Hi, last week we had a lot of news, especially for the Aud which made trading it very difficult. The majors in general have not been easy for those of us who trade from longer timeframes. So what to do?
I look at around 20 pairs on weekly charts. It is not as time-consuming as you might imagine. I can tell in a few seconds if a chart looks interesting or not. If the latter then I move on to the next. My goal is to find up to half a dozen (Non-members will have to sign up to view)“A” grade setups, with good risk-reward ratios and that I can place forward orders and walk away.
Last week I had 2 more good wins using this strategy. The Euro/Nzd which I showed last Sunday and in Tuesday’s live session, gave me 90 pips profit. I also made 100 pips from the Gbp/Chf which I can not claim credit for :)- One of my private students, Thinus, pointed out a great “range trade” setup on the Gbp/Chf. I showed you this in the live session on Tuesday. I then made a short video showing how I managed the trade once it got to 100 pips in profit. You can check it out here:
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The Forex Week Ahead
There is not too much scheduled news for the week ahead. The big events being the Cad & ECB rate statements on Wednesday & Thursday respectively. As ever do not trade around them and leave the €uro Thursday morning too as it tends to go to sleep before the announcement. The press conference is often the most volatile period, so wait until that is out of the way.
Make sure to check into the forum there were some great trade setups shared there last week.
Pay close attention to Correlation. All the Yens are to some degree and a lot of this weeks cross pairs.
Understanding correlations between forex pairs is one of the keys to becoming a successful trader. Positive correlation refers to how pairs move in the same direction. For example, the Euro/$ & The Gbp/$ usually move in the same direction more than 80% of the time.
An example of negative correlation is the Euro/$ and the Chf which usually move in opposite directions. The significance for traders is that taking two such pairs at the same time increases one’s risk and therefore is best avoided or cut the risk in half.
You don’t want to take multiple trades in pairs that are heavily correlated because if you start losing on one of the trades then the likelihood of you losing on the others is very high. Use the below guide to work out how correlated the pairs you are looking to trade are before deciding which positions to take.
Focus on daily for Marc’s M2 and 4 hour if you are trading Pierres Earth & Sky. It’s best to avoid going to any lower timeframe for correlation.
€uro/$: $1.2000 is a huge area. I will place an order to long at 1.2020. I will cancel it if it hasn’t fired before London closes on Wednesday. Then look after the press conference.
Chf: No risk reward current position, I need a pullback looking to short at 0.9150/9190 area.
Euro/Gbp: Fundamentally I think it should be dropping, I will short at 0.8665
Gbp/$: Its not great and hopefully I kept you out of buying at the top the last 3 weeks. I only want to long on a pullback, 1.4000 is the 1st place.
$/Yen: 108.30 is a key area to consider a long. I explained last week about not being too greedy as it would probably reject at 110.00 once more. It did.
Cad: Leaving it alone again. No multiple reasons for a stop long or short hence poor risk reward I explained there was a multi year support area and the price would more likely bounce off it than not. We trade probability! We have been shorting this successfully for over a year. Needs a big pullback to short. First place to consider for me is 1.2330.
Euro/Cad 1.4950 is where I will look to short again.
Gbp/Cad: Looking to short at 1.7200
Nzd: My bias is still to long 0.7125 is now the area for me
Aud: Its been messy for weeks and limited moves. No trade
Euro/Yen 131.70 is technically the spot for me to take a long.
Gbp/Yen. Not one of my pairs, 152.70/153.00 … is the place to consider a long.
Aud/Yen: 84.20 watch for possible long.
Nzd/Yen: 77.50 is key.
Aud/Cad: possible short at 0.9470
Gbp/Chf: Worked last week shorting at 1.2790 I will take it again if it gets back up there. Also possible long at 1.2650
Euro/Nzd: same as last week “This one has more reasons for the stop so I will short if it pulls back to 1.6950″ – Intraday watch 1.6800 on smaller timeframes.
Euro/Cad: I will short once more, now at 1.4960 – If it moves higher I will look to short at 1.5200
Euro/Nzd: Worked again last week for 100 pips. If it pulls back I will short again at 1.6950
M3 Shorter timeframes
I do my analysis on daily and weekly charts first and make a note of the MAJOR areas of support and resistance. Then copy them onto Pierre’s Earth and sky template. Then I make a note of the weekly & monthly pivots points and add them to the charts. You will see lots of opportunities line up during the week. The important thing then is to select a bias for the next few days and do NOT take trades if the price is too near a trend line or pivot. Ideally, you want to buy when the price is near a major support and or pivot point line and has the potential to make at least 40 pips. Vice versa for a short.
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” our aim is to teach you how to trade for yourself.
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Watch the video for more detailed explanations of this week’s analysis and trade plan.
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