USD/CHF was our leading horse. The inverse head & shoulders setup up. Then a double top with full currency correlation helped us sell dollars across the majors. Pivot Points and Oscillator Divergence helped us out from there

After a fantastic ‘ride the 5′ down on GBP/CHF during the London session for a couple hundred pips, we had extended a little too far too fast and a retracement looked likely. In this video we build a trade plan for longing the retracement, in order to take advantage of the profit taking from the short. Using support and short term chart confirmations offered us our entry around 1.9715. By it’s very nature this type of countertrend trade is far riskier than normal setups, but with an 80-100 pip potential this one had a decent risk vs. reward. However, as you will see in the video, this one did not play out during our time horizon in a comfortable fashion at all, our reward potential steadily decreased, nearly stopped us out but ultimately gave us our pips. A perfect example of how things do not always go as planned, but with discipline, and a trade plan that you do not deviate from you can keep your calm whether you win or lose. Not every trade plan is a bed of roses.

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The FOREX Basic Training Program

10 Months Of Intense Forex Training… For Free!

Register for this Session

Experts: Wayne McDonell, Chief Currency Coach & David Pegler, Drill Instructor.  FxBootcamp.com
Moderator: Maud Gilson
Start: Fri, Mar 28 2008, 08:00 GMT <— GMT
End: Fri, Mar 28 2008, 10:00 GMT
Type: Live Webinar

Basic Training | Session #1

Summary:
In this long-term educational series, called "FX Bootcamp Basic Training", we will start you at the very beginning: teaching you how to crawl. Over the next several months, you will learn how to stand, step, walk, run, and sprint your way into the forex trading industry.

The FX Bootcamp Basic Training series includes technical analysis, fundamental analysis, inter-market analysis, trade analysis and of course psychological analysis. Each of the presentations will a mix of webinar and live market data.

The first presentation in March will teach you:

- How to identify Support and Resistance with trend lines.
- How to identify the major Candlestick Patterns
- How to use Candlestick Patterns to trade Support & Resistance

The first step in becoming a successful forex trader is learning how to read your charts. This is the foundation of what we do: use past price data to try and predict future price action. We may apply sophisticated mathematical models to extrapolate patterns and cycles, but the basic building blocks of forex technical analysis are simply candlesticks and trend lines.

The Basic Training Continuing Series

Please plan on attending future presentations at FXstreet.com:

April: Fibonacci Studies, Moving Averages.

May: Stochastic, MACD, and RSI Oscillators.

June: Pattern Recognition, Currency Correlation, Commodity Correlation, Inter-market analysis.

July: Breakouts, Continuation Patterns, Trending and Naked Trading.

August: Pivot Points, Andrews Pitch Fork News Trading.

September: Trade Planning, Carry & Swing Trading, Trader Psychology,

October: Money Management & Trader Psychology.

November: Central Banking and Global Money Flow.

December: Course Review with Q&A: GRADUATION!

Register for this Session

A multi-year low for this month’s version of the Conference Board’s Consumer Confidence Index produced an immediate negative reaction in yen crosses and U.S. equity indices alike. Analysis from multiple angles – history, fundamentals, technicals, currency correlation, and intermarket analysis – suggested that a downward move would not likely have legs. A double bottom on the GBP/JPY short-term charts gave traders the final clue of the reversal to come. From entry just above a psychological level, to exit at the top of a downward channel, the long trade produced a 120-pip profit for those traders who recognized the clues and acted on them.

  (click chart to expand)

The end result of this trade has two opportunites:

1) You take profit at the first momentum cross down on the 1 min chart.  This occured 36 mins after the news and about 21 mintues after the entry for a quick 30 pips from "cross to cross".

2) Stay in the trade based on the 15 mintue chart.  The channel is point up, so it should be ok.  However, the stochastics looks like the pair is over bought and ripe for a retracement.  Assuming I entered the trade after the news, I can’t afford to ride out the pull-back.  But if you feel oil prices are likely to continue to fall, maybe this is a longer term position trade to you and you are slowing scaling in your CAD shorts. 

It all depends on your plan.  You have a trade plan… right? 

  (Click To Expand Chart)

Canadian JAN RETAIL SALES

M/M: 1.5%  1.4%E; LESS AUTOS M/M: 1.3%  0.5%E
- Prior Retail sales MoM revised from 0.6% to 0.8%
- Prior Less Autos MoM revised from -0.4% to -0.3%

In these USD/CAD charts, you can see the response to CAD Retail Sales.  It was a little better than expected… but not much.  The Loonied gained value for less than 5 minutes until it hit a support channel on the 15 min charts.

A scalp trader would have picked up 24 pips or less, but most likely broken even on the reversal.  However, spot traders got an "easy in" after the bounce at support.  The cross on the 1 min chart AFTER the bounce was the conservative/repeatable trade oppotunity.

The Easter Monday holiday in most major international markets suggested low liquidity conditions for today’s New York session, giving many traders reason to take the day off. Those traders who did show discovered that a case was building during the first 30 minutes for a bounce in the yen crosses. An aggressive entry for a long trade on the GBP/JPY came about 90 minutes prior to a more conservative entry which followed the release of U.S. existing home sales figures for February. Two logical targets – the first an hourly 200 ema, the second a major psychological level – were achieved within the hour following the housing news. Profits from these trades during the pound yen’s climb ranged from 150 to 235 pips, depending on entry & exit.

A 30 minute review of the market moving events from last week and their effects on forex trading. A preview of this week’s calendar is also included.

Weekly Pivot Points*
Mar 24-28, 2008

       EUR/USD          GBP/USD       USD/CHF        USD/JPY

R3      1.6266          2.0684          1.0859          106.15
M5      1.6175          2.0581          1.0685          104.73
R2      1.6084          2.0478          1.0512          103.30
M4      1.5921          2.0312          1.0407          102.37
R1      1.5758          2.0146          1.0302          101.43
M3      1.5667          2.0043          1.0129          100.01
PP      1.5576          1.9940          0.9955          98.58
M2      1.5413          1.9774          0.9850          97.65
S1      1.5250          1.9608          0.9745          96.71
M1      1.5159          1.9505          0.9572          95.29
S2      1.5068          1.9402          0.9398          93.86
M0      1.4905          1.9236          0.9293          92.93
S3      1.4742          1.9070          0.9188          91.99

* - based on GFT DealBook 360 price data

Weekly Pivot Points*
Mar 24-28, 2008

          USD/CAD      AUD/USD       NZD/USD        EUR/CHF       GBP/CHF

R3      1.0828          0.9819          0.8458          1.6170          2.1226
M5      1.0695          0.9725          0.8394          1.6054          2.0969
R2      1.0561          0.9632          0.8330          1.5937          2.0712
M4      1.0478          0.9478          0.8227          1.5847          2.0533
R1      1.0395          0.9325          0.8123          1.5756          2.0354
M3      1.0261          0.9231          0.8059          1.5640          2.0097
PP      1.0128          0.9138          0.7995          1.5523          1.9840
M2      1.0045          0.8984          0.7892          1.5433          1.9661
S1      0.9962          0.8831          0.7788          1.5342          1.9482
M1      0.9828          0.8737          0.7724          1.5225          1.9225
S2      0.9695          0.8644          0.7660          1.5109          1.8968
M0      0.9612          0.8490          0.7556          1.5018          1.8789
S3      0.9529          0.8337          0.7453          1.4928          1.8610

* - based on GFT DealBook 360 price data

Weekly Pivot Points*
Mar 24-28, 2008

          AUD/JPY       EUR/JPY        GBP/JPY          NZD/JPY      CAD/JPY

R3      98.34           161.85          211.13          86.54           106.19
M5      97.16           160.64          208.80          85.36           104.98
R2      95.98           159.42          206.46          84.17           103.77
M4      94.43           157.98          204.17          82.83           102.15
R1      92.88           156.54          201.87          81.49           100.52
M3      91.70           155.33          199.54          80.31           99.31
PP      90.52           154.11          197.20          79.12           98.10
M2      88.97           152.67          194.91          77.78           96.48
S1      87.42           151.23          192.61          76.44           94.85
M1      86.24           150.02          190.28          75.26           93.64
S2      85.06           148.80          187.94          74.07           92.43
M0      83.51           147.36          185.65          72.73           90.81
S3      81.96           145.92          183.35          71.39           89.18

* - based on GFT DealBook 360 price data

Average Daily Ranges *

               AVERAGE
               Last 4 Weeks

EUR/USD         163
GBP/USD         194
USD/CHF         164
USD/JPY         172
USD/CAD         130
AUD/USD         151
AUD/JPY         237
CAD/JPY         227
EUR/JPY         222
GBP/JPY         351
NZD/JPY         217
NZD/USD         137
GBP/CHF         305
EUR/CHF         146

* - Based on DealBook 360 price data through Friday, March 21, 2008