Sunday, June 14, 2009
The Power of Candlesticks
I am currently studying Candlestick charting. Candlesticks are a way to represent the data on investment charts, including commodities, stocks and even Forex. They were invented over 400 years ago but then usage of candlesticks is still not so prominent. Sure, online Forex platforms all have candlesticks embedded in them but then traders usually rely more on their indicators. But Candlesticks can do a lot more than what indicators can do.
The most important reason I will always pay close attention to candlesticks is that candlesticks provide a faster prediction of the future compared to indicators. Let me just give you an example. 2nd week of June 2009. The USDCAD was going straight down, according to my indicators RSI and EMA lines. But all 5 days of USDCAD showed me strange candlestick patterns indicating that there could be a reversal, especially Wednesday and Thursday. So I closed my short position for a loss of about 100 pips, following what the candlestick signals tell me. Sure enough, on Friday, the price shot up a few hundred more pips. If I hadn’t closed the position, I would have lost 4-5 times more!
I have still a long way to go till I master candlesticks, but I will happily take on that journey as it would be worthwhile.
Friday, June 12, 2009
Realtime Forex Charts on Josh Tam Forex
Realtime Forex charts are very important for a lot of traders as they provide market data tick by tick. Realtime charts that update instantly are very valuable especially to traders who are scalpers and they need only a slight movement to profit.
To me, realtime charts are important but not as important as Forex scalpers. But nonetheless, I found an embedable realtime chart and I put it right here on Josh Tam Forex! The chart can be found on the realtime forex charts page. They are even customizable, so you can view data from different timeframes, ranging from 1 minute to 1 month, and that is awesome. And the realtime chart is done using AJAX, not Java or Flash, so any modern web browser should be able to load them fine.
Today, I ended my USDCAD trade with a loss of 100pips because the candlesticks show that USDCAD trend is likely to end, so I decided that it would be better to pay 100 pips than to pay 1000 pips when USDCAD goes up. Canadian Dollars are a bit shaky recently. However, I locked into GBPUSD 600+pips and AUDUSD 130+pips. If they hit the stop loss, then I still win, but I’m hoping that they will ride on.
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 ProfileWednesday, June 10, 2009
Australian Dollar Getting Strong Around June 2009
I have noticed that the Australian Dollar has been getting stronger and stronger. However, a slightly strange behavior of the Australian Dollar was spotted. At different times of the day, the Aussie would show different trends.
At about 7am to 8am Perth/Tokyo/Asian time, the Australian Dollar would seem to rise. This can be seen noticeably when you check out the AUDUSD pair. And it will continue to rise until the end of the day, with the highest movement around 2-3pm when the European and British banks open. And then when the American Banks open at 7pm (7am NY time), the Aussie would fall.
From this, I deduce that the Australian Dollar will move up and fast during the day and will slow down during the night. If not generally, then recently, during the month of June, 2009. This cannot be said for other currencies especially EURO and USD. Although those currencies do slow down during the night, they sometimes still show signs of high volatility.
Saturday, June 6, 2009
USD Non-Farm Payroll’s Effect
Friday June 5 2009. All of a sudden, the United States Dollar spiked upwards. This caused major pairs like GBPUSD, AUDUSD and USDCAD to experience a big trend retracement. I am losing quite a bit because of that… haha.
On Friday, the US Non-Farm Payroll stated that the unemployment rate is the lowest in several months, or something like that, and people are speculating that this is a sign that the US recession is coming to an end. This is funny, cause on the previous day, I saw articles saying that the recession will last for several more months to come…
But to be on the safe side, I will be exiting my trades involving USD pretty soon if the United States Dollar does indeed stabilize and start strengthening. But by looking at daily charts, you can see that the USD pairs charts are all going against its favor.
But what can I do now? I can sit back and relax, cause there is nothing I can do… the Forex market is not open on Saturdays and Sundays. I’ll just wait till Monday. From my analysis, I expect the USD to continue dropping again on Monday, but who knows? Anything can happen. Let’s wait and see.