Christmas and SecretFXNews

Excuse the reduce amount of News Trading Reviews, recently I was asked to start writing Daily Prenews signals and analysis for SecretFXTrading.com

If you go there you can sign up for a daily email with the pre-news alerts, which include deviations to look out for and review of price action on previous releases and general overview of the release.

Also I am going on holiday for Christmas, this includes quite a long flight and is a few weeks long, so will get back into forex full steam in mid january.

Long GBPUSD Trade during the European Session - helped by UK Construction PMI

This Thursday morning Dec. 2nd 2010, during the European trading session about 45 minutes after the London Open there was a live online forex trade signal given in the Profitmongers traderoom. It was tempting to jump in long just before the London open as good momentum had been building for the past 3-4 hours as the Asian trading session came to an end, however this was very dangerous as often when London opens for business there is some sort of reversal as dealers and marketmakers try to fill the orders on their books. Also traders in asia will book their gains and close up shop for the day. The British Pound-US Dollar pair, otherwise known as cable did drop some 45 pips just below the 1.5600 handle. The live trade signal was given to enter the market, buying the GBPUSD pair around 1.5590.

Although the chart looks like it moved instantly, this is a 5 minute chart and some patience was required to allow the price to move up in our favour. Time has a tendancy to seem longer when you are a taking risk, such as when a trader has a highly leveraged position on a forex currency pair in the market. Every effort must be made to remain calm and patient and somewhat detached and unemotional, just stick to your rules and let the trade do what it will, yet at the same time remain attentive to price action and the news, ready to react to any situation which might occur which would require the trader to take action.

Profit was taken when the GBPUSD FX Currency pair reached back over the 1.5600 handle and took out the last swing high at 1.5615, although this was a minor swing, likely there were some stops their from those traders who shorted the pair right at the 8am GMT open, as the 2 doji candle right before this time seemed to provide a good entry. Risk appetite had reemerged after a few weeks of sell-offs so it seemed that there was good potential for more upside. With the stop-loss moved to break-even the trade was risk free and the after a pullback of 10 pips of so the UK Construction PMI numbers came out. Last month this number provided a good move although there were other market forces exerting force at the time, perhaps M&A activity or inter-european government payments. Regardless a small positive deviation again helped the GBP take out the important 1.5650 level which provided resistance yesterday and seems to be a natural level for stops to be clustered. Here is the Construction PMI data:

(UK) NOV PMI CONSTRUCTION: 51.8 V 51.3E- No revisions

The expectations for this number had been lowered quite a bit after last months poor number. In fact the expectation was lower than last months number by -0.2. So although this number was +0.5 above expectations, it was only +0.3 above last months poor number. So it did not seem so great, although with risk appetite in the market, especially since yesterday's 13 year high for Manufacturing PMI, just the fact that the number was not so low as last month was enough to get the GBPUSD to rally another +55 pips. The possibility of price getting close to 1.5700 was high but the way price knocked out 1.5650 with a strong spiky up-bar, it seemed more sensible to book the +75 pips rather than wait for another +20 or +30 more. The last pips are always the most expensive. This proved to be a wise choice as the focus of the market moved to the ECB's Claude Trichet speech after their Interest Rate Announcement the market sold off quite handily. It appeared that Trichet was not giving the verbal messages that the market was expecting, however as he spoke it was reported that the ECB was seen in the market buying peripheral debt. This is the Greek, Irish, Portuguese, Spanish and Italian Bonds whose yeild have gone way up. When the ECB buys these bonds the yield go down and this helps the EURUSD pair go up. The GBPUSD followed in along with this move.

Big Futures and Forex News Data Releases for Nov.29th - Dec 3rd

We will be trading these live this week in the Profitmongers live online forex entry signal traderoom
both giving specific info for catching the Price Spike when the news is released using the
Secret News Weapon from Fast Economic News as well as looking for afterspike opportunities 5-15 minutes after the release and longer term forex swing trades in the hours after the news - if the impact is big enough. This is a great week to sign up because there is alot of news the first week of the month. Try the Secret News weapon for 30 days for only $69 and Profitmongers traderoom for 14 days for $29

See the News Trading Schedule for the Week here

London Open Forex Entry Signal in the Live Online Traderoom

The day after thanksgiving, which saw a thin US market and gave the marketmakers a chance to chase and squeeze the traders who were short the EURUSD. After a decent sell off during the London Forex Session yesterday, all of these moves were reversed and the EURUSD nearly achieved 1.3400. As soon as the Asian Session started though more sellers showed up and as European traders woke up this Friday morning they found the EURUSD at news lows again, this time at 1.3265, which is the 61% of the September rally, see on the included Daily chart.

As trading commenced in Frankfurt at 7am GMT (2am EST), the EURUSD initially bounced off this level perfectly - see first circle on the 2nd chart. This produced a decent 30 pip bounce. The news out of the Euro zone continues to be bad. Not only Ireland, but now concerns about Portugal, possibly Spain and even Belgium now. Worries of a domino effect are in traders minds. Definitely the safe trade is to short after a rally, for instance at the Tokyo open last night, but a trader needs to get some sleep. Sometimes as a trader you have to be prepared to take the hard trade, this is the contrarian trade - the trade no one is thinking about. Sometimes it is easy to get caught up in the bad news coming thru the news wire, it can make a trader overlook the technical setups that are occuring right in front of them. Some purely technical traders go so far as to not even listen to the news, to them the price has everything priced into it.

Anyhow despite all the news, this was a significant fibonacci retracement level from the daily and I was prepared to go long a few minutes ahead of the London open. A key candlestick formation on the 1 and 5 minute charts indicated the opportunity to go long - just for a scalp. Naturally using tight stops as the EURUSD is definately in a downtrend and this looks set to continue now below 1.3000, possibly to 1.2800 depending on how the situation progresses. Got in around 1.3255 as a long lower wick doji closed 3 minutes before the London Forex Market Open, then the 5 minute candle confirmed. This also correlated to the big Quarter Century Level in the EURUSD at 1.3250 - this is another forex trading strategy that has merged with existing techniques. Here is a book about this:

Price was a bit indecisive for a few minutes but soon moved up and took out the last swing and hit the target pretty much spot on at 1.3295. One thing to look for around the London Open, and also the Tokyo and New York opens is some sort of reversal. It might be a temporary reversal before the main trend heading into the Open resumes or it could reverse the previous trend and set a new course for price action during the session. Basically the big banks have order books which they must fill, if they have customers who want to sell euros above where the market is at the open, they might buy in the spot market to move price to these levels to settle these customers orders. The market wants to do business, especially if it is a big order or a customer who gives the bank alot of business. It is also a chance to stop out any shorts who jumped in short too soon and were using a typical 20-30 pip stop loss, and also gets asian traders to take profit. All sorts of traders are entering or exiting for various reason and it is helpful to observe the price action during the open and think about what other market participants maybe doing and where they have their stops and limits. The market wants to do business and that means filling stops and limits as it goes.

EURUSD short trade during London Open - Live Trade Room Forex Entry Signal

This Thursday morning Nov.25th 2010 we were live in the ProfitMongers Live Forex Trading Signal and Eduction Room when the EURUSD setup for a nice scalp trade short. It is Thanksgiving so the markets in the USA are closed, however there was still some decent price action during the European Session.

The chart shows how a initially at the 8am GMT London Open the EURUSD moved up to 1.3350, this corresponded with the 50% retracement of Wednesday's sharp move down during the European Session from 1.3413 to 1.3284. We did not get the live forex trade entry signal right on this fibonacci retracement level, rather we waited for price action to confirm a key reversal candlestick formation and some news hit the wires at 8:44am. Basically Moodys said they were placing several Irish banks ratings under review for a possible downgrade. The reaction was not automatic but when price showed us evidence of responding to this we did not hesitate to pull the trigger and enter the short EURUSD trade. As price moved in our favor, more news continued to come thru the news wires which supported the EURUSD short. ECB's Makuch said the Euro was slightly overvalued and then talk of an expected sovereign ratings downgrade for Italy was rumoured to be circulating the dealing desks. We took some profit around 1.3315 and were targeting 1.3290, but stretched this out to just above the big 61% fib of the September rally at 1.3270. The EURUSD 5 minute candlestick did close with a long lower wick doji right at 1.3290 while I was away, so this was a good reason to take the rest here, but regardless the stop loss was moved to lock in profit on the remaining position at 1.3320