How I will Trade this week's volatility. My GOLD, AUD, USD, EUR and GBP intraday plays

Gold began a parabolic decline in October 2016 but bounced back late in the same year leading to a parabolic rally for the Two Quarters of 2017 ending last week. One can safely say that this rally has been a Powerful pullback that blew up major ceilings(38% and 50% Fib levels ) and now Gold is at a critical point. why critical? if you plot the Fibonacci tool  the rally that begun in early 2017, price is now resting at the 38% level. This cluster (of a level  that was  previously a fib support now turned resistance and the 38% support level) forms a very strong floor and to add more concrete to it, currently the 200 day moving average acts as support too. That said, the rally has really propped up the Aussie for the last 2 quarters This Technical uptrend has also been supported by good data coming out of Australia (Latest GDP data -Dec Qtr 2016 to Mar Qtr 2017 up to 0.3% from a previous 0.2%), precipitated a booming mining sector and China. But despite the impeccable performance of the Aussie and the Australian Economy in general  the RBA has seen no need to hike interest Rates since inflation is well within its targeted levels (2.5%-3.5%). The market also does not expect it to do so tomorrow. But we'll find out.

Despite the interest rate hikes by the FED that have tried to at least prop up the US10yr bond yield but not yet trading above the 200day MA, the Dollar has been depreciating. Seems to me that few investors have appetite for the bond yields and preferring to invest in US Equities which have been performing quite well as per the S&P 500. Adding onto this, the recent hawkish comments by key ECB Officials doesn't make things better for the dollar because investors will further be attracted to the high yielding European Bonds.

*Kindly read the rules at the end of this post before proceeding 

GLD- I'll be looking to go long after a confirmed break of resistance at  1260.00 on a 4hr setup , above both the 200MA and 100MA. In my rule book, I look for trends that are above these MA's  on the the long term chart and the Short term Timeframes as a confirmation of the trend and also as a way of finding a reasonable price to place my stop loss. Preferably below one MA or both.

4hrAUDUSD- the parabolic rally seems to be pulling back as we head toward s NY open. I will watching key support levels in anticipation of tomorrow’s economic releases and after the releases in order to find good risk reward levels. watch for breakouts after the releases and the support levels. bad data might further drive the pair down but if support at 0.7602 if broken and the break confirmed my short-term bias will change. 

 

4hr EURUSD the pair is currently pulling back. Also, be on the lookout for those support levels and resistance level breakouts after the barrage of US Data is released. A confirmed breakdown below 1.1200 invalidates my short-term bias.

 4hr USDX(Dollar Index). will upcoming Data give us pullbacks or will they change the short-term trend. I will be keeping an eye on the resistance levels, confirmed Breakouts above the 200ma will invalidate my short-term bias.

4hrGBPUSD the pound is pulling back after the parabolic rallies last week. The BOE governor has a lot of speaking engagements this week. The pair might react because this since traders are anticipating on how hawkish he'll be regarding a rate hike given that UK's inflation data has so far made a case for a hike. Good data from the US might  precipitate nice  pullbacks. For now, looks like the bullish pennant has failed and we might see a further pullback .

 

4hrGBPJPY- expecting a good pull back here for a long setup. breakout below 144.36 will change my bias.

1hrGBPCHF- This pair has a good risk reward setup as I write this. A confirmed break  of 1.2477 should justify a long.

 

 P.s

Kindly take notice of this Blog's Disclaimer.

-Thick horizontal Lines represent weekly Resisitance,Extra thick-Monthly and Thin, the Daily 

- Anticipated Trades are in the direction of the short-term and long-term Trend

- Trades are taken In accordance with the order of the two moving averages.If price falls between the two Moving Averages setups become invalid

AUDCAD  WEEKLY AND INTRA-DAY TRADING

TECHNICAL ANALYSIS

WEEKLY CHART

The price already shows strong signs of bearishness as it is being held by support zone marked T. Confirmation of fall of the price will be close of the weekly candle below support zone marked by red horizontal line marked T around 0.99164. This may lead lead price into a larger pivotal support zone marked S around 0.97464.

As we wait for weekly candle confirmation, lets us see what we can be playing intra-day.

HOURLY CHART

Intra-day trading on the hourly chart is more logical to be done between the zone marked by the red horizontal lines R and T shown on the chart below, as we wait for larger timeframe confirmations. 

Currently price is held in a congestion marked by small yellow trendlines r and t. Close above r can lead price to retest the R resistance zone and close above t can lead price to retest the previous lows support zone marked T which is the same zone on the weekly chart above.

Since momentum on the downside looks strong and there was just a break of a blue trendline support P, a break below t is highly probable for a downside continuation. But nevertheless, wait for confirmations either way.

Chronicles of an Armature Trader: Part Three – I made it! I have been trading for 3 months & netted 100% + in profits!

 Sleepless nights; volatile mood swings; over 5 indicators on my charts; listening to every analysts on T.V and getting more from their social Media feeds; 2 books on trading already read and every page digested; Trading course on babypips finished at record speed and finally, thousands of hours worth of trading videos watched, what would prevent me from making my monster profits and daydreaming of Cruise Ship vacations?

It was towards the end of 2016, remember the $50 joke of an account I had opened? well, with insane Leverage and position size, I managed to make a quick clean $100! on a single trade! This inspired me and I pumped an extra $500 in my account looking forward to trade the American Election, which I did trade and made an extra $1000 during the Asian session when election results in favour of Donald Trump were streaming in. That day folks, I spent the night at my workplace, it was the only place I could get a reliable internet connection and it was worth it!

With all the Monies I had made in Two weeks’ time, I figured if I can do that with one single trade, I should open at least 5 more positions larger than the first one! Mmh the most I can make is $500 in a week and the least is $100, I thought. Wow! why didn’t I learn this in school? and most importantly, why didn’t they teach this in school?  I felt cheated by our Education System.

Just in case you are wondering if I ever came across Money Management, Leverage and position sizing in my studies, of course I did but who cares? I made over 100% profits so I definitely “understood” those concepts besides, they were usually the last Topics in the books I read and therefore not really important. Anyway, after a detailed and exhaustive analysis of my over 5 indicators (not price but indicators) coupled with my cockiness I placed my five trades on 15 minutes Time frames, having already calculated my expected reward and no stop loss at all. Stop losses are for suckers. The Market moved 20pips against 2 of my positions, 1 minute later, my phone rang….

EURUSD, WEEKLY

TECHNICAL ANALYSIS

Price is into a large weekly resistance. It looks like a better retest of the trendline support broken towards end of 2016 on 9th October but there are no signs of major reversal to the downside quite yet. 

More upside will be confirmed by close of weekly candle above the green trendline R resistance.

Reversal to downside/ confirmation of retest will be confirmed by weekly candle close below red trendline S support. 

This confirmation may lead price to fall into an immediate  strong support zone around 1.09098 marked by the black horizontal line T.

Ok, So what do we do as we wait for larger time frame confirmation? Answer: Keep the trading on the lower time frames like hourly or 4-hourly within the zone/channel created by the S and R trendlines.

EURJPY, WEEKLY CHART

TECHNICAL ANALYSIS

The price is back into the A zone as we had  in our 2015 article here. This is large resistance zone (highlighted zone) that could serve as a retest for continuation of down trend or as change from downtrend to uptrend ie shift in sentiment from sellers to buyers.

Price has been moving in downward channel shown in the chart below with several false breakouts. But these breakouts would move over 400 pips before price gets back to channel. The break outs are marked with golden arrows. So it was quite tricky channel to pick bounces off the channel support and resistance

Currently the price as at channel  resistance.Although the weekly candle break is not very convincing, the monthly candle break shows higher probability to test a higher resistance around 128.000 marked by the green horizontal line. A strong weekly bullish candle is required for confirmation or else price could fall back into the channel or congest longer.

Chronicles of an Armature Trader: Part Two – The Journey to becoming a Dollar Millionaire begins …

Before I proceed from where I left off on Sunday, first I would like to thank Gloriouschartpatterns for giving me this opportunity to document my journey as a beginner. The main goal of this column is to record all that I am experiencing in trading as a beginner to an amateur and eventually to a pro and by this, I mean actual experiences some unfolding at the present moment as I trade. Having read a bunch on trading and hearing lots of success stories, I am yet to come across any story that resonates with a beginner in a detailed manner by espousing the challenges that one goes through  when making countless mistakes every day . So, I shall endeavour to record my mistakes and successes. in fact, emphasis will be on the mistakes. This column has been inspired by a loss I suffered after having a good run following the discovery of my trading style. l made mistakes and reduced my account from $1,500 to a $495 in just two days! (and I still make mistakes hehe) I hope beginners can relate to my story. Hope you all enjoy. 

 So, I embarked on intensive research and reading. I have never read so much in my life, sometimes I am actually astonished by how much I read within that year (and how much I still continue to read up to today) and mind you I was still in Law school. After completing my first book on trading in a month (Anna Couling's Forex for Beginners ) I opened my first Demo account, a  Million Dollars here I come, ready to bank you! at first it was confusing but given my knack for Techy stuff I explored my MT4, learning how  it works  and deeply getting into more research, I started familiarizing myself with the economic Calendar and the key events ready to place a trade in anticipation of positive or negative news, I literally became a Financial News junky. Always scouring on www.bloomberg.com  and www.investing.com for information that can make me some quick cash. Making money never felt so easy!

As my experiments went on, it had a toll on my other part of life. I was a Legal Intern and this suddenly seemed boring and dull because I realized that I liked the Law but I did not have a passion for it and I hated the bureaucracy involved in practicing the law. I loved Justice, still do, but the court processes involved in seeking it and worst of all the delays in getting Justice made my stomach turn and to add more salt to the injury, delayed justice didn’t mean that an Advocate’s payday got delayed! Delayed justice is indeed painful. And to top up to the delays, in order for the wheels of Court bureaucracy to turn in your favour one had to line someone’s pocket at some point. To me, it is still amazing why such a dysfunctional system is tolerated and everyone just goes with the flow!  My moral beliefs on fairness slowly became aligned with trading but not legal practice (discussion for another day)

 Moving on, I came across  www.babypips.com and this is when I began familiarizing myself with technical analysis and the fact that I didn’t have to wait for a News release, finger on the mouse button ready to pull the trigger and place a trade. I further started reading blog posts from traders and trading coaches and watching hundreds of hours of trading videos  and by mid-2016 I had accumulated so much knowledge (I naively believed so ) and I was already trading on a $30 live trading account (what a Joke!) the money was “free money” from an online broker who was enticing potential clients ( www.xm.com ) I funded the Account with an extra $50 and got a leverage of 500:1!! Plus the broker offered a wide variety of tradable assets.

 I naively believed that given the information I had accumulated, I can be able to turn around the $50 to $500 within a short period of time. This is how brokers draw you in folks. By the time you learn about money management and you become consistently profitable the broker has made a handsome amount from commissions and spreads they charge you as you continue to fund and trade that tiny account.

Things didn’t go bad for me and did I make my killing as I had anticipated? Well, you’ll find out from part Three.