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Financial Markets are Tense…

This is a Guest Post by Tom Cleveland from ForexCharts.net

Financial Markets are Tense, But the Fate of the Euro Hangs in the Balance

Financial markets are presently in a “stuck place”. Nearly every index from stocks to commodities and even to currencies has been hovering in a tight trading range for the past several weeks. Traders have been frustrated, as volatility has also remained low. There is opportunity in chaos, but not when prices are jerked back and forth in “whip-saw” like movements. Treading in these waters often results in being sliced to ribbons in a heartbeat.

Ranging markets, however, eventually morph into meaningful trends. The timing is the only issue to resolve, and, in circumstances like these, the best approach tends to be to take a longer-term outlook and try to draw insights from this broader perspective. This type of analysis combines basic fundamentals with technical data to form a basis for projecting near-term prospects. The “EUR USD” currency pair has become the current focal point for the trading community. Its fate will dictate the direction for stocks, instead of the other way around, but it presently floats at levels that seem to defy gravity.

The following diagram of the Euro versus the Greenback paints the recent “picture” for our analysis:

The hourly pricing behavior of the “EUR/USD” is presented for the past ten months, together with several indicators and other technical information. The “Ichimoku Kinko Hyo” indicator system is often helpful at longer timeframes where “noise” levels are lower and pricing patterns are more predictable. The “Kumo Cloud”, represented by the Aqua/Blue shaded regions on the chart, is the most distinctive aspect of this system.

Here are a few technical insights from the above diagram:

• The Euro has been trending downward for months within a defined channel, depicted by the parallel red lines;
• The Euro, to the consternation of all, has rebounded from the lower trend channel line on two occasions during this period. The explanation for this source of strength has been threefold. Foreign exchange reserve managers around the world have shifted their portfolio allocation back to Euros after the crisis was reduced. Central banks have also stepped in to ensure adequate liquidity in the region. Lastly, banks and corporations have repatriated foreign earnings to prepare for the oncoming recession in the region;
• A pronounced “Head-and-Shoulders” pattern has recently formed, but the “neckline” has been tested on several occasions to no avail. Traders would expect an abrupt fall down to the $1.24 level based on this pattern alone;
• The “Ichimoku” indicator speaks to two issues. The “Kumo Cloud” has mirrored the upper trend channel line, and the Euro has had difficulty each time it has attempted to penetrate the cloud. Secondly, all moving averages and current prices have converged within the cloud, uncertain as to their next move.

Basic software trading platforms provided by currency brokers can be used to create this same analytical picture. From a fundamental perspective, Europe is headed for another business downturn. Bond yields for weaker member states are rising. Iran is adding uncertainty to the oil market. China is ratcheting back its growth in response to less demand from the West. Lastly, the U.S. recovery appears to be losing steam and bringing back memories of last year’s failed recovery rally, but the possibility of a “QE3” program from the Fed has bolstered the strength of all currencies versus the Dollar.

All signs point south for the Euro. Currency experts have forecasted its fall for months, some down as far as parity. Its gravity-defying act will have to conclude at some point. The question is not “if?” but “when?” Only time will tell.

Posted in News

Forex Ladder GAINS 226 Pips Weekly on EUR/USD since Jan 2010

It’s been a little over 3 months since I publicly announced the Forex Ladder Trading Method. Since then I’ve been working with a small group of traders in the Hedge Report.

The EUR/USD is about to make another BIG MOVE…keep reading to see how you can benefit from it…

Before telling you *HOW* to grab the next big EUR/USD movement, allow me to *SHOW* you the results of the last 145 trades this method has produced:

Forex Ladder Produces Results

Although this new forex trading method has only been available to a small group of traders for the past few months, I spent many years painstakingly developing this method prior to releasing it. To prove the results, here is a summary of EVERY Forex Ladder Matrix trade that has happened since January 2010 for the EUR/USD on daily charts:

 

Date	Buy	Sell	Gain/Loss	Total
01/25/10	1.4080	1.4134	0.0054	0.0054
01/27/10	1.3982	1.4036	0.0054	0.0108
01/28/10	1.3924	1.3985	0.0061	0.0169
02/02/10	1.3900	1.3904	0.0004	0.0172
02/03/10	1.3857	1.3906	0.0049	0.0222
02/03/10	1.3779	1.3953	0.0173	0.0395
02/04/10	1.3679	1.3988	0.0309	0.0705
02/08/10	1.3747	1.3941	0.0194	0.0898
02/08/10	1.3747	1.3664	-0.0083	0.0816
02/08/10	1.3747	1.3659	-0.0088	0.0728
02/08/10	1.3747	1.3703	-0.0044	0.0684
02/10/10	1.3602	1.3758	0.0156	0.0840
02/10/10	1.3672	1.3741	0.0069	0.0909
02/15/10	1.3656	1.3614	-0.0042	0.0868
02/15/10	1.3656	1.3603	-0.0053	0.0815
02/15/10	1.3656	1.3629	-0.0027	0.0788
04/26/10	1.3209	1.3323	0.0114	0.0902
04/26/10	1.3258	1.3399	0.0141	0.1043
04/26/10	1.3306	1.3324	0.0018	0.1061
04/26/10	1.3209	1.3412	0.0204	0.1265
04/29/10	1.3326	1.3355	0.0029	0.1294
04/29/10	1.3326	1.3251	-0.0075	0.1218
04/29/10	1.3326	1.3199	-0.0127	0.1091
04/29/10	1.3326	1.3231	-0.0095	0.0996
04/29/10	1.3326	1.3279	-0.0048	0.0948
05/02/10	1.3182	1.3356	0.0173	0.1121
05/02/10	1.3238	1.3293	0.0055	0.1177
05/09/10	1.2924	1.2662	-0.0262	0.0915
05/09/10	1.2924	1.2814	-0.0110	0.0804
05/11/10	1.2621	1.2704	0.0083	0.0887
05/12/10	1.2578	1.2651	0.0074	0.0961
05/17/10	1.2264	1.2346	0.0082	0.1043
05/23/10	1.2456	1.2268	-0.0188	0.0855
05/23/10	1.2348	1.2398	0.0050	0.0905
05/24/10	1.2306	1.2326	0.0020	0.0925
05/24/10	1.2188	1.2481	0.0293	0.1218
05/25/10	1.2207	1.2459	0.0252	0.1470
05/27/10	1.2302	1.2614	0.0312	0.1782
05/27/10	1.2302	1.2297	-0.0005	0.1777
05/27/10	1.2302	1.2243	-0.0059	0.1718
05/27/10	1.2302	1.2343	0.0041	0.1759
07/05/10	1.2496	1.2551	0.0055	0.1814
07/05/10	1.2526	1.2575	0.0049	0.1863
07/07/10	1.2588	1.2676	0.0088	0.1951
07/11/10	1.2598	1.2783	0.0011	0.1962
07/14/10	1.2675	1.2692	0.0016	0.1979
07/14/10	1.2633	1.2644	0.0185	0.2164
07/14/10	1.2548	1.2831	0.0283	0.2447
07/14/10	1.2597	1.2880	0.0284	0.2731
07/19/10	1.2734	1.2996	0.0262	0.2993
07/21/10	1.2880	1.2881	0.0001	0.2994
07/22/10	1.2941	1.2957	0.0017	0.3010
07/25/10	1.2875	1.2980	0.0105	0.3116
07/26/10	1.2934	1.3027	0.0093	0.3209
07/28/10	1.2814	1.3037	0.0223	0.3432
07/28/10	1.2799	1.3073	0.0275	0.3706
08/01/10	1.2853	1.3093	0.0240	0.3946
08/01/10	1.2890	1.3149	0.0260	0.4206
08/02/10	1.2957	1.3219	0.0262	0.4468
08/05/10	1.2997	1.3240	0.0243	0.4711
08/05/10	1.3000	1.3300	0.0300	0.5011
08/09/10	1.2993	1.3147	0.0154	0.5166
08/09/10	1.3157	1.3147	-0.0010	0.5156
08/09/10	1.3212	1.3147	-0.0065	0.5091
08/09/10	1.3119	1.3147	0.0028	0.5119
08/09/10	1.3176	1.3147	-0.0029	0.5091
08/09/10	1.3180	1.3147	-0.0033	0.5058
08/09/10	1.3260	1.3147	-0.0113	0.4945
08/09/10	1.3198	1.3147	-0.0050	0.4895
08/10/10	1.3160	1.3005	-0.0155	0.4740
08/10/10	1.3082	1.3005	-0.0078	0.4662
08/18/10	1.2813	1.2865	0.0052	0.4714
08/19/10	1.2765	1.2831	0.0067	0.4780
08/23/10	1.2632	1.2715	0.0083	0.4863
08/23/10	1.2586	1.2677	0.0090	0.4954
08/27/10	1.2677	1.2643	-0.0034	0.4920
08/28/10	1.2636	1.2706	0.0071	0.4990
08/31/10	1.2797	1.2663	-0.0134	0.4856
08/31/10	1.2797	1.2722	-0.0076	0.4780
08/31/10	1.2797	1.2709	-0.0088	0.4692
08/31/10	1.2797	1.2768	-0.0030	0.4663
08/31/10	1.2797	1.2728	-0.0069	0.4594
08/31/10	1.2797	1.2695	-0.0102	0.4491
08/31/10	1.2797	1.2682	-0.0116	0.4376
08/31/10	1.2797	1.2740	-0.0058	0.4318
09/20/10	1.3056	1.3115	0.0059	0.4377
09/20/10	1.3071	1.3159	0.0088	0.4465
09/20/10	1.3070	1.3204	0.0135	0.4600
09/23/10	1.3363	1.3393	0.0030	0.4629
09/23/10	1.3343	1.3443	0.0100	0.4729
09/27/10	1.3420	1.3501	0.0081	0.4810
09/27/10	1.3462	1.3540	0.0078	0.4889
09/29/10	1.3574	1.3654	0.0080	0.4969
09/30/10	1.3612	1.3689	0.0077	0.5045
09/30/10	1.3625	1.3752	0.0128	0.5173
10/04/10	1.3726	1.3783	0.0057	0.5230
10/04/10	1.3643	1.3847	0.0204	0.5435
10/05/10	1.3718	1.3898	0.0180	0.5614
10/06/10	1.3891	1.3972	0.0081	0.5696
10/10/10	1.3849	1.3991	0.0142	0.5838
10/12/10	1.3937	1.3965	0.0029	0.5866
10/13/10	1.3913	1.4003	0.0090	0.5956
10/13/10	1.3837	1.4049	0.0211	0.6168
10/13/10	1.3917	1.4094	0.0177	0.6345
10/14/10	1.3958	1.4141	0.0184	0.6528
10/18/10	1.3974	1.3920	-0.0055	0.6474
10/18/10	1.4053	1.3920	-0.0133	0.6341
10/18/10	1.3902	1.3920	0.0017	0.6358
11/15/10	1.3531	1.3633	0.0102	0.6460
11/17/10	1.3627	1.3529	-0.0098	0.6362
11/17/10	1.3627	1.3572	-0.0055	0.6308
11/21/10	1.3614	1.3687	0.0077	0.6384
11/22/10	1.3553	1.3611	-0.0127	0.6257
11/22/10	1.3442	1.3737	0.0063	0.6321
11/23/10	1.3302	1.3674	0.0372	0.6692
11/25/10	1.3297	1.3345	0.0049	0.6741
11/25/10	1.3248	1.3345	0.0096	0.6837
11/28/10	1.3184	1.3269	0.0085	0.6923
12/02/10	1.3370	1.3115	-0.0256	0.6667
12/02/10	1.3370	1.3033	-0.0338	0.6329
12/02/10	1.3370	1.3096	-0.0275	0.6054
12/02/10	1.3370	1.3208	-0.0163	0.5892
12/02/10	1.3370	1.3271	-0.0100	0.5792
12/07/10	1.3226	1.3339	0.0113	0.5905
12/08/10	1.3240	1.3324	0.0084	0.5989
01/11/11	1.3051	1.2977	-0.0073	0.5916
01/11/11	1.3051	1.2928	-0.0122	0.5794
01/11/11	1.3051	1.3003	-0.0047	0.5746
01/12/11	1.3279	1.3178	-0.0101	0.5646
01/16/11	1.3381	1.3439	0.0058	0.5704
01/20/11	1.3459	1.3528	0.0069	0.5773
01/20/11	1.3463	1.3592	0.0130	0.5903
01/24/11	1.3562	1.3696	0.0134	0.6037
01/26/11	1.3620	1.3733	0.0113	0.6150
01/27/11	1.3652	1.3598	-0.0053	0.6097
01/27/11	1.3653	1.3598	-0.0055	0.6042
01/27/11	1.3690	1.3598	-0.0092	0.5950
01/27/11	1.3654	1.3598	-0.0056	0.5894
01/27/11	1.3709	1.3598	-0.0111	0.5783
01/30/11	1.3645	1.3720	0.0075	0.5858
02/02/11	1.3787	1.3715	-0.0071	0.5787
02/02/11	1.3812	1.3715	-0.0096	0.5691
02/02/11	1.3764	1.3715	-0.0048	0.5643
02/07/11	1.3570	1.3572	0.0002	0.5645
02/07/11	1.3529	1.3572	0.0043	0.5689
02/07/11	1.3600	1.3572	-0.0028	0.5661

That’s 226 Pips a Week!

As you can see, over the course of the 25 weeks trades were signaled, there was an overall gain of 5,661 pips! This is impressive considering that the EUR/USD from it’s high to it’s low during the same time period only moved 2,538 pips!

Out of the 145 total trades, 90 (62.1%) were profitable. The best part about this trading method was that it takes less than 10 minutes a day AND there’s nothing to think about. You simply enter your buy/sell orders and you’re done for the day.

How Does It Work?

The Forex Ladder takes the most recent price data from the forex charts and gives you buy and sell targets. It works by allowing you to buy low & sell high (the secret to all profitable trading).

All you need to do is determine if the currency is trending (takes 30 seconds or less with a simple trick), then login to your forex account to place your orders (takes 5-7 minutes).

By placing many trades, you are able to put the odds of being right (making a profitable trade) on your side. It’s impossible to be right all of the time, but you can be right more than you’re wrong…and THAT is a very profitable SKILL to possess

What About Other Timeframes and Currency Pairs?

The Forex Ladder also works well with other timeframes and currency pairs. There are certain timeframes you should avoid for ALL trading (covered in the forex ladder course), this mistake has undoubtedly ruined untold fortunes for forex traders worldwide.

Next EUR/USD Price Wave Imminent

It’s been about 6 weeks since the EUR/USD had a trade using the forex ladder method. The EUR/USD is currently approaching a new price wave. With such a potentially lucrative movement about to happen, I want to give you a “heads up” on how you can take advantage of this new opportunity taught in the Hedge Report Member’s Area…I’ll even PROVE the results to you:

Click Here to Enroll in the Hedge Report

to Benefit from the Next EUR/USD price wave!

Posted in Technical Analysis

126 Pip Pivot Point Profit

Pivot Points are an incredibly useful online forex trading technique. A recent trade of mine yielded a 126 pip profit in only 50 hours, which grew my entire trading account by 10.04%, which is exceptional for 20-30 minutes worth of work!

Why Forex Pivot Points?

Pivot Points are one of the most commonly used methods of online forex trading. The pivot point takes the High, Low, & Close prices from yesterday and generates Support & Resistance target prices.

Forex Pivot Points are uncannily accurate when combined with the right directional entry strategy. In the example below you’ll notice the predictive nature of forex pivot points for online forex trading success.

Spotting Trend Direction

In the Forex Sailing course I explain the fibonacci wave theory for determining trend direction. In a recent post, I also explained EMA/MACD divergence for signaling key trend movements.

While the trade below could have been an excellent Sail, it also would have required a stop of several hundred pips, which would have violated the money management system followed by the LIVE Forex Training class.

For this reason, I used pivot points to capture a shorter term profit of 126 pips in 2 days. Here’s how the trade unfolded.

EUR/USD Daily Trend Moves Down

From Forex Sailing we had a forex umbrella handle form after breaking a longer uptrend on the daily chart for the EUR/USD. I’ve labeled the fibonacci wave with the key points of I, II, II on the daily chart below:

In the chart shot above notice how there is good separation of the EMAs and how the MACD is increasingly negative as prices make new lows. This is a strong signal that prices will continue moving down for several days. We also moved past II, which means we should move to a lower low to reach IV.

To confirm this direction I also looked at smaller timeframes, which lined up nicely as well to indicate downward movement. As indicated on this 4 hour chart below:

In this chart we also had nice EMA separation, and an increasingly negative MACD. While there was a fair amount of divergence, the trend direction was still downward. But a large enough stop was needed to make sure the divergence didn’t retrace too much before the trend continued.

The 15 min chart below also indicated a downward moving trend:

As newer lows were made we maintained a widening of the EMA, we also maintained strong negative MACD divergence as new lows were made.

Downtrend Confirmed -> Let’s Trade

With a downtrend confirmed on these timeframes, it was time to look at our pivot points for good stop/limit prices. For the entry price I used a price close to the pivot and found a EMA/MACD divergence on a 5 min chart.

Initially I set the following trade parameters:

Entry: 1.3397 short

Stop: 1.3547

Limit: 1.3274

This gave us a good reward/risk ratio of 82%. We were below the pivot price of 1.3453, so the stop was less likely to be hit than our limit. This initial trade would have netted 123 pips profit.

24 Hour Adjustment

The next day the pivot points were recalculated because the trade was still in progress.

Entry: 1.3397 short

Stop: 1.3411

Limit: 1.3271

This reduced our risk to only 14 pips, and increased our profit 3 pips from 123 to 126 pips. The next day the trade was exited for a profit. Here’s the picture of what happened during the life of this trade on the hourly chart:

You can see the entry price of 1.3397 (red line). You can see the price at which the limit was hit 50 hours later at 1.3271 (blue line). The stop isn’t included on this chart because that price was never approached

As you can see the price consolidated a bit, but moved downward overall. We managed to get in near the top of this price movement and captured a 126 pip profit in only 50 hours.

Posted in Technical Analysis