Sep30 – Market Analysis

George’s personal notes

The blog should become more consistent again now, as my two-week French course has finished!!

September is turning into an okay month – in terms of the results – I am now up 2.7R after two winning trades on GBPJPY, one winning trade on GBPUSD, losers on GBPCHF and NZDJPY and a break-even trade on EURGBP.

Overall my self-confidence as far as trading is concerned is continuing to grow – that’s good. 

Trade Orders from Thu/Friday

My NZDJPY trade was stopped out.  Unfortunately I never got filled on the short AUDNZD order.  That one collapsed and came quite close to my target, although it never hit the target, getting to a low of 1.1216.  This NZDJPY trade was never more than 20 pips in profit.  Would it have been more prudent to set the entry level to 0.8185 (rather than 0.8195) which was the level of the MA20?  I set it at 8195 because I was scared to miss the trade.  So clearly 8185 would have been better in this case.  However on the AUDNZD I did choose the prudent level and was abruptly missed by a few pips.  No easy answer!

The EURGBP trade – it went 5-6 pips past my break-even stop loss level, and then collapsed and hit my original target – shame!

The Cable trade – that trade as low as 5998 (6 pips above my stop) before rallying again and hitting my full target (at 6110) early on Friday morning.  Good thing I didn’t just exit the trade when it was showing a measly £300 profit and when “I just knew” it was going to be stopped in any case.  I held on and did nothing and managed to get the full £1,800 profit (2.4:1) !!

Market Analysis

European equity markets gapped down this morning and didn’t do very well on Friday.  Similarly US markets are falling. Gold and oil are steady.

Main fundamental news – potential US government shutdown from Tuesday, vote of ‘no confidence’ in Italy.  Lots of news this week – NFP on Friday, Bernanke on Wed night, RBA and BOJ rate meetings (Tue morning and Thu morning respectively)

FX Analysis

EUR, CHF, NZD and GBP still the strong ones with 10-12 points.  NZD is weakening a bit.  AUD, USD, JPY and CAD are clearly weak.  Looking to buy the strong ones and sell the weak ones.  JPY is showing strong momentum on the 4H charts.

Currency pairs with S1 setups that have strength/weakness combinations:

GBPJPY, CHFJPY, EURJPY, EURUSD, GBPUSD, NZDUSD, USDCHF, AUDNZD, NZDJPY

  • The Yen pairs are currently declining strongly.  Wait for bullish price action before shorting Yen again.  Look for Yen pairs that are declining into demand zones, as these would be good buying areas.  GBPJPY – Look to buy around 157.30.  At which levels are the other Yen pairs good purchases?
  • AUDNZD – My corn-trade based order to sell at the 20MA did not get filled.  Price then declined into the demand zone and is now retracing a bit.  Regardless of technical setups, I cannot enter a trade on this pair since the RBA interest rate meeting occurs on Tuesday morning.  No trade.
  • NZDUSD – There has been a retracement on the D chart, at the start of last week, but price has been trading sideways since then.  No setup.
  • USDCHF – No retracement has occurred.
  • GBPUSD – No retracement has occurred.  Can I expect anything significant to happen prior to the NFP figure on Friday?
  • EURUSD – Has been trading sideways for some days.  Expect this to continue until NFP.

There are no currency pairs with S2 setups that have strength/weakness combinations.

Note on Sunday night gaps

Again, there were large gaps on Sunday night – GBPJPY gapped 100 pips down, EURJPY 110 pips, USDJPY 50 pips, AUDJPY 70 pips, CHFJPY 70 pips, NZDJPY 50 pips.  None of these gaps closed, except for NZDJPY.  Therefore -> I must remember that holding a position over the weekend carries a higher level of risks as larger size gaps are occurring more frequently – particularly with the Yen pairs. 

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