A Rob Booker Exclusive Treat
EUR/USD March 10, 2006
Here is a great Head and Shoulders pattern. They are super reliable, and fairly easy to trade. Here is the chart. We want to sell below the neckline, and go long above the trendline connecting the head to the right shoulder.
; "rob booker head and shoulders")
March Issue of Currency Trader Magazine
After all of our comments regarding the lack of substance regarding ichimoku chart analysis, the March issue of Currency Trader Magazine fills the gap. There is a 6 page article, "Demystifying Ichimoku analysis." I'm looking forward to reading it. In addition, the new issue contains:
-Dollar Bull: Can the buck stay a step ahead of pundits?
-Japanese Yen: Marching to its own drummer
-Currency Basics: All about the interbank
-Currency System Test of the Trend Strength Indicator
Content Removed: Download from http://www.currencytradermag.com
I took a beating today
I took quite a beating today knocking my profit/loss down into the red. I’m down $1300 this week. As my losses started piling, I started to let my emotions get the best of me. Today has really made me scratch my head and wonder what I’m supposed to do now. Yesterday I was stating how in the flow with the market I felt and how everything on the charts was making sense but today really knocked me for a loop. I look at the charts and it’s almost like I’m looking at another language. Now nothing seems to make sense.
I have to say that I could kind of see this coming. Do you want to know what my biggest mistake has been this week? It has been my inability to let my positions run their course. I’ve been foolish on every trade this week. I’ve found that I’m not even setting limits most of the time and when I do set limits, I totally disregard them. I’m entering on a setup on the 240-minute chart and exiting on a 5 minute just for a little profit. Today I gave up quite a lot in profit because I just wanted a little bit. Then I was willing to let 1 trade go 50 pips lower before closing it out. My money management has been poor and I’m paying for it literally.
I will have to learn from these mistakes and move on. What’s gone is gone. I should actually feel lucky that I’m not down more.
No wonder I’m starting to salivate at the thought of paying $1000 for an online seminar. They must reel you in when your most vulnerable. Help. 
Busy Trading Week
I’ve been keeping a close eye on the charts this week. I have never quite felt out of the market whether I’m studying the charts or thinking about what might happen next. While this can be mentally draining, I feel like it is necessary for my training.
I’ve kept the indicators on my chart quite busy this week as they must constantly dodge each other on the screen. Yes, I still have too many indicators yet I don’t feel like any of them should be taken away at this point in time. I am using the following indicators this week:
1. Ichimoku – I love this indicator. I’m still learning to use it. Ichimoku actually means "one glance cloud chart." I’ve found it very useful for support/resistance confirmation. In addition, the current trend can be determined in a glance.
2. Trend Lines – Where would any of us be without these
3. EMA’s – 21 EMA Wave, 8 EMA, and 50 EMA
4. Bandwidth – Similar to the squeeze. This indicator is used to indicate volatility or lack thereof
5. RMOM – An indicator that I developed that uses MACD histogram values to compute whether the existing MACD value is greater than or less than the last up or down segment
6. RSI (7) – Relative Strength Index (7 period)
7. Directional Movement Index
8. MACD(12,26,4)
9. Pivot Point Oscillator – An indicator that I developed that I find quite useful now that I made modifications to it last night. I now paint the pivot point values directly on the indicator. This saves having to plot pivot lines on the price chart. Using the 15 minute charts can indicate trend nicely. See the indicator below:
Rob Booker Analysis Tuesday
From fxcmtr.com:
1 Hour Chart
I really like this one. The trade would come on a close below the redline. The profit target is all the way down at 1.3020, or perhaps 1.3060 for more conservative traders. I would like to just use a 30 pip trailing stop on the trade.
; "Rob Booker")
Waiting for a Yen pullback?
I’m waiting on a Yen pullback. The price has been hanging around the S2 pivot point all day. Depending on where the pair is during the Asian open, I may be shorting this pair if it pulls back a little more. Remember that this pair is trending on the 240-minute and momentum indicators aren’t worth a bit. Right now I’m watching the Directional Movement Index, pivot points, and trendlines. The pair will have to pull back quite a bit for my continued interest, at least to the high 116′s.
The chart below shows the S2 pivot point at 116.08, .09 below the price (bottom red dotted line). The pivot point for today was 116.807 (thin solid black line)
Rob Booker Analysis Today
This information is already stale but good for those of you who want exposure to Rob Booker’s style.
GBP/USD 1 Hour Chart
Friday, the pair broke below the redline, and created a really nice short trade. Here’s what I would consider now: a short trade on a break below the low of Friday, with a target of EITHER of the blue lines shown below. The lowest blue line is the more aggressive target. One way to handle this is to initiate the position immediately on a break below Friday’s low, then move the stop loss to break even when the pair hits the FIRST blue line below. Then use the lowest blue line as the profit target.
; "Rob Booker")
Playing the Odds with a Bearish Engulfing
The graphic below is the weekly EUR/USD chart with corresponding candlestick patterns. As you can see, going into next weeks trading, we are following an engulfing bear. Care to play the odds that this week will see more bearish action? Since 1999, here are the pip profit/loss if going short for the week following an engulfing bear:
+51, +266, +21, +124, -58, +132, +38, +8, +11, +46, -10, +136
Out of 12 weeks, only 2 of the weeks were losing and they were small losses of 58 pips and 10 pips. The average profit was 83.3 pips over the other 10 weeks.
We could very well see another bearish week if we played the odds. I know I will be.
March Issue of Stocks & Commodities
I picked up a copy of the March Issue of Stocks & Commodities magazine this weekend.
There is an article that explains the use of candlesticks and moving average crossover as a strategy. This is yet another setup strategy that I like for its simplicity. As long as you can chart 2 moving averages and identify candlestick patterns, you can use it.
The simple idea is that as moving averages crossover, the candlestick that forms during that crossover can be used to identify the possible direction of the market.
You can read a snippet of the article at http://www.traders.com/Documentation/FEEDbk_docs/ForexFocus/FOREXfocus.html
To read the full article, you need to buy the latest issue of Stocks & Commodities.
