Good opportunities in sight

Things have been hectic lately and therefore I haven't had a chance to post recently. Lets take a look at some possible money making opportunities --

I'm still holding onto my short position with USD/CAD -- having had the opportunity to speak with a few market analysts, I received quite a few mixed suggestions as to which direction this pair is looking to head towards. What I can point out is that historically, well, at least within the past few months, CAD news has made a bigger impact on this currency pair than US data such as the NFP which is due this Friday at 8:30AM. With speculation that CAD news will continue to follow a positive trend, I'm eager to see where my short position will end up. I already have my stop set in place so I'm just hoping for the best when it comes to this trade.

We see EUR breaking newer and newer highs but all traders who invest in EUR must think about the impact this recent explosion will have on the European economy. At 1.3, people started getting worried that EUR is getting overpriced. After hitting 1.4 levels, businesses were concerned at the seemingly unstoppable appreciation of their currency value and its affect on imports/exports. The 1.5 levels brought upon protest in the streets which leaves linguiring thoughts as to when the government will step in and do something about it. If your in the market for the long term, look to short this pair and start the repurchasing of the US Dollar.

If you look at the tech analysis I did for GBP/USD - what you'll see is that it broke past a major resistance from its triple top. We're looking at a range of a little under 500 pips. Theres quite a ways for it to go up from here which leaves me asking "how much and when?". Nothing is certain yet because this may just be a false break, but according to my analysis, I would say long the pair with a stop at 1.9933 and a limit at 2.0400

USD/CAD <-- Head & Shoulder forming...

We see a head and shoulder forming on the daily chart for USD/CAD. I'm currently shorting the pair with a stop at 0.9955 and limit at 0.9608

USD / JPY ---> SHORT

Market will be closing in a about 2 hours and thirty minutes but we're looking at a quadruple top / triple bottom on the hourly chart for USD/JPY. It broke its support of 107.19 this morning around 7:00 AM and will look to test its new support of 106.05 . I would go short and look to take a 40-50 pip profit now with a stop at its old support of 107.19.

Follow up on yesterday's USD/CHF

As per yesterday's analysis, it went better than expected. All technicals pointed upwards and thats exactly what the pair did - we saw a high at 1.1023 so my limit of 1.0991 was executed somewhere around 6:00 AM today.

USD/CHF --> LONG

Look to long with limit at 1.0975-1.0991 which would be a nice 40-50 pip profit. All the technicals are hinting for this push upwards so lets hope it's right.

Followup on USD/CAD

Well, it seems as though the pair dipped down to the 1.0052 level - it didnt go down as much as I hoped but for those who shorted around 1.0090 , it was a good 40 pip profit.

USD/CAD ->> SHORT

Looks like a great opportunity to short USD/CAD right now. Look to set your limit around 1.0045 if you want to be conservative with a stop at 1.0125. Otherwise the agressive approach would be to set the limit around 1.0014 to as low as 0.9991 with a stop at 1.0140

Follow up on yesterday's USD/JPY short term analysis

Yesterdays suggestion was to go short with limit around 107.84 - 107.52. Price action hit 107.76 Looking more towards the long term progress now... thats all for today.

Don't forget long term...
http://gotpips.blogspot.com/2008/02/look-into-2008.html

USD/JPY Short term / Long term analysis

-SHORT TERM-

If we take a look at the hourly chart, we're looking for a crossover per ADX/DMI as well as MACD levels shooting downward. We're seeing a lot of action the past few days with the pair - it seems like now is a good time to book a nice profit by going short. Look to place your limit with a range anywhere from 107.84 - 107.52.

-LONG TERM-

Taking a look at the daily chart, we see a clear downward trend channel. It may be too soon to short the pair - it seems as though MACD,ADX/DMI,and Stoch are hinting that the pair still has some space to move upward before trending back down. If you have enough margin to sustain a 2-300 pip movement, then you can look to short the pair now, otherwise, I would stand fast and wait till it tests the channel resistance before placing the trade.

Follow up yesterday's USD/JPY

As per yesterday's analysis, the pair DID break past resistance 107.12 area and shot up further than my prediction which was 1/3 the signal range. It actually trended up 1/2 the signal range which was a healthy amount of pips for those who went long around the 106.70 level.

Triple Top - USD/JPY - 30 Min Chart

Lets use StockCharts.com's explanation of what a triple top is to quickly review what we know about this technical signal(you can just skip to bottom to get to the point):

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Prior Trend: With any reversal pattern, there should be an existing trend to reverse. In the case of the triple top, an uptrend or long trading range should be in place. Sometimes there will be a definitive uptrend to reverse. Other times the uptrend will fade and become many months of sideways trading.
Three Highs: All three highs should be reasonable equal, well spaced and mark significant turning points. The highs do not have to be exactly equal, but should be reasonably equivalent to each other.
Volume: As the triple top develops, overall volume levels usually decline. Volume sometimes increases near the highs. After the third high, an expansion of volume on the subsequent decline and at the support break greatly reinforces the soundness of the pattern.
Support Break: As with many other reversal patterns, the triple top is not complete until a support break. The lowest point of the formation, which would be the lowest of the intermittent lows, marks this key support level.
Support Turns Resistance: Broken support becomes potential resistance, and there is sometimes a test of this newfound resistance level with a subsequent reaction rally.
Price Target: The distance from the support break to highs can be measured and subtracted from the support break for a price target. The longer the pattern develops, the more significant is the ultimate break. Triple tops that are 6 or more months old represent major tops and a price target is less likely to be effective.

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The pair can go two ways right - it has a major resistance at the 107.12 area and if that were to be broken, we could see it continue to trend upwards for at least 1/3 of the signal range which would be anywhere from 20-30 pips. The alternate scenario would be the pair shooting downwards and continuing to break more support lines. In this type of situation, I would go with one of the following two options:

Long EUR/USD -- 20 pip stop loss

Long USD/JPY -- 20 pip stop loss

Limit: Having one of those positions liquidated, it should leave you with a 60-75% idea on the trend of the pair along with a few pips profit. I would then throw in a trailing stop with trigger set at 50% profit and let it ride.

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If then OCO - If 107.12, Long USD/JPY with limit @ 107.40 Stop @ 107

If then OCO - If 106.82, Short USD/JPY with limit @ 106.31 Stop @ 107

Of course, if one of these two orders execute, you should close out the other order accordingly.

A look at 2008

Lets step aside and take a glance at what may be some big 2008 potentials:

1. Investors returning to metals.

We've seen a huge growth in the price of gold in 2007, it may very well surpass $1000. Look for an appreciation in AUD. CAD may very well benefit from it as well as 45% of their country's GDP comes from gold.

2. Oil prices drop

Most of the presidential candidates are pushing for the "Green Movement" - utilizing bio diesel fuel,solar energy, hydrogen energy,etc. as a mainstream basis of energy. With the likelihood that Obama will take the victory, lets take a look at what his outlook is like on energy and environment:

Reduce Carbon Emissions 80 Percent by 2050
Invest in a Clean Energy Future
Support Next Generation Biofuels
Set America on Path to Oil Independence
Improve Energy Efficiency 50 Percent by 2030
Restore U.S. Leadership on Climate Change

What does this mean? Oil prices down , CAD ++

3. YEN YEN YEN

Carry trade pairs are my favorite pairs, not just because my last name is Yen. We are looking at the unwinding of the Japanese Yen carry trade due "broad-based risk aversion". Simply, investors have historically borrowed Yen cheaply to invest in global markets. We see this in the long term charts for currencies like GBP, USD, NZD, etc. Due to predictions of spiraling high-risk markets(equities + commodities), investors will be likely to close out their long GBP/JPY, USD/JPY, NZD/JPY trades therefore buying back the Yen and pushing it to levels as high as 140.

4. Yuan being revalued

The US was the only country to come out of the olympics with a profit, all other countries took losses. The market in China has skyrocketed in 2007. I remember speaking with a few clients and they would tell me their strategy on buying stocks - pick a random company and dump money. The olympics is not just about competitive athletics - its a multi multi billion dollar business. Right now China is flooded with tourists, businesses are booming, but what happens when the 2008 Beijing olympics are over?

5. Federal Reserve cutting interest rates

Doesn't seem the Reserve is done cutting rates yet. The country is in recession and the monetary policy NEEDS to be changed. Our money used to be backed by gold and silver, but nowadays it's just being printed out of thin air from the Federal Reserve. When the Reserve cut rates, they are simply printing more money because the government asks of them to. Most people dont even realize that the Reserve is nothing but a cartet of banks and doesn't even have ANYTHING to do with the government - it's a seperate entity just like the IRS. The country is screwing itself over for a lack of better wording, due to its foreign policy and the middle class is taking a huge hit(as always). The amount of money that we borrow from China is so extravagant that if China were to decide to sell off 5% of their U.S. treasuries, our stock market would collapse - panic would flood the markets, and that would inevitably lead to the downfall of the country. Too bad the only presidential candidate who understands this, Ron Paul, is ignored or bashed by the media.
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Lets keep our eyes peeled for good opportunities this year. I took a few big losses early on in 2007 but have revamped my whole strategic approach and mindset since.

"Keep on going and the chances are you will stumble on something, perhaps when you are least expecting it. I have never heard of anyone stumbling on something sitting down."
- Charles F. Kettering,

Followup on the AUD/USD short from yesterday

.8915 right on the money as predicted. Credit goes to A. Serafin for an on point analysis.

"We are what we repeatedly do. Excellence, therefore, is not an act but a habit."

Look to short AUD/USD with limit around .8915

%D crossed over %K per GET Stochastic, and trendwise -DMI and +DMI are looking for a crossover. Looks like a great opportunity to score a quick 30-40 pip hit.

Vision without action is daydream. Action without vision is nightmare.

Looks like USD/JPY was testing the 108 level earlier today. If you look at the daily chart, I drew a few trend lines and a fib retracement. You'll see that the trend is pretty clear as it is moving downwards in that channel. We're looking for a retracement as per my previous post, and according to the way things look right now, theres a good shot of it potentially testing the 110 levels before we know it. I'm still holding on to that long, we'll see what happens in a few days. Here is a 15 minute increment chart of USD/JPY for today - for those of you conservative traders who took my advice on going long and took profit, cheers :)

USD/JPY going LONG

What you'll see on the daily/weekly chart for USD JPY is that its due for a retracement back up to the 108 levels. Due to recent interest rate reports and further credit fears, the dollar has taken quite a hit. You'de think that along with the NFP and the core spending reports, the dollar would tank down even more, but what you have to understand is that there is such a substantial amount of volume in shorting dollar over the past months that people are now finally starting to close out their positions and taking profit(buying back USD) . The volume of the pair itself has dropped over 40% in the past two weeks. Now that it looks like we will be sitting tight around 3% along with some debatably positive focus on the economic sector with tax rebates and what not floating in the atmosphere, we might see a the dollar going up quite a ways against the yen. You'll see that trendwise, based on the ADX/DMI system, the (+)DMI and (-)DMI are due for a intersection and a 100-150 pip upward transition is very easily obtainable.

Look to long with stops at 106.30(0.618 on fib retracement for daily chart) and limits anywhere from 107.90 to 108.69(1.00 - 1.618on fib retracement)

What is Forex?

So basically, the reason why I created this blog is for a personal record of the trades I make - something to reflect back on. I'll be posting the analysis I make and what trades I'm going into. Feel free to leave your feedback in the comments section.

For those of you who have no idea what FX is, here is a post from www.wisegeek.com .


Currency trading is the largest market on the planet. It is estimated that in excess of US$2 trillion is traded every day. Compare this to the New York Stock Exchange's daily transactions of approximately US$50 billion, and you can see that the magnitude of the currency trading market exceeds all other equity markets in the world combined. The practice of currency trading is also commonly referred to as foreign exchange, Forex, or FX, for short.
All currency has a value relative to other currencies on the planet. Currency trading uses the purchase and sale of large quantities of currency to leverage the shifts in relative value into profit.
There are two reasons the relative value of a currency fluctuates. The first is because of a 'real' market: as outside investors or visitors wish to buy things within a country, they are forced to convert their domestic currency into the currency of the country they are buying within. Similarly, as money leaves the country, people must sell their currency for the foreign currency they will need to spend or invest abroad.
The second force for currency fluctuation is speculation. As investors feel a given currency will act strongly or weakly, they will buy or sell accordingly. This speculation can have drastic consequences on a national currency and consequently on a country's economy. During the East Asia Crisis in 1997, for example, as nations in Asia began facing economic downturns, speculators used currency trading to realize enormous profits and in many analysts' view helped to exacerbate the problem.
Currency trading has many very real benefits over equity trading like the stock exchange. The spreads for currency trading are extremely low, making the cost to a trader very low as well. The volatility of the currency market is extremely high, which means that a trader can generate enormous return on a given exchange. The ratio of volatility to spread is approximately 500:1 for the currency trading market, as compared to 100:1 for even the most ideal of stocks.
Until recently, the currency trading market was very closed to small investors. Banking conglomerates and large multinationals were the main movers of this market place. In the past few years, however, new technologies have opened the doors to investors of all stripes. It is difficult to miss the enormous benefit of this 'new' market for the individual investor: higher returns with lower risk given the same amount of market knowledge have a very small downside.