Month: September 2010

The Top 10 Things That Separate Pros From Amateurs

Jared Levy, Editor, Smart Investing Daily

I’ve just returned from our Global Opportunities Summit in Las Vegas and my mind is swirling with ideas for Smart Investing Daily. I not only had the pleasure of meeting many of you, but also got the chance to have some in-depth conversations with many of my fellow editors from around the country.

At the summit, I noticed that there were common threads that wove their way through the minds of both the speakers and attendees.

Our goal at Taipan Publishing Group is to not only help identify potential investment opportunities, but close the gap between what has made many professional traders successful and what the average investor needs to know.

I assembled 10 of the most important techniques and mantras you should use to take your trading and investments to the next level.

In coming issues, you can be sure I will take each one and more into great detail, but this should at least get you started.

No. 10: Hedge Your Bets/Diversify

• If you are an options trader, you can use spreads to reduce your investment’s exposure to the overall market. Some option spreads can not only greatly reduce how volatile your account is, but they actually can put the probability of success on your side.
• Diversify your investment portfolio not only with stocks in different sectors, but also with BETA! Beta tells you how your stock will typically react to the market. If all your stocks have high betas, your account may be susceptible to just as much if not MORE volatility than the market, even if you bought stocks in different sectors.

No. 9: Plan Your Risk Ahead of the Trade

• Have a maximum downside dollar and/or percentage risk spelled out ahead of your investment, not after the fact.
• Use stop-losses, put options or spreads to solidify your plan if you understand how to use them.
• Don’t exceed your comfort zone; this may cause irrational decisions in your trade. In other words, don’t make your investments too large in any one security.

No. 8: Be a Contrarian

• It’s usually better to buy on rumor, sell on news.
• By the time everyone is talking about it, it might be too late.
• Don’t be scared to think “outside the box.”

No. 7: Sell or Protect While the Trend Is Still Strong

• It’s much easier to sell when a stock is rising in value vs. when it’s in free fall.
• Remember, insurance is cheaper before you have an accident, so if you are an options trader, buy your puts when the market is complacent, not panicking.
• Think of a climber who is 30 yards from the summit of a mountain and runs out of oxygen. He may touch the top, but he won’t get down. This is analogous to a stock that has been rallying for a long time and you take no action to exit. While you may see the top in the stock, stocks can change direction frequently, and most investors don’t get to sell the highest high!

No. 6: Learn From Your Losses, NOT Only Your Profits

• Your losses can tell you just as much if not more about your trading personality.
• Sometimes just limiting losses can turn an unsuccessful trader into a thriving one, or at the very least, allow you to live to trade another day.

No. 5: Be Consistent in the Types of Issues You Trade

• Look for similarities in the behaviors of your securities; this will help you to find the patterns you are looking for and will help minimize errors. These attributes include ATR, Price, Volatility, Sector, Chart Patterns.
• Remember that most professionals are specialists in a certain group of stocks or sectors.
• If it feels uncomfortable in a trade, it is probably not for you.

(Investing doesn’t have to be complicated. Sign up for Smart Investing Daily and let me and my fellow editor Sara Nunnally simplify the stockmarket for you with our easy-to-understand investment articles.)

No. 4: Think Three Steps Ahead

• Have a game plan for all possible outcomes in a trade (most retail investors just focus on the best outcome) and have alternatives for a flat investment as well as one that begins to go against you!
• The analogy here is to pretend that you’re playing chess or poker; in both games you are thinking about what you might have to do if your opponent (the market) makes a move that puts you in danger. Investing is no different.

No. 3: Trust Yourself

• Professionals are confident in their abilities and their plan.
• NO ONE knows exactly what you are thinking; only you can control your emotions.
• Your risk tolerance and views on the trade are completely unique; therefore even though we can offer trade ideas and theses, you must execute them in your own way and use your individual money management to find how much of your account you will invest.

No. 2: Be Adaptable, Yet Adept in Your Strategy

• Be able to admit you’re wrong and change direction when needed.
• Don’t apply a strategy you are NOT COMPLETELY comfortable with.

No. 1: Ask Questions

• If there is something you don’t know, always ask.
• If there is any piece of the trade that didn’t make sense, don’t trade it with real money until you are able to quantify it. (Many brokers offer paper trading platforms to test out new strategies.)
• The only stupid question is the one that is not asked.
• Professionals were not born that way; they too had to learn just like you!

In summary, remember that at the end of the day, you are in control. In trading and investing, just like in many other areas of your life, it’s the little things that usually make the biggest difference.

Taipan Publishing Group will give you the vehicles you need to generate exceptional returns, but don’t forget that it is you behind the wheel!

Don’t forget to follow us on Facebook and Twitter for the latest in financial market news, investment commentary and exclusive special promotions.

About the Author

Jared Levy is Co-Editor of Smart Investing Daily, a free e-letter dedicated to guiding investors through the world of finance in order to make smart investing decisions. His passion is teaching the public how to successfully trade and invest while keeping risk low.

Jared has spent the past 15 years of his career in the finance and options industry, working as a retail money manager, a floor specialist for Fortune 1000 companies, and most recently a senior derivatives strategist. He was one of the Philadelphia Stock Exchange’s youngest-ever members to become a market maker on three major U.S. exchanges.

He has been featured in several industry publications and won an Emmy for his daily video “Trader Cast.” Jared serves as a CNBC Fast Money contributor and has appeared on Bloomberg, Fox Business, CNN Radio, Wall Street Journal radio and is regularly quoted by Reuters, The Wall Street Journal and Yahoo! Finance, among other publications.

By Russell Glaser – The EUR/USD is currently testing a technical resistance level that once breached should solidify the rising trend and a retracement of the December to June bearish trend.

During the Japanese trading session on Monday the EUR/USD tested and failed to break 1.3510 (R1), the 50% retracement level of the previous bearish trend that spanned from December to June. Following the failed breach the pair has fallen to the price of 1.3400.

Should the EUR/USD close above the 50% level, the next technical target would be found at the 61.8% Fibonacci retracement at 1.3890.

Support for the EUR/USD comes in at the height of the June to August bullish move at 1.3330 (S1).

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Indeed, things are looking more depressed for the greenback? Now, what led me to say such pessimistic statement? Well, technically speaking, the US dollar index (USDX) which is a measure of the greenback’s valuation against a basket of other currencies like the arch nemesis, the euro, has just broken down from a massive cone head like head and shoulders pattern. As you know, a break down from such usually leads to a downside reversal which would send the USDX’s value to at least its previous low just above 74.00. Conditions at the moment are, however, already oversold. Given this, the index and the dollar itself could stage a “return move” or a rebound before heading down south again. The neckline of pattern should keep it from rising any further. If in case the index finds itself back above it then the dollar bulls would be saved from a massacre. Anything can still happen in the financial market especially during times of uncertainty. Miracles happen but seldom do they. Having said that, again from a technical perspective, the index and the dollar as it is have a higher chance of losing some more.

On the fundamental side, sustained rally in the global equities markets plus the US Fed’s recent intention to do another round of quantitative easing have brought the USD some wrath. Improved confidence among investors in the markets, of course, has led them to reinvest their funds into other higher yielding instruments like equities and currencies like the euro, Australian dollar, and the like, away from the low-yielding greenback. Well, it’s really understandable. If you’re a practical investor. Why would you place you’re money in the dollar that only yields roughly 0.00-0.25% a year when other markets, stock markets per se, are milking some honey day after day? Secondly, the Fed’s noted that it is ready to flood more dollar in the market to encourage more lending and stimulate business activity given the state’s below par performance. This naturally would weaken the dollar’s valuation. It’s actually simple supply and demand. So when the central does another round of QE, expect the dollar to fall some more. At the same time, if market confidence remains, other investments would be more attractive than the USD.

More on LaidTrades.com …

By GCI Forex Research

Fundamental Outlook at 0800 GMT (EDT + 0400)

USD

Eurozone concerns resurfaced on the back of a debt downgrade of an Irish financial institution but currency moves were largely quiet until a Wall Street Journal article after the equity close gave the dollar a slight boost. The article suggested that any further quantitative easing by the Fed could be less heavy-handed than expected as officials continue to monitor the data as they weigh their next move. But it did not necessarily dissuade the notion that more easing is possible.
Our analysts now think the fed funds target will not be hiked until Q3 2011, at least three months later than their original June 2011 forecast. In the aftermath of the latest FOMC decision, our economists do not think further quantitative easing will be necessary but they do acknowledge it is now a much closer call. We therefore lowered our one and three month dollar forecasts to reflect the increased risk of further potential Fed action. There were no major headline US data releases and investor risk-seeking was muted with equities modestly lower and lower Treasury yields across the curve, which was partially spurred by a good 2-yr auction. But among G10 currencies the Australian dollar managed to gain versus the dollar as the relative monetary policy differential remains in Australia’s favour. Upcoming data releases include Conference Board Consumer Confidence, S&P/CaseShiller home price data and the Richmond Fed manufacturing survey. EURUSD traded 1.3426-1.3506, USDJPY 84.12-84.39.

EUR

A downgrade of the subordinated debt of a prominent Irish bank highlighted widespread fears surrounding the Irish banking sector and the prospect of future downgrades remain. The FT reported that further updates on the situation would likely come on Thursday but it underscores the fact that sovereign and fiscal concerns remain unresolved and sovereign yields remain elevated.
ECB President Trichet’s comments at the Quarterly Hearing before the Committee on Economic and Monetary Affairs of the European Parliament largely echoed his recent comments as he reiterated again that inflation should moderate over the policy-relevant horizon despite a potential short-term increase. Trichet remains cautious on Eurozone growth and said current policy is accommodative and the current level of interest rates is appropriate.
JPY

BoJ Governor Shirakawa said the BoJ will take “timely and appropriate action on monetary policy as needed”. Shirakawa also opened the door to potential intervention in non-USD crosses when he said “the yen has appreciated not only against the US dollar and the euro, but also against fellow East Asian currencies: for example, it has traded at levels close to its record high against the Korean won”. Such intervention has not happened since 2000. Shirakawa also warned that if a central bank’s purchases of government bonds is seen as a means of paying for fiscal expenditure, or as an act of debt monetisation, inflation expectations and government bond yields would rise. While a modest increase in inflation expectations may not be a bad thing as far as the Japanese economy is concerned, rising bond yields could lead to a substantial increase in the cost of servicing Japan’s public debt.
Japanese exports rose by less than expected to +15.8% y/y (cons. +19.0%) while imports came in slightly ahead of expectations. This slowdown in export growth adds more weight to BOJ’s intervention policy as it highlights the negative effects that the stronger yen is having on the real economy.
CAD

Final Q2 GDP is due after the preliminary print slightly exceeded expectations at 1.2% q/q and 1.7% y/y. Consensus estimates are for no change.
The IMF endorsed the UK’s fiscal tightening plans as it greatly reduces the risk of a loss of confidence. The IMF noted that things were on the mend but also stressed that monetary policy will have to be nimble in the event of further downside risks. The October 20 fiscal austerity measures could point to further BoE easing, which policymakers hinted at in the latest BoE minutes. We adjusted our GBPUSD forecasts to reflect the shift in our dollar view but think fiscal austerity could keep the pound weak versus the Swiss franc and the Nordic currencies.

TECHNICAL OUTLOOK

EURUSD stalled at 1.3511.
EURUSD BULLISH Stalled in front of 1.3511; a break here would expose 1.3692. Near-term support comes in at 1.3426 ahead of 1.3287.

USDJPY NEUTRAL 85.93 and 82.88 have now become the key near-term directional triggers.
GBPUSD BULLISH After the break of 1.5729, expect gains to extend towards 1.5999 key high. Support is defined at 1.5642 ahead of 1.5503.
USDCHF BEARISH Following the break of 0.9786, there is scope for next support at 0.9625. Resistance at 0.9983 ahead of 1.0183.
AUDUSD BULLISH Violation of 0.9600, psychological level, favours another bullish run towards 0.9850 key high. Near-term support is at 0.9442 ahead of 0.9309.
USDCAD BEARISH Focus is back on 1.0108; break of the level would expose 0.9931. Near-term resistance holds at 1.0380.
EURCHF NEUTRAL Trading within 1.3391 and 1.2991 range. Break below 1.2991 would expose 1.2766 key low.
EURGBP BULLISH Upside potential held below 0.8609 ahead of 0.8774. Support defined at 0.8463 ahead of 0.8390.
EURJPY BULLISH While support at 110.66 holds, expect the cross to target 114.74, ahead of 116.68 and 119.33.

Forex Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

EUR/USD

Yesterday’s attempt towards 1.3510, 50% retracement of 1.5144/1.1875, reached 1.3504, ahead of pullback. This is seen corrective while 1.3285 level holds, with break through 1.3510 to open 1.3520/83, Apr highs. Below 1.3285 delays immediate bulls and allows for stronger correction.

Res: 1.3470, 1.3494, 1.3504, 1.3510
Sup: 1.3368, 1.3355, 1.3304, 1.3285

GBP/USD

Broke higher on Friday to test 76.4% retracement of 1.5997/1.5285 downleg. Sustained break here will open 1.5860 first, with possible retest of 1.5997, 06/09 Aug highs, not ruled out. Initial support lies at 1.5740/28, while break below 1.57 zone delays.

Res: 1.5842, 1.5865, 1.5910, 1.5997
Sup: 1.5771, 1.5740, 1.5728, 1.5697

USD/JPY

Undergoes near-term consolidation following reversal off 85.92 and 85.38 lower top. Hourly structure remains negative, and break below 84.03, 61.8% retracement of 82.86/85.92 upleg to open way for possible retest of 82.86. Immediate cap lies at 84.46, while clearance of 85.38 firms tone

Res: 84.46, 84.75, 84.90, 85.21
Sup: 84.10, 84.03, 83.75, 83.60

USD/CHF

Continues to trend lower, following reversal off 1.0181. Break below 0.9916, 2009 low, and 0.9803, 23 Sep previous low, have so far reached 0.9777. Consolidation is now underway and while 0.9880/98 caps, scope remains for extension towards 0.9700, possibly 0.9630.

Res: 0.9880, 0.9898, 0.9931, 0.9980
Sup: 0.9809, 0.9777, 0.9700, 0.9630

By Russell Glaser – The price of spot gold continues to rise, moving closer to the psychological level of $1,300 as the dollar falls out of favor.

During the European trading session on Monday, spot gold prices held close to their all-time high, trading at $1,200, from an opening day price of $1,2981.

The price continues to be buoyed by overall dollar weakening that intensified following last week’s announcement by the Federal Reserve. The release of the Federal Reserve Open Market Committee meeting minutes declared the Fed’s willingness to enact further quantitative easing measures to help stimulate the US economy.

The chance of further quantitative easing was increased on Friday in a speech by Fed Chairman Ben Bernanke. The Fed chief noted the effort to reduce unemployment has been significant. Despite the lengths the Fed’s has gone to, the quantitative easing has not reduced rising US unemployment numbers. Last month the US unemployment rate rose to 9.6% from 9.5%.

The easing of monetary policies in the US has been a major contributor to the rise in the price of spot gold. As a steady stream of dollars continue to increase in the markets, inflation fears are rising given the lack of commitment by central bankers to reduce the amount of dollars available.

As the dollar continues to fall out of favor with traders, market players have looked to other instruments to act as safe havens such as the Swiss franc and the Japanese yen. However, none of these instruments are able to keep up with the strong appreciation that has been seen in the price of spot gold.

Gold prices are up over 400% since 2001. Looking at the weekly chart, since the price of spot gold rose from the $685 resistance level in October of 2008; the price is up 90%. A rising trend line follows the rise in the price.

The price of spot gold has made a push above its previous high at $1,265 (S1) and reached a new all-time high last week, trading at $1,299. The next support level falls at the July low at $1,156 (S2). $1,300 should act as the next resistance level because it is a big round number that traders tend to focus on and therefore set their limit orders near this level. Should the $1,300 price level be breached, traders will want to target the $1,400 level for spot gold prices.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

Amid the central bank movements from the United States and Japan, the euro zone has been eerily silent regarding its currency valuation and interest rates. This week’s news events should help shed more light on what’s happening in the region, but the scale of reports may not be on par with what is taking place elsewhere. Today’s leading events will be from Britain, although the euro zone will be publishing a few reports on French consumer spending, prelim CPI, and the German consumer climate report from GfK.

Economic News

USD – USD Under Pressure from Quantitative Easing Speculation

A modest portion of the US dollar’s losses yesterday were offset this morning after the greenback rose slightly against most of its currency rivals. After declining against the euro to as low as 1.3425 in yesterday’s afternoon trading, the EUR/USD has risen back to 1.3465 in today’s Asian session. Against the British pound a similar gain has been seen; after the pair fell to 1.5800, it steadily climbed back to 1.5830 as of this morning.

The downturn in the US dollar appears to be considered part of a larger strategy by the Federal Reserve to weaken the currency through speculation incentive prior to undertaking another round of quantitative easing. The Fed has been talking of adjusting its monetary policies to combat an unstable currency.

So far the effect has been to weaken the USD against all of its currency counterparts. Should the Fed step in at this point, the impact may be milder than previously thought due to the recent pricing in of a downturn prior to any action being taken. There is a possibility that this wave of speculation may help stave off the adjustment for a few weeks longer.

Today’s news may be of a little help for the buck. The Conference Board (CB) is set to release its recent household survey of consumer confidence. This report has been floating between a reading of 50 and 60 for the past few months. Should today’s report remain within this range, we should see some mild upward movement for the dollar heading into late-day trading sessions.

EUR – EUR Dips on Profit-Taking; Long-Term Trend Remains Bullish

The euro remains bullish against most of its currency counterparts this week, despite a recent setback due to profit taking. The EUR/USD has been rising over the previous three weeks, setting a recent high just over 1.3500. However, the pair recently fell back to 1.3425 before resuming its upward movement. The EUR/GBP remains steady with only minor price fluctuations; it currently trades at 0.8505.

Amid the central bank movements from the United States and Japan, the euro zone has been eerily silent regarding its currency valuation and interest rates. This week’s news events should help shed more light on what’s happening in the region, but the scale of reports may not be on par with what is taking place elsewhere.

Today’s leading events will be from Britain, although the euro zone will be publishing a few reports on French consumer spending, prelim CPI, and the German consumer climate report from GfK. Should these reports come in line, or above expectations, the EUR could see additional bullishness, correcting its most recent downturn.

JPY – USD/JPY Continues Bearish Despite Talk of BOJ Intervention

The Japanese yen appears to be devaluing as planned against most of its currency rivals, except the US dollar. The EUR has advanced on the Japanese currency to currently trade at 113.40, while the British pound climbed to 133.36, up from 132.92. Somehow the greenback, on the other hand, has persisted in rising against the island currency. The USD/JPY fell from a recent high of 85.92 to currently trade at 84.18 over the past several days.

Two forces seem to be pulling both the USD and JPY into a bearish trading pattern. The Bank of Japan (BOJ) and Federal Reserve are both attempting to devalue their respective currencies through monetary intervention and quantitative easing, respectively. The push and pull between these two giants appears to be in favor of the dollar falling more than the yen. If tonight’s Tankan Manufacturing Index from Japan provides additional positive data for the Japanese economy, the yen may continue to outpace the greenback with a potential target price below 84.00.

Crude Oil – Crude Oil Targeting $80 a Barrel?

The price of Crude Oil continues to fluctuate between $71 and $78 a barrel, with a current price settling yesterday just under $77. Speculative reports about a decline in inventories have fueled a number of analyses to predict an impending rise in oil prices from a boost in consumption among the larger economies. The United States, Canada, and Japan all appear to be showing positive signs of industrial and manufacturing growth, adding support to oil demand.

On the other hand, a large number of economists seem to share the view that the fundamentals are still lacking for a boost in oil and gas prices. Regardless of a number of positive manufacturing reports, demand continues to appear stagnant. The range-trading price is a testimony to the fact that oil prices don’t seem to have much pressure in either direction, but the general trend is a gradually sloping bullish channel, with a near-term target around $80 a barrel.

Technical News

EUR/USD

The price has broken past the significant barrier around 1.3340 and appears to be targeting 1.3665, according to the Fibonacci retracement levels on the daily chart. However, the daily Stochastic (slow) appears to have a fresh bearish cross and the daily RSI shows the price as heavily over-bought. Both suggest strong downward pressure. Going short could be the wiser move today.

GBP/USD

The price of this pair appears to have recently entered the over-bought region on the daily chart’s RSI, suggesting an impending downward correction. The breach of the upper border on the daily chart’s Bollinger Bands, followed by a price flattening, also suggests that a downward correction may be imminent. Today’s preferred tactic may be to go short on this pair, but with tight stops.

USD/JPY

The RSI on the daily and weekly chart shows the price of this pair moving in an upward direction, counter to the actual movement of the pair. This suggests that a divergence is underway and the pair should correct into a bullish pattern in the near future. The impending bullish crosses on the daily Stochastic (slow) and MACD, as well as the weekly MACD, all support this notion. Going long may turn out to be a smart move today.

USD/CHF

There appears to be a fresh bullish cross on the daily and weekly chart’s Stochastic (slow) for this pair. This seems to suggest that a hefty amount of upward pressure is building under this pair. The price also appears to be floating in the over-sold region on the daily and weekly RSIs, which support the notion of a buildup in bullish pressure. Going long with tight stops appears to be preferable.

The Wild Card

Gold

The price of Gold has been climbing rapidly these past few weeks, but technical indicators unanimously agree that this precious metal is highly over-bought and over-prices at the moment. Recent bearish crosses on the daily and weekly Stochastic (slow) and MACD all suggest that there is downward pressure building atop this commodity. The price has also entered the over-bought region of the weekly chart’s RSI. Forex traders have a chance to enter a downward correction to a highly over-bought commodity by going short on this metal now, and at a great entry price.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By Chris Donnell

How can you improve your forex system with filters? You might be looking for a way to improve your successes. You might want to get in on trends in trading. What are some ways to identify the ideal time to join in? See examples about this article and our Forex Systems on our Forex Blog site. How can you tell if the popular trend is moving in a direction that you like?

Experienced traders know that nothing is guaranteed but filters can help. Just as carbon filters help eliminate pollutants from kitchen sinks, leaving you with clean water, you can use filters when trading.

Moving averages and balance point line are two crucial filters found in Top Gun forex training. Here is a simple overview of how to use these filters. These filters are most successful when used concurrently with trading rules. Trading rules will be explained in a different article. Filters may also be more effective when used with multiple time frame analysis.

The Top Gun forex course discusses its trademark balance point line. You can find a short discussion of the balance point line in the second part of the Support and Resistance article. The balance point line follows the following guidelines: above the line, search for possible trades to buy; when below the line, search for possible sells. Of course, this is a very simplified explanation, and you will also want to look at multiple time frames (which will be discussed in another articles), as well as look at trending tools which can be crucial to your success. You should combine the balance point line with additional trading methods.

Another filter method is moving averages, these are common among forex software programs. Some typical moving averages are: the 20 period hourly average as well as the 10, 20, 50, and 200 day moving averages. What would the strategy be? One kind of strategy is if the price is higher than the previously named averages, then you should search for buys. Of course, there are other ways to use moving averages, but this method is the easiest.

Here is another Top Gun forex strategy filtering method. Pay attention to lows and highs. So, if a price goes higher than monthly, weekly, or daily filters, then you will want to search for buys. Sure, you might want to review other tools, this is only a quick and easy overview.

To sum up, the balance point line, highs and lows, and moving averages, are all essential techniques in the Top Gun forex training program. Additional articles will discuss how to identify resistance and support, how to develop trading plans, and how to create rules for trading.

This article is in no way meant to be investment advice. It is merely for educational purposes and to help you think in new ways about trading.

About the Author

Chris Donnell is a professional trader. See many examples of his tools, systems, and trades on his ForexBlogFX.com site.

USDCAD formed a sideways consolidation in a range between 1.0191 and 1.0378. Bounce towards 1.0378 key resistance would more likely be seen, a break above this level will confirm that the downtrend from 1.0672 has completed at 1.0191 already, then the following upward move could bring price back to 1.0600 area. Key support is at 1.0191, only break below this level could indicate that the downtrend from 1.0672 has resumed, then further decline could be seen to 1.0150 area.

Daily Forex Forecast

By George Koumandaris

The Bank of Japan made it clear that it is willing to intervene in the markets in order to curb the Yen strength. This can translate into a trading opportunity for the USDJPY when coupled with Technical Analysis.

The Bank of Japan Intervention was one of the most interesting events in the currency markets over the last few weeks.

The Bank of Japan implied that they will intervene (sell the JPY) if the price starts to fall below 85.00. The price of USDJPY is around that area now, so if it makes another down leg then the BOJ could potentially intervene again. This should cause the price to post a dramatic rise.

The BOJ intervened in order to respond to concerns about the yen’s rise. The intervention took place on last Wednesday for the first time in six years to knock the currency lower.

Bank of Japan money market data indicated that the yen-selling may have amounted to1.86 trillion yen. This is a record amount that demonstrated to the market that the Bank of Japan means business. This should definitely have an impact on the market’s expectations regarding the Yen.

Prime minister Kan is facing a divided parliament so he wants to show that he is able to take decisive action in order to curb the Yen strength which is hurting Japan’s exports, which are the main driver of the Japanese economy. In addition, a strong Yen may push Japanese firms to relocate abroad as the strong Yen harms their global competitiveness. In turn, this could increase unemployment in the country.

From a technical perspective, the pair has posted a pullback and is now trading around a key support level denoted by Support S1 around the 84/84.50 area. Trade Signals is a buyer around these areas targeting the Resistance R1 area, around the 88.00 area.

This is something I will be watching closely since when you have Fundamental and Technical factors in your favor, the probability of success increases dramatically.

Happy Trading!

About the Author

George Koumandaris, Senior Trader in TradeSignals.com. Has over 10 years experience of bonds and currencies trading. He was trading government and corporate bonds for a big bank as an institutional buy side trader. He has an M.B.A. specializing in Risk Management, Holds a Certificate in Risk Management from New York University (NYU) and certified by CySec and is licensed to Trade several Asset Classes within the EU.