Dynamic Trader Forex Blog FXCPS.co.uk: Some you lose, Some you win !

Good Evening / Morning Dynamic Traders

"Better to have tried and failed, than not tried at all"

Cross = USDJPY : Day chart below.

Hello everyone, thank you to those that found looking at where I went wrong on my trade entry of the AUD & NZD in the last post. I do not intend to make a habit of this as it can become costly, however if we all learn from it, we move forward with our education. Both crosses have continued to pull back deeper which would have given greater losses than the calculated risk I was happy to take. Remember "Money Management" is a vital part of trading and you do not want to be trading with greater than 4% risk (2% would be ideal)

With my trend trading, we have had plenty of oppertunities of breakouts since Xmas, even if some have been false signals. You will never get it right 100% of the time, just like you will never guess the "Top or Bottom" of a move. It is the movement or power we are looking for which will give the move some momentum.

Let us look at another trade I am currently in, the JPY in a DAY chart.

You can clearly see we have had a "Downwards" trend since mid 2007, with the VI together with a trendline giving resistance from above. Now lets look closer.

Price has tested the top resistance line, which has VI following in tandem in a classic manner. This has been illustrated in the insert, where we test resistance, pullback and then retest our resistance again. This time after the double top, price drops away and when it goes below the pullback we have a textbook entry to go short, with a stop just above resistance. I have drawn a couple of support lines that could test us on the way down. Not also the change in the MACD.

How many of you are in this trade, which has over 100 pips profit since entry ?

Please remember to do your own analysis before entering any trade.

Trade with Passion

John Maher
Forex Analyst