Jul 22 – Market Analysis

General comments

Finally, this week is a bit lighter on the news front across the board, unlike last week where there were several heavyweight items on the schedule for GBP and USD.  US equity markets rallied to record highs over last week.  European markets rallied but are still below their early 2013 highs.

The daily candles on all the JPY pairs look very ugly at this moment – I am assuming that this has to with upper house elections in Japan overnight (as listed on forexfactory.com).

Today’s analysis is going to take less time (I am thinking I might be done by 9am German time, and have time to go to the local café for my first injection of caffeine! – fingers crossed!).

Change in sentiment – Following the close of the weekly candles, GBPJPY has changed to bullish. EURJPY has turned to bullish.  This is showing weakening of the Yen.  Coincidentally both pairs have transformed into S1B environments.

Rankings – No change over the last few days.  EUR is still the strongest with USD and CHF a bit behind.  GBP, JPY and AUD continue to be the weaker pairs.

Review of pairs in S1/S2 setups (and that reflect a strength/weakness combination)

EURGBP – Retracement has occurred, but there’s no bullish PA.

GBPCHF – Retracement has occurred, but there’s no bearish PA. Also pair is very choppy.

GBPUSD – Retracement is currently occurring. Cable is in fact approaching the moving average on the D chart from below.  No bearish PA on this so far.  I am still looking to go short, even though I have had two losers on this pair.  Each trade is independent.

EURJPY – new S1B.  No retracement thus far.

USDJPY – no clear bullish PA at this point – thank God I didn’t enter a trade on this pair last week! 

CHFJPY – No clear retracement thus far.

Thus there are no new orders to enter into the market.

Discipline Strategy

Both trades are still open at 8am UK time.  Checked the equity markets and the FX charts as usual.

This will be the last week of me doing the discipline strategy.  As of next week, I will be based in the London office for all of Aug and Sep, and will experiment performing the STAM analysis in the evening time instead.  I feel I have learned something from doing some 70 trades using this strategy:

  • Being ready for the markets at 6.30am/7am every day is difficult, and will grind me down unless I go to bed at a reasonably early time
  • I need to concentrate/focus and follow a check-list when I enter orders into the market – it’s possible to make mistakes
  • The FXCM brokers tends to work better than CMC
  • Running strategies with small targets and gains really shift the odds against the trader, because the bid-ask spread becomes very large proportionally and thus the trader must be really good at correctly predicting in order to overcome this cost
  • It is possible to very disciplined (following the rules) in entering and managing trades – I didn’t have any problems with that., 



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