Using M2 to trade all markets

Hi all,

It has been tricky to trade forex in the past few weeks because the DXY has been consolidating at a major level. I explained last year in December that we could probably see it just going sideways because of the Christmas holidays and most of the traders being out of the markets. It exactly did that, then we had a  move up after MLK day and it is now stuck again in a range. It is repeatedly bouncing off the Weekly 55, Daily 200, and the 78.6 fib. So if we get a breakout above then we long and a break below we short the Dollar.

I also showed you how other markets are interlinked with each other. I have added the 10-year bond chart (TNX) which has a similar pattern to the DXY. If the TNX shoots up we could see a drop on Gold & silver. Gold recently bounced off the 78.6 fib  and $2000 level which I mentioned would be a logical place to buy. I have also set some orders to buy again if it drops to 1950. I wouldn’t advise trading Oil at the moment due to the geopolitical events in the Middle East. If something kicks off it could be a wild ride. So keep an eye on other charts as I have shown you in the video for clues and use them to your advantage to be one step ahead.

But I have also shown you I use my M2 strategy to trade other markets such as crypto and stocks. Sometimes forex is relatively easy and other times not. The same can be said for other markets. I show in the video how Bitcoin was very simple in 2020/21.

I have been testing trading M2 on the S&P, Nasdaq, metals and crypto and passed a $50,000 evaluation account last week! It’s just another opportunity to leverage the M2. I will explain in more detail on Tuesday in the live training session.

Bitcoin did a pullback and bounced off the 78.6% after the ETF was approved. I bought more of Microstrategy at $500 and $460 recently, it Bounced off the 78.6% and a major psych level. This is the company that holds around 160k bitcoin which is worth around $5 billion. So if Bitcoin goes on a run again this will likely follow.

You can see in the video how I have used my strategy to trade all markets by keeping it simple. I use trendlines, fibs, EMAs and support and resistance. The last thing is of course check if any news event could ruin your trade and then make a decision whether to take the trade or not.

This is also a good time to study and increase your knowledge on other things. One of my private students, Zoe, did an excellent piece of research on the GBP. Have a read through it as it would help you to understand the UK economy better, link below.

Overview of the UK economy

You can also check out Marc Chandler’s article summarising the week & month ahead and areas of interest on FX pairs from a fundamental perspective.

February 2023 Monthly

The Forex Week Ahead+++++++++++++++++++++++

For the week ahead, Monday and Tuesday is fairly quiet newswise. On Wednesday you have the AUD CPI and a big day for the Dollar because they have the rate statement. I would advise closing all positions, or protect the trade as it could be very volatile. Thursday is equally very important for the GBP as they announce their bank rate, so would advise trading the GBP after Bailey speaks. I wouldn’t advise trading on Friday as you have NFP which is forex at its craziest. So make a plan and trade the plan.

++++++++++++++++++

 

MAJORS

The $index is still in a daily downtrend for me unless or until it breaks the current zone of 78.6% fib and emas.

Remember I am looking for “A” grade trades from weekly & daily charts that I can place the orders and then just walk away. A “B” grade is one that I will watch on 4 hour timeframes to see how it reacts if it hits my zone.

EUR/USD: My forward order at 1.0820 triggered this week which I waited for weeks. I explained this in my Blog post on Friday.

USD/CHF: No multiple reasons for the short, but keep your eye on it and the dollar index as they are correlated.

Do not take the Euro/$ & Chf at the same time. They are correlated so it’s the same “bet.”

GBP/USD: Messy. Not confident, leaving alone for now.

AUD/USD: Looks good for a short at the Emas but the R:R is not there. Would be better if it breaks above EMAs and then a long as there is a lot of fresh air.

NZDUSD: Very similar to the AUDUSD, but leaving it alone for now.

USD/CAD: Stuck between the EMAs just like the DXY so would leave it alone for now.

USDYEN: I continue to ignore the Yens until we get to an area where we have multiple reasons for a stop. At the moment I would just be gambling.

CROSSES

Some are A grades where I will place forward orders, most pairs have “areas of interest.” I have a lot of similar crosses so be very careful with the correlation.

EURGBP:  I am waiting for the pullback. Looking to short at 0.8630 and 0.8640.

GBPCAD: Needs a big pullback, but anything can happen in forex. Will split the order at 1.6863 and 1.6840

EURCAD: Would split the order at near 1,45 region

AUDCAD: The short worked again this week at 0.88900. Follow Ashley for further updates on this pair.

I have quite a few other “possibles” that I will monitor during the week. See the video. I also show areas I will look to buy metals on pullbacks and crypto and miners.

As always, remember correlation! 

New members, please note: If I am looking to take a trade long, for example, 1.5000, I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.

We are NOT a “tipping service” we aim to teach you how to trade for yourself.

Watch the video below for more detailed explanations of this week’s analysis and trade plan (click the 4 arrows bottom right to view full-screen):

Kind regards,

Marc