Forex Trade Analysis

4-17-2013

Hello Traders,

Today I will review a trade that  I am currently short, the AUD/JPY. It is important to understand the Yen and it's personality when you day trade this aggressive pair. The Yen is not for newbies, the Yen is fast and furious, and can be your best friend, or your worst enemy. The reason I write this is because most Brokers weigh the pips on the Yen as more leveraged, in addition Yen moves are wider than the USD. Now that I have made my point, let's go ahead and get to the analysis.

The recent Gold sell off has been a violent one. This sell off was sure to clobber many longs who thought the Gold rally would last forever, or maybe they were recently listening to Cnbc recently as they have been preaching the long Gold trade. In our Forex Day Trading room we do not focus on Cnbc, Bloomberg or other news agencies to provide us with a daily direction on our day trades. Over the years I have studied many so called 'Experts' and was not at all impressed with the advice from these guests on many of these networks, in fact, I calculated that doing the opposite I  would have a slight better chance in success. I mention this to tell you how excited I always am about understanding technical analysis that works.

Some Basic Strategies:

Fibs: Most people know about Fibs, many even know about the founder of Fib numbers and history, what they fail to learn is how exactly to use this when day trading. This is extensively covered in our live forex room.  I use Fibs on many different time frames. Weekly, Daily and sometimes as low as 15 minute charts, the key is knowing when to use them.

Moving Averages:

Using moving averages I feel is helpful in day trading. Knowing when and where to use as I mentioned above is key. First you must decide on what moving averages fit your style. Are a short term trader? Are you a trader who likes to hold into news? Do you like daily charts? Or 5 minute charts? These are factors that can determine what moving averages are best for you. I say there is no right or wrong way to day trade as long as the end result is green on your screen.

A good example of moving averages is note on this weekly chart the 20 period provided a nice bounce despite the fast move lower in the Indexes.

Forex Trade Analysis - Drawing Fib Retracement

You will see a image I posted below, this image is clear to show the fib retracement drawn as most traders draw them, I have some modifications that I make to my fib lines and I explain this in my forex trading course as well as the live forex room. See example below.

Forex Trade Analysis Targets

Here are my proposed targets on my short trade. The first target on my short trade is 100.55,
depending upon my strategy and trade I will look at round numbers as well as half numbers like many day traders.
In our Forex trading room we teach extensively on money management and how to combine this with forex trade analysis to have that 'winning edge'. You will see my first target and second targets also fall near but not on the fib numbers.

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