Monthly Market Updates on Exotic Crosses (December 2012)

“I certainly don’t expect anyone to make 10% a day in their account. What about per week? Still a bit unrealistic. Monthly? Possibly. Quarterly? Probably. Yearly? Definitely so!” – Rick Wright

Last month, the currency markets were generally able to maintain their predominant biases, in spite of prevalent corrections and equilibrium phases. These biases are expected to continue in the month of December 2012 – it’ll even be seen till the end of 2012. However, this doesn’t rule out the possibility of pullbacks and rallies in near-term. 

Below is the summary of some of my trading forecasts this month: 

AUDUSD

Primary trend: Bullish

Last month, the AUDUSD consolidated to the upside. We can say that the bullish trend in the market is still valid. The MACD histogram and signal line are above the zero line. The ADX +DI is still above its –DI counterpart. I would prefer a long trade for this month.

Monthly Market Updates on Exotic Crosses (December 2012)
Monthly Market Updates on Exotic Crosses (December 2012)
 

AUDJPY

Primary trend: Bullish

The bullish trade that was called for the month of November 2012 was valid on this market. This cross moved up by more than 300 pips last week – good news for trend riders. Right now, this bias is still valid. The MACD and the ADX are still showing very strong bullish inclination, I would prefer to go long.

  

EURNZD

Primary trend: Bullish

This cross moved up moderately last month. The northward bias is till valid, though the trend is very weak right now. The ADX signal line and histogram are still above the zero line, but the ADX period 14 needs more confirmation before a long position is opened.

 

EURCAD

Primary trend: Bullish

Despite a dip in the price at the beginning of November 2012, the price is still bullish. It can be said that the price has gained what it lost, as far as October is concerned. The ADX 14 is pointing towards the level 30, showing a strong trend (the ADX +DI is above the -DI). Even the MACD supports this view. BUY.   

 

AUDNZD

Primary trend: Bullish

This exotic cross broke upwards in the earlier part of the last month, but was caught in some equilibrium zone towards the end of that month. There are conflicting indications on the chart. The ADX 14 is giving a sell signal while the MACD is giving a buy signal. It is better to stay out of this market right now…till a clearer signal signal.

 

GBPCHF

Primary trend: Bearish

The GBPCHF cross dropped by more than 230 pips last month. Right now, the price is around the accumulation zone at 1.4800, and should the price break it downwards, the next target could be the accumulation zone at 1.4700. The indicators on the chart also give bullish confirmation pattern. 

 

Conclusion: Just because a seemingly perfect setup occurs, that doesn’t necessarily mean that it must be a winner. Consequently, sometimes a trade may look unsure, but in reality it may be that our maturity and patience is simply under test. We shouldn’t impulsively take any signals we see, but we should take into consideration other factors as well before taking a trade. It does not matter if your situation looks hopeless. Risk management and positive expectancy will eventually bring good returns!

Some mornings I wake up with appreciation in my heart. I am so happy to be a trader, and I’m thankful for that. How grateful to say that we love trading and that trading is good.

The article is ended by the quotes below:

“There are only two types of people that want to learn to trade: those that want to know everything about trading and are prepared to spend the time to learn about the markets and those who just want to make money.” –  John Bartlett

“…The get rich quick idea can have quite the allure. The problem is that nothing works that way. To trade well you have to get comfortable with taking losses. Over and over and over.” – Richard Chignell 

Monthly Market Updates on Exotic Crosses (November 2012)

“Though the initial starts were discouraging, I kept going on with the simple reason that if some traders are making money, then there has to be a way.” – Sunil Mangwani

When the markets are really choppy, there can’t be an extended upward or downward bias. When a pair/cross makes an attempt to go down while in a choppy mode, it mayn’t even go beyond the most recent low of the last candle before it flops. This flop may be sudden or may be protracted.

Below is the summary of some of my trading forecasts this month:

AUDUSD

Primary trend: Bullish

This pair was essentially bullish for the most part of last month – though not significantly. Another bullish run is expected for this month, especially so as the USD itself has consistently failed to show protracted strength. The ADX +DI is above its –DI counterpart (whereas the ADX itself is far below the level 30, showing that the market pressure is weak). The MACD signal line is moving towards the zero line.

Monthly Market Updates on Exotic Crosses (November 2012)
Monthly Market Updates on Exotic Crosses (November 2012)
 

AUDJPY

Primary trend: Bullish

There is a ‘Buy’ signal on the AUDJPY – since the cross has turned bullish. The ADX 14 period has gone far above the level 30 (showing a strong trend), while the +DI has crossed the –DI to the upside: significantly. The MACD histogram and signal line are both above the zero line. What we have on the chart is therefore a Bullish Confirmation Pattern.

 

EURNZD

Primary trend: Bullish

Here, the MACD histogram and signal line are above the zero line, but the ADX 14 is not giving a clear direction. There is a distribution zone around 1.5800, and an accumulation zone at 1.5700. Yes, the long-term outlook on the EURNZD remains bullish, but the market itself is not attractive at the present. One would need to wait for a clearer signal before taking any position. 

 

EURCAD

Primary trend: Bullish

The bullish bias on the EURCAD cross has been very significant. The month of October 2012 saw what could be called a continuation of the northward journey in this market (which moved up by over 350 pips in that month). The ADX line is at the level 30, while the +DI remains above the –DI. The MACD histogram and signal line are conspicuously above the zero line.  

 

AUDNZD

Primary trend: Bullish

The trend on this instrument is now bullish as the Aussie proves to be a kind of stronger than the Kiwi. Lately, the price has been caught in an equilibrium zone; but it will soon go out of this zone. When this happens, it would be more probable for the price to break upwards. There is a Convergence Pattern on the chart – something that shows a potential bullish reversal.

 

GBPCHF

Primary trend: Bearish

This cross went bearish last month, before giving up a large chunk of the bearish trail. The bias still remains bearish, because the Bearish Confirmation Pattern (Divergence) is still available on the chart, although the ADX which is below the level 30 shows that the market pressure is currently weak. Should this bearish determination continue to hold on, the price could reach the support level at 1.4950. 

 

Conclusion: One trader admits: “I’ve stopped losing too much, and I’ve more patience. I feel better in the markets. Best of all, I’m happy to know that by caring about the safety of my accounts, I’m working for their lasting existence. I used to think that making hundreds of percentage per month is the ultimate goal. But now that I’ve starting risking small to lose small, I wouldn’t trade it for anything!” Loses are common in trading, but they won’t ruin your career unless you let them! In the end, it’s not the losses you encounter in the markets but how you deal with them that’ll make or break your trading career.

The article is ended by more quotes from Sunil Mangwani:

  1. “Trading without stops is like walking the tight rope without a safety net. And if my trade is stopped out by unforeseen circumstances, I just accept the loss as a part of trading and move on to the next trade.”

 

  1. “Focus on your trading process and not on the outcome. Losing trades are a ‘part and parcel’ of trading and do not expect to get all your trades correct. Accept the losses and learn to see failures and setbacks as opportunities for learning.” 

Monthly Trading Signals (October 2012)

“Years ago, when I began trading (before the days of PCs, when all you had was a chart service that came once each week) the only way you could make any money was to trade the trend.” – Joe Ross

There’s no end in sight to the current economic problems the world over. The fact now is that as the economic woes worsen, central banks simply turn out more currency, but the more they do this, the grimmer the economic woes. However economic woes have little effects on successful traders, and perhaps you could be one of them. If you aren’t meticulous about chart reading and trading signals, but meticulous about trade management, trading would be a better experience. You can control many things while trading, save for the market itself. You can control your positivity and negativity. Ideally, if loss trades are smoothed when they reach some negative territory that isn’t too dangerous to your portfolio, your mean negativity won’t be dangerous to the existence of your portfolios.

The crosses analyzed aren’t the only instruments traded with the type of analysis used. Below you’d find some pairs and crosses on which I opened positions on a monthly basis. Personally, this is what I do, not what’s recommended that others should do. Below are 7 of my open trades. I opened only 5 positions this month, because of some directionless instruments and consolidation in the markets. The maximum duration for each trade is one month, and we should note that the orders have been running before this article was written.

1. Instrument: EURCAD
Order: Buy
Entry date: October 1, 2012
Entry price: 1.2670
Stop loss: 1.2470
Take profit: 1.3260
Status: Open
Profit/loss: 86 pips 

2. Instrument: GBPCHF
Order: Sell
Entry date: October 1, 2012
Entry price: 1.5030
Stop loss: 1.5230
Take profit: 1.4539
Status: Open
Profit/loss: 121 pips

3. Instrument: AUDJPY
Order: Sell
Entry date: October 1, 2012
Entry price: 80.85
Stop loss: 82.85
Take profit: 74.87
Status: Open
Profit/loss: 70 pips 

4. Instrument: NZDJPY
Order: Buy
Entry date: October 1, 2012
Entry price: 64.60
Stop loss: 62.47
Take profit: 70.47
Status: Open
Profit/loss: -33 pips 

5. Instrument: NZDCHF
Order: Sell
Entry date: October 1, 2012
Entry price: 0.7775
Stop loss: 0.7554
Take profit: 0.8354
Status: Open
Profit/loss: -181 pips 

The position sizing is 0.01 lots for each $2000 (thus making it 0.05 lots for each $10000). When an order goes positive by 70 pips, I move the stop to breakeven. From 200-pip profit upwards, I use 50% trailing stop. Success has nothing to do with generating as many trades as possible. Rather, we could filter our trading methods and have fewer signals with higher hit rate.

Conclusion:  Meanwhile, as chart reading is very much useful, we tend to pay to much attention to it. There are reasons behind this. We want to be right in our trading activities, as it means we can predetermine our fate in the markets. Predetermining our fate as traders or predicting the markets with stunning accuracy means that we’re trading geeks. Traders seek confirmed predictability in an unpredictable arena. We long for confirmed predictability. Using as many indicators as possible makes us feel that we can predetermine our fate. Why? It’s a consensus in the currency markets that analysis paralysis makes sense. Yet, in reality, simple speculation methods can yield decent returns. 

This article is concluded with the quote below:

“One must always realize that traders aren’t paid on the quantity of trades, but on the quality of our trades. I would rather place 5 trades a month to earn 200 pips than 50 trades to earn the same 200 pips!” – Rick Wright

Monthly Market Updates on Exotic Crosses (October 2012)

“If the market conditions are not optimal, you have a choice: Stand aside and wait for conditions to change, or adapt to the reality of the current conditions… Over the years, I found that I can’t always trade my favorite markets. I have to trade in markets where I’m able to make money.” – Joe Ross

Irrespective of the timeframe used in your analysis, one thing remains important in trading, that’s the methodology that enables you to follow the trend. It’s now vivid that when Smart Money maintains long positions, pullbacks to support levels would be expected so that new long orders could be opened at those levels.

Below is the summary of some of my trading forecasts this month:

AUDUSD

Primary trend: Bullish

The AUDUSD pair experienced mixed results last month. It went up by over 350 pips and later fell by more than 200 pips. On the chart, we have a Convergence Pattern – meaning that the current bearish threat is weakening (indicated by the trendless ADX which has gone far below the level 30) as the MACD gives a new ‘buy’ signal. For this month, a long trade is preferred.

 

Monthly Market Updates on Exotic Crosses (October 2012)
Monthly Market Updates on Exotic Crosses (October 2012)

AUDJPY

Primary trend: Bearish

There were also mixed results on the AUDJPY cross last week: the first half of the month witnessed a rally and the second half of the same month saw a pullback. There is what looks like a potential bearish move on the chart. The MACD is already giving a ‘sell’ signal (as confirmed by the ADX -DI which goes up above its +DI counterpart). This new trend would be confirmed as strong when the ADX line goes above the level at 30.

 

EURNZD

Primary trend: Bullish

 In the context of the current bullish trend, this cross dropped by over 300 pips in the month September. The primary trend is still northward – giving one possibility of a buying lower in an uptrend. The ADX is trying to cross the level 30 to the upside, and when this is done, the condition on the MACD will showcase the next signal. If the signal line and the histogram are still above the zero line, then it is a ‘buy’ signal. Otherwise, it is a ‘sell’ signal.

 

EURCAD

Primary trend: Bullish

The EURCAD is still in a valid uptrend – only that the steam in the market is not that strong at the moment. I can say that there is a Convergence Pattern on the chart. The MACD still displays a clear bullish victory, and a new entry level would be confirmed if the ADX (which is presently below the level 30) crosses the level 30 upwards. If not so, the MACD histogram would be going towards zero line as the northward bias is currently violated.

 

AUDNZD

Primary trend: Bearish

The AUD is vividly weaker than the NZD: the AUDNZD crossed plummeted by over 360 pips last month. And it looks like this will continue, The ADX line is above the level 45 as the MACD shows a strong selling pressure in the markets. What we have now is a Divergence Pattern – a bearish confirmation pattern for that matter. Trend followers would do well to call a short trade.

 

GBPCHF

Primary trend: Bearish

The GBPCHF did not experience much activity last month. There was no significant movement on either side (whether bearish or bullish). However, the MACD proves that the underlying trend still looks bearish. Nonetheless, this is not supported by the -DI that is situated below the +DI. The ADX is above the level 30, trying to point upwards. If the ADX continues like this, the market may turn bullish. But it is advisable to remain neutral right now.

 

Conclusion: When some instruments go up, some instruments fall down. All instruments cannot fall at the same time or go up at the same time. Although, when some instruments nose-dive, they do so continually and thus generate clean returns. Why is this so? Southward moves tend to be more rapid and extended than northward moves.  As certain instruments fall, it portends economic problems in some areas. For instance, inflation – which is a common economic problem, isn’t just a plague of modern-day life. But whatever the economic situation says, you can become financially free as a trader.

The article is ended by the quote below. It is a food for thought by Dr. Janice Dorn:

“The answer is really quite simple, and—just like so many secrets—is hidden in plain view. The type of thinking that made you successful in life outside the markets is the mirror image of that in the markets. In “regular” jobs, in the world of real life—there are rules. These rules are set down by other people. Other people make rules and you follow them. If you do not follow the rules, you risk for losing your job or your license. Think of medicine: a doctor must abide by many rules set forth by state medical boards. If they do not, they are warned, disciplined and may have their licenses revoked. The rules are out there and doctors follow them—or don’t (at their own peril and that of their patients.)… In other words, the same type of thinking that brought you so much success in the world outside the markets will not bring you success in the markets.”

What I’ve Decided to Do in the Markets

TREND FOLLOWING IT IS!

“The trending market is an ideal market to trade and make money. What trend following is not is prediction or forecasting about how the markets will go. Trend following is based on reacting to price, price and again, price. It is not based on trying to predict price directions.” – Michael Covel

Hello:

Perhaps the most crucial aspect of the dynamics of the market is their current bias whose relevance is due to the reality that it causes the nexus between trend development and the mindset of both Smart Money and Dumb Money. Obviously, secret purchases in a northbound market is far more upwards than secret purchases in a southbound market and shorting in a southbound market is far more downwards than shorting in northbound market. Because of this, the dynamics of the market proffer crucial explanation of the popular ‘trading mentality,’ i.e. a field of study that attempts to expatiate on market reactions by analyzing the psychology of Smart Money and Dumb money. Owing to their characteristics, market biases proffer some speculative methods.

Biases happen any moment, and as such, they’re what we need to realize desired gains. Vividly, the bias ought to be in place, therefore positions sometimes mayn’t be opened in an extremely bearish trend or smoothed in an extremely bullish trend. Trading against the extremely bullish trend or extremely bearish trend isn’t the most crucial thing for a trader – the pundits of this style would merely have you misguided. The most crucial thing is the general trend. Our belief is that if a bias has started, it should keep on going. It’s much more for that to hold than it to be void especially when positions have been opened. At times, a bias may last more than expected. It can thus be challenging for speculators to keep on riding their profits when the bias still holds and not to exit based on fear.

When an analyst thinks a market is oversold, it isn’t oversold. Being oversold or being overbought is simply something imaginary. This should be construed to mean a similar thing from a financial newscaster who announces that an economic item is rated a ‘buy’ due to a turning level. No matter how logical the explanation is, or the kind of ‘degree’ they hold, whether they’re wearing a $5 tie or $50 tie, in most cases they’ll only achieve 50% accuracy in their analyses. If they’ve more than that, it means that they short weak markets and buy bull markets.

An adept rule-based speculator enjoys more free time than a mechanical trader. Adeptness has to do with the tendency to go with the flow of the markets. Mean reversion speculation is anti-trend (selling in an uptrend and buying in a downtrend, looking for turning points). Many traders feel that an overextended bearish market could be ready to rally and do so protractedly. But the reality is that it might still fall by 600, 800, 1000, 1300 pips before it even goes up. One of the major reasons traders buy renowned and world-famous pairs is that analysts talk about them and investors are often aware of them. If the overextended market continues in the direction that people don’t expect, then investors get whacked. As a result of this, everybody would be looking forward to strangling the prime economic forecaster, as investors holding other instruments are apprehensive. Invariably, you’d see some suave ape who’s shown on the screen or other type of media, often a forecaster whose studies were published in the previous year and adjusted some days prior to the occurrence, safeguarding his studies by reducing the likelihood while announcing that he still prefers the scenario since it remains overextended. Or it might be that the pair displays a temporary halt in its journey and some speculators feel it’s now great to enter contrary to the established trend and realize gains in counter-trend or mean reversion trading. They may not realized, yet they’ve fallen in love with a wrong direction and would go on opening positions against the trend, usually with heavy losses, till they receive a margin call or forfeit their portfolio.

I’ve experimented seriously with over 120 trading ideas, but trend-following has stood the test of the time. Thomas Stridsman (CTA), who’s been developing strategies for

model-based investing since the early 1990s, declares that he’s decided to do only trend-following. The notion behind this idea is plausible, anywhere the strongest trend is, is where returns can easily be realized… For trading purposes, I’ve decided to do only trend-following; and only trend-following I’ll do. This kind of trading approach has proven timeless. We make gains while the trend is still extant. 

Could I say I’m better than other traders? I feel I’ve an advantage in believing that any trader can be successful, myself included. That’s what my methodology is all about. As a result of this, I shrug off all misleading moves and noises regularly. I’m not misled by incongruous financial data that have no long-term effect, since I stay focus on my time-tested analysis, which has to do with offering myself with high-risk, low-reward opportunities that would ensure my ultimate victory in the markets.

Those going with the flow of the markets are aware that even if a trend has been happening for a long time, and they think there are still more gains to make, they may still trade in that direction, and as often as not, they’d win. Never forget that the Forex market is the best trending market that exists, and therefore the best trading method to use on it is trend-following. It’s no secret that trading with the trend will normally provide the best results.                                     

I’d prefer to conclude this article with these quotes:

“…A truly great trader will learn to take his money off the table and be satisfied with what he made.  It is the greedy trader who overextends himself.  It is the novice trader who fights the trend.  It is an even greater novice who believes that there is such a thing as “support.” – Joe Ross [Paraphrase]

“The trending market is arguably the type of market that best lends itself to being traded and offers the greatest earnings prospects… The trending market is an ideal market to trade and make money… You should only trade in the direction of the main trend” – Thomas Wacker

Monthly Trading Signals (August 2012)

“You gain strength, courage, and confidence by every experience in which you really stop to look fear in the face. You must do the thing which you think you cannot do.” – Eleanor Roosevelt

You could have possibly seen my monthly analyses on some exotic crosses. The crosses analyzed aren’t the only instruments traded with the type of analysis used. Below you’d find some pairs and crosses on which I opened positions on a monthly basis. Personally, this is what I do, not what’s recommended that others should do. Below are just 10 of my open trades. The maximum duration for each trade is one month, and we should note that the orders have been running before this article was written.

1.Instrument: EURNZD

Order: Sell
Entry date: August 1, 2012
Entry price: 1.5155
Stop loss: 1.5368
Take profit: 1.4568
Status: Open
Profit/loss: 3 pips 

2. Instrument: AUDJPY

Order: Buy
Entry date: August 1, 2012
Entry price: 82.13
Stop loss: 8.12
Take profit: 88.12
Status: Open
Profit/loss: 94 pips 

3.Instrument: GBPCAD

Order: Sell
Entry date: August 1, 2012
Entry price: 1.5693
Stop loss: 1.5906
Take profit: 1.5106
Status: Open
Profit/loss: 21 pips 

4.Instrument: GBPAUD

Order: Sell
Entry date: August 1, 2012
Entry price: 1.4908
Stop loss: 1.4908 (break even)
Take profit: 1.4320
Status: Open
Profit/loss: 104 pips 

5.Instrument: NZDJPY

Order: Sell
Entry date: August 1, 2012
Entry price: 63.57
Stop loss: 63.57 (break even)
Take profit: 64.27
Status: Open
Profit/loss: 70 pips

6.Instrument: AUDCAD

Order: Buy
Entry date: June 18, 2012
Entry price: 1.0528
Stop loss: 1.0322
Take profit: 1.1122
Status: Open
Profit/loss: 57 pips 

7.Instrument: NZDUSD

Order: Buy
Entry date: August 1, 2012
Entry price: 0.8123
Stop loss: 0.7921
Take profit: 0.8721
Status: Open
Profit/loss: 62 pips 

8.Instrument: AUDUSD

Order: Buy
Entry date: August 1, 2012
Entry price: 1.0507
Stop loss: 1.0305
Take profit: 1.1105
Status: Open
Profit/loss: 64 pips 

9.Instrument: USDCAD

Order: Sell
Entry date: August 1, 2012
Entry price: 1.0016
Stop loss: 1.0219
Take profit: 0.9419
Status: Open
Profit/loss: -1 pips 

10.Instrument: NZDCHF

Order: Buy
Entry date: August 1, 2012
Entry price: 0.7932
Stop loss: 0.7717
Take profit: 0.8517
Status: Open
Profit/loss: -2 pips 

The position sizing is 0.01 lots for each $2000 (thus making it 0.05 lots for each $10000). When an order goes positive by 70 pips, I move the stop to break even. From 200-pip profit upwards,I use 50% trailing stop.

Conclusion: Speculation remains one of the most challenging endeavors under heaven. You grapple with speculators on the opposite side of your trades and always you grapple with your emotions as well – whenever you decide to open or smooth orders. Obviously, there must never be open positions without stop orders.

This article is concluded with the quote below:

“I have been trading for almost eight years now, have taught thousands of people worldwide and worked for a fund, yet I would be a lair if I said that I never doubted my plan when taking a trade from time to time. It is human nature to doubt oneself from time to time. I wouldn’t be human if I didn’t! However the difference between me and a novice trader is actually quite minimal. I will never let my doubts get in the way of taking a trade which meets the criteria of my trade plan.” – Sam Evans

Monthly Market Updates on Exotic Crosses (August 2012)

“If there is one vital lesson I’ve learned in my own trading career that has served me better than any others, it is to keep things as simple as possible in trading as this is really nothing more than a game of probabilities and mental fortitude… Now, while we are happy to look for those rewards in the market, we often let the excitement of making money overpower the reality of losing money… Just because you are a trader, it does not mean that you have to trade all the time.” – Sam Evans

Last month, the currency markets experienced great volatility and trend-based pressures. The instruments that went up did so without moderation, and so also were the instruments that went down. Speculating on seriously falling markets remains one of the most agreeable trading methods. Extremely falling markets would soon offer traders excellent opportunities to enter the markets long at very cheap prices. Even position traders would like to speculate on low prices and anticipate them to rise in value. When a trend goes down for a long-period of time, timing the accurate turning point for a bullish market is the knowledge that victorious traders ought to have. There are many ways to speculate on the markets that seem to have gone too far. 

In July, 2012, there were gaps that occurred at the beginning of the markets. A gap that opened lower in a downtrend showed that the bears were dying to get their hands filled. This could not have been interpreted in other way, except to mean mere southward pushes. The bulls’ aspiration was overwhelmed with bearish pressure, till the bears were satisfied. The markets were then forced to drop further. What was the outcome of this? The bears have subjugated the bulls. The bulls were really in a pitiful condition as the markets tended to go against them.

Below is the summary of some of my trading forecasts this month:

AUDUSD

Primary trend: Bullish

The AUDUSD rose by over 280 pips last month – something that could have been gained as returns provided profits were allowed to run. On the chart, we see a bullish Confirmation Pattern that is still early enough. The ADX line is trudging upwards (now at the level 27), while +DI is above -DI. The MACD signal line and histogram are now above the zero line. The bullish trend is still valid.

AUDJPY

Primary trend: Bullish

This cross did not trend that much in the month of July 2012, but the bias is still to the upside. The perpetual strength in the JPY could end anytime soon and the cross might garner enough stamina to assume a significant bullish stance. On the chart, we have a Convergence Pattern; which mean that the bears are getting tired in their desperate battle against the bulls. If their strength is exhausted, the cross might rise.

EURNZD

Primary trend: Bearish

Early last month, I said this cross was in a bearish mode. The cross fell by well over 500 pips in the month of July. The bias is still down. On the chart, we have a conspicuous Divergence Pattern, showing sellers’ supremacy. The fact remains that the EUR is weaker than the NZD. The next support level is 1.5100, and if it is successfully broken, the price might trend lower to 1.5000.

EURCAD

Primary trend: Bearish

This cross also nosedived by far more than 500 pips in the month of July 2012. The present Divergence Pattern on the chart stands for a confirmation of the present southbound bias. Both the signal line and the histogram of the MACD are clearly below the zero line, while the ADX line is far above the level 40. This shows potent bearish pressure. The price may be corrected up a little before it moves down further.

AUDNZD

Primary trend: Bullish

This exotic instrument had a significant rally last month, but it is currently having a serious correction. It was corrected lower by more than 100 pips as the price in the month of July 2012 ended at a low of 1.2928. This potentially gives us a great opportunity to buy cheaper in the context of an uptrend. However, there are obstacles to overcome in the distribution zones at1.3000 and 1.3050.

Monthly Market Updates on Exotic Crosses (August 2012)
Monthly Market Updates on Exotic Crosses (August 2012)

GBPCHF

Primary trend: Bullish

This market is currently around 200-pip bearish correction after it moved up by 500 pips last month. The ADX line went up above the level at 40 – hence the present bearish correction. I still maintain a bullish scenario on this market, assuming that the current price action would afford me the opportunity to buy cheaper. There are demand zones at the levels 1.52000and 1.5015.

Conclusion: Next week, you would have the privilege to see some trading signals that were taken with the kind of analyses used here. Being a market speculator, you show know your level, be faithful to your trading rules, and be brave about the trading convictions you have. If you do what you need to do to be a permanently triumphant trader – some may not like you, but your success in trading might endear you to many who crave trading success. Sure, you can try to be just like every other trader moving downwards rather than upwards. But that’s so boring! Being a permanently successful trader makes you stand out in a good way. It doesn’t make you weird. It makes you likable.

It’s part of the FXEmpire.com’s mission to make you thrive as a trader – to metamorphous into a market wizard, and flourish as a market speculator.

The article is concluded with the quotes below:

“However, it is true that trading is difficult. Of the many who try, few realize lasting success…. While the risks and sacrifices can be many, you don’t have to give up your whole life to become a trader. Initially you might not be able to spend as much time with your family as you would like, but that is a choice you make, not one that is put upon you. You might have to work extra jobs to build up capital needed for trading or to pay for trading expenses… I don’t believe it’s necessary to focus exclusively on trading. You want and need to have a life.” – Joe Ross

 “The KISS approach’ –‘keep it simple & stupid’ and is more important than ever for today’s trading world. With thousands of systems, indicators, markets and brokers, it is easy to fall into the trap of information overload. Media also brings most moves into the limelight in which the contrarian should mostly tend to look the other way. Any market can only move in the directions; up or down (and of course sideways). With this in mind, primarily you can flick a coin and the outcome of up or down will have a 50.50 chance. Why make the process more difficult by suffocating these probabilities with a hundred indicators or a thousand possible news outcomes?  “Simplicity” is key” – James King

 

Monthly Market Updates on Exotic Crosses (July 2012)

“A very conservative position sizing strategy can generate great results. For instance, you could risk ¼% equity per trade and generate something like a 60%return in a year through the effects of consistent results and compounding.” – Ken Long

Last month, prices broke previous highs in an uptrend,whereas falling instruments broke previous lows. This makes it appear that no kind of bias can last forever, and this kind of velocity could be stalled during market equilibrium. Analyzing with indicators apart, trading biases are vividly seen on the charts. This is a good way to recognize trends. When prices trade apart in negatively correlated markets, they emphasize what indicators also signal. Based on the happenings of some chart patterns, an uptrend possibility is made available (for instance, a market plunges while the indicator on the chart points up). These kinds of patterns show that the plunge in the price may be short-lived as this may occur around great demand or supply zones. Besides, some hidden patterns are just what they are – hidden patterns.These are what underline the validity of a trend and proffer a great probability of a good trading signal. It’s known that a form of analysis in which indicators rise portend the bulls’ supremacy and bullish pressure pertaining to the kind of time frame used. When a form of analysis in which indicators plunge on a chart, it portends overall bearish bias in the kind of time frame used.

Below is the summary of some of my trading forecasts this month:

AUDUSD

Primary trend: Bullish

This pair rose by more than 600 pips in the month of June. We are still very much in the bullish bias – though it’s not uncommon for the price to pull back to some support zones, and therefore giving excellent opportunities for buyers to go long. With the ADX 20 and the MACD currently showing a Converging Pattern, this propensity may be grounding to halt since the ADX itself is below the level 30.

 

Forex Market Overview - July 5, 2012
Forex Market Overview - July 5, 2012

AUDJPY

Primary trend: Bullish

This cross rose in the most past of the last month – something that has continued till the time of writing this article. We have a Converging Pattern as well on the Daily chart (The ADX line is below the level 30 as the MACD signal line has crossed its zero line to the upside, staying there). It is likely that this propensity would continue,especially if the Yen shows more weakness.

 

EURNZD

Primary trend: Bearish

Since the beginning of June 2012, this exotic cross has fallen by more than 900 pips;a great bearish trend indeed! No doubt, the EUR still continues to be weakened against the NZD as we have some Confirmation Pattern. The ADX 20 is showing a strong trend and currently above the level 45 (–D1 is below +DI), and the MACD is clearly bearish. I would like to go short at an appropriate price.

EURCAD

Primary trend: Bearish

The price development on this market has not been very much interesting – especially in the recent times. However, the trend last month was bearish (but slightly). From the monthly high of 1.3031 the price reached a low of 1.2742: a mere 280pips (approximately). The price has continued to fall this month as the price is becoming gradually weaker. We have a Divergence Pattern on the chart and this could just be the beginning.

AUDNZD

Primary trend: Bearish

Although the Aussie was generally weakened against the Kiwi last month, the price movement remains sluggish and undecided. Last month, the price reached the level at 1.2661 and has been rising gradually since then; but this could be a trap. The ADX line is below the level 30 (the MACD is still showing some weakness in the markets). Even the ADX +DI and –DI has been undecided, as the price seems to be rallying (albeit weakly). It’s better to stay out of this market now.

GBPCHF

Primary trend: Bullish

This cross has been a kind of difficult to predict in recent times, owing to the manipulation going on the CHF itself. Strictly speaking the last month was bullish; but not that much. The price velocity was below 300 pips last month, and in this month, the price has been indecisive so far. We have a Converging Pattern right now and the price may stubbornly move up a little bit before finding the next turning level.

Conclusion: While we assume our trading stance for this month, we would do well to remember some costs that can be incurred while trading. For instance, accurately calculating price slippage, spreads and other speculation-related expenses may seem to be a challenge for most trader, especially when using some trading software. In most cases, we would be better off if we think of our trades in terms of pips and percentage returns or draw downs – rather than in terms of deposit or base currencies. Nonetheless, in the course of their long-term career, many traders have become aware of this challenge and can tackle it with some touch of professionalism. We would also need to pay attention to the fundamental figures coming out the world over. These figures are only ignored at our own risk.

As it’s my habit, his article is ended by the helpful quotes below:

“The typical novice trader thinks that part of successful trading is actually pulling the trigger as often as possible. They usually believe that the more they trade, the more they make, which in reality couldn’t be farther from the truth.” – Sam Evans

“Keep in mind that events don’t make you afraid. It is the interpretation of those events that makes you afraid. You are scared because you mentally believe that you are about to get hurt, there is no way out, and that there is nothing you can do. If you were to think instead, “I’m not going to get hurt, I have several alternatives I can pursue, and there is a lot I can do to get out of this,” you wouldn’t feel fearful at all.” – Joe Ross