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Hi Traders, here’s another gartley pattern and elliot wave count confluence. See the USD/JPY H1 chart…..

What a beautiful convergence of Inverted Head and Shoulders, Elliot Wave and Gartley pattern, all in one! Even though this is a great opportunity and great set up, you still need to exercise caution in current market conditions. Please assess your own risk appetite, don’t trade with scared money; if you do,you will not be successful in forex trading. Now back to the chart, see the perfect elliot wave count, a classic 5 motive wave count and 3 corrective wave count. It forms an inverted head and shoulder, and price ended right at the previous support becomes resistance. A gartley was formed right at the support and resistance. Look out for price action to sell, see how it bounced off at the head of the head and shoulders pattern? Beautiful isn’t it? Frankly, this trade is risky because of the FOMC. Anyway, it was a good trade, hope you guys catch it.

If you don’t know the way I trade, I hope you can spend sometime going through my previous posts, click below for back posts and learn how to trade forex successfully. Where can you learn to trade forex for free but here?

Trade Well

Posted In: Daily Technical Analysis Tips and Picks

Hi Traders, It’s been another crazy choppy week. Like I said, the bailout plan is only temporary, if those who have heed my warning on bailing yourself out before the window closes when DOW is making 500 pts advance, congratulations. 700 billion is way too little to save wall street, it is only enough t feed the fat cats in wall street. So what’s next? I told my friends that the DOW will break 10k, all I get is laughter and mocking jokes; look who’s laughing now?! All I can see is Paulson and Benanke is not addressing the issue at all, all they want to bailout is their own fat wallets. The cause of his whole sub-prime crisis started because of housing, and they are not doing enough from stopping the housing collapse. So what if the banks are injected with capital? The banks are not lending, if the banks are not lending, how will the people get finances to buy houses, and how will the prices be kept from falling, let alone stabilizes. Equation is simple, housing continues to collapse, economy continues to fall.

Gold has been doing some movements lately, are we in the trading area to by gold? Let’s see, look at the daily chart…..

Ok traders, I have done all the homework for you, what do you see? It is a classic Elliot Wave count, with an Inverted head and shoulders pattern. See the convergence. Gold price has done a nice motive wave of 1-2-3-4-5, and now is making a corrective wave of A-B-C. With the confluence of an inverted head and shoulders pattern. If you have done a measurement of price projection on the inverted head and shoulders pattern, it will end at $1053, ye, $1053! If you extend the neckline, there is a confluence with the price projection of the inverted head and shoulders somehow. Elliot wave, inverted head and shoulders and butterfly pattern all converge on this technically incline gold, it looks so tempting as to just place my trade in. But unfortunately, I may not be too interested, looking at the current situation, something is amiss fundamentally. If you have done Intermarket analysis, you will know that gold rises on oil spike and dollar falls. But at present, the Dollar is making a high, and oil is falling; somehow the picture is not right. And by the way, gold trading is expensive, make sure you have checked the charges and fees with your broker before entering a trade. So when gold rises, dollar falls, do your math, the gains won’t be that great, it is only good for a hedge against a declining dollar. UNLESS gold is bought and sold with other currencies, then I will be interested. Well, please do your due diligence before you enter any trade, don’t do it just because I said so. Trade with discretion, trade with your own decision, not on others, ultimately it is your own money that is at risk!

Below are some links that I have traded successfully on spot gold trading, go through it, they are great resources to learn technical analysis.

Spot gold trading 1

Spot gold trading 2

Spot gold trading 3

Spot gold trading 4

Spot gold trading 5

Spot gold trading 6

Spot gold trading 6

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Hi Traders, here is another triangle breakout trade set up on USD/JPY. Let’s look at the USD/JPY H4 Chart…..

Price has broken out of the triangle, retraced, and has headed back to the triangle trendline again. This is what a triangle breakout price action will take. You can also see that the price is hesitating at the previous support, I will be interested to go short here. BUT always wait for confirmation before you do that, if you ever enter a trade based on someone else’s due diligence, you are in for big trouble. Look for signal confirmations, price action, chart patterns on lower timeframe before you execute any trades. 2trade set ups today, not too bad after a long winter, finally the bailout debate has got underway and it’s over , let’s hope that the forex market has found it’s direction and trade according to the trend, remember, the trend is your friend, until it ends (that’s my modified quote, trade marked, lol).

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Hi Traders, can you believe it? Dow Jones is down 777 pts !!!!! My oh  my, this is the greatest free fall in a day anyone has ever experienced.  I have posted something on my blog saying that Benanke and Paulson may not get his bazooka or bailout, and true enough, the bailout was not passed (click here to read my previous post comment on the bailout). To be honest, even if there is a bailout, the market would have fallen also, but at a slower pace, the bailout is just a stall tactic to calm the markets. Well, maybe the voters knew this all along and decided not to play along with Bush, in supporting the fat cats in wall street with the money of the people in the streets. Personally, I welcomed the bailout if there is any, it will somehow give a soft landing to the markets around the world, I hope anyone out there heed my advise to get out of the market before the window closes (something I posted before) when the Dow Jones responded to the bailout plan with 500 pts jump. My advise, keep cash, cash is king in situations like this. I will not be buying gold even though gold is spiking, it is just way too volatile, and the returns is not worth the volatility on my personal view.  So much for the market, now let’s look at the EUR/USD…..

This is a EUR/USD H4 chart. Look at the price, it is doing a triangle, you are looking at a triangle breakout trade. Price action determines to breakout from the triangle pattern towards 1.4170 and 1.4090. More likely it will bounce off at 1.4090 because of the multiple support and downtrend, convergence on gartley pattern on both areas. Price will likely to move back to the trangle trendline and bounces off downwards. Personally, I don’t really trade triangle breakouts, as there are not much confirmation to enter a trade, I will be more interested to enter at the reboound on the trianle trendline again. Look for confirmation before you enter any trade, as forex market is very volatile for the past few weeks, be really careful out there, you may be trading on thin ice.

Trade Well

Hi Traders, did you catch the trade I sent out yesterday? Well well well, what did you know, it was unexpectedly great. Look at the USD/CHF chart…..

It went to the target area I have spotted; Multipe convergence on gartley patterns, double drives, support and resistance on the H4 and 150MA moving average. Read my previous post on how I made a trade entry (click here gartley patterns). It just came right down with a 70 pips gain, if you trailed your trade. I will have to agree that this is a risky trade, look at the 15min chart, there are not much confirmation on it, pretty slight. But if you think that you are not confident in taking this trade, then don’t. Well, it works out for me after all. And traders, if you think that this is a spoof, a gag, a photoshoped chart, just look at the time of entry of my blog; and to those who visit my blog often will know that all my trades are real. To the doubters, you can carry on with your “forex systems” and hope to be rich. Trade with me, walk along with me in my journey, you will know that forex trading is not a dream. Of course, it’s not a 100% sniper shot, forex trading is like running a business, take care of the down side, the upside will take care of itself.

Trade Well

Hi Traders, Trade alert! If you want to squeeze some trades out of this boring market, here it is. Look at the usd/chf 60min chart.

You can look at the stochastics, it has a negative divergence going on. There are 2 levels of Double Drives, or it can be a gartley pattern on 1.0900 and 1.0960 levels. Personally I would like the price to go to 1.0960 level as that will also converge with my 150MA. If you go to H4 chart, you can see that it has quite a strong support and resistance also. Like I always say, please don’t force trade, wait for price action, signal confirmation before you execute your trades. No price action, No trade, it’s as simple as that. If you are using standard lots or min lots to trade, you can de-stress psychologically by looking at pips in your profit/loss; see it as pips gain or loss, not money gain or loss. That way, you can trade with ease. Happy Hunting!

Trade Well

Hi Traders, it’s been sometime I have not been updating my forex blog. Well, if you are in the forex market, you would have realized that the market is flat, boring, no show. I only had a good run on GBP/USD last week making 90pips. For the rest of the days till now, there is just no opportunity to enter. This is the time to practise some trader’s psychology, if there is no trade, don’t trade. If you force trade, then you are on the road to disaster. Never break your own rules!

Basically the market is waiting for the mother of all bailouts in wall street. When the market rallied close to 500pts in Dow Jone, I have cautioned my friends that this is the best time to get out of the market before the window closes; it is not the opportunity to buy, if you did, you are practically chasingthe market. True enough, Dow and the rest of the world went down again. The reasom being, everyone is waiting for the 700 billion to be approved. My view on the bailout is I welcomed it, it will somehow give the market a breather and a chance to have a soft landing. The market is not going to recover anytime soon, as the equation is very simple: If the housing is not solved, the market is not going to recover. Anddo you think that Benanke and his gang is going to get the bailout? Personally, I hope he will, but I doubt he could. You can read all about it on CNN, some of the congress thinks that the president will be in his seat for just a few months left, probably so is Benanke. If they are going to pass the bailout, if anything goes wrong, they will be the ones that are staying behind to fix the mess. Benanke was asked what if the bailout did not worked, do they still have enough money? Benanke simply KEPT QUIET.

Well, I really do hope that this bailout or no bailout thing gets underway, because I need the market to be ALIVE again. My caution to all traders here, don’t force trade in such environment, go read a book, walk the dog or catch a movie.

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Hi Traders, I believe you would have noticed there is a change in trend lately in the 4 majors, USD/CHF, USD/JPY, EUR/USD and GBP/USD. The reason behind is because there is a heavy selling in the dollar. But if you really srcutinize the daily chart in the 4 majors, this change in trend is only a retracement or pullback. In a shorter term, the trend for EUR/USD and GBP/USD will be up, it will eventually go back to the downtrend; probably EUR and GBP may be selling harder than the dollar. I will remain cautious in these few days, and will only trade really short-term. Just be careful! If you are in doubt, stay OUT!

Trade Well

Heightened risk aversion dominated the markets at the start of the week amid a fresh bout of turmoil in the financial sector. The combination of Lehman Brothers filing for Chapter 11 bankruptcy, Merrill Lynch being acquired by Bank of America and fears of AIG teetering near the brink sent ripples through the major equity bourses with the Dow Jones plummeting by 4.42%, the Nasdaq lower by 3.6% and the S&P 500 plunging by 4.71%. The yen advanced sharply across the board as traders unwound risky positions, rallying toward the 104-level against the dollar and advancing to the 186-region versus the sterling.

Earlier in the session, credit rating agency S&P’s cut the long-term rating for AIG from AA- to A-, citing a “combination of reduced flexibility in meeting additional collateral needs and concerns over increasing residential mortgage-related losses”.

A barrage of US economic reports is slated for release on Tuesday, including August real earnings, CPI, net Treasury capital flows, and the September NAHB housing market index. The key highlight for tomorrow will be the FOMC’s monetary policy decision, due out at 2:15pm. Prior to the events this week, the Fed was largely expected to leave rates unchanged at 2.0%. However, given the failure of Lehman Brothers and burgeoning fears of a domino effect on Wall Street as the malaise spreads under the increased scrutiny of counterparty risk, the Fed may be compelled to slash rates by 25-bp tomorrow to 1.75%. With crude oil retreating beneath the $100 per barrel level to a new 7-month low at $95.11, the easing of inflationary pressure will provide the FOMC with more leeway to stimulate the struggling economy with additional policy easing.

In the coming session, traders will digest inflation reports from both the UK and Eurozone, offering markets a glimpse of whether rate cuts from both respective central banks may be imminent. The UK August CPI figures are seen sharply higher, up 0.5% versus a flat reading in the previous month while edging up to 4.6% from 4.4% a year earlier. Also slated for release overnight will be Germany’s September ZEW survey, with economic sentiment at -54.0 from -55.5 while the current situation index is seen deteriorating further to -15.0 from -9.2.

Hi Traders, it’s another week, another monday, another opportunity to make some money. I am sure everyone in the world will be shocked by the filling of bankruptcy by Lehman Brothers. Just imagine Lehman Brothers which is able to withstand the onslaught of the railroad bankruptcies, the great depression, But it cannot escape the crutches of this sub-prime crisis, I really fear that more is coming and this is not the end.

Anyway, I have readers like Li and some others that have asked me how long did I take to become a successful forex trader? Well, to answer that question wasn’t easy, I have been interested in the stock market something like 7 years ago, but did not have the time to study it because of some businesses I am running. It was only 3 years ago that I started studying macro economics  on my own. I took up this subject because I knew that Intermarket Analysis is very important to every trader; as all markets affect one another, they ae all linked and related. Be it commodities, forex, stock or index, they are all related, and by studying one market you can get a hint of what other markets are going to react. Followng that, I started reading lots of books on stocks picking, like One Up On Wall Street by Peter Lynch, other Warren Buffet stuffs; I read Times, Newsweek, Financial Times, Bloomberg, watch Bloomberg TV; anything that talks about finance and the market I can get my hands on, I will read and study it. During the past 3 years, I would have probably read close to a hundred books. But it was only a year ago that I discovered forex and has been started trading forex since.

What makes me trade forex then stocks? Well, I find that forex is less complicated than stocks and you can profit both ways. Stocks can too, but you need other financial instruments like CFD to do it, it is way too troublesome. When compared to stocks, forex charts are easier to understands, while stock charts have lots of gaps and it can be driven by big institutions. And of course, when I trade forex for a good living, I have risks too, but risks are managed to the least when you have the knowledge of what the market is doing. That is why I always encourage my fellow traders not to concentrate too much on indicators, they are ALL lagging indicators; use leading ones like Gann or Fibonacci. And study support and resistance, they tell you a very true story as compared to indicators.

There is NO short cut to forex trading, if you really believe you can be a trader and start making money just by attending a course, I think you are holding on to a dream. Courses are good, they give you good information fast but please be really careful when you trade live. Like I said in my previous post, I don’t believe in systems, forex systems rely heavily on indicators eg. MA crossover, MACD crossover or you can combine them togther to tell you a buy/sell signal; forex systems can only perform in a certain market, whether uptrend or downtrend, but when the market is consolidating you will be stuck.

So my fellow traders, once you have decided to trade forex as a profession, you have decided to put in commitment to learn it. There is NO short cut, there is NO holy grail, there is NO forex system that can make you money consistently, only knowledge and wisdom is the way.

Trade Well