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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(See "SWING TRADING STRATEGY & TRADE RESULTS" for Product Details)
_____________________________

Duane Shepherd 

(M.Sc. Economics, B.Sc. Management and Economics)

Currency Analyst/Trader

Contact: shepherdduane@gmail.com

Twitter: @WorldWide876

Facebook: DRFXTRADING 

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The Average Trader Is Being Set Up By The Market - ddfx forex trading system free download

The Average Trader Is Being Set Up By The Market ~ ddfx forex trading system free download

The legendary trade Jesse Livermore once remarked very aptly that "The market is designed to fool most people most of the time." He has also been quoted in saying that "Markets never change, because human nature never changes." Although many aspects of this mans life may not be worth learning from, his perceptivities into the financial markets are timelessly invaluable to anyone who is serious about achieving success in trading.

If you have ever had some experience in investing or trading, have you ever felt that the market seems to have a way of going against you "most of the time"? For instance, if you have traded Forex before, have you ever felt that "it always goes down whenever I buy, and it always goes up whenever I sell"? Is it a matter of bad luck? Or are there some fundamental reasons why most traders lose money?

Think about it. If you do not have a highly systematic and controlled way of approaching the markets, the fact is that the markets are always rigged against you. It is not unlike going to a casino, where your chances of making money in the long term are practically zero. In the casino, all the games are rigged against us in the sense that they always have an edge over us. An "edge" is simply a statistical advantage that ensures that you will lose money if you stay long enough in the game.

So, how do some people devise strategies to take money out of the casinos? They do so by systematically eliminating the "house edge", and establishing "an edge over the house". Professional gambling syndicates win the games they play by playing only when the odds are in their favour, and knowing when to walk away without allowing the joy of winnings to get them carried away.

In very much the same way, the Forex market (and any financial markets, for that matter) is being "set up" against us. Firstly, we know that we start from a losing position from the very first moment after entering into a position. This is due to the transaction cost of entering a trade, i.e. the difference between the bid and ask price, known as spread which immediately shows up as a floating loss from the very first instance after entering a position. Psychologically, many traders are affected by the floating negative number that is displayed on the trading statement, and spend a lot of time scrutinizing the moment-by-moment increases and decreases of that number.

Our psychological reactions to market movements, and the ups and downs of the numbers in open positions, will almost certainly leads us to make counter-productive trading decisions. The interaction between human emotions and price movements naturally cause us to buy high and sell low most of the time!

What we see on price charts is essentially a graphical representation of the ebb and flow of mass market psychology, which involves millions of trading decisions at any one point in time. These trading decisions are the outcome of human nature at work in the market, involving many instinctive trading habits and attitudes.

The more we understand these and overcome the same habits and attitudes ourselves, the more we are able to eliminate the markets edge over us and stand out above the majority of traders and win successfully. Successful trading is about eliminating the markets edge over us and developing an edge over the market. It is only possible if and when you realize how the market is naturally "designed" to beat you. This involves not only understanding the market behaviour, but also understanding your own psychology as a trader.
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ANOTHER FALSE BREAKOUT ON THE EURO USD - m1 forex trading system

ANOTHER FALSE BREAKOUT ON THE EURO USD ~ m1 forex trading system

Many traders will now be wondering why the 2 strong Bullish Breakout attempts on this pair have been met by sharp Bearish reversals in favour of the USD? The Bull Candle Signals given on the Daily Chart appeared to be strong enough to justify entry and provide sharp EURO gains, yet on each occasion, the Bears took control aggressively to pull us back inside of the Pennant Setup. So are there explanations for these reversals that are all so common across the Forex Market or should we put them down to just being random movements?

The Pennant Setup on the Daily Chart was formed by waves of Uptrends and Downtrends since June of this year. Within the last few weeks, we saw the first attempt to break out of this attempt with a strong Bull Candle at Resistance. However, this was followed up by sharp Bearish Candles that took the pair back inside of the Consolidation.

DAILY CHART- FALSE BREAKOUT SIGNALS

After only managing to reach half-way inside of the Pennant, we saw another attempt to head higher and breakout once more. This was given with a smaller candle signal but a very strong one nonetheless that usually leads to successful breakouts. Yet, once more, the Bulls were taken out by sharp Bearish Candles that have taken us back below the Resistance boundary. Based on this, it is very possible that we see a break to the Support boundary at 1.0815.

DAILY CHART - EXPECTED BREAK TO SUPPORT

These scenarios are very common traps that lead to trading losses. Breaks of Consolidation barriers are usually strong indicators that a profitable move will take place, offering large gains in a very short time. So it is no exaggeration to say that these losses can be surprising and frustrating for traders -especially when the signals are strong.

Based on what I have observed in the market over the years, I have found that there are 3 main categories of Breakout Signals that appear at Consolidations and only 1 of these leads to profitable breakouts. I have also noted that these candles also have to break the Resistance/Support boundary by a large enough distance in order to justify entry.

TAKEN FROM THE TRADING MANUAL 

("Successful Currency Trading With the Daily & 4 Hour Time Frames"-
Available as part of the Swing Trading Course at www.drfxswingtrading.com)

The first Candle that attempted the break out is one of those that have a low probability of success and should be avoided. The 2nd Candle is actually one of those that are normally safe to trade but the distance by which it broke the Resistance was not enough. Ideally, more than half of the body of the Candle needs to close beyond the boundary.

DAILY CHART- TYPES OF BREAKOUT SIGNALS

In order to have a correct signal, therefore, the type of candle and the distance of the breakout need to be appropriate. Once you are able to identify these types of Candles and examine if they should be traded based on these and other criteria in the Trading Manual, you will be able to avoid these traps and focus on those that lead to profitable moves.

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STRONG PROFITS STILL CAPTURED BY EURO USD TRADERS - omni forex trading system

STRONG PROFITS STILL CAPTURED BY EURO USD TRADERS ~ omni forex trading system

Before the Non-Farm Payroll Numbers for the US on Friday, the EURO USD continued to offer profitable short positions for lucky traders. The downtrend on this pair started at the turn at Resistance of the large Pennant at the 1,4000 area, declining by 1,500 Pips. With the pair now close to the Support of this Consolidation formed in the aftermath of the 2008 flight to safety, we could see another period of volatility ahead of a rally back to Resistance or a significant breakout short. 

The chart below shows the Pennant that has defined the movements of the Currency Pair since 2008. 



DAILY CHART- LARGE PENNANT SETUP

The turn at Resistance took place in May this year, leading to the sharp downtrend that provided strong gains for the US Dollar.


DAILY CHART- SHARP DOWNTREND

Several opportunities presented themselves during this decline for traders as the Support area came in to focus.  These trades would have taken place with breaks of Consolidation patterns and Counter Trend Lines on both the Daily and 4 Hour Charts. The most recent one came a few days before the NFP data on Friday and allowed traders to exit ahead of the potentially volatile reaction.




DAILY CHART- COUNTER TREND LINE BREAK

4 HOUR CHART - PENNANT & COUNTER TREND LINE BREAKS

Evening Stars are also a popular bearish signal that can be traded with confidence. Stop Losses are placed above the high of these U-turns. (CURRENCY TRADING WITH THE DAILY & 4 HOUR CHARTS - Section 3 - Currency Patterns & Market Direction)
 
In September, breaks of a Pennant, Counter Trend Lines on the 4 Hour Chart also provided a significant payout for the sharp trader following the continuation of the trend with a break of a Counter Trend Line on the Daily Chart.


DAILY CHART-  CTL BREAKOUT

4 HOUR CHART- ENTRY SETUPS

Taking advantage of these trends requires spotting the strongest setups and signals that allow traders to remain in the trade without the need to move their Stop Losses nor monitor their positions. One must also be aware of the targets at which to exit trades so that there arent any unexpected reversals that erode our profits. At the stage of the trend, the proximity of the pair to the Support Level suggests that we are likely to see an upcoming period of sideways movement. 

Generally after such larger trends that take us to the boundary of a major Consolidation, the market will pause as it decides on its next move. We could either see a rally that takes us all the way back up to Resistance or a break of Support. Such a break would be significant as it would represent the end of the long period of market indecision on this pair following the safe-haven buying of US Dollars during the 2008 Financial Crisis.

Which ever direction materializes, let´s stay prepared with the right strategy for more opportunities that will surely be offered.

___________________________________________________________

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GET STARTED TODAY
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US$99.00

US$69.99

US$49.99

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(See "SWING TRADING STRATEGY & TRADE RESULTS" for Product Details)
_____________________________

Duane Shepherd 

(M.Sc. Economics, B.Sc. Management and Economics)

Currency Analyst/Trader

Contact: shepherdduane@gmail.com

Twitter: @WorldWide876

Facebook: DRFXTRADING 

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70 OF TOP TRADERS BEATEN BY DRFX TRADING - forex binary options trading system

70 OF TOP TRADERS BEATEN BY DRFX TRADING ~ forex binary options trading system

Since its inception in July of this year, the Trading Service offered to clients has provided them with five trade setups. These included two losses on a long position on the AUD USD and a short position on the CHF JPY. However, gains from a long position on the AUD NZD and short positions on the AUD USD and the CHF JPY were more than able to compensate for these losses. Overall, these results were equivalent to a rate of return of 8.0% between July 1 and October 10, 2014. This was higher than the Year-To-Date returns of 70% of the Top Currency Traders in the latest BarclayHedge Rankings as at September 30, 2014.

RATE OF RETURN (5% RISK PER TRADE)

 BARCLAYHEDGE RANKINGS AS AT SEPTEMBER 30, 2014 

 

Centurion Fx Ltd. (6X) - (3.35%)

This company uses a combination of Swing Trading (1-2 days) and Intraday Trading (1-5 hours) strategies as part of their systematic trading model. They also use Trailing Stops in targeting a 2 to 1 Reward to Risk Ratio with a small risk exposure per trade. While the use of Trailing Stops is a very popular way of locking in profits ahead of reversals, this can be a double-edged sword that limits profitability. 

Markets have a natural tendency to wave and pullback as they make their way towards major price points. If, through manual interference or computer programmes/algorithms, Trailing Stops are implemented, trades can be prematurely closed at these temporary pullbacks before they have a chance to reach larger profit targets.  It is for this reason that I have identified the areas that provide the strongest protection from these waves early in the trend, so that the maximum benefit from a profitable trend is obtained. In doing so, I also target trends that last beyond 2 days to capture an even larger share of Pips that are offered by the market on a weekly basis -the Weekly Range. 


LCJ Investments SA (LCJ FX Fund Strategy) - (11.72%)

This company uses a fundamental and discretionary global macro strategy expressing both directional and non-directional views on currencies using FX options. The investment universe includes major currency pairs, non-traditional crosses, and emerging market currencies. The Strategy has two distinct areas of investment: 1) Medium Term Allocation - invests in directional trades on currencies on a 2/3 month basis 2) Long Term Allocation - invests in directional and non-directional trades on currencies on a 6/12 month basis. These two areas of allocation seek to offer broad diversification in terms of time horizon, product, and investment objective: allocating across different time horizons, allocating to a range of currency pairs including majors, relative value crosses and emerging, and through using a combination of vanilla and barrier FX OTC option and spot products, which we believe have characteristics that assist the portfolio by not being constrained to the linear (spot) universe. Full portfolio transparency is available to each client.

In contrast to this approach, my Methodology targets the Short-Term period of a few days to a week. While this may be more volatile relative to a 3 to 12 month time frame, it reduces the level of investor uncertainty that is more of a factor within this extraordinary policy environment. The low interest rate policy by the major central banks has also reduced the influence of interest rate differentials on currency demand, making long, stable trends a very rare occurrence. This has led to the formation of Consolidation patterns that have become more prevalent in the absence of meaningful trends. As such, a strategy that is able to incorporate these patterns into its tool box is of greater value to clients seeking profitability in all market conditions. 


P/E Investments (Standard - 18.47%, Aggressive - 28.44%, Conservative - 8.89%) 

These three strategies used by this company involve a systematic dynamic process utilizing a Bayesian statistical approach. The program invests in all major currencies by constructing an optimized portfolio that maximizes return for a given volatility level. Specifically, the FX program utilizes several fundamental factors to forecast returns for each currency on a weekly basis. These forecast returns are combined with the current volatilities and correlations to determine positions in each market that will yield a targeted risk level and maximum return. The process is systematic and therefore reliable and the process is dynamic. Each variable is re-weighted depending on its effectiveness. As variables become more effective they increase in weighting and as they become less useful, their weighting is automatically reduced. In summary, the FX program is disciplined dynamic systematic fundamental process that is risk managed to a risk level designated by the client. 

As an Economist, I can appreciate the use of economic factors in the analysis and forecast of currencies. Surprisingly, however, such a comprehensive approach is totally unnecessary in being able to accurately predict market movements. All Currency Pairs have a cycle of technical patterns which, once identified and understood, provide all the information needed to make trade decisions. Weekly economic data is also often volatile and uncorrelated to actual currency direction and can therefore be misleading. Candlestick Formations, Trend Lines, Consolidations and the average Weekly Range of each Currency Pair are all the tools required to predict 90% of the market’s most profitable movements.
 

THE METHODOLOGY

The trades that are shown here were developed from a Price Action-based strategy that uses the most accurate Candlestick Patterns and Signals of the Daily and 4 Hour Charts. These time frames provide more stable and reliable trading patterns and are thus more amenable to consistent profitability. Specific combinations of Chart Patterns and Signals on these charts have been found to continuously provide the most profitable trading opportunities across all Currency Pairs in the Forex Market. Once these signals are identified and traded within the context of established Rules and Parameters, larger rates of returns are more likely for both Retail Traders and Currency Fund Managers.

The Methodology involves exploiting the Trending and Range bound patterns of a Currency Pair over the Short-Term (4-7 Days). It does so by utilizing the Signals and Setups on the Daily and 4 Hour Charts to identify the most profitable breakouts that provide a large number of Pips per trade. The New York Close of the Daily Chart is used for to obtain these Signals from FXCM while the trades are executed on my Live Account at Dukascopy. The main aspects of the Methodology are;

• Identification of Market Direction using Candlestick Patterns;
• Using the Daily & 4 Hour Charts for Entry Signals & Stop Placement;
• Aiming for 100 to 200 Pips per trade;
• Trading to the Weekly and Monthly Ranges of each Currency Pair;
• Risking 5% per trade (90-120 Pips);
• Holding Trades for a Pre-Determined Number of Days to eliminate the uncertainty of when to exit Profitable Trades - the Achilles Heel of traders.

The risk per trade is not fixed. Each client is able use a risk level that is in keeping with their risk tolerance and their required rate of return. The Methodology does not utilize Statistical Indicators nor is it dependent on the subjective analysis of short-term Economic Data. Although many successful traders include indicators in their analysis of the market, most of these indicators are lagging in nature given their use of past price data. Short-term Economic Data released on a daily basis can be quiet volatile and are often uncorrelated to the most profitable currency movements.

TRADE RESULTS


CHF JPY OCTOBER 6- OCTOBER 10, 2014

Trade Type	False Consolidation Breakout
Signal Given	Daily Chart Bearish Candle
Target	Near End Value
Result	76 Pips

 
This pair was reversing inside of the Pennant Consolidation after a False Breakout Bullish.


DAILY CHART- PENNANT, UPTREND

 

















DAILY CHART - FALSE BREAKOUT

FXCM Charts used for Trading Signals and Setups based on New York Close Daily Candle

There was an initial uncertainty about the viability of the trade which led to a small loss of 9.5 Pips when the trade was closed earlier on. However, after confirming its adherence to my rules, entry took place on the 4 Hour Chart a few days later. At the end of the established holding period, the trade captured 76 Pips.

DAILY CHART RESULT

Dukascopy Swiss Forex Marketplace used for Live Account Trades

 KEY CONCEPTS OF TRADE

• False Breakouts move to the other end of the Consolidation;
• Holding Period;
• Near End Value;
• Entry at Follow-Up 4 Hour Setups;

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AUD USD  - SEPTEMBER 11 - SEPTEMBER 17, 2014

Trade Type	Consolidation Breakout
Signal Given	Daily Chart Bearish Candle
Target	Breakout Equivalent
Result	148 Pips

 
This pair was breaking out of large Pennant Consolidation.


DAILY CHART SETUP

Entry then took place at the third candle with the Stop Loss and Take Profit targets set based on the parameters of the Methodology.


DAILY CHART- ENTRY SETUP

After 4 Days, the target was hit for 148 Pips, following a temporary pullback close to the opening price.


DAILY CHART- TARGET HIT

DAILY CHART- LIVE ACCOUNT RESULT

 KEY CONCEPTS OF TRADE

• Breakouts from Consolidations are often fast and sharp;
• Temporary Pullbacks can take place before targets are hit;
• Stop Losses placed at the right area protects trade from unexpected spikes;

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AUD NZD  - AUGUST 27- SEPTEMBER 3, 2014

Trade Type	Consolidation Breakout
Signal Needed	Daily Chart
Target	Breakout Equivalent
Result	70 Pips

The setup for this trade was a simultaneous breakout from a large Pennant and the Range pattern on top of its Resistance boundary.

DAILY CHART CONSOLIDATION

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