Trend for 12th of January 2012

I haven�t written a post on the blog �Trend� for over a month. I want to renew writing my posts. I won�t do it every day, but hope to renew the blog a few times each week. 

Today I will write a short post on my expectations about gbp/usd pair. If you look at daily chart, you will see that the security is at a very important support level of 1.5270-1.5300. The last time the pair visited the level was on the 6^th of October 2011. It isn�t a very long period of time, but I still expect the area to hold and pound to strengthen against the greenback. This prediction of mine is based on general technical market tendencies. We more often see a reversal at important support and resistance levels rather than breakouts.

Although RSI indicator is not too much oversold yet, it does not mean the 30 level on indicator has to be reached by all means. No, my intuition says we have to follow price action in this situation on not start selling a breakout. Let the pair play a little in a range and when the breakout time comes we will have sat in a tight range for quite a long period of time. At least I hope so. And then, down we will go.

Hope this short market trend analysis was useful.

See also:

Resistance

Support

Day trading

Disclaimer

Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.

Trend for 18th of September 2011

Hi, market trend analysis fans. My pc is still not repaired, so my post will again be short today, with no charts attached. I hope that I will come back to normal posting in the middle of this week. 

Today I wanted to pay your attention to eur/usd pair. You saw that it stopped falling last week and was mildly rising throughout all of the week. However, if you carefully look at the pattern in which it was rising you see that it might reverse and start falling again this week. 1.3750 level is support now, but when broken we will definitely see the most recent bottom of 1.3500 and nobody knows whether the pair will stop there.

It seems to me that the security will visit 1.3000 level somewhere this year. In my opinion eur/usd will continue going down in a downward channel creating shorting opportunities in counter trend moves (rallies). Wait for reversal patterns there. 

It is important what happens during European session on Monday. If support breaks, I believe we are going to see much lower prices in eur/usd sooner rather than later. Let us wait for the morning. Do careful analysis, before you make any serious trading decisions.

See you tomorrow.

Disclaimer

Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.

Trend for 16th of September 2011

Hi guys. It is the third day I am sitting with an old pc of mine, which does not work very properly, therefore I can simply remind you a few things till my computer will be fixed. Today I wanted to stress the importance of looking at the big picture. How can we do it? By looking at long term charts. That�s how you should start your market trend analysis. 

You should always remind yourself whether the market you are studying is in a big move, range or is going sideways. Daily charts, with the help of 4 hour charts can help you to do it. When you see that you are in a move, wait for counter trend moves and when they are over jump back to continue going in the direction of a trend.

If the market is ranging, wait for it to reach important resistance or support levels and reverse there (after forming a reversal pattern). And if the market is going sideways, I would simply stay out of it and wait for better opportunities. 

Hope that helped. See you tomorrow.

Disclaimer

Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.

Trend for 15th of September 2011

Hi everyone who enjoys my market trend analysis. I am not sure if you can enjoy it much these few days, because my computer is being repaired now and I have to work with the old horse I am working with now. So, my posts will be extremely short for about five or six days. At least I hope so!

Today I just wanted to remind you about the fact that in trading a range you have to look at support and resistance levels. Markets are now in awful ranges and the best way to trade them is to simply wait for a security to go to a resistance (or support) level form some reversal pattern (123 or head and shoulders) and reverse. If you learn to do that you will become a professional range trader. 

See you tomorrow!

Disclaimer

Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.

Trend for 15th of August 2011

Hi, everyone. Let me do a quick market trend analysis for today. Contrary to the usual way markets behave on Mondays we saw some pretty cool volatility today in Forex. US dollar collapsed and most probably you know why. The news from United States was very bad and markets reacted very negatively. You should never forget that this kind of reactions are often short term and the next day markets can come back to where they were before the news release, but there are often opportunities to use those events to make money.

Unfortunately, today did not look like a very good day for that. Dollar was falling around one hour before the news was released and when the news finally hit the market it had already travelled more than half the distance it covered after the release. So, I think it would have been a good idea to take a day off and not to trade the release. Maybe one could have used day trading opportunities, but that depends on personal preferences and trading style. I hope there would be more fashionable moves in the coming days this week. 

See also:

Trading divergence

Bollinger bands

Disclaimer

Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.

Market trend analysis for 8th of July 2011

Yesterday�s leaders become losers today

 

Hi, everyone. The trading week is over and let me do my market trend analysis for today. Markets had reversals after yesterday�s moves. Yesterday�s winner Euro became a pretty big loser. Currency pairs formed reversal patterns over Asian session and collapsed during European session. You can clearly see it in eur/usd and eur/jpy, the pairs that skyrocketed yesterday. If you looked at yesterday�s price action in those two pairs you might think that you are looking at one security (such great similarity in price action of both pairs!). eur/jpy even did not stop falling today. And news from US accelerated the fall even more. Let us look at some possibilities to trade currencies today. 

Learn to analyze market trends before trading them

 

Nonfarm payrolls has always been a very important event in financial markets. As far as I remember, looking back to my trading experience of 8 years, this piece of news has always created great volatility, especially in forex exchange market. I traded quite many of these events and know that it is both risky and profitable. You would have been profitable trading most pairs today. I have noticed that commodity currencies (usd/cad, nzd/usd and aud/usd) perform worst during those events, so I would not even analyze them while preparing for trading the event. You could have been profitable trading eur/usd, gbp/usd, usd/chf and usd/jpy though. 

Let me look at gbp/usd pair and see how it was possible to trade it during the event. I hope you will be able to do your own analysis for other pairs after that. I believe you have to learn analyze markets trends first before trading them. This gives you a background for profitable trades. It is good if you are able to scroll back your charts and do analysis of the whole year looking how markets reacting to this or that piece of news. Then you can create the best trading strategy with various filters to filter your trades. 

The way that you could trade gbp/usd today

 

When I look at 1 hour chart in gbp/usd I see that perfect resistance and support levels for placing your orders were 1.5985 for going long and 1.5930 for going short. The first order for placing had to be long as the price was further from the level 5 minutes before the news release (see my post about forex news trading to understand better how to trade the events) and sell stop had to be placed 1 minute before the news came out. The market was moving downwards just before the announcement. It is better if you place the order as further away from the price as it is logical (in case markets suddenly start moving upwards when news comes). I think 1.5920 level would have been good for selling the pair. 

So, news came and gbp/usd exploded upwards. You could move your stop loss order together with the market placing it under valleys of 5 minute chart. That would have gotten you out of the market at 1.6053 level. 

Hope you enjoyed the market trend analysis.

See also:

Forex news trading

EUR/AUD

Disclaimer

Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.

Market trend analysis for 7th of July 2011

New page about eur/aud pair

 

Hi, everyone. Let me do a market trend analysis for today. I want to remind that I have started a few new pages that deal with specific currencies and I am intending to start a few more. Today I wrote my first post on eur/aud pair and you can find it on upper part of the page on the right. I will be updating those pages at least once a week and hope you will enjoy them and find something useful to implement in your trading. Let us go to trend analysis now. 

News from Europe strengthen Euro and weaken US dollar and Yen

 

News from Great Britain and Europe (Interest Rate Decision) created huge daily trends in financial markets today. USD and JPY were beaten really badly. Euro was the champion of the day. British pound remained pretty weak throughout the day. Eur/jpy and eur/usd were probably the best candidates for long trades. Of course, you could have taken eur/aud or eur/gbp too, but if you want some orderly pairs eur/usd and eur/jpy would have been the best choices. Eur/gbp could be difficult to trade for we had news coming from both Europe and Britain at an interval of 45 minutes and to play one currency against the other could have been problematic. 

Nice possibility to go up in eur/jpy after the release

 

Let us look how you could use the news event for trading eur/jpy. If you have been reading my posts I think you could tell by heart now the principle that I use for trading these events. I try to define support and resistance levels and place orders below and above them to trade breakouts that happen after economic news is released. In case of eur/jpy you had to place a buy stop order above 115.95 level for it was resistance with a stop loss order below 115.51 level, for it was support and wait for the market to break out upwards. You then had to move your stop following peaks and valleys principle (placing stop loss below 5 minute valleys). This would have gotten you out at 116.58 level, where your stop loss would have been taken away (in the plus zone). 

Was the upward trend true or false today?

 

If the break was not fake, we are going to see a continuation of it tomorrow. How to test it? We have to wait and watch price action around support level now. It is in the area of 116.20-116.40 area. If the pair goes down to this area and forms 123 pattern we can go long again at the break of point number 2 in the pattern. Read my post on 123 pattern to understand better what I mean by that. If the pair does not form a reversal at the area we will have to conclude that the breakout upwards was false and we are going to see a continuation of a downtrend in eur/jpy. 

Hope you enjoyed my market trend analysis. 

See also:

123 pattern

Breakout

Disclaimer

Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.