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I have been trading on and off for the last 6 years, roughly. I have tried a dozen of different strategies, services, signal providers, expert advisors, etc. There are a few good ones out there, but the majority is nothing but hot air. During these 6 years, I have lost money from trading and buying useless products and services; a frustrating period which I consider as an “educational fee”. I have learned a lot in this period, and my approach to trading has changed a lot since the day I started out. One thing I know for sure, is that no system, strategy, EA or service will make you rich within the end of the week. I no longer believe in “secrets”, or extremely complicated strategies.

 

I try to keep my trading as simple as possible. Basically, it is mostly based on technical setups, but I try to keep fundamental aspects in mind too. I use candlestick charts, and I set it up starting from drawing support and resistance levels from a monthly, weekly, daily and 4-hour chart. I look for technical patterns in the same timeframe (sometimes the 1-hour as well). I then base my entry on a close of either the 1-hour of 4-hour candle above or below certain levels, and only enter if is possibility to get a good risk:reward ratio. I only trade when I see a good setup, which obviously means that I don’t trade every single day.

 

I also trade other strategies, but as I plan on sharing my trades, I will stick to this type as I can get the word out in time. I have been posting signals in the last couple of month but due to some different projects, it has been rather quiet lately. I will also keep this log updated so people here can follow me.

 

I will be posting more information shortly.

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The picture below is a print-screen of EHR/GBP on a 4-hour chart. The break of the support level was one of my recent trades where I went short, and closed it right before it retraced back up, just above the level and then back down. Now this pair has setup for a perfect double bottom; if and when this pair closes the next one- or four hour candle above 0.8719 I will probably enter on a long trade. I don’t want to see it close more than 50 pips above this level, as this will greatly reduce my chances for an appropriate risk:reward ratio. Normally I would place my stop loss below the two bottoms, but in this case, that would be 120 pips, and I think it will be difficult to get a risk: reward ratio of even 1:2 with such a stop loss. However, if we get a close above 0.8719, the pair is also back in the triangular pattern, and I would then feel comfortable with a stop loss some 10 to 20 pips below the support level (green line). I will be heading to bed with an hour or two, so hopefully we won’t get a break before I am back in front of the screen tomorrow morning. If I enter on a trade, all the details will be posted on facebook in real time.

 

EURGBP5.jpg

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Today there should be a good chance to catch a pre-NFP trade. Read the details below.

 

We did have a setup yesterday which did not work out, unfortunately. That was the only trade I took the entire day, as we were waiting for news from ECB. They did hike rates as expected and further hikes are anticipated. EUR/USD did rally all the way up to the 1.4370 level, which is where the pair currently trades.

 

EURUSD-18.png

 

Along with the rate hike, we did have warnings from S&P and Moody´s in the past couple of days. In addition to this ADP came out yesterday at 157K which was more than double the expectations. Finally we have NFP coming out today, with expectations of a better than previous release, which is supported by the ADP figure. Needless to say that I am a bit ambivalent with the entire situation due to conflicting fundamental aspects. However, I do have some fairly specific ideas. Keep reading.

 

Bias

 

After a rate hike yesterday and a fairly light move to the upside, I am close to neutral at this moment, mostly due to the state of the Euro and less so for the Dollar. With the NFP expectation and the actual ADP figure, I think we will see dollar strength today, in the hours up to the NFP release. However, keep in mind that the hours before NFP tends to be thin on liquidity. A couple of hours ago we did have a break of the lower range on EUR/USD and right now it is trading closer to the higher end of the range. I think looking for a trade on USD/CHF or USD/JPY and look for possibilities to long the dollar might be a good bet as well, as well as a possible short on EUR/USD. I have a small bit of bias on EUR/USD to the downside, mainly because the move after the rate hike was somewhat limited (relative to previous releases) along with the ADP figure and expectations for NFP. I am currently in on a short trade on EUR/USD and long on USD/CHF.

 

EURUSD-19.png

 

Current state of USD/CHF also gives us an indication of possible further downside on EUR/USD. However, due to the mentioned aspects related to the EUR, the inverse correlation between the two pairs might not be a good as it tends to be.

 

Technical Perspective

 

There is not a whole lot to be said here. Everything runs heavily on fundamentals right now and technical analysis tends to less follow-through. Because of this, pin-pointing perfect entry levels are close to impossible and obviously going in with a larger stop loss hence a smaller position size will be necessary.

 

Ideas

 

With the above mentioned aspects in mind, I am mainly looking for possibilities to go long on Dollar.

 

EUR/USD is difficult. A rate hike is obviously good for further upside on EUR/USD. However with the warnings from S&P and Moody´s along with some possible pre-sentiment buying into dollar, I think we are looking at possible downside in the hours coming closer to EUR/USD. I am already short, but anywhere close to the 1.4350 level should be a decent bet. Make sure to keep a larger stop than what you normally use. Alternatively or additionally, a long on USD/CHF or USD/JPY could be a good bet as well. I am already long on USD/CHF, so if you want to get in on that on, waiting for a bit of a pullback would probably be a good idea, and the same goes for USD/JPY. Remember to have larger stops than usually (read; 50 – 100 pips), hence decrease your position size so you don’t risk more just because you use a larger stop. Moving SL to BE around 50 pips of profit would be a good idea. If this would be the case, I would prefer to move my stop loss to break even and keep it open over NFP as if we get a better than expected release, this could be some really good trades. Best of luck to everyone and remember to keep risk low. Things can be very volatile on a day like this!

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In yesterdays post, I mentioned a possible setup for a short trade. We took a short trade at 1.3374 and if you got in on this trader, there was a possibility to grab around 90 pips in total. As we did have an initial 50 pip stop loss, I was hoping for a bit more and chose to move my stop loss to break even, but we had a strong pullback during the Asian session, and the trade is now close to the entry level. I hope you had a chance to grab some pips from this trade.

 

Bias

 

As mentioned in the post yesterday, my overall bias is still to the downside. However, things do look slightly different for now, and I think a short term pullback might be in the cards. This is partially based on correlation with other USD pairs, price action and our two EMA´s. However, we still have an upper trend line which is likely to show us some resistance so I think today might be a good day to wait for a really proper setup, before jumping in. Trading forex is all about planning your trade and trading your plan. If the plan is unclear, its more often than not, a good idea to stay on the sideline and wait for a no-brainer setup.

 

Technical Perspective

 

There is not a whole lot more to cover here, since the post yesterday. One key thing to pay attention to is yesterday’s daily candlestick formation, which clearly shows up a possible reversal, and since the close, we have seen upside on EUR/USD. The pair currently trades at the 1.3364 level. We do have resistance about 30 pips higher both from yesterday’s high, the upper trend line and finally that the level itself is somewhat of a psychological level (read; 1.3400). So this is clearly a level to pay attention to. In addition to this, we have the same level of resistance at the 1.3440 level as mentioned yesterday, which is another level I will pay attention to.

 

Price Action

 

Now here is one of the key reasons why I might wait a bit, before looking for another short trade. Price action wise on the 4-hour chart, we are now starting to see higher lows but so far not higher highs. With another higher high, I would be careful with any short trades.

 

EURUSD-31.png

 

Make sure to plan your entry on the right time of the day. If we do see continuation to the upside during London open, I would wait to look for a possible short around London close. Another thing to keep in mind is that correlating pairs, specially AUD/USD and Cable, clearly looks like further upside for now. Because of this, we are also likely to see EUR/USD head higher and another reason why we should be careful with any short trades for now.

 

Ideas

 

As mentioned above, we do a mixed picture this morning and I am open for both long and short trades but they will be based on a short term price action setup.

 

From the 4-hour charts, I think we are better off, looking for a possible short around London close. I am paying attention to the same key levels as mentioned in yesterday’s post. For any short term entry setups, I will be paying close attention to the price action just around London open, and if we do get an initial move down, I might wait for a small pullback and then take a short trade with a tight stop loss. It all depends.

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For those of you who read today’s outlook had an idea I was looking for a possible short around the 1.3440 level. Unfortunately I wasn’t able to place a trade today once the level was reached but if you did, this would have been close to a perfect trade. The level was spot on as solid resistance, and the pair is now trading back down at the 1.3330 level. So basically the pair is right back at the same level as where it started the day. So where do we go from here?

 

Bias

 

My bias hasn’t changed. News from US has been mixed for the first two days, but the Euro zone situation continues to take the main attention and with no significant deviation on US news, I see no reason for a change in bias, other than what I have mentioned in earlier posts regarding some possible profit taking. Tomorrow we will get ADP Non-Farm Employment Change from US, expected to come out at 131 compared to 110K previous release, so any kind of pre-news sentiment should also be to the downside for EUR/USD.

 

Technical Perspective

 

As mentioned in todays post, on the 4-hour chart we are still seeing higher highs and higher lows. However, this almost start to look more and more like an inverse flag formation which also gives us a clue of possible further downside. However, the most interesting thing is the daily candlestick formation. Well the day is not over yet, but unless we see a significant move within the next 45 minutes, we are likely to get a good reversal candlestick formation, also indicative of possible further downside.

 

EURUSD-32.png

 

It is possible that we could see some upside during the Asian session, but I actually think that the pair is very likely to start a move down shortly after EOD. But who knows. I will be asleep shortly and hence I would prefer to wait for tomorrow morning around London open, to look for a possible short trade.

 

Ideas

 

With the above mentioned aspects in mind, I still prefer to look for a short trade.

 

I will pay attention to price action around London open tomorrow morning and look for a possible short trade. The best case scenario in my opinion would be that the pair trades around the current level (Read; 1.3330) and look for a short trade with close to a 50 pip stop loss. Of course, if price starts to move up, right around London open, I will wait on the sideline for an entry short, at a higher level. 1.3440 is still at key level to have in mind.

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In yesterday’s post, I mentioned the possibility for a short trade, and early in yesterday´s London session, I took a short trade with a 50 pip stop loss. The trade came up to around 60 pips of profit, so hopefully those of you who were in on the trade had a chance to move stop loss to break even. Once news hit the wire about the coordinated action from central banks, I got stopped out at break even. Yesterday’s price action is a perfect reminder that we should always make sure to have a stop loss in place when taking any trades.

 

As major central banks agreed to lower swap rates on USD , all USD crosses was heavily affected and we had an immediate move up on EUR/USD to the 1.3530 level – a rally of close to 240 pips in a matter of minutes. With events like this, there is no particular reason to look at the pair from a technical perspective – fundamentals and risk sentiment is the only force in play and we need to think deeper in order to get an idea of further possible direction.

 

Now actually I think this rally is giving up a very favorable price for a possible short trade, maybe in the upcoming week. I think we will see further upside throughout the rest of this week, but I would be careful only looking for long trades, specially in the upcoming week. Keep in mind that we had the ADP coming out better than expected yesterday, and tomorrow NFP will hit the wire. This will definitely give us some market volatility. Going back to the coordinated action from major central banks, there is a very good read over at BabyPips.

 

<strong>“Risk assets love this news this morning. The euro is jumping and stocks are rocking and rolling...good for financial market players, but we've seen this before--credit thrown on top of credit to solve a problem that was caused by too much credit in the first place. It seems a dangerous game that lacks any form or imagination. But maybe this time is different.”</strong>

 

I do have a couple of ideas for possible trades today, but I have decided to stay on the sideline and let the market calm down. As mentioned above, I think we will see further upside on EUR/USD today and an entry around 1.3450 with a 50 pip stop loss seems like a fairly good bet. However, I see no reason to jump in today. I would prefer to wait for the market calm down, so we also have a chance to base our trading on a more technical setup.

 

Remember to play things safe, keep your risk exposure low and always have a stop loss in place.

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The latest trade I mentioned was back on Thursday December 1st, where I wrote a blog post saying there was a good possible trade on EUR/USD if you took a long around 1.3450 with a 50 pip stop loss. If you took this trade, you should have been able to grab close to 100 pips in total.

 

I decided to stay out of the market for the rest of the week, first of all due to coordinated intervention from several major central banks, and then with NFP during Friday. I thought it would be a good time to let the market make its moves and wait for the beginning of a new week. So here we are, in the beginning of December, and my bias is starting to point to further downside on EUR/USD again.

 

NFP very close to expectations which is definitely not a bad figure. We had an initial spike on EUR/USD and then the pair started to plummet close to 200 pips from the high of the day. The pair currently trades around the 1.3400 level and my bias is starting to in direction of further downside. However, the pair currently trades between two key zones of support and resistance, namely the 1.3450 level and the 1.3370 level.

 

My preferred way to trades this would be to wait for a re-test of the upside and look for a possible short trade with a 4-hour reversal candlestick formation. However, I am willing to jump in on a short trade around London open at the currently level if the short term price action supports such a trade. Stops above 1.3460 is recommended.

 

Ps. A pair which I normally do not trade is CAD/JPY, which looks amazing for a possible short trade from a daily time frame perspective! I will definitely be looking for a possible entry. Keep in mind you don’t want to hold this position overnight (Asian session) due to the possibility of intervention from BOJ.

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In yesterday’s post Trading Forex - EUR/USD after NFP I mentioned a good possible short trade on EUR/USD around the 1.3460 level if we got a 4-hour reversal candlestick formation. We got a perfect formation, close to a pin-bar and I took a short trade at the close of the 4-hour candle with an entry at 1.34628 with an initial 50 pip stop loss. The trade is currently 90 pips in profit and I am keeping a close eye on this trade around London open. Post a comment below if you had a chance to get in on this trade.

 

The reason I consider to close the trade around London open, is because the pair currently trades at the key support level mentioned in yesterday’s post – hence the pair is still trading in the range highlighted yesterday.

 

I still think we will see the pair continue for further downside, but its definitely possible that we will get a bounce at this level around London open. So if short-term price action indicates possible upside in just around an hour from now, I might be closing out. For now I have moved my stop loss to the 1.3450 level locking in a bit of profit and if you are in this trade, I recommend you to do the same.

 

EURUSD-33.png

 

If you are not in this trade, there is a possibility to look for a short trade, should we get a second re-test of yesterday’s high, again with some 50 pips in stop loss. Another possibility is to wait for the break and close below the 1.3360 level, wait for a pullback to test this level from below as resistance and look for a possible short trade at the 1.3360 level, again with a 4-hour confirmation setup.

 

Another setup I highlighted yesterday was a possible short on CAD/JPY. The pair did move some 30 pips lower so it would be a good trade, but I still think there is a good chance to get in on this one. I will wait for a pullback to the 76.50 level and look for a possible short trade, again with a confirmation setup.

As always keep your risk low and make sure to place hard stops right after trade execution.

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