Thursday, June 11, 2009
Australian Dollar Regaining Momentum
Thursday June 11, 2009. As the USD regains its dropping, the Australian Dollar regains momentum. It is quite fun to watch the bullish bars go up. Last week, around the same time, I opened a buy trade on AUDUSD and I anticipated the price to go up. But it didn’t. It still went down. It retraced further but I knew it was a temporary retracement, so I waited one week. Was it a worthwile wait? Damn yeah! Now I’m winning 163 pips on AUDUSD and it is going to reach my monthly capital increment target.
The same is true for Great Britain Pound. Last week, there was turmoil about Prime Minister Brown stepping down, reshuffling cabinet, bla bla bla. But now everything seems steady and GBPUSD is steaming up with bullish bars as well. My GBPUSD trade from 2 weeks ago is winning 600+ pips as of right now.
Technorati ProfileAwesome Oscillator Trend Strategy
The Forex Market, at times, can be successfully traded using the awesome oscillator as indicator. This oscillator maybe lagging, but in some cases, they can prove themselves worthy of being the indicator that can show the momentum of the market, that is when there is a trend or a reversal.
The awesome oscillator consists of green and red bars. The bars can form mountains, valleys and saucers that will be good indicators of trends that are tradable.
I'd love to provide an explanation on this, but I found that the OANDA site has already done that, so here you go! Once on the site, scroll down to view the Interpretation.Highs and Lows Strategy
This strategy can be an effective counter-trend (consolidation) strategy in numerous occasions. Basically, during the counter-trend period of a currency pair market, the graph moves up and down, like a zig-zag pattern. When you zoom out, it seems that the graph does not slant upwards nor does it slant downwards. It just goes horizontally. Some people would say that it is risky to trade in this condition and it would be better to trade when there is a noticeable trend.
However, some others would say that trading counter-trends can be very profitable. The basic strategy used goes like this:
1. They draw 2 lines, one on top of the zig-zag and another at the bottom.
2. The top line is the high and the bottom line is the low.
3. Traders buy at the low and sell at the high and vice versa.
Yes, it is that simple. The hard thing is knowing when the counter-trend would end. When it ends, you could be making a big profit or a big loss! Advanced counter-trend traders use indicators and systems to help them in analyzing the counter-trend period better, so they are more confident when opening/closing trades.
Wednesday, June 10, 2009
EMA Trend Detection Strategy
I use this Trend Strategy a lot. EMA lines can serve as a guide to let you know whether a trend is strong, still going, weak or ending or reversing. It can also tell you about retracements.
My trend strategy goes like this.
First, I set the following EMA lines:
1. EMA 80
2. EMA 50
3. EMA 21
4. EMA 18
5. EMA 5
Then, I make the analysis based on the lines. To understand more clearly the details below, please open your charts and insert the 5 EMA lines above.
EMA 80 and 50 will tell you the trend direction. If the lines are not touching the price chart, the trend is valid. When the lines are at the bottom, it is an uptrend and when the lines are at the top, it is a downtrend. A good indicator that you can still follow a trend is when you see that the lines are in order: EMA 80, 50, 21, 18 and 5. When some lines criss-cross, the trend maybe reversing or maybe just retracing a bit. And if you happen to see that the trend is criss-crossing, especially the EMA 5 line crossing 21 and 18, it maybe a good time to trade to get maximum profits from a retracement. However, if the EMA 5 line crosses over 50 and 80, with the EMA 21 and 18 crossing each other as well, it is a sign that something is not quite right. Maybe a time to exit trade and not a good time to start a new trade based on this strategy.
I find that this strategy works best with longer-term trading.
Small Breakout Strategy
With this Breakout Strategy, I am for only a few pips. Let’s say maybe just 15 to 20. I normally check for consolidation periods where the price is neither trending up or down and is just zig-zagging horizontally. So, we all know that when the market is moving like that, it will break the consolidation and start a trend sooner or later. But we just do not know when.
So use your own analysis to determine which direction the market will move when it breaks out. You can use your indicators to help you. I will not go in detail about this here. Then once you have an idea, place a limit order. For example, if you think the market is going to drop when it breaks, put a limit sell and when it drops, your trade would be entered and after 10-15 pips, you take your profit.
This is one of the basic Breakout trade strategies. I do not use this often though. Identifying the perfect situation for this strategy is a bit tiring unless you know specifically what time of the day you can see a consolidation market that will be breaking out soon…