EURO USD TRADING GAIN AHEAD OF STRONG REVERSAL - forex lines 7 trading system review

EURO USD TRADING GAIN AHEAD OF STRONG REVERSAL ~ forex lines 7 trading system review

The EURO USD provided us with a small trading gain of 46 Pips on Thursday as we took advantage of the sharp Bullish Reversal that was predicted in December 2015. The original trading target was 165 Pips but by the end of the Holding Period established for this trade this had not been hit, obligating us to close our trade for the smaller profit. During this trade, a sharp bearish pullback had threatened our Stop Loss, coming within 5 Pips of taking out our trade. 

This pullback would have tempted many to exit the trade for fear of being stopped out. However, thanks to the rule that we have of never looking at our trades while they are open, we were able to capture this trading gain as the market u-turned and rallied once more. As a result, this trade, combined with the 138 Pips from the GBP USD, has now given us a good start to 2016 with a Rate of Return of 9.4%.

The screenshot below is taken from the Private Video Analysis we did for the EURO USD in December which predicted the sharp rally. 

As can be seen from the current patterns for this pair, this was exactly what occurred in the last few days. This provided us with the trading gain as we entered at one of the Bullish Candlestick Signals.

The chart below shows our Entry Setup on the 4 Hour Chart, including the original target that was set at the Resistance Boundary of the Range.

Entry and our Stop Loss placement were done using this ABC setup - a setup that was predicted a few days earlier...

Now this is where it got interesting. For traders who choose to follow their trades, the pullback that took place after entry would have led many to close the trade as the market began reversing towards the Stop Loss.

This would have led to an unnecessary loss instead of the trading gains offered by the rally that eventually took place. The temptation to monitor our trades while they are in motion is very common. It is very natural to want to ensure that our trades are heading towards our targets without any pullbacks that threaten our Stops. While this can prevent some losses, it is a habit that can affect our long-term profitability. 

The Forex, like all markets, has a natural tendency to move in waves towards its daily, weekly, monthly and yearly targets. This reflects the changing value of currency pairs in response to changes in economic fundamentals and investor sentiment. It is therefore necessary for us to expect this for all our trades and not interfere. This is why it is crucial to adjust your platform so that you do not see the chart of the trade open nor the balance but only the tab that shows you whether the trade is still open.

Another important issue related to this trade was the Holding Period. Keeping our trades open for too short a period can curtail our profitability while having them open for too long can expose us open to unnecessary volatility. It is for this reason why a specific time period is used for each type of trade to establish a balance between these two extremes. 

When the Holding Period for this trade had ended, we had to close the trade regardless of the floating profit/loss at the time. This decision was later proven to be accurate as you can see from the pullback now taking place.

This trade highlighted many of the important things we need to succeed at trading over the long-term. These relate to the technical factors that determine our decision to execute a trade but more importantly the emotional aspects of trading - the traders Achilles Heel. 

Watching our trades can feel like the right thing to do to ensure profitability given the volatility of this market. However, this can be a serious hindrance to success if this leads to the habit of constantly closing trades before they have a chance to hit our targets. By adhering to the rule of not watching your trades and obeying the Holding Period, you will be assured of maximum gains for each trade ahead of sharp market reversals.

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NZD CAD SHARP 800 PIP FALSE BREAKOUT AS FORECAST - mtf forex trading system

NZD CAD SHARP 800 PIP FALSE BREAKOUT AS FORECAST ~ mtf forex trading system

The last time we examined this pair in April this year, we had projected a sharp decline in favour of the Canadian Dollar based on the False Breakout pattern that had been unfolding. In the chart below, we can see that the Bullish Candles that attempted to break out long from the Pennant were eventually taken out by the slow Bearish Candles that took us back inside of the Consolidation.

DAILY CHART - FALSE BREAKOUT 

Based on this movement and the fact that False Breakouts usually lead to breaks at the opposing end of the Pennant, we had projected the pair to break towards the major Outer Uptrend Line.

DAILY CHART - PROJECTED DECLINE 

Looking at the current situation on the Daily Chart, we can see that this forecast had in fact materialized over the last few weeks. Starting from the high of the start of the reversal, the pair has declined sharply by approximately 800 Pips.

DAILY CHART - SHARP DECLINE 

Now, how could you have taken advantage of this profitable move?

Having seen the start of the breakout below the Support of the Pennant, the first thing to do would have been to draw the Downtrend Lines that were being formed.

DAILY CHART - DOWNTREND LINES 

These Downtrend Lines can be used for the placement of Stop Losses with the assurance that your profits will be protected throughout the trade. The next step would have been to enter short at around the 0,9100 area, with a Stop Loss of 100 Pips placed above the Inner Downtrend Line. Your Limit Order would initially be set to the Outer Uptrend Line for a profit of 370 Pips.

  

DAILY CHART - ENTRY SETUP

As the market began to move in you favour, you would have moved your Stop Loss lower, breaking even initially and then locking in profits below your Entry. This would have continued until the market started to reverse bullish just above the Outer Uptrend Line target. Your Stop Loss would “sadly” have been taken out and you would have pocketed 300 Pips in gains.

DAILY CHART - 300 PIP PROFIT

This is one of the ways in which Breakouts and False Breakouts can be profitably traded in this market. Many of these opportunities are likely to continue to present themselves for us given the current environment of low liquidity that now characterizes the major Currency Pairs. As Swing Traders, we simply need to spot these setups and the appropriate signals provided to take advantage of them, for continued monetary reward.

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NZD JPY BULLISH SIGNAL NEEDED FOR LARGE GAINS - professional forex trading system

NZD JPY BULLISH SIGNAL NEEDED FOR LARGE GAINS ~ professional forex trading system

Consolidation, Consolidation and more Consolidation. When will they end? Only the policy makers at the major Central Banks and the key market players know the answer. Until then, our responsibility as traders of the Larger Time Frames is to accurately spot them, analyze them and trade them for large gains. We do this by using the trading rules established for trading these patterns in my Trading Manual and waiting patiently until our targets are hit.

The next major setup that could provide such an opportunity is on the NZD JPY. This has been moving sideways towards the major Inner Uptrend Line following the end of a very long 5 -year rally.

DAILY CHART

The sideways movement can be seen more clearly on the next chart where a Range setup appears to be taking shape.

DAILY CHART

This 390-Pip Range would be completed with a rally to the Resistance boundary. A few hundred pips would be ours for the taking if we see a strong Bullish signal above the Downtrend Line (DTL) and the Counter Trend Line (CTL).

DAILY CHART

Once this appears, we can enter immediately with the appropriate Stop Loss and Limit Orders, using the Daily and 4 Hour Charts. The exact size of these Risk and Reward parameters will depend on the patterns formed when the signal appears, so long as they are within our limits set out in our Excel Worksheet.

Take full advantage of the low market volatility by maximizing on these large Consolidation setups. Trade them on your own using the guidelines established in the Trading Manual or execute them directly from my Trade Setup emailed to you as a Subscriber.

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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 

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KIWI DOLLAR TEMPTING BEARISH SIGNAL FOR HUNDREDS OF PIPS - super max forex trading system.part1.rar

KIWI DOLLAR TEMPTING BEARISH SIGNAL FOR HUNDREDS OF PIPS ~ super max forex trading system.part1.rar

This pair has been in a very large Pennant setup for the last 3 years since the end of the strong 2-Year Uptrend between 2009 and 2011. We have been hovering on top of the Resistance of this Consolidation for the last few weeks and could see the start of a new Downtrend to carry us back down to Support. A strong Bearish Candle signal has been given in this regard below the current Uptrend Line and this Resistance, but the accompanying setup for the signal is too weak to justify entry. Nevertheless, a stronger setup could materialize this month to either continue the break Bearish, or provide a platform for a strong Bullish reversal.

The strong Uptrend that came to an end represented the return of Risk-Appetite to the market following the period of Safe-Haven buying of US Dollars in 2008. This has given way to a very wide Pennant within which we have been experiencing waves of smaller Uptrends and Downtrends.

DAILY CHART

 

Closer to home, so to speak, the pair has formed a Range above the Resistance of this Pennant. It has now broken the Support of this Range as well as that Resistance boundary to possibly start a very strong Downtrend. In the process, it has also broken below an Outer Uptrend Line.

DAILY CHART

Taking a closer look, we can see the strong Bearish Candle that broke below these barriers. On the face of it, this could be a signal to start entering short to take advantage of the potential drop of just under 400 Pips.

DAILY CHART

 

However, the setup is neither a Consolidation nor a strong Counter Trend Line - setups that you would expect/require after a large 300- Pip decline. This means that until we have a clearer, stronger setup at this crossroads, the chance of a Bearish trend is now equal to that of a Bullish rally that breaks the Downtrend Line.

While the market provides us with this setup that we need before trading, it is important that we constantly review past examples of this scenario. This will allow us to confidently trade the new signal in either direction and capture hundreds of pips that are likely to be on offer for us.

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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 

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GBP JPY STRONG BREAKOUT STARTED ABOVE LARGE CONSOLIDATION - my forex trading system

GBP JPY STRONG BREAKOUT STARTED ABOVE LARGE CONSOLIDATION ~ my forex trading system

This pair has been in a very strong Uptrend that began in 2012, forming an Inner and Outer Uptrend Line and 2 Large Pennant Consolidations. 

DAILY CHART - STRONG UPTREND

We can now see that it has started to breakout from this 2nd Pennant with strong Bullish Candles above Resistance.

DAILY CHART - PENNANT BREAKOUT

The manner in which this started is one of 3 ways in which these Consolidation setups tend to be broken in this market.

1) The First is when the market simply provides a Single Breakout Candle without any pullbacks;

2) The Second way is when the market pulls back on the inside of the barrier and then U-Turns to provide the breakout signal;

3) The Third way- which is what has taken place here - is when the market initially breaks the barrier, U-Turns to test the barrier before U-Turning to give the signal that leads to the breakout;

These alternate forms can be seen in the diagram below taken from the Trading Manual;

DAILY CHART - BREAKOUT SIGNAL

As attractive as this signal has been on the Daily Chart, the size of the Stop Losses required to trade this breakout on the 4 Hour Chart have been too large.

Based on where we would have entered at the close of the Daily Candle, the Stop Loss would have been 332 Pips for the 1st entry option. With the 2nd Bullish Signal, the Stop would have been 169 Pips- both of which are too large for the average Retail Trader.

4 HOUR CHART - ENTRY SIGNALS

So the overall setup and breakout signal on the Daily Chart were strong, but unfortunately can’t be traded based on the Stop Losses required.

In these situations, we simply either wait on another setup on this pair that offers a smaller Stop Loss, or move on to another pair.

VIDEO ANALYSIS OF GBP JPY, MAY 13, 2015

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LARGE CANDLE LEADS TO NZD USD REVERSAL AS EXPECTED - launch pad forex trading system

LARGE CANDLE LEADS TO NZD USD REVERSAL AS EXPECTED ~ launch pad forex trading system

As was predicted in a recent Private Video Analysis for Subscribers, the NZD USD has begun to show volatility that is typically associated with Large Candles. This Candle appeared as part of an ABC Setup at the Support Boundary of a Range Setup on the Daily Chart as the pair heads to Resistance. Despite the strength of this Signal, I warned that trading this Candle or any other that followed would be too risky based on the theory behind Large Candles across all time frames. 

As we would see the following day, the market began to pullback with a strong Bear Candle that would have taken out Long Positions that may have been opened - justifying our decision to avoid trading this pair.

The video below shows the analysis that was done last week and the rationale provided about Large Candles.

There are 3 main types of Candlestick Signals. One of these is the Large Candle that is very risky to trade. It is usually associated with pullbacks and sideways movements instead of profitable trades. This can be very tempting to trade because of their strength but unfortunately this is one of the traps of the Forex Market that can take us by surprise. As long as you are aware of this type of Candle and the reason they are dangerous to trade, you can focus your trading on the other 2 Candles that lead to profitable trade.

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