Forex Go!

Its been a very quiet week this week because I only managed to find one decent trading opportunity overall. There were no trades according to my 4 hour trading system (see right for more details) because the price generally moved against the trend on the FTSE and the GBP/USD and EUR/USD pairs. The only trade I did find was a breakout trade on Tuesday morning.

The overnight trading range (between 00.00 and 08.00 UK time) for the GBP/USD pair was just 44 points so when the price finally broke below this range at around 08.55, I went short at 1.5401.

I then closed the position for 20 points profit a short while after. The S1 level, which is often a good exit point was a little too far away for my liking (around 50 points below my entry point), but as it turned out the price did actually hit this target.

Not to worry though. A 20 point profit for the week is better than no profit at all, and certainly better than losing money. Plus the stock market rally has meant that a lot of my long term holdings have gone up nicely, and I even banked a 150 point profit going long on Vedanta earlier in the week.

So it wasnt a bad week at all.

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The U.K. pound is gaining in forex trading on the currency market today. Better than expected economic data is helping the sterling in currency trading. 

Indeed, right now the sterling is one of the few currencies gaining against the U.S. dollar. A little bit of risk aversion is pressuring most of the high beta currencies. Euro is struggling as the fallout continues from S&P’s response to the latest suggestion on the Greek bailout.

Equities are struggling, though, and that could weigh on the U.K. pound later. For now, though, sterling is higher, bucking the trend for a higher dollar across the board. 

The ongoing Greece crisis continues to weigh heavily on the markets, but thankfully its been another profitable week this week. My main 4 hour trading strategy (see right for more details) generated two winning trades out of three, and I managed to find two winning trades using my early morning breakout strategy as well.

Lets start with the 4 hour strategy first of all. I traded one position on the GBP/USD and two on the EUR/USD pair. I opened the GBP/USD position on Monday when the EMAs crossed upwards on the 4 hour chart. I was only looking to go long at this point as the Supertrend indicator was still green on the daily chart (although it has since turned red, indicating a bearish trend), and I entered a position at 1.6204.

I actually entered a little prematurely as I took a position before the crossover was confirmed, but I got away with it as I managed to close half the position for 50 points just after midnight.

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The U.K. pound is heading lower in currency trading on the FX market, thanks to the release of the latest minutes from the last MPC meeting. 

Minutes show that there are concerns about unemployment and other issues related to a slowly recovering U.K. economy. As a result, it doesn’t appear as though the Bank of England is likely to raise interest rates anytime soon.

The news sent the sterling lower in currency trading today. Even with stocks recovering around the world, and commodities on the rise, sterling is dropping against the U.S. dollar, unlike the euro, which is gaining against the dollar. 

It is a sad fact that the vast majority of people who enter the world of forex trading will ultimately end up losing money in the long run. However some will end up being profitable, but even these people will have gone through a long and arduous learning curve.

I know that was the case for me because I made lots of mistakes and lost a lot of money during my early days in relation to both stock market trading and investing and forex trading.

Anyway in todays post I want to tell you about a new video that Casey Stubbs has just put together that talks about this particular subject in more detail. He discusses why most forex traders take years to succeed, and also discusses three areas of trading that causes traders to lose money and explains why you too could be destined to failure if you do not address some of these issues.

You can watch this video right now by clicking here.

Moody’s downgraded Ireland earlier today, and that is affecting confidence in the euro zone. The euro is down against the U.S. dollar in forex trading as concerns about the financial system in Europe persist.

However, the euro is expected to make up some ground as risk appetite starts to return to the financial markets. Good news in the U.S. is prompting an equity rally. The Aussie is gaining now, after faltering on concerns about a possible Chinese rate hike.

Besides, Fitch and Standard & Poor’s kept Ireland‘s rating steady, so confidence isn’t all gone. It will be interesting, though, to see what happens next with the euro in forex trading. 

The sterling is retreating in forex trading on the currency market as risk appetite takes a break, and as concerns about the U.S. economic situation become more apparent.

At the end of last week, many currencies were gaining against the U.S. dollar. The U.K. pound was one of these, rising on the FX market as PPI data helped provide a boost. However, the story has changed somewhat. While some of the drops are due to profit taking, there are also some other issues.

The IMF just revised its forecast for the U.S. economy, and it is a less positive picture, resulting in high beta currencies losing ground. Another issue is that energy stocks — and other stocks — are lower. Worries about Japan and the state of euro zone countries are also re-surfacing. All of this means that the U.S. dollar is preferred to currencies like the sterling and euro. 

Forex

Asian trading hours today rendered the Dollar a slight lift as a sort of correction of the recent downmove. Right now in the European morning a consolidation in the major pairs has set in. For EUR/USD (now at 1.4170) and GBP/USD (now at 1.6070) we see another upmove to set in during today`s trading, to 1.4230 and 1.6149 correspondingly. For USD/CHF and USD/JPY (presently at 0.9210/83.60) we expect a slight selling tone in today`s trading to remain, testing the levels around  0.9175/83.35.

Stock Indices

After a mixed picture of Asian trading today (Hongkong up, Tokyo down) the Euronext 100 (presently trading at 717.77) started almost unchanged, consolidating its higher levels in this cyclical upmove, a move we expect to overwhelm the Euronext 720-mark today. DJII and NASDAQ bear further upside potential in our view, to 12375 DJII and 2365 NASDAQ. 

Its been another highly dramatic week on the markets, but its been pretty good overall. My main 4 hour trading system (see right for more details) generated one good trading opportunity and the Forex Morning Trade system, after having a very rare losing week last week, bounced back to form with a total profit of 68 points, as you can see below:

This system was 40 points ahead going into todays session, but after the price fell just short of the 40 point target earlier this morning and then started falling, I decided to take profits of around 28 points and call it a week. After all it would have been very disappointing to see if fall back to break-even (which is exactly what happened) and not bank any profits at all.

My 4 hour trading system produced a few possible set-ups on both the GBP/USD and EUR/USD pairs, but none of them were ideal set-ups because either the breakout candle was too long, or there was no pull-back for me to get a good entry point.

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Oil worries are continuing to weigh on the U.S. dollar. Even though stocks have pared some of their losses today, the greenback is still struggling in forex trading. Slightly lower oil prices have not been able to help the U.S. dollar.

Gold prices have retreated to the $1,400 mark, and that isn’t helping the U.S. dollar, either. Generally strong commodities are weighing on the greenback, and helping the euro in forex trading.

The only major currency losing out to the dollar is the U.K. pound. Sterling is lower on currency trading, thanks to renewed fears about the British economy.