RATE OF RETURN NOW 13 0 ON SMALL AUD CAD TRADE - forex odyssey trading system

RATE OF RETURN NOW 13 0 ON SMALL AUD CAD TRADE ~ forex odyssey trading system

This trade was intended to take advantage of a sharp breakout short from a Pennant Consolidation, with the target set for its Breakout Equivalent. All Consolidations have Breakout Equivalents (B.E.) - it is the area that they break towards before pulling back. They will either pause here to then resume the trend or become volatile and reverse. Nevertheless, once spotted and measured accurately, one should either be exiting your trades there (see the AUD USD 148 Pip Trade and the AUD NZD 70 Pip Trade) or avoiding entries at these areas altogether.

In this instance, the pair had already broken out from a previous Range and was now breaking a Pennant. 



DAILY CHART - AUD CAD

(FXCM Charts used for Trade Signals- Dukascopy used for Live Trades)

Based on the way I had originally measured the B.E. for this Range, it would not be hit until a few hundred pips. However after analyzing the chart again for confirmation that my Entry Setup was correct, I realized the error and exited immediately. This provided only a small gain of 9,6 Pips, but was much better than what would have taken place if it was left any longer.


This was the entry setup on the 4 Hour Chart. It required waiting on the market to pullback so that my Stop Loss would have met the criterion in the strategy.


4 HOUR CHART - TRADE SETUP

Entry then took place as the market pulled back to trigger the entry but shortly after, I realized that this B.E. was actually at the Entry Price of my trade.


DAILY CHART

Luckily I was able to come out before the rally took place, which would have taken out the Stop Loss.


DAILY CHART- PULLBACK

Following this trade which pushed the rate of return to 13.0%, my Subscribers are still 9 trades away from a 100% return.

RATE OF RETURN FROM METHODOLOGY

The FXCM Demo Account that you will see in MyFxbook does not reflect this trade. The entry order was not triggered due to the natural differences in prices that takes place across trading platforms.


Mistakes like these are par for the course. Sometimes they lead to large losses, but sometimes you get lucky with only a small loss or gain. It can be very difficult to exit a trade that has the potential for large gains. However, this is perhaps the best trading decision that one will make when large sums of your funds or those of your clients are at stake.

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Duane Shepherd

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

Currency Analyst/Trader

Contact: shepherdduane@gmail.com

Twitter: @WorldWide876

Facebook: DRFXTRADING
Website: www.drfxswingtrading.com

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3 WAVE RULE DENIES BEARS ON CAD CHF - forex trading social network trading system

3 WAVE RULE DENIES BEARS ON CAD CHF ~ forex trading social network trading system

What looked like a promising bearish breakout has now turned Bullish with a sharp U-Turn that appears to have come out of thin air. However, based on our 3-Wave Rule of market trends, this pullback was always expected at some point in time.

Daily Chart below shows the strong Bull Candle that is now heading back to the broken Support barrier.


DAILY CHART

The cause of this reversal was the trend on the 4 Hour Chart. Several waves of bearish setups had led to that Daily Bearish Signal that broke the Range Support. However, pullbacks such as these are always to be expected to take place, making a short position an unwise one.


4 HOUR CHART

This technical aspect of trends can be seen across the Forex Market on all time frames. If there are several of these waves on a lower time frame, the immediate higher time frame will eventually pullback sharply.

In situations like these, we will either see a continuation of this rally that takes us back up to Resistance (False Consolidation Breakout Reversal)...


DAILY CHART

....or a U-Turn after testing Support to resume breakout...


DAILY CHART

In either case, the signal on the Daily Chart will have to be strong enough to justify entry such as the case with the GBP CAD trade (see Recent Trades).

Lets wait and see what unfolds.

In the meantime....

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Duane Shepherd

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

Currency Analyst/Trader

Contact: shepherdduane@gmail.com

Twitter: @WorldWide876

Facebook: DRFXTRADING
Website: www.drfxswingtrading.com

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MAJOR BREAKOUT TO CONTINUE ON CHF JPY - new science of forex trading system

MAJOR BREAKOUT TO CONTINUE ON CHF JPY ~ new science of forex trading system

Following the start of a sharp Bullish breakout from its large Pennant Consolidation, this pair has taken a bit of a pause before it resumes the sharp rate of gains for the Swiss Franc. This pause in the breakout is what I refer to as the Mid Point of the Breakout. It is where the pair will form a smaller pattern of Consolidation such as a Pennant or Range before continuing to the major target of the Breakout Equivalent.

Whenever Consolidation patterns are broken, they will ultimately go to this Breakout Equivalent target before either pausing for a very long time or reversing all together. This concept can be seen across all time frames and for both Ranges and Pennant Consolidations. The accurate measurement of this target helps traders to confidently identify their Limit Orders in their trade setups without the need to monitor the trade for signs of pullbacks. One can confidently leave the trade to move towards this area knowing that this target will be hit 95% of time once identified.

There are times when the market will move quickly to this area with very few pullbacks along the way and there are times when it takes a breather before resuming its breakout. If it takes a pause during the breakout, it will provide another profitable entry point for traders who would have exited their first trade at this area.

The larger the Consolidation, the larger the breakout and the greater the distance to be covered to reach its ultimate target. Given the size of this Consolidation on the Daily Chart of the CHF JPY, traders have a very large number of Pips that they will be able to capture once the breakout resumes.


DAILY CHART

This breakout has taken place within the context of a strong Uptrend that began from a low of 78.35 in July of 2012, providing added momentum to this Bullish move.


DAILY CHART

The Bullish signal that started the breakout came on November 3, following which the pair rallied quickly by 647 Pips over a 25 day period.


DAILY CHART

After reaching this area, we can now see the gradual formation of a possible Consolidation setup in the form of a Range. If we see a U-Turn from its current price in the next few days towards Resistance, the Support and the Range will be complete.


DAILY CHART

If we then see a strong enough Bullish Breakout Candle to resume the breakout, we will enter accordingly to take advantage of the rally. Assuming this Range is formed, we would now have two possible targets to aim for during this breakout.


DAILY CHART

After ensuring that the trade setup meets our criteria, we will then need to decide which of these targets to choose. We could see the pair rally towards the Breakout Equivalent of the Range and then pause for a few days or weeks before continuing to the 2nd Breakout Equivalent. It could also bypass that 1st target with very few pullbacks or pauses to then hit the 2nd target. This decision can be avoided, however, if our targeted range of Pips is achieved prior to these areas being reached. If on the other hand, our target range coincides with any of these points, then our Limit Order will be based on our criteria for trading these types of scenarios.

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Duane Shepherd

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

Currency Analyst/Trader

Contact: shepherdduane@gmail.com

Twitter: @WorldWide876

Facebook: DRFXTRADING
Website: www.drfxswingtrading.com

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3 Wave Rule Denies Traders Sharp Gains on GBP CAD - oracle forex trading system

3 Wave Rule Denies Traders Sharp Gains on GBP CAD ~ oracle forex trading system

After starting what appeared to be a strong Bearish breakout from its Consolidation setup this week, this pair has now started to pull back sharply Bullish, much to the chagrin of Currency Traders. As surprising as this may have been to some, there was a key Technical Factor at work that was always going to have a hand in this reversal that my traders were aware of - the 3-Wave Rule of trends in the Currency Market.

There are generally two types of trends that are seen in this market. They will either be sharp and fast with very few pullbacks or slow and steady with waves of U-Turns along the way. Whenever they take the form of waves as was the case in this Range breakout, they will usually pullback and reverse after 3 of these waves are completed. Following this, the pair will either take a break before resuming the trend or start a new trend in the opposite direction (Section 9 - “Consolidation Trading on the Forex Market - A Complete System for Illiquid Market Conditions”).

As we see in the chart below, this is exactly what has taken place following the start of the downtrend at Resistance.



 DAILY CHART - GBP CAD

The size of the Range, the three strong waves of bearish signals and the breakout at Support, should have meant the start of large Pip gains for short traders in the days that followed. However, as with the other Technical Factors that lead to False Breakouts in this market (Section 6), the 3-Wave Rule would not be denied. After a few days, the currency pair started to pullback with Bullish Candles to deny me and my clients valuable additions to our growing trade results.


 DAILY CHART- GBP CAD

Spotting these pullback areas is key to choosing the currencies that can be traded successfully and side-stepping those that will lead to losses. From this point, we could have two alternate scenarios playing out in the days ahead. In the first, this pullback could only be temporary, giving way to a strong U-Turn after testing the Support of the Range.


DAILY CHART- TEST OF SUPPORT

In the second scenario, this pullback could actually be the start of a Bullish reversal, supported by what would be the formation of Double Bottoms below this Range.


DAILY CHART- DOUBLE BOTTOMS & BULLISH REVERSAL

We would then see the pair rally sharply back inside the Range to the Resistance boundary, over 300 Pips away.

Setups and scenarios like these can be seen across the currency market on all pairs and on all time frames with Japanese Candlesticks. False Breakouts are a common occurrence and the 3-Wave Rule is one of the main reasons that they take place to surprise the unprepared trader. Once these and other important factors are incorporated into a comprehensive trading plan, more gains than losses will be realized, providing you with  profitable trading results each month.

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RECENT EMAIL FROM CLIENT

________________________________________

________________________________________

Duane Shepherd

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

Currency Analyst/Trader

Contact: shepherdduane@gmail.com

Twitter: @WorldWide876

Facebook: DRFXTRADING
Website: www.drfxswingtrading.com

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