willing to risk.  In this case, it's a risk of 17 pips to get 79 pips.  As the trade progresses, I expect yesterday's high to be tested and retested before a further descent toward the Asian session low.  Instead of a complete reversal to the Asian session low, we end up in the middle of the range in this case...which is not usual, but it often will go the full distance.

Keep your eyes open for this kind of trade setup.

Good luck with your trades!

Back tomorrow.

Michael  www.privateforexcoaching.com

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A volatile week of trading and very messy charts.  To my eyes the EURGBP looked best.  This pair has been very active the past couple of weeks and tends to move in a more orderly manner than most pairs.  It set up very nicely during the UK session, rejecting a close above the Asian session high, followed by a very bearish candle.  A short trade with an affordable stop meeting our minimum 3:1 Reward to Risk ratio to our Target 2 followed.

The market has been very volatile this week and with Dr. Bernanke testifying yesterday and today, there is room for considerably more volatility.  After a bounce off the Asian session low, the trade is closed before round one of the major US Economic news releases.   Better to play it safe today or not play at all.

Be very careful trading volatile looking charts.  It is always better to avoid the difficult looking trades and choose the easier looking setups or not to trade at all.  Be very selective and keep your stops tight.

Good luck with your trading!

Back tomorrow.

Michael  www.privateforexcoaching.com

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The AUD made a larger Asian session range than usual yesterday and continues to weaken against the USD.  After putting in a series of lower highs it chopped its way down during the UK session attempting to close below yesterday's low and the Asian session low, but lacked any real momentum until the US session news.

When you can, eliminate your risk by placing your stop better than breakeven, it removes the stress from trading.  If the worst case scenario is you make a couple of pips, but are bored silly...at least you're getting paid.  With major news around the corner, always protect yourself.  If you are in profit, protect some of it and be prepared for volatility.  Some traders choose to take any profits, close their trades and avoid the chop.  There is nothing wrong with that.   When the US economic news releases began, price almost stopped us out for plus 2 pips, but pushed down in our favour and hit both our targets, where we closed the trade.

We don't trade on Mondays, so we are happy with the first day back of our trading week.

Back tomorrow.

Good luck with your trades!

Michael  www.privateforexcoaching.com


 

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The NZD looked like it had good potential to go down during the UK session, and allowed for a small stop.  The Reward to Risk was a bit better than 4.5:1 to our Target 2 - easily meeting our minimum risk criteria of 3:1.

The AUD shot up while Governor Stephens was speaking, and I was really hoping for it to roll over and set up for one of my favourite trading patterns, but it wasn't to be.  The EUR had potential, but the stop loss was too expensive...so the Kiwi turned out to be the preferred setup.

We didn't make it to our Targets, but we'll take 30 pips any day.

The market was very generous to begin our trading week and the past 2 days have been tricky.

A wonderful thing about trading, is every day is a new day and every week we search for new opportunities using the same tools - like a prospector searching for gold. 

Our particular style enables us to take very low risk and high probability trade setups.  We bank the pips each session.  We never let large gains back up on us and we never leave positions open at the end of the trading session.  We have clearly defined targets before we enter and we read price as it moves through the levels toward our targets.  If price indicates to us that it may be reversing, we have protected our profits and happily accept what the market gives us.  We remove risk (the initial stop loss) as soon as it is prudent to do so, thereby making our trades "stress free" as they progress.

A little tip:  Never move a stop loss to break even.   Always move it ahead to at least, Plus 1 pip.  It is psychologically much better to have a positive trade than a scratch trade.  After all, the dealer has made money the moment you open the trade and again when you close it.  This naturally refers to moving the stop loss once it is prudent to do so.

Enjoy your weekend!

Back Tuesday.

Michael  www.privateforexcoaching.com

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The EUR broke through the Asian session low very quickly once the UK session got underway - without retesting the level.  I learned a long time ago from my mentor, it's never a good idea to chase a trade.

The CHF moves inversely to the EUR because the Franc is the cross not the US dollar.  I typically use the CHF to confirm (inversely) the EUR setups.  In this case, when the CHF made a lower high, just as the EUR  made a higher low, I opted for the CHF short.  The CHF offered a tighter stop loss and with some major US news releases around the corner, it seemed like the better trade at the time.  The Reward to Risk was 4:1 to our Target 2.  It turns out that there was more money to be made by taking the EUR long.  Oh well...that's trading.

Let's see what Friday brings us in the way of opportunity to close the week.

Good luck with your trades.

Michael  www.privateforexcoaching.com

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The EUR and AUD set up very nicely during the UK session.  This is turning into a great week for trading and as traders know, some weeks are much better than others.  The USD continues to strengthen. We are intraday traders not macro economists...so we are happy to find trade setups that meet our criteria, require low risk entries and bank our profits each session.  We trade what we see each session and wish "position traders" all the best.  We look for signs of  where the BIG institutional money is entering and exiting their positions each session.

With the reaction to the UK news behind us, we saw a short opportunity in both the EUR and AUD.  The EUR trade was a 4:1 plus Reward to Risk ratio setup.  Although it didn't make it as far as our Targets 1 and 2 before the US Economic news releases, we are very happy with the trade.  Our targets enable us to determine whether our Reward to Risk ratio minimum of 3:1 to our Target 2 is available, and once we enter a trade, we protect our profits and read price for signs that the market may be turning or continuing.   If price is slowing down, showing signs of reversing or event risk is entering the market, we tighten our "take profit levels" or close the trade.  Where price goes after that is inconsequential.

It has taken me years of trading experience to develop the methodology.  I was taught by the best and the rest comes from experience.

So far, it's been a great week.

Good luck with your trading!

Back tomorrow.

Michael  www.privateforexcoaching.com

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EURGBP trade to begin our trading week.  I teach my students to keep an eye on this pair when the EUR is moving one direction and the GBP the other direction.  Two advantages to trading this pair include; it tends to move at a slower and steadier pace than the either the EUR or GBP and it is crossed with the GBP, so currently each pip is worth 1.54 times what a USD crossed pair is worth.

The EUR began to move up during the UK session with the GBP moving downward.  After a wicky candle bottom the EURGBP began to rise and close back above its Asian session low.  It tested and re-tested the Asian session high before rising through our Targets 1 and 2.  With a small stop and a greater that 3:1 Reward to Risk ratio, this trade started our week very positively.  As the UK session ended, it was still looking like it had a bit of momentum to the upside, so we held on a few minutes longer than usual to close it out.  This was an excellent way to begin the week.

There was also a very nice setup on the GBP (not shown) so all in all, a very profitable session.

Let's see what the rest of the week brings us.

Good luck with your trading!

Michael  www.privateforexcoaching.com

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The AUD trades continue this week.  We haven't had any stellar trades with the AUD this week, but they add up.  We waited until after the UK economic release to enter short.  With a small stop just above yesterday's high, our minimum 3:1 Reward to Risk ratio to our Target 2 criterion was met.

The AUD had been unable to close above yesterday's high once the UK traders began their session.  Price moved down to test and re-test the Asian session low, before dropping further.  As price penetrated our Target 1 and began to pull back we exited the trade for acceptable gains.  Once we reach Target 1, we are very protective of our profits.  After the US economic release, price dropped through our Target 2, but we are very comfortable with our execution.  Successful and consistent trading has more to do with discipline than attempting to get the maximum number of pips each trade.

Enjoy your weekend!

Back Tuesday.

Michael  www.privateforexcoaching.com

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AUD began climbing higher shortly after the UK session got underway, but could not close above yesterday's high.  We observe price for a while and with no significant news releases pending, we enter short.   We look to see what will happen near the Asian session low.  Price continues downward and we protect our profits by placing a "take profit" just above the Asian session low ( not shown on the chart ) but highly recommended.  As a wicky bottom candle forms below the Asian session low, we wonder if buyers are entering the market.

We are now prepared to close the trade if price retraces, so as to protect more profits.  I personally like to place my "take profit" above/below structure, or lock in pips usually but not always in 10 pip increments.  Price continues down one more candle and we close on the following candle as price begins to retrace.  It would be nice to have had a larger move downward, but we can only get what the market offers on any given day.  It is much more important to be able to read price and manage your trades, than to concern yourself with big moves each day.  Some weeks the market is much more generous than other weeks.

Happy Valentine's Day!

Good luck with your trading!

Michael  www.privateforexcoaching.com

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The AUD set up nicely fairly early in the trading session, allowing for a short with a very small stop loss.  Fortunately is was not volatile after the UK news which certainly affected the GBP, EUR, CHF and EURGBP pairs.

I like this setup and really love it when the Asian session has had a extended range.  With a very tight stop, I was hoping that price would move down to at least the Asian session low, as it was making no signs of moving up to test the Asian session high.  Alas the trade fizzled out at yesterday's high and that was it.

Modest gains are always better than modest losses.  After the UK news some trade setups were very evident, but I don't like large stop losses, so I walk away from those types of setups.  There is nothing easy about forex trading and some days are humbling.  Let's see what tomorrow brings.

Good luck with your trading!

Michael  www.privateforexcoaching.com

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Although there was lots of movement during the UK session, it was difficult to find a setup that met our minimum 3:1 Reward to Risk ratio.  The NZD or Kiwi moves very similarly to the AUD most sessions.  The Kiwi setup required a smaller stop loss and the setup was more convincing to my eyes.

Both the NZD and AUD as it turned out, began to move at the same time.  If a trade gets away from you in one pair, have a look at a similar moving pair for an entry, but never chase a trade.  The EUR and CHF move inversely, so I usually like to confirm a setup in the EUR with the CHF looking like it will move in the opposite direction.

 
Good luck with your trading!

Back tomorrow.

Michael  www.privateforexcoaching.com

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The EUR was much more contained in its movement overnight.  After an exceptionally large drop Thursday, it is not surprising to see it attempt to stabilize today near yesterday's low...at least for now.

The setup was very similar to Thursday, but the move down ended at yesterday's low and temporarily reversed.

On a side note, my platform has been showing some corrupted data.  The gap down in yesterday's chart turned out to be erroneous caused by a data corruption issue.  It is not unusual to see a gap in the forex market between Friday's close and the new week's opening, but it is very rare to see gaps during the week.  I've had a couple of issues in the past 2 weeks with data, so I will download a new charting platform this weekend and continue to compare it to other MT 4 platforms.

Technology is wonderful but far from perfect.  Always have your broker's trading desk's number on hand, just in case you encounter a power outage or become aware that your charting data may be off.  I know from experience, not being able to see your charts while in a trade, due to a computer malfunction or power outage can be quite stressful.  It's nice to be able to call the trading desk to ensure your trade is moving in the desired direction or be able shut it down.

It's been a great trading week and we look forward to next week.

Enjoy your weekend!

Back Tuesday.

Michael  www.privateforexcoaching.com

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Fabulous trading day!  The EUR was a textbook trade for us.  Breakout traders were lured in long and it didn't take long before the EUR plummeted, then gapped through our Target 2.

It's unusual to see a gap in the forex market during the week.  We see them  after a weekend, when trading resumes, but during the week, it's rare.  This gap was filled in on the same candle, which also is rare.
 
Overall this was a gift of a day!  A number of pairs offered up nice setups and exceptional profits.  A day like this makes up for all the frustrating tedious days when the setups we look for aren't there or where there isn't much profit to be had.  Patience and discipline are key to trading success.

Let's see what tomorrow brings to end the week.

Good luck with your trading!

Michael  www.privateforexcoaching.com

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After a very active Asian session, the CHF lured in breakout longs and set up a familiar pattern for us to take it short.  With very little news during the UK and US session, it was not easy to find a good trade setup.  After a very active Asian session, I like to find a setup that will run in the opposite direction to where price is  when the UK traders come to their trading desks.  In other words, if the Asian session has extended itself to the long side, then I am looking to find a trade setup to go short.

Unfortunately this trade produced modest gains and ended the session in the middle of the Asian range.  Very often trade setups like this will run right back to where price began the Asian session.

Let's hope for some bigger moves in the UK session tomorrow.

Good luck with your trading!

Michael  www.privateforexcoaching.com

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The EURGBP can be a very nice pair to trade.  It moves slower than the EUR or the GBP, so it's easier on the nerves as it tends to be a gentle moving pair.  As it is crossed with the GBP, it has a higher pip equivalent than the USD crosses.  When this pair trends as it has since the beginning of January, it can produce some nice returns.  When it has a tight trading range, it is best to avoid this slow mover.

It set up nicely last night and to my surprise went well above our Target 2.  As price hit Target 2, we closed the trade happy with the 3:1 Reward to Risk ratio trade setup that we entered.  We may have left at least 35+ pips on the table, but greed is very dangerous in trading and the downfall of many a new trader.  Have targets, manage your risk, lock in profits and read price action.  If you can do these 4 things, you are well on your way to being a successful trader.

February has all the makings of being an interesting month for trading.

Back tomorrow.

Good luck with your trades!

Michael  www.privateforexcoaching.com

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