right triangle formation EUR/USD hourly
I’ve spotted a right triangle formation forming in the EUR/USD hourly charts as evidenced by this:
The purple lines are the high/low/close 34 EMA. The trend is mildly up but not enough to look for a swing trade. I’ll be looking for a momentum trade and for the USD to push the EURO down below 1.1750.
When is the best time to trade forex?
I’m posting this because I searched for the answer for a little bit today:
EUR/USD
During the Asian session, the Euro trades 15% of all volume but it can still have a good move.It trades 39% of all forex volume during the European session.
GBP/USD
The pound trades lightly before and during the Asian session but has good moves.The market can be quiet in the middle of the Asian session.In the European session ,GBP/USD accounts for approximately 23% of all forex trading volume .
USD/JPY
During the Asian session,USD/JPY accounts for approximately 78% of all forex volume.This drops to about 17% during the European session but price can be on the move all day.
——————————————-
The Asian session opens at 0.00 GMT or 7 PM EST and closes at 9.00GMT or 4 AM EST.
The European session is the largest market and opens at 7.00GMT or 2AM EST and closes at 17.00 GMT or noon EST.
The US session opens at 13.00 GMT or 8 AM EST and closes at 22.00GMT or 5 PM EST. The best trades occur in the first 3 hours.
Near-sure-fire FX trading tactic
Funny I just mentioned this yesterday but in an interview with Barbara Rockefeller, she states that a "near-sure-fire FX trading tactic is to watch a breakout move in the London morning get transformed into a second breakout move in the New York morning… will probably be repeated in the Asian time zone."
Example:
USD/JPY has major move at 11 a.m. this morning New York time. London traders then exit the market and take a profit between 12 noon and 1 pm New York time. Then the move comes back and surges lower between 1 pm and 3 pm New York time. New York traders then exit the market with profit taking between 4 pm and now. She states that, "If the moves comes back and surges to a higher high by 1:30 pm, when the US market is winding down, then you know it has legs of its own and will probably be repeated in the Asian time zone."
So from this I would think that during the Asian time zone this evening, the USD will be pounded yet again..
November 22nd CFTC report released
CFTC report was released today due to Thanksgiving holiday. No flips this week compared to last. Interest in the USD increased a bit. Check out Forex Volume
Inside the Numbers: Volume 2
This information may be known off the top of one’s head if you are a professional trader but not to me:
Currency pair with greatest interest rate differential: NZD/JPY (7.0%)
Currency pair with smallest interest rate differential: GBP/USD (0.5%)
Interest rate differentials:
| Currency Pair | Interest Rate Differential |
| EUR/USD | -2.0% |
| GBP/USD | +.5% |
| USD/JPY | +4.0% |
| USD/CHF | +3.25% |
| USD/CAD | +1.0% |
| AUD/USD | +1.5% |
| EUR/GBP | -2.5% |
| EUR/CHF | +1.25% |
| NZD/USD | +3.0% |
| EUR/JPY | +2.0% |
| GBP/JPY | +2.0% |
| CHF/JPY | +.75% |
| GBP/CHF | +3.75% |
| EUR/AUD | -3.50% |
| EUR/CAD | -1.0% |
| AUD/CAD | +2.5% |
| AUD/JPY | +5.5% |
| CAD/JPY | +3.0% |
| NZD/JPY | +7.0% |
| GBP/AUD | -1.0% |
| AUD/NZD | -1.5% |
Have a plan and stick to it
I had a plan last night and I stuck to it. According to the 34 EMA, the USD/JPY was trending up so I was looking for a swing trade. The Yen did bounce off the resistance line and I entered a 1 short position at 119.48 (currently up 55 pips). I opened another position when the pair declined to 119.20 (currently up 28 pips)
From my studies last night, my first profit target is 118.76 which the pair is approaching. It currently trades at 118.87. If it breaches this level, I’ll look for the pair to retrace to the 38.2% fibonacci level at 117.32.
Inside the Numbers : Volume 1
Most Consecutive Up Days: 10
CAD/JPY has had 10 straight up days since 11/14/2005 when the pair opened at 99.15. The pair is currently trading up for the 11th day at 102.50.
Profit in pips since 11/14/2005: 335
Source for information below: Investopedia
Why would the CAD/JPY rally? As we mentioned earlier, the Canadian dollar is a petrocurrency that has received a tremendous boost from the stratospheric rise in the price of crude. The yen, on the other hand, is the principal victim of high oil prices because it is the only highly industrialized country in the world that must rely on imports for 99.5% of its petroleum needs. The CAD/JPY, therefore has an 89% correlation with the price of oil.
Canny traders who bet on an oil rally could have expressed that opinion very effectively in the currency market through a long CAD/JPY position. Even better, they would have harnessed a positive yield differential in the process. With the loonie currently yielding 2.75%, while the yen rates remain at 0%, the interest rate differential alone was 275 basis points or 27.5% annualized using a standard 10:1 leverage factor. (This essentially means that since FX traders can use $1 of capital to control $10 worth of currency, the gain from the 275 basis point differential will be 10 times larger than if traders did not use leverage.)
{mos_ri}
Technical Analysis of Stocks & Commodities
I purchased the December issue of "Technical Analysis of Stocks & Commodities" this weekend at Barnes and Noble.
I want to mention some key points contained in the magazine interview with Barbara Rockefeller. She is a trader specializing in foreign exchange, with more than 20 years of institutional experience.
What She Reads
Wall Street Journal, Financial Times, Reuters, MarketNews, Bloomberg Market News, The New York Times, The Economist, ForeignAffaris, Business Week, Forbes
When She Works
Barbara prepares 2 newsletters a days that are purchased by big institutional firms. She takes price data at 5 am, which is the most liquid time of day in FX, and prepares her charts. Her morning report includes charts with 2 moving averages, a linear regression channel, relative strength, and momentum, plus any obvious hand-drawn support and resistance lines
Read more to find out why she isn’t a good trader.
Can I Get Rich Trading Currencies?
I’ve been wondering whether my Foreign Exchange experiment is going to pan out. I remain enthusiastic of the prospect of quitting my day job to trade full time but in all honesty, I haven’t heard too many success stories.
On a side note, it’s amazing how many forex related websites there are. I’ve noticed 2 things about a majority of them:
1. They have outdated content which I can only assume was run by someone who burned through their account and gave up on currency trading. I often wonder if I would continue to run this site if I didn’t trade anymore. I doubt it.
2. They promise success and riches but only if you pay them.
Getting back to success stories, I read a little about John Henry, the owner of the Boston Red Sox who made billions following trends in Futures, Foreign Exchange and Fixed Income. I found an article about him from 1996 which was before he owned the Red Sox and therefore was more known for his trading expertise and not for winning the world series. John Henry success story here
I still don’t know if I can make it in trading. I need to become a lot more disciplined and exit trades when they aren’t going my way instead of waiting for my luck to turn.
EUR/USD Support and Resistance
Support : 1.1700
Resistance : 38.2% fibonacci and downtrend line: 1.844
The Comments by the Fed yesterday lifted the EURO a bit in overnight trading but the downward trend has taken over once again.
Traders who usually exit their positions on Friday will probably do so today before the Thanksgiving holiday. Expect lighter than usual volume.
Next week will bring a plethera of economic reports…
