Posts Tagged ‘forex’

Tradesight January 2013 Forex Results

Friday, February 1st, 2013

Before we get to January’s numbers, here is a short reminder of the results from December. The full report from December can be found here and you can get the last several months in a row vertically by clicking here and scrolling down.

Tradesight Pip Results for December 2012

Number of trades: 25
Number of losers: 9
Winning percentage: 64%
Worst losing streak: 3 in a row (during the Holiday week)
Net pips: +185

Reminder: Here are the rules.

1) Calls made in the calendar month count. In other words, a call made on August 31 that triggered the morning of September 1 is not part of September. Calls made on Thursday, September 30 that triggered between then and the morning of October 1 ARE part of September.

2) Trades that triggered before 8 pm EST / 5 pm PST (i.e. pre Asia) and NEVER gave you a chance to re-enter are NOT counted. Everything else is counted equally.

3) All trades are broken into two pieces, with the assumption that one half is sold at the first target and one half is sold at the final exit. These are then averaged. So if we made 40 pips on one half and 60 on the second, that’s a 50-pip winner. If we made 40 pips on one half, never adjusted our stop, and the second half stopped for the 25 pip loser, then that’s a 7 pip winner (15 divided by 2 is 7.5, and I rounded down).

4) Pure losers (trades that just stop out) are considered 25 pip losers. In some cases, this can be a few more or a few less, but it should average right in there, so instead of making it complicated, I count them as 25 pips.

5) Trade re-entries are valid if a trade stops except between 3 am EST and 9 am EST (when I’m sleeping). So in other words, even if you are awake in those hours and you could have re-entered, I’m only counting things that I would have done. This is important because otherwise the implication is that you need to be awake 24/6. Triggers that occur right on the Big Three news announcements each month don’t count as you shouldn’t have orders in that close at that time.

You can go through the reports and compare the breakdown that I give as each trade is reviewed.

Tradesight Pip Results for January 2013

Number of trades: 26
Number of losers: 16
Winning percentage: 38.5%
Worst losing streak: 5 in a row
Net pips: +10

 

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Tradesight 2012 End of Year Market Summary

Sunday, January 6th, 2013

As usual, we wrap up the year with a report about the markets and our trading for the last twelve months (here’s a link to last year’s report). Having been involved in and trading the markets now for over 20 years, I have to say that this year was unique in many ways, most of them not really positive for trading. Volume and activity were way down in all three asset classes that we trade (stocks, futures, and Forex). Without action, it really takes a concentrated effort to get and stay green. Overall, I would say again that our flagship stock report performed admirably as usual, while Forex had a decent start to the year but really suffered as ranges dipped to extended historic lows. The futures also suffered from lack of range and volume, especially in the second half of the year.

I make the case often that I believe professional traders should be open to trading anything because things go through cycles, and this was certainly a year that would have challenged anyone trading only Forex or futures in my opinion, although the stock stuff had enough moments to make it the easier asset class to trade. We’ll get into some numbers at the back end, but let’s first look at what the market gave us.

The S&P 500 came into the year at 1257.60 and closed at 1426.19 after once again spending a lot of time on the critical ES level of 1312.50 (an old Tradesight joke from the last decade, as is the EURUSD at 1.2737). That’s a 13% gain on the S&P for the year, which is certainly nothing to sneeze at. Here’s the chart, though, which shows that we didn’t have nearly the up and down swings that we are used to:

And you can see that also by looking at the Volatility Index (VIX) for the year, which, for the first time in the last 5 years, never really got a spike over 40, which creates the pullbacks:

Even with all of the Fiscal Cliff concern, there was never really a drop in the market, and we went through an election with no issues. Also, I’m writing this a few days into 2013, and the market is up strong to start the year as well.

The NASDAQ came into the year at 2277 and closed at 2660, a 383 point gain, or 16.8%. Again, nothing to sneeze at for investors:

If you break out the two key tech sectors, the Semiconductors and Biotechs, you can see that the Bios had a decent year:

However, the Semis were actually down for the year at the midpoint (note that the low bar of the year is a 13 buy signal from our Seeker tool:

I’ve already written up a separate Forex end of year report, but for Forex traders, ranges were the problem, and overall movement wasn’t great either. Here’s the US Dollar Index, which basically traded flat in three boxes for most of the year:

The EURUSD was in a smaller range than normal for annual numbers:

As was the GBPUSD:

The USDJPY had impossibly narrow intraday moves, but on the whole, the US Dollar strengthened against the JPY for the year (even though it slightly weakened against other currencies):

While 2011 saw the nuclear disaster in Japan (and the USDJPY has been pegged and tough to trade ever since), the last two years saw all of the issues out of Europe, including the failed austerity actions (failed meaning that the moves to cut spending has only raised unemployment and done nothing to help their respective economies), the potential (still looming) fracture of the Euro, and the self-created Fiscal Cliff mess that Congress set up for post-2012 election over a year ago.

All of those individuals added up to less economic activity, less movement of money, and a lot of uncertainty about taxes and where money was headed. It has also been a much stricter lending environment as the banks are still reeling from the 2008 debacle, and that hasn’t helped. Add it all up, and all of the markets were somewhat stuck in place.

Volume in the stock market is important for trading, and 2012 set an interesting record from the last FIFTEEN YEARS (this fact is extremely important but will be lost on many people). 2012 was the first time in 15 years that NASDAQ volume never saw a 10-day moving average get over 2 billion shares. Our general rule for good trading has always been that the 2 billion share “average” day or better volume is needed for the better sessions. We did have some days over 2 billion shares, but not many, and the 10 day moving average never got over that number, as you can see here:

Compare that to even 2011, where the moving average spent almost half of the year above that level:

Or 2010, which is a year that is much more typical of what we have seen for a long time, where volume is well over 2 billion shares most of the year, except maybe the summer doldrums of August and the Holiday season of December:

Easily, the single biggest contributor to the trading environment is the lack of volume, which means everything is moving less, and following through LESS, which is the most important point.

Another contributor to this, though, was the amount of “fast” money (i.e. daytrading money) that got “stuck” in Facebook on the IPO:

Again, one of the most poorly handled (except for for people working at Goldman) IPOs in history, and if you line up the biggest drop in market volume, it comes with the day that Facebook went public.

This was not a year that needed that to happen.

Here’s a look at oil, which declined for the year (and despite what some people might try to say, is down quite a bit from what we’ve seen on average the last few years):

There are also some interesting points to be made about some of the bigger tech stocks that we trade frequently, such as AAPL, which had a strong early part of the year but sold off sharply late. It came into the year just over $400 and almost broke $500 in the December plunge, although you’ll notice that the Seeker again gave a 13 buy signal on the day that might have tried to break $500, and that has been the low so far (it is behaving like it will break it soon):

GOOG, on the other hand, had a slower start to the year, but clearly came on stronger in the second half as it continues to see better Android sales than iStuff sales, especially in other countries:

AMZN, another favorite trading stock of ours, had a strong year and held it:

And finally, let’s put a few more things into longer term perspective. Here’s the 8-year chart of the NDX, which now makes the 2008 banking collapse look like a blip, but I’ve marked it up with the high in 2007 when oil first closed over $80 (when Tradesight predicted bad things were coming) and the recent post-stimulus trendline, which started in early 2009 and tested as recently as September. This is a line we’re going to want to watch if the looming “battle” in 60 days leads to too much in spending cuts (“austerity”), which will most likely put the recovery on hold and hurt the markets:

Here’s the S&P over the same period, which hasn’t yet reclaimed the highs of 2007 prior to the collapse, but is clearly in a “channel” that we can monitor:

And finally, here’s the VIX over 8 years. You can’t do a year-end report without showing the importance of the VIX or Rich will get mad:

Remember that the VIX over 40 usually means panic is setting in and a reversal is ready to happen. The spike to 90 and the period of 3 months that the VIX basically held over 40 in late 2008 on the collapse was historic, and at the time, what we said was that when it finally retreated under 40 (which happened in March 2009), that would a long term bottom in the markets. So far, that has proven extremely accurate, but it was also predicated on a lot of good economic decisions coming out of Washington. And certainly, we’ve made the money we wanted on that move. I’m not sure based on the actions out of Washington over the last 18 months or so that we can assume that good decisions will continue to be made, which can still derail the train. Keep in mind that the downgrade of US debt, if you read the report, was not because of our debt ratio or growth rate. It was because of a concern that Washington was suddenly so dysfunctional that it wouldn’t do the things that it has always done to show that the United States is the responsible leading financial player in the world (i.e. always pay our bills and don’t pretend that we wouldn’t).

With the Fiscal Cliff at least behind us (and if they had just done it back six months ago, things would have been a lot better the last six months for trading), we’re already seeing better volume and movement in the opening days of 2013. Unfortunately, they couldn’t get more than a 2 month extension on the sequester, so the spending battle looms and lines up with the debt ceiling increase (again, the more you suggest that the United States might NOT increase the debt ceiling, therefore might NOT pay our existing bills), the more it hurts the economy. And, just like everything these days, my expectation has to be (in terms of guiding traders) that Washington will take it right up to the last day again because they can’t put the country first. So, we will see how long the “better trading” environment that we are seeing signs of lasts before the market gets crippled again wondering how that will be resolved. If you want a better trading environment, call you Congressperson and let him/her know that they better put together a deal that lasts for several years so the market and the economy has certainty. Believe me, that’s more important that the DETAILS of the deal. We can’t keep going through this every 12 months.

So, in the context of that market environment during 2012, I think it is clear that stock trading was the better asset class. Every year, we have one, maybe two months that are losing months in Forex as ranges come and go. This was the first year (in the seven that we’ve been doing Forex) that we had THREE months IN A ROW even that had losses. That’s how bad ranges got.

Meanwhile, almost 70% of our stock trades that triggered with market support worked enough for a partial, which means that even though there were more than normal that didn’t do much beyond the partial, you shouldn’t lose money on those 70% of trades. And we still had plenty of big winners, all of which you can track daily in the Market Blog even if you aren’t a subscriber.

The futures were the middle ground. They still behaved technically, but I see a lot more false starts where a nice setups sweeps once and stops and then works at least to the partial the second time than we have seen in prior years. And that just creates a lot of whiplash and net-nothing days.

I do expect ranges to come back in Forex, and as we see stock market volume improve, Futures will see better action. Stocks, while fairly consistent, will get even better, with more trades following through, with market volume.

So, even though Santa has already come and gone for 2012, if you are asking for anything, ask for volume in the markets. Or better yet, don’t ask him, ask someone in Washington DC, as they are really the ones that can make it happen. But no, the stories you here about “regulation killed the Forex market forever” and “High Frequency Trading makes it impossible for retail traders to make money” are all nonsense. Economic activity will only grow over time on average.

Here’s to a great 2013, and thanks for being the best subscribers in the world.

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Tradesight June 2012 Forex Results

Friday, June 29th, 2012

Finally, a much better month in Forex.

Before we get to June’s numbers, here is a short reminder of the results from May. The full report from May can be found here and you can get the last several months in a row vertically by clicking here and scrolling down.

Tradesight Pip Results for May 2012

Number of trades: 36
Number of losers: 23
Winning percentage: 36.1%
Worst losing streak: 6 in a row (May 20-25)
Net pips: +10

Reminder: Here are the rules.

1) Calls made in the calendar month count. In other words, a call made on August 31 that triggered the morning of September 1 is not part of September. Calls made on Thursday, September 30 that triggered between then and the morning of October 1 ARE part of September.

2) Trades that triggered before 8 pm EST / 5 pm PST (i.e. pre Asia) and NEVER gave you a chance to re-enter are NOT counted. Everything else is counted equally.

3) All trades are broken into two pieces, with the assumption that one half is sold at the first target and one half is sold at the final exit. These are then averaged. So if we made 40 pips on one half and 60 on the second, that’s a 50-pip winner. If we made 40 pips on one half, never adjusted our stop, and the second half stopped for the 25 pip loser, then that’s a 7 pip winner (15 divided by 2 is 7.5, and I rounded down).

4) Pure losers (trades that just stop out) are considered 25 pip losers. In some cases, this can be a few more or a few less, but it should average right in there, so instead of making it complicated, I count them as 25 pips.

5) Trade re-entries are valid if a trade stops except between 3 am EST and 9 am EST (when I’m sleeping). So in other words, even if you are awake in those hours and you could have re-entered, I’m only counting things that I would have done. This is important because otherwise the implication is that you need to be awake 24/6. Triggers that occur right on the Big Three news announcements each month don’t count as you shouldn’t have orders in that close at that time.

You can go through the reports and compare the breakdown that I give as each trade is reviewed.

Tradesight Pip Results for June 2012

Number of trades: 23
Number of losers: 9
Winning percentage: 60.8%
Worst losing streak: 3 in a row (June 26)
Net pips: +275

We finished the May Results report with the line “The turning point lies ahead.” Turns out, it was June 1.

For the first time in a while, Forex ranges were stable/improved for the month. Not a ton, but it does suggest a turn. We ended up with a few days where no trades triggered because the ranges were still small, so we only had 23 trades for the month, which is unusual. However, it was a really clean month. We had 3 losers in one day, and other than that, we only had 6 losing trades for the month, and many of the winners carried over a couple of days and led to bigger gains, which is what we like to see. Our system is built around small losses and letting winners play out when they do, and this definitely shows the value of that approach. Summer can be a slow time for Forex, especially June and July, but after months of a stagnant market waiting to see how Europe would dig out of its problems, the fact that the picture might be clearing up is positive for Forex trading.

The ranges didn’t expand enough to add more than a couple of pips to the 6-month average daily ranges on some of the pairs, so we can’t get too excited yet, but it does feel like maybe May was the turning point and end of the doldrums for now. If July stays good, then the outlook for the rest of the year is much improved from the first half.

On to July…

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A Discussion of Forex Ranges

Thursday, April 5th, 2012

I get a lot of questions about the bad ranges that we are experiencing in Forex right now and what that means and whether the Forex market is now dead forever because of the regulations that have come about in the last few years, some of which protect consumers, but others cut leverage and do things that some people believe affect the market negatively in terms of range.

Let me start by shooting down those theories.

1) All markets have dull periods and wild periods.

2) The Forex market moves based on global economic events and money flows. Just because the average retail daytrader can now only trade on 50:1 leverage instead of 100:1 doesn’t mean that the EURUSD can’t move. In fact, it will.

I hope by the end of this article, you’ll see that.

We track what we call “Average Daily Range” in the Forex pairs. Basically, we’re looking at the last six months of data on each pair. A “day’s range” is the high minus the low of the day. So let’s take the EURUSD. If the high is 1.3164 and the low is 1.3035 on a day (which it was Wednesday at 5 pm to Thursday at 5 pm EST), that’s 129 pips of range for the day. We then take that number for the last six month’s of trading days, add up the ranges, and divide by the number of trading days. This tell us the six month average.

It is VERY important to use 6 months and not less in these calculations. First of all, we use them as a trading support and resistance point when hit each day, and our research and backtesting showed that if you used less data, such as 2-3 months, the number swung more wildly and wasn’t used by the market. Anything over 6 months seems to have diminishing returns in terms of practical use.

So at this moment, the EURUSD 6 month ADR is 139 pips. That’s down from 168 pips, which was the 6 month trailing ADR at the end of 2011, just a mere three months ago. What does that mean in practical application? It means that in those three months, we saw a lot of days well under 139 pips that have brought the number down.

We make way more money when the market moves under our system, so lower ranges generally mean a few things:

1) Higher chance of stopping out of a trade
2) Less chance that even if a trade is profitable, it goes far or turns into a big winner

So, what’s the net importance? Periods of bad ranges mean lesser results from our trading. We’re going to make the most money when the ranges are good.

Now that we understand that dynamic, obviously it becomes important to know whether the Forex market is truly seeing worse ranges forever and is in a permanent decline or not. Even though the movement of the market is not about the leverage factor or how much retail money goes into daytrading, that seems to be a discussion among daytraders (who seem to give themselves too much credit for being the primary factor of market movement).

So let’s look at this graphically and see if we should be concerned.

Here are the last 12 months in the EURUSD, and I choose this because it is the most commonly traded pair:

I’ve boxed in two periods of a couple of months or so where the movement was limited, and thus the average daily ranges in there were smaller, bringing down the averages. Now, let me point out that even at the end of that first box, which is around September 1, 2011, the 6-month average range on the EURUSD was still 155 pips. So basically, even though there are 2-3 months of fairly flat activity there, the average for the first half or so of 2011 was 155, which is still 16 pips better than the current 139, and believe me, 16 pips off of a SIX MONTH average is a big deal. But, as I’ve already said, even after that cycle, we were back up to 168 pips on the average by the end of 2011.

2-3 months at a time of narrow ranges happens in Forex. It usually happens at least once a year. Also, a common time is July/August when the world is on summer break, especially out of Europe. Big decisions aren’t being made. Note that that first box in the chart above ended at the end of August, and remember that as we start going backward in time in a few paragraphs.

Now, let’s look at the same chart (last 12 months on the EURUSD) with boxes drawn around periods of good movement, which also raises average ranges by definition (it would be rare for the market to move over the course of a month in one direction fairly well, but for the range of each day to get worse in the course of that move):

What do we see here? I would say last May and into June had good range, and September through the end of January in general did, although I put a secondary box around three flat weeks, which was the end of year Holidays (also common, but you’ll see soon, not always the case).

If you go back and look at our results, we had some killer months in there. But those summer months were awful, and the current environment is even worse based on the ADR being 139 pips. And while it doesn’t correlate exactly, note that the EURUSD is exactly here at the start of April where it was at the start of October, six months ago.

Next, let’s start going back in time year by year, showing the full calendar year, starting with 2010, with boxes drawn around the periods where trading was good and ranges were good. That means that the areas between the boxes were dull. Here’s 2010:

What we see here is that mid-February through mid-April was boring, most of August was boring (on average, it’s the slowest month of the year), and December was slow, especially the back half (nothing unusual). So I would call 2010 a good year that saw less slow periods, and certainly nothing extended for more than about 6-8 weeks. The EURUSD cover 2500 pips that year.

2009:

2500 pips from high to low again, most of it in one direction. Three solid months (12 weeks) of doldrums in the summer. End of the year wasn’t bad. The funny thing here is that even with the movement, since July and August were so slow and the rest of the back half of the year wasn’t too wild, the ADR on the EURUSD at the end of the year was 132 pips…LOWER than it is right now!

By the way, you can log into our site and go to Forex Levels and go back to any date you want and see what the 6-month trailing ADR was at that time.

2008:

A great trading year. Some slowness in November for 4 weeks, and yet, still, we had a bad period from April through mid-July (strangely, the rest of July and August were great, so never STOP trading just because you hit August). The main point, though is that we saw a full 3 months of bad activity in 2008 also. I’m going to surprise you with the EURUSD ADR at the end of 2008 in a few paragraphs.

2007:

Another great trading year. Nothing to complain about except that period from mid-April to mid-June. This is really a dream year for traders. Trust me, there were no points where people were whining about the ranges being bad.

But here’s where the real point comes in. 2006:

While the back end of the year (starting the weekend of Thanksgiving if you were here and remember) and into 2007 were great, the prior 6-7 MONTHS were awful. The bulk of trading for that whole period was almost in a 200 pip range. I like days that hit that in a single session!

Trust me, everyone back then was proclaiming the death of Forex, which had really only come into the public eye about 4-5 years prior. People were saying “Everyone is trading Forex now, so the market can’t move” and “Now they are going to regulate it and ruin it.” Stuff like that. I had started trading Forex in 2005, but then again, I have been trading markets since 1989, so slow periods, I know, are part of the game, and we said that here at Tradesight at the time. Note the comment above the box on that 2006 chart. The ADR on the EURUSD on Thanksgiving Day 2006 was 91 pips! Today, we’re still at 139. And between here and there, scroll up and look back through all of those years and see all of the movement.

And then here’s the real doozy. What was the EURUSD ADR on December 31, 2008? 227 PIPS. That’s not a typo. Why? A little thing called the banking collapse of 2008. The markets went crazy…all markets.

So remember, in late 2006, everyone was proclaiming the death of Forex trading. Look at how 2007 went and 2008, and think about the change in ranges from that dull six month period in 2006 to the peak at the end of 2008 (227 pips of ADR is almost not tradeable from the other perspective…too much fast movement equals too much risk).

The driving factor of Forex isn’t regulation of the retail trading houses or lower leverage for the retail trader. It’s global economic forces, and believe me, maybe right this moment, with interest rates near zero globally and the problems we are still experiencing here from the real estate bust and banking collapse and the issues of debt in Europe…it’s a little bit frozen. But those are the reasons, and at some point, one way or another, something’s going to break. Could be a collapse of a country or someone starting to grow. Either one will get things moving.

Having said all of that, that’s why we trade stocks and futures here as well. They have trading just great even as Forex has gotten a little slow the last few months. But I don’t expect to go all the way through 2012 without some better periods for Forex too.

Have a great weekend.

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An Outlook on the USDJPY: Dual Exhaustion Signals

Friday, March 23rd, 2012

We had an interesting set of events last week on the USDJPY. Both our Seeker and Comber tools, which use different techniques to give exhaustion signals after large moves, but gave separate 13 bar sell signals on the daily chart of the USDJPY…at the same time! This is extremely rare for this to happen and add to the power of the potential reversal. Let’s take a look at the two tools separately and then discuss how the USDJPY has reacted so far.

First, we have our Seeker tool, which gives a reversal sell signal with a red “13″ above a bar. It also draws a pink risk line, which is then used as a stop out point for the short if we close above it. If the pair closes above it, the pink line becomes dashed instead of solid to show that it is broken. We commonly see a signal and then the use of the risk level as strong resistance, which is exactly what we see here:

So far, the risk level has not broken, and the USDJPY is starting to roll.

Even though the Comber counts exhaustion differently, in this case, it got the exact same signal, which means the exact same risk level, so even though the numeric count that gets to 13 is different than the Comber, the sell signal and risk level look the same:

When these two signals line up at the same time, or even one or two bars apart, it creates an even more probably reversal point.

At this point, the USDJPY is just starting to rollover and has established the first 2 bars of a green “setup” count to the downside, which we will monitor to see if it can approach the key 9th bar. At the same time, two targets are in motion. One is the 50% retracement of the move, which is the black line at B. The second, which should not be discounted although it looks extreme now, is the red line C, which is the static trendline of the count itself. Let’s watch for both in the coming days and weeks.

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Tradesight December 2011 Forex Results

Monday, January 2nd, 2012

Before we get to December’s numbers, here is a short reminder of the results from November. The full report from November can be found here and you can get the last several months in a row vertically by clicking here and scrolling down.

Tradesight Pip Results for November 2011

Number of trades: 33
Number of losers: 17
Winning percentage: 48.5%
Worst losing streak: 5 in a row (around November 28)
Net pips: +75

Reminder: Here are the rules.

1) Calls made in the calendar month count. In other words, a call made on August 31 that triggered the morning of September 1 is not part of September. Calls made on Thursday, September 30 that triggered between then and the morning of October 1 ARE part of September.

2) Trades that triggered before 8 pm EST / 5 pm PST (i.e. pre Asia) and NEVER gave you a chance to re-enter are NOT counted. Everything else is counted equally.

3) All trades are broken into two pieces, with the assumption that one half is sold at the first target and one half is sold at the final exit. These are then averaged. So if we made 40 pips on one half and 60 on the second, that’s a 50-pip winner. If we made 40 pips on one half, never adjusted our stop, and the second half stopped for the 25 pip loser, then that’s a 7 pip winner (15 divided by 2 is 7.5, and I rounded down).

4) Pure losers (trades that just stop out) are considered 25 pip losers. In some cases, this can be a few more or a few less, but it should average right in there, so instead of making it complicated, I count them as 25 pips.

5) Trade re-entries are valid if a trade stops except between 3 am EST and 9 am EST (when I’m sleeping). So in other words, even if you are awake in those hours and you could have re-entered, I’m only counting things that I would have done. This is important because otherwise the implication is that you need to be awake 24/6. Triggers that occur right on the Big Three news announcements each month don’t count as you shouldn’t have orders in that close at that time.

You can go through the reports and compare the breakdown that I give as each trade is reviewed.

Tradesight Pip Results for December 2011

Number of trades: 31
Number of losers: 18
Winning percentage: 41.9%
Worst losing streak: 6 in a row (last week of the year)
Net pips: +20

As is often the case, the market got really slow during the end of year Holidays. In reality, we adjusted for this by going to half size for the end of the year, but under our rules for counting pips in our direct trade call results, we don’t reflect that in these numbers. This is just a raw pip count for the month.

We won a lower-than-normal percentage of trades in the month, which, again, isn’t shocking. The net results were only 20 pips of gains, our second worst month of the year. Average daily ranges mostly dropped in the month, with the EURUSD’s 6-month average range dropping 6 pips from the start to end of December. That’s a pretty sharp drop off in a six month number. Several of the days were incredibly thin trading, and I actually didn’t count two winning trades in these results because they occurred on spikes that were virtually impossible to get a fill in, something we didn’t see at any other point in the year.

I will be putting out a year-end Forex summary soon that analyzes the market action for the year and summarizes our trading results for the whole twelve months, which were great. Check back soon.

On to 2012…

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Tradesight Twelve Month Forex Calls Track Record

Monday, October 17th, 2011

We recently posted the net results of our trade calls for September. At this point, we have officially posted monthly results for 12 months. Our forex service launched in 2004, and we have all of our trades archived, which are still available to subscribers, but they were not broken down monthly for net results.

You can now review every day of trading for the last year by clicking on this link and scrolling down as you go. These blog summaries don’t include our full forex reports for each day, but they recap our official trade calls that we gave for the session.

In addition, you can view the twelve separate one month summaries by clicking here and scrolling down as you go.

Today, I’ve put together net results of the service, and I wanted to make some comments about what it means for our methodology. Let’s start with a couple of different looks at the data.

For the year, we had 427 calls THAT triggered. That means we likely had about 700 official calls in total. Our win ratio on those 427 calls was 52.46%. That means we lost on 203 out of 427 calls. Our goal is a 50-60% win ratio, so we fell into that range, even if it was on the low side of the range.

We had only one month of negative results, and that was January 2010. Our win ratio there was only 34.29% and we lost 40 pips net.

The other 11 months were positive, and our win ratios in those months ranged from 42.5% through 70.0%.

The total net gain in pips accounting for stops, partials, and final exits was approximately 3446 pips. That’s a pretty solid number for a year.

Our system doesn’t rely on you magically catching one or two trades that accounted for most of those pips. In fact, there probably were no winners over 150 pips net (partial and final) in the year. But, it shows the importance of a net strategy of maintaining tight stops and letting the winners ride. Even though we only won 52.46% of our trades, the gains speak for themselves. And yes, you can have losing months. We had one. We also had three months where the net gains were barely over 100 pips, including August, which is typically the slowest month of the year. None of this analysis accounts for adjusting size to account for slow periods, holidays, or news. These are just the raw numbers.

When we get through October, November, and December, we will post net numbers for 2011, but it isn’t likely that the average overall will vary much. I think it demonstrates clearly that the Tradesight Forex system works and does not require a lot of time. This is not our active trading service that we teach separately where you need to monitor the market. This is our “set and forget” strategy where you get the calls in the evening, put them in, and check at key times of day to make adjustments. It requires about 30 minutes of your day, and I think it’s worth the time.

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Another Tradesight Seeker Tool Example

Wednesday, September 28th, 2011

I’ve talked to a lot of people lately who are impressed by the Value of the Tradesight Seeker tool. Although it is ultimately the red 13-bar counts that give solid buy and sell reversal signals, the reality is that you can often find key market inflection points from the green 9-bar setup phase.

Let’s talk about the US Dollar Index. If you are trading Forex pairs, it’s typically useful to watch the US Dollar Index. Our courses teach a variety of tools to watch the Index and monitor it’s direction, which offers a “top-down” look at what to expect from USD-based Forex pairs at the time.

But how does the Seeker tool work on the US Dollar Index intraday, let’s say on the 5-minute timeframe, which is my most-used timeframe? Let’s have a look at the price action from Tuesday night going into Wednesday on it with our Seeker tool (and market directional tool, which are the various green and red lines):

Remember, green numeric counts, which must be in sequential order, are the Setup phase of the process. If you don’t meet the look back criteria for all 9 bars, the count is erased, so on that chart, you only see the completed setup phases for the session. There were three.

At point A, the market had bounced a bit off of lows and approached the mid-point (red line) of the session. That completed count was exactly a top.

At point B, we had extended sharply to new lows. That completed count was exactly the bottom.

There were no more completed counts for seven hours until late in the Forex trading day around 11 am PST (charts in PST). Then we had another 9-bar setup count, which topped at C and was the high.

It is extremely hard to suggest that this tool isn’t something that can put money in your pocket when you see it work like this on so many symbols in all asset classes and all timeframes.

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Profitable GBPUSD Seeker Sell Signal

Tuesday, September 27th, 2011

We’ve had a lot of interest in our Seeker tool lately, so I wanted to take some time to walk through a 13-bar Signal on today’s GBPUSD 5-minute chart to show how the tool can be used.

We’ll start with a look at the GBPUSD around 6:00 am PST / 9:00 am EST this morning (charts are PST). It is currently 7 bars into the SETUP phase of the Seeker tool, which are the green numbers. Once you get to 9 (see recent course for the count methodology); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES the setup is complete and in place:

A few bars later, we get the 9, so the Setup is in force. The red count is the actual Seeker Countdown using a non-sequential 2-bar look back from close of the bar to low of the bar two bars back. Note that the red count begins as soon as the green 9 is complete:

Also, understand that the 4-bar look back count that is used to generate the 9-bar green setup phase can actually continue beyond the 9th bar. Although you don’t need those additional bars (i.e. they are not labeled 10, 11, etc.) for the red Countdown to begin, our tool draws a box around the setup count once the 4-bar look back is broken. So in this case, the Setup count methodology continued for four bars after the 9, and then the box is drawn:

Moving forward, we now see the red count underway. Remember that this count does NOT need to consecutive. Also the red line D is the Static Trendline of the setup count, which is the low of the range of that count:

Seeker signals are a test of patience. This one proceeds fairly quickly but still takes over an hour to get to the 10th red count. 3 to go at this point:

Finally, we get our 13 signal, which is a sell signal by default. You’ll also see that the pink risk line begins to draw after that. Basically, the trade is to sell short at the 13 (or if you want to be conservative, sell when you break the low of a 5-minute bar after the 13) with a stop over the risk level:

The risk line is F, and the GBPUSD starts to roll without touching it:

Over the next 30 minutes, it works nicely as we shuffle into the end of day:

Ends up being about a 50 pip winner at that point. Hard to complain, and very easy to follow if you have time to watch. Note that this tool works on all asset classes and all timeframes equally.

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A Key Breakout on the US Dollar Index

Friday, September 9th, 2011

A couple of months ago, we were watching the rising triangle wedge that was forming between the two lines on the chart below, looking for a breakout or breakdown. At point A, the Index broke out intraday but failed to close above the key 76.00 level. It ended up breaking under the trendline at B, but that ended up leading to general sideways action for August doldrums:

We have now officially rallied at C and broken through the 76.00 level, which is significant and bodes well for the US Dollar over the next weeks and perhaps even months. It also means that the US Dollar Index low still was back in 2008 for now, as you can see on this weekly chart:

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US Dollar Index Update

Friday, August 26th, 2011

So, let’s discuss the US Dollar Index. From a broader perspective, we stuck in what I call the “back side of a wedge,” which is denoted on this 9-month daily chart by the break of both the intermediate and short term trendlines:

Meanwhile, despite everything that is going on in the world today, which people constantly tell me should be moving the forex market right now, there is a reality that I think some people like to try to ignore. August really is a time where the big money players, specifically out of Europe, take a break. It’s almost always the slowest, most meandering month of the year. Only one year out of the last decade was this not the case. When you think about it from that perspective, let’s zoom in on the more recent chart data over the last four months or so:

First of all, clearly, we’re in a pretty narrow range now for FOUR MONTHS. That is an important note to make. At some point, when we break this either way, things will get going. But, specifically look at May, June, and July, where I highlighted some decent moves with black trendlines. Those allowed us to make decent money in those months…in fact, pretty good money in some cases.

Now focus specifically on August. No trends for even a week. Lots of back and forth bars. Narrowest range of the four months.

Despite what is going on in the world, you can’t trump one thing. The big money players vacation in August.

From a trading perspective, what this means for us is that I have been half size for most of the month and will continue to do so until ranges improve for a couple of days (at some point after Labor Day) or we break out or down from this four month area on the Dollar Index.

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Tradesight July Forex Results

Friday, August 5th, 2011

Before we get to June’s numbers (which were huge); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES here is a short reminder of the results from June. The full report from June can be found here and you can get the last several months in a row vertically by clicking here and scrolling down.

Tradesight Pip Results for June 2011

Number of trades: 42
Number of losers: 17
Winning percentage: 59.5%
Worst losing streak: 3 in a row (June 26-27)
Net pips: +645

Reminder: Here are the rules.

1) Calls made in the calendar month count. In other words, a call made on August 31 that triggered the morning of September 1 is not part of September. Calls made on Thursday, September 30 that triggered between then and the morning of October 1 ARE part of September.

2) Trades that triggered before 8 pm EST / 5 pm PST (i.e. pre Asia) and NEVER gave you a chance to re-enter are NOT counted. Everything else is counted equally.

3) All trades are broken into two pieces, with the assumption that one half is sold at the first target and one half is sold at the final exit. These are then averaged. So if we made 40 pips on one half and 60 on the second, that’s a 50-pip winner. If we made 40 pips on one half, never adjusted our stop, and the second half stopped for the 25 pip loser, then that’s a 7 pip winner (15 divided by 2 is 7.5, and I rounded down).

4) Pure losers (trades that just stop out) are considered 25 pip losers. In some cases, this can be a few more or a few less, but it should average right in there, so instead of making it complicated, I count them as 25 pips.

5) Trade re-entries are valid if a trade stops except between 3 am EST and 9 am EST (when I’m sleeping). So in other words, even if you are awake in those hours and you could have re-entered, I’m only counting things that I would have done. This is important because otherwise the implication is that you need to be awake 24/6. Triggers that occur right on the Big Three news announcements each month don’t count as you shouldn’t have orders in that close at that time.

You can go through the reports and compare the breakdown that I give as each trade is reviewed.

Tradesight Pip Results for July 2011

Number of trades: 41
Number of losers: 18
Winning percentage: 56.1%
Worst losing streak: 4 in a row (July 30-31)
Net pips: +410

After a huge month of June that I believe set a near record for gains for us, July wasn’t too shabby either. We netted out 410 pips. After a while, you should see the pattern emerging if you go back and look at that results going back several months. We almost always average between 50 and 60 percent winners. The one month of the year that we were significantly under that at 37% (January of 2011) was a negative month. However, all of the other months averaged right in that range (one month was higher as well). That’s about exactly where our system is meant to land, with the losers then being kept to a very specific small amount and the winners being allowed to run when they do. I’ll be doing a complete summary of all of 2011 at the end of the year, but right now, I can tell you that our win ratio for the year is about 55%. Some people think you need to be higher to win at forex, but I don’t agree. I think systems that have higher win ratios have to take on more risk per trade, and that’s the secret to success.

Not much to say about the ranges this month. The six month Average Daily Range of almost all of the pairs stayed relatively stable, which means that our ranges this month were not extremely high or low. Obviously, things got wider in the last few days of the month, but overall, it’s right where we like to see it. We had 6 trades during the month that led to over 100 pip winners to the final exit, so it wasn’t that you had to catch one of two specific trades to make most of the gains, as has happened a couple of times.

Looking ahead, August is typically the slowest Forex trading month of the year, but obviously there is a lot going on in the world, and this August might be the exception. I usually drop to half size trading when the ranges drop in August, but we haven’t seen that yet, and I’m not going to do that until it happens.

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A Value Area Walkthrough

Wednesday, July 20th, 2011

A Value Area play is a trade based on the “market memory” of the prior day’s trading activity. It is a specific range from the prior day’s action that the market uses in a certain method with a high percentage of success. One of the main ways that we use the Value Area is to look for wide open Value Areas where a pair starts outside the Value Area, then enters the Value Area or breaks through a key support/resistance point just inside the Value Area, and then targets moving across the Value Area without breaking back outside of it.

On Wednesday, we had a Classic Value Area play on the GBPJPY. We focused in the Trading Lab on the break under the LBreak, which was just under the line blue (cyan) Value Area High line. The dark blue Pivot was also right there. So the goal was to go short under LBreak with a stop over VAH (in case it came back outside the Value Area) and a target of the cyan VAL. It triggered short at A, retested EXACTLY the VAH at B and didn’t stop out above it, and hit VAL target at C for a perfect Value Area trade:

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How the US Dollar Got Here

Wednesday, July 6th, 2011

There are benefits to having a weak US Dollar…up to a point. Weak currencies are supposed to encourage exports. Other countries see our goods as cheap when adjusted for currency exchange and buy our products. That’s a solid economic theory…assuming certain factors are held steady.

This theory implies that we are a producing society. We are not anymore. We produce very little. Most of our manufacturing has been outsourced to Asia and countries near Asia. We maintain, for the most part, a technology industry and a defense industry, although the technology industry in many ways manufactures abroad.

The economics and politics of the US Dollar rely on certain assumptions, and I would argue that in the last decade, the assumptions were faulty. The old rules don’t apply. We used to manufacture and sell goods to the world. When that was the case, in times of slowdown, a weaker Dollar would spur sales. That doesn’t work in today’s global realities. Let’s take a look at the US Dollar Index from three different timeframes and comment both on what it is doing and what the charts mean. And remember…charts don’t lie, people do.

Here is the last year and a little more on the US Dollar Index:

If you looked solely at that chart, you might make a few assumptions. It shows clearly that we are in a very short term uptrend, have recently broken the intermediate-term downtrend line, and are struggling with the longer-term downtrend line (at least on this timeframe). This chart certainly makes the US Dollar look weak, which would be the result of either bad or intentional policy to drive it lower on our part.

Having said that, let’s now back out the picture to a weekly chart that shows several years of data and see what that indicates:

In this timeframe, things don’t look as bad. We have a clear 5-6 year downtrend, but the trendline is fairly flat. We have a clear 2-3 year intermediate-term uptrend line that was recently broken to the downside. And we have a clear short-term downtrend (which was the longer-term line on the prior chart) that is resistance. From all three angles, we are in a downtrend, but it certainly doesn’t appear as steep as it looked on the prior chart. In fact, we haven’t made a new low since early 2008.

Now let’s back the chart out to a monthly chart that dates back to the 1980s:

Here we get a very different view of the US Dollar, but what happens is that the really long-term picture clarifies how much our Federal government policy matters. Here, I’m not worried about trend lines. I’m more focused on the highs and lows. Remember that in the 1980s and into the early 1990s, we followed Republican economic politics, which cut taxes while increasing spending and accruing huge deficits. This was clearly a negative for the US Dollar, but it also came at a time where the US manufacturing sector was much stronger and more prominent than it is today. If you look at the end of 1992, the US Dollar bottomed right at the election (on Election Day, no less) of President Clinton. This led to an 8-year rally on the Dollar that was driven by lowering the annual deficit and topped out in annual surpluses. The only blip in that run was the period where the Federal government almost shut down over a budget impasse (in fact, it did for a few days). Other than that period (ahem…sound familiar); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES the Dollar got stronger and played a major role in our prosperity.

The chart then almost tops out on Election Day 2000, although it makes one additional push that is capped at 9/11. The next eight years is a solid decline as the country returned to the notion that we can spend on wars and everything else while lowering taxes and paying for nothing. The difference is that in the two decades since that policy had been implemented the previous time, we outsourced our manufacturing jobs and had nothing to sell. The combination proved deadly for the economy, the stock market, and employment. As I said at the top, a weak Dollar has its benefits, in a certain scenario. We aren’t in that scenario.

What the Index has said since 2008 is that we’re trying to get back on track. We need to get the economy moving again, bring jobs back home (a step that isn’t really being addressed); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES and only after that, get our fiscal house in order. The fact that the US Dollar bottomed in 2008 suggests that the market believed that that would be the direction that we would take. But here again, at a crucial junction, instead of looking to get our house in order and get our spending AND revenues in line, we’re flirting with the debt ceiling and shutting down the government, something that nearly killed the recovery in 1995.

When you really examine the long-term chart of the US Dollar, it becomes clear that it is about fiscal policy and not just the ebb and flow of the economy. The reality is that today, we don’t have an economy that thrives on a weak Dollar, and we’re in trouble if we don’t recognize that and prevent it from going much lower.

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Tradesight June Forex Results

Friday, July 1st, 2011

Before we get to June’s numbers (which were huge); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES here is a short reminder of the results from May. The full report from May can be found here.

Tradesight Pip Results for May 2011

Number of trades: 36
Number of losers: 18
Winning percentage: 50%
Worst losing streak: 5 in a row (May 16-19)
Net pips: +266

Reminder: Here are the rules.

1) Calls made in the calendar month count. In other words, a call made on August 31 that triggered the morning of September 1 is not part of September. Calls made on Thursday, September 30 that triggered between then and the morning of October 1 ARE part of September.

2) Trades that triggered before 8 pm EST / 5 pm PST (i.e. pre Asia) and NEVER gave you a chance to re-enter are NOT counted. Everything else is counted equally.

3) All trades are broken into two pieces, with the assumption that one half is sold at the first target and one half is sold at the final exit. These are then averaged. So if we made 40 pips on one half and 60 on the second, that’s a 50-pip winner. If we made 40 pips on one half, never adjusted our stop, and the second half stopped for the 25 pip loser, then that’s a 7 pip winner (15 divided by 2 is 7.5, and I rounded down).

4) Pure losers (trades that just stop out) are considered 25 pip losers. In some cases, this can be a few more or a few less, but it should average right in there, so instead of making it complicated, I count them as 25 pips.

5) Trade re-entries are valid if a trade stops except between 3 am EST and 9 am EST (when I’m sleeping). So in other words, even if you are awake in those hours and you could have re-entered, I’m only counting things that I would have done. This is important because otherwise the implication is that you need to be awake 24/6. Triggers that occur right on the Big Three news announcements each month don’t count as you shouldn’t have orders in that close at that time.

You can go through the reports and compare the breakdown that I give as each trade is reviewed.

Tradesight Pip Results for June 2011

Number of trades: 42
Number of losers: 17
Winning percentage: 59.5%
Worst losing streak: 3 in a row (June 26-27)
Net pips: +645

Just a stellar month with several calls leading to triple-digit pip gains. It was a month where the market behaved very technically and reaching first targets was more common, increasing our win rate to almost 60% of triggered trades. One key here is that average daily range on the EURUSD has moved ahead of GBPUSD in the last few months, and we made more calls in the EURUSD this month. Additionally, the EURUSD 6-month Average Daily Range increased by 4 pips to 145 during the month of June, which means that we had a lot of days above that average to bring the 6-month number up. GBPUSD dropped to 136 pips of range per day. The JPY-based pairs continue to see less activity, with the USDJPY pair in particular being almost untradeable many days with 35 pips of range. Have to stay away from that pair for now.

Hopefully, July will continue to impress, as we know that August is, on average, the lightest month of the year for Forex ranges, but you never know.

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Tradesight May Forex Results

Friday, June 3rd, 2011

Before we get to May’s numbers, here is a short reminder of the results from April. The full report from April can be found here.

Tradesight Pip Results for April 2011

Number of trades: 26
Number of losers: 14
Winning percentage: 53.8%
Worst losing streak: 2 in a row (twice)
Net pips: +140

Reminder: Here are the rules.

1) Calls made in the calendar month count. In other words, a call made on August 31 that triggered the morning of September 1 is not part of September. Calls made on Thursday, September 30 that triggered between then and the morning of October 1 ARE part of September.

2) Trades that triggered before 8 pm EST / 5 pm PST (i.e. pre Asia) and NEVER gave you a chance to re-enter are NOT counted. Everything else is counted equally.

3) All trades are broken into two pieces, with the assumption that one half is sold at the first target and one half is sold at the final exit. These are then averaged. So if we made 40 pips on one half and 60 on the second, that’s a 50-pip winner. If we made 40 pips on one half, never adjusted our stop, and the second half stopped for the 25 pip loser, then that’s a 7 pip winner (15 divided by 2 is 7.5, and I rounded down).

4) Pure losers (trades that just stop out) are considered 25 pip losers. In some cases, this can be a few more or a few less, but it should average right in there, so instead of making it complicated, I count them as 25 pips.

5) Trade re-entries are valid if a trade stops except between 3 am EST and 9 am EST (when I’m sleeping). So in other words, even if you are awake in those hours and you could have re-entered, I’m only counting things that I would have done. This is important because otherwise the implication is that you need to be awake 24/6. Triggers that occur right on the Big Three news announcements each month don’t count as you shouldn’t have orders in that close at that time.

You can go through the reports and compare the breakdown that I give as each trade is reviewed.

Tradesight Pip Results for May 2011

Number of trades: 36
Number of losers: 18
Winning percentage: 50%
Worst losing streak: 5 in a row (May 16-19)
Net pips: +266

I much better return to form as we had 10 more trades trigger in May than April and things went pretty well and were spread out again. The interesting thing is that the Average Daily Ranges (6 month) dropped 2-4 pips on most of the pairs (except the AUDUSD and NZDUSD) during May, which is again a pretty sharp drop on a number based on six months worth of data when only 23 days are new. Still, the system works because holding winners into the next session pays off, and this time, there were several nice gainers scattered throughout the month. We ended up with a total net gain of 266 pips, which is much better than the last few months. As long as at least 3-4 months of the year are 250 pips or higher, we’re in good shape since we keep such tight stops.

It would be more interesting to see the average ranges gain for the first time in a while, which should only provide us with better results. Late summer isn’t the usual time to see that, but you never know, and we have early summer to deal with first. On to June…

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COT 4-01-11

Tuesday, April 5th, 2011

Hi Traders,

Well, I was swamped last week so I never got to the COT. No matter, with Non-Farm Payrolls out on Friday, I don’t think it was that big of a deal; and, the previous week’s report sufficed just fine.

About the COT and coming up-to-speed, Let’s get busy. The latest charts ae here: http://www.tradesight.com/wp-content/uploads/2011/04/COT-4-01-111.pdf

The commodity currencies have been climbing and the NZD has moved 5% in two weeks. That’s just ridiculous. But, the pair is at a .786 Fibonacci retracement level per the last daily chart high and low, and is pretty much overbought. I’m watching closely to see if it moves lower, retracing to a Fibonacci level of the last leg up. Correlate this with the COT chart, and you’ll find the kiwi WAS at extremes: the commercials and specs are 180-degrees apart, where the commercials had been buyers and specs sellers. But this changed two-weeks ago and the COT gave us a heads up. So, even with NZD at the current .786 Fibonacci level, if it does move lower from here, I believe it is temporary (and, again, will be a retrace of this last leg up). Also note the daily trend line hasn’t been so much as tested. Hence, the trend is still up.

The aussie is also at extremes, with the commercials net short and the specs net long. And, based on the COT and price charts, I’m looking for AUD to make a nice move down from these highs. CAD looks the same, but the inverse is true, i.e., I looking for is to move up. Like NZD, note the daily trend lines for both remain untested, at this point. So, conservative and/or longer term traders might want to wait for confirmation signals before taking a position. Just a thought and this totally depends on one’s style of trading.

The swissy and euro are in a similar, but inverse, situation. And, when looking at the USD Index, both appear close to a turn around. Note the commercials and specs are 180-degrees out on the Index, which, as I’ve mentioned in the past, presages a USD turn-around. Yes, I know everyone hates the greenback, but guess what?

I’m not “everyone” and neither are you. We’re a lot smarter and prefer to think contrarain, right?

Right ;- )

About the yen, well…. I’m not a fan of interventions, so I’m going to leave this one alone. Other than carry trades (playing the interest rate differential); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES one may very well be living on the edge by trading the yen. You just never know when you’ll get a price spike, which, if you’re on the wrong side of the trade, may feel like a spike in the forehead. I’m just sayin’….

Gold and silver? Momentum is slowing to the upside, but gold’s COT shows the commercials selling and the specs buying. As for silver, its COT is pretty much a plate of spaghetti. Yes, per the price charts, it’s still a long. But, we’ll see where it goes, as it is overbought and (as I already mentioned) momentum is slowing.

That’s it for this week. Feel free to comment.

Be well and good trading!

Clay

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COT 3-18-11

Monday, March 21st, 2011

Hi Traders,

A good Monday to you! I have to admit, it was an amazing Tampa Bay weekend; I mean, it was the perfect illustration of “why” this time of years our state fills-up with out-of-staters driving very large cars, doing below the speed limit and with one directional flashing on, then off, then on, then… for miles and miles on any Florida Interstate. Yes, we love them. And, yes, May will be here soon.

Okay, the COT charts are here: http://www.tradesight.com/wp-content/uploads/2011/03/COT-3-18-11.pdf

Everything we discussed previously (as in last time) has continued in the same direction this past week, meaning if a currency was at extremes between the commercials and specs then, it is more extreme now. If it was in the middle of a move toward extreme levels, the direction hasn’t changed. And, if it was in a state of confusion, like the yen, it still is.

I will note that if one is looking for dollar bull, you’ll probably have to pay a private investigator to find one for you. To excerpt one of my letters: “Everyone is bearish on the dollar. Many newsletter writers are bearish on the dollar. Magazine headlines scream warnings of a dollar disaster. Financial TV talking heads are universally gloomy on the greenback. And while I agree with them over the long term, we’re ready to see a big dollar rally (and a euro fall) in the short term.”

My point, exactly. So, I suggest one continues to note what the COT charts are telling us while keeping an eye the price charts for longer-term setups (i.e., daily and 4-hour).

Cheers and great trading,

Clay

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COT 3-12-11

Monday, March 14th, 2011

Hi Traders,

What an awesome weekend here in Tampa Bay… and that’s all I’ll say just in case it’s cold and nasty where you are. Okay, that and… Hold on, summer is coming!

Okay, the COT charts are here; feel free to grab a copy of the sheet music and sing along.

The commodity currencies AUD and CAD are starting to push the “extremes” limits, especially the latter. Remember, though, even when this occurs, it can take some time for the spot FX market to change gears; these readings are best used as a heads up. NZD, though a member of the commodity currency team, keeps getting sold by the specs and bought buy the commercials. And, it’s nowhere near extremes, so this could go on for a while. You might take a look at all three charts and note the difference.

The Swiss Franc and euro charts show the commercials 180-degrees apart; the commercials have been selling and the specs buying, though this may be changing soon, especially considering what’s going with the EU’s PIIGS. I mentioned this last week, so I won’t kick that dying horse–that said, I never understood why anyone would consider kicking a dying horse, anyway.

The pound is beyond extremes, having turned around a couple of weeks ago. The commercials are buying, though not with conviction, and the specs are selling, though not with any sort of conviction, either. GBPUSD bounced off a monthly pivot last Friday and made a nice move higher. Will it head to 1.6400? Absolutely… unless, of course, it doesn’t. GBPJPY and GBPCHF, like GBPUSD, found support (see daily price charts) and, by the looks of things, the market is considering where to take these pairs next. If the most recent daily highs are taken out, I anticipate this happen with less momentum, which is a signal for a turn (think “divergence)). Keep an eye on the daily highs.

The market is in a state of confusion about the yen. And, with the tsunami, it might take a little longer for conviction to enter the picture. Standby to standby.

The USD Dollar Index shows the commercials and specs180-degrees apart, which, when considering the swissy and euro charts, makes sense. Correlate these with the price charts and the extremely negative USD sentiment, and we’re seeing the makings of an about-face.

Gold and silver are an interesting couple. The small traders and specs are buying gold again, but with silver making these most recent highs, it appears they’re concerned and not sure what to do. That said, unless one’s an aggressive trader, shorting silver now would, in my opinion, take a lot of guts and the willingness to be wrong if the market continues higher. Remember the old adage, “The market is never too high to go higher, or too lower to go lower.” That, and, “Trade what you see.”

That’s it for this week.

Cheers,

Clay

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COT: 3-4-11

Saturday, March 5th, 2011

Hi Traders,

A good Saturday morning to you. It’s a little overcast here in the Tampa Bay area, but yesterday was FANTASTIC, so I’ll put up with some cloud cover. At least it’s warm enough to wear shorts and flip flops!

On to the COT but first, get this weeks charts HERE.

The small traders and specs have been buying the aussie and looney; as commodity currencies, it’s no wonder, especially with oil going through the roof this week… and the commercials were sellers (hey, the specs and smaller traders have to buy from someone). That said, the looney (i.e., CAD) is at extremes and the aussie is real close. Look for a 180-degree differential, which usually presages a turnaround. The kiwi, however, didn’t benefit, and small traders kept on selling.

Other pairs at extremes are the swissy and euro, and the pound has turned the corner. This is a good time to start looking for a longer-term move setting-up in the opposite direction. Depending on one’s risk tolerance and whether they’re an active, swing or position trader, entries might already be in place. But, especially for active traders, Friday was Non-Farm Payrolls, which creates some chop and, if stops are too tight, you run the risk of getting a whipped around. This next week may offer some good entry opportunities in the shorter timeframes. Keep your eyes open.

Note the US Dollar Index. Specs (green line) and commercials (orange line) are at extremes. AND, finding a dollar bull right now is about as easy as trying to find a politician you’d want take home to meet your mother. But I digress…. The point is, right now the consensus is 99% dollar bears. O’ to be contrarian ;- ) If you’re not sure what this means, please see my post this week covering the topic–or just post a message and ask. Anyway, take a look at the COT chart.

What can I say about the shiny metals? The specs and short term traders are buying, which means the commercials are selling. While I don’t know where the top is (especially with silver–though it did hit my target near $34.80); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES I have to ask: “If it’s the end of the world and, the commercials being the “smart money”, why would ANYONE be selling? I mean, if you knew there weren’t anymore macadamia nut white chocolate chip cookies, and you LOVED, LOVED, LOVED macadamia nut white chocolate chop cookies… I mean you just couldn’t live without ‘em… would YOU sell any of your stash?

Okay, maybe “insulin” is a better metaphor. Bygones. Still, you get my point.

That’s it for this week.

Be well and keep living large!

Clay

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COT 2-25-11

Saturday, February 26th, 2011

Hi Traders,

An awesome Saturday morning to you! For some reason, I was up at 7:15, today. I have no idea why, but I’m not complaining! Nope, I have tons to do, including preparing this week’s COT report for you guys. So, I better get busy ;-)

This week’s COT charts are here

Gold and silver climbed this week, with silver hitting highs. Who’s buying? The small guys and specs. Hmmm… what does that tell ya? It tells you the commercials, those groups with more money than the Fed can print in a month, are selling. They’re selling gold, too, while the small traders are buying it up like my ex-mother-in-law used to by Beenie Babies (she had boxes of those things… don’t ask me why).

So, are these to shiny metals at a top? If you look at the gold chart, not the specs (green line) and commercials (orange line) were 180-degrees out not too long ago, which often presages a turn-around. Silver isn’t showing the same thing, however. Instead, there’s plenty of room before the “180-degree” indication comes into play. So, keep watching.

When it comes to the commodity currencies, the CAD is at extremes, which, as you know, is a heads up (see above explanation). The aussie isn’t at extremes, and is sort of treading water. AUDUSD keeps hovering around parity and it appears the specs and small traders aren’t sure where to go next. I mean, it’s sort of a game of “Do or Dare”. It makes sense to; after all, after such strong run-up to parity, do you want to be the guy who bets the aussie will go EVEN higher… before a correction, that is? NZD is has the specs and commercials at a standstill. With all the bad news there, lately, a longer-term “watch and see” attitude just seems prudent. Not exactly rocket science.

The pound is coming off extremes between the commercials and specs. As I mentioned last time, we might see another push north to the 1.64 area (GBPUSD); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES although it’s really struggle at current resistance. Based on the COT reading, whether prices move higher or not, a change of direction is in the air.

Nothing new to report on the yen or euro, BUT a look at the US Dollar Index shows the commercials and specs are 180-degrees apart. As I’ve said before, there’s a better than good chance, in my opinion, that USD will gain strength as we head deeper into the year.

“Huh?”, say some. “But what about all the bad press and crazy stuff the gov’t is doing… you know, the out-of-control” spending and budget cuts and lay-offs and, and, and….”

Well, as you might have observed, whenever sentiments are at extremes, this is usually when markets turn. Remember internet stocks and real estate?

Okay, that’s it for now. I hope your weekend is rockin’.

Be well and live large!

Clay

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Tradesight January 2011 Forex Results

Wednesday, February 2nd, 2011

Before we get to January’s numbers, here is a short reminder of the results from December. The full report can be found here.

Number of trades: 34
Number of losers: 18
Winning percentage: 47.0%
Worst losing streak: 4 in a row (Dec 26-28)
Net pips: +315

Reminder: Here are the rules.

1) Calls made in the calendar month count. In other words, a call made on August 31 that triggered the morning of September 1 is not part of September. Calls made on Thursday, September 30 that triggered between then and the morning of October 1 ARE part of September.

2) Trades that triggered before 8 pm EST / 5 pm PST (i.e. pre Asia) and NEVER gave you a chance to re-enter are NOT counted. Everything else is counted equally.

3) All trades are broken into two pieces, with the assumption that one half is sold at the first target and one half is sold at the final exit. These are then averaged. So if we made 40 pips on one half and 60 on the second, that’s a 50-pip winner. If we made 40 pips on one half, never adjusted our stop, and the second half stopped for the 25 pip loser, then that’s a 7 pip winner (15 divided by 2 is 7.5, and I rounded down).

4) Pure losers (trades that just stop out) are considered 25 pip losers. In some cases, this can be a few more or a few less, but it should average right in there, so instead of making it complicated, I count them as 25 pips.

5) Trade re-entries are valid if a trade stops except between 3 am EST and 9 am EST (when I’m sleeping). So in other words, even if you are awake in those hours and you could have re-entered, I’m only counting things that I would have done. This is important because otherwise the implication is that you need to be awake 24/6. Triggers that occur right on the Big Three news announcements each month don’t count as you shouldn’t have orders in that close at that time.

You can go through the reports and compare the breakdown that I give as each trade is reviewed.

Tradesight Pip Results for January 2011

Number of trades: 35
Number of losers: 23
Winning percentage: 34.3%
Worst losing streak: 8 in a row (January 6-14)
Net pips: -40

2011 starts off with our first negative month in almost three years. On the surface, the first part of the month should have been better than the second part, but that’s not how it worked. We had a couple of unlucky stop outs that barely happened early that would have improved the month, and we managed to catch three nice moves in the last eight days to bring things back a bit (including 50-, 20-, and 70-pip winners to close out the month in the last three days). We also had a near record 8 losers in a row, which is really where the problem area was. Ranges didn’t move much, although a couple of days late in the month brought the averages back up. GBPUSD was 151 pips per day heading into January on average over the last six months and 150 after January. EURUSD was about the same.

Still, from time to time, you have to expect a series like this. What’s clear is that the month ended up being barely negative in the end despite a 2-to-1 losers-to-winners ratio. That’s critical. You system, as we teach, always needs to focus on keep losses small even when you go through a string of them so that a few winners can bring you back quickly. It’s a disappointing start to the year, and the activity in general did surprise me given that there should be a lot going on in the world, but after making 512, 218, and 308 pips respectively each of the last three months, things are still working fine. It’s important to focus on what we teach, which is that a system isn’t based on trying something for a couple of weeks. We’re trading to put together a year of results. Sometimes, that gets a little tough for newer trades to focus on, but think about the risk management numbers that we cover in the course and I think that will make more sense now.

On to February…

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China: Who’s Hu?

Tuesday, January 18th, 2011

Hi Traders,

I hope your long weekend was more than just “long” and you had some BIG fun. You know, it’s been interesting watching the current currency debacle. And, you have to wonder where it’s all going. Or, maybe you don’t care. No matter; but I for one, do. Anyone else?

So, with China’s Mr. Hu meeting with the head PooPah in DC this week to talk about trade and finance and “patching things up” with the US, I found this statement REALLY interesting:

“The current international currency system is the product of the past” Hu said in a written response to questions posed by writers ahead of his meeting with the U.S. President today. Highlighting the dollar’s importance to global trade, Hu implicitly criticized the Fed’s recent decision to pump $600 Billion (QE2) into the U.S. economy, a move criticized as weakening the dollar at the expense of other countries’ exports. Hu, went on to say, “The monetary policy of the United States has a major impact on global liquidity and capital flows and therefore, the liquidity of the U.S. dollar should be kept a a reasonable and stable level.”

Man of man! That’s quite the comment, don’t ya think? And, it probably has a lot of merit. After all, have you been watching the yuan!

Oh, and there’s this:

“Driven by its huge trade surplus and strengthening currency, China is moving quietly bu swiftly to increase investment in U.S. Manufacturing and real estate. The U.S. is second only to Australia (where they get the majority of their raw materials) as a destination for Chinese investment…”.

Is it time to learn how to speak Chinese?

Keep living large!

Clay

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COT: 1-7-11

Monday, January 10th, 2011

Hi Traders,

The first week back from the holiday break was somewhat uneventful; but, historically, it takes a couple of weeks for money flows to pick-up this time of year. Of course, there was the Non-Farm Payrolls report (NFP) on Friday, which so many of us look forward to—almost as if it’s some kind of celebration: “Happy NFP Friday!” we exclaim as we swap presents and raise our glasses for a toast….

Okay, maybe not. But you get the point: the markets tend to pay attention to this, the mother or all reports. And this past one was interesting, but only because there were those in DC and the media saying that 103,000 jobs and an alleged drop from 9.7% to 9.4% was real “progress”. Of course, even though it’s not reported, half of the .4% can be attributed to those who fell off the unemployment rolls (that’s what happens after six-moths) and those who just stopped looking for work. Oh brother. And…
Just in case you’re wondering, according to ShadowStats.com, the real unemployment figure in the US is about 23%. But I digress.

(Get this week’s COT charts here.)

About the COT charts, the specs have been buying AUD, CHF, NZD, and JPY. That said, the specs and commercials have been clearly, and more or less decisively, taking AUD and CHF in opposite directions and toward extremes.

Remember, we like when the specs and commercials are at polar opposites, as this often gives us a heads up on a pending major market turn. Also, the specs have been buying JPY and NZD, too, but the commitment to sell the JPY and NZD by the commercials isn’t as well-defined as with AUD and CHF (JPY Is clearer than NZD).

The picture for USD is a bit muddy; obviously no group is overly excited about buying the US dollar, at least not yet. Can we blame them? Still, the almighty dollar (or is that “once mighty”?) stands to make more gains in the future… the shorter term future, that is–more on this another time. Regardless, a USD rally is welcomed, even if the reasons for it happening don’t make much sense fundamentally.

The specs are still buying the shiny metals, gold and silver, and the commercials don’t appear to be overly-committed to selling it. No “extremes” here, so I’m not looking for the bottom to fallout. That said, it doesn’t mean one or both might experience a selloff. Watch your daily price charts and pay attention to the divergence between rising or maintained prices and momentum (I use MACD for this).

That’s if for now.

Trade to trade well,

Clay

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Forex and Stock Market Preview for Last Week of December

Sunday, December 26th, 2010

Cautioning traders about rough environments has been one of the cornerstones of Tradesight’s approach over the last decade. A lot of newer traders get so excited about trading that they don’t recognize that not all days are equal and provide equal opportunities. The Holiday season is one of those periods.

While we saw some light action last week, the outlook for the final week of the year is even worse, though it might not be apparent to the novice’s eye. Some people assume that the banks have shuffling left to do for the rest of the year, but the reality is that most of that is done. In the stock world, the funds and banks have the positions that they want to show for their end of year statements. They can’t move massive positions in a day or two, so they can’t wait until December 31. All they want at this point is price stability.

Add to that the fact that a lot of retail traders are on vacation, and this year, much of the East Coast is blanketed in the worst blizzard in half a century, and there are ample reasons that nothing great will happen. The last week of the year typically sees a 20% drop-off in stock market volume on average from the rest of December, and December so far has only averaged 1.7 billion NASDAQ shares, which is already 300 million lighter than normal. A 20% drop takes us down to 1.5 billion or less. It is often said that 800 million shares of trading volume each day is just institutions trading back and forth to each other with automated trading, so the real difference between a 1.4 billion share day and a 2.0 billion share day (the average over the last few years) is really the difference between 600 million and 1.2 billion in real trading, and that’s a big difference. You don’t see good trading activity without the volume.

Meanwhile, in the Forex marketplace, activity is about the banks, and the reality is that even though the United States doesn’t know how to relax and take a day off, the rest of the world does, and much of the rest of the world is just as relevant to overall activity and volume. US rules state that the US Stock Market and Banks must be open on December 31 for a full day unless it is a Saturday or Sunday. This is because 70 years ago, people needed the full day to be able to make final adjustments for the tax year. It’s an outdated rule, and because of it, we don’t close, but we might as well. Let me give you a preview of the week globally.

Monday:

New Zealand, Australia, Great Britain, and Canada all half full day bank Holidays to continue observing Christmas. Without them, the Forex market is not going to be active.

Tuesday:

The same four continue to have bank Holidays. Remember that while New York is active for trading and banking, Great Britain is the center of Forex. Meanwhile, the snowstorm on the East Coast also crushes New York.

Wednesday:

No bank Holidays. There also isn’t much for economic data.

Thursday:

No bank Holidays, but it is the day before New Year’s Eve and people are already heading out to get where they want to be for New Year’s.

Friday:

Japan, Italy, and Germany have bank Holidays for the New Year, although the rest of us, including the US, save the bank Holiday for Monday (even though the stock market will be open).

So realistically, it’s Tuesday of next week (January 4) before the world is all back to work, and we might see Forex pick up then. Stocks usually take until day THREE of the New Year, so expect that Thursday, January 6, and it could be to the downside pretty hard if the first three days are up.

Meanwhile, the benefit of being a trader is being able to take time off and enjoy life and family when the markets aren’t doing anything. As much as we hope to see you in the Trading Lab, there probably won’t be much to see there.

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COT: 12-17-10

Monday, December 20th, 2010

Hi Traders,

Holiday greetings from a sunshiny Tampa Bay!

I hope all’s well and you haven’t lost your mind by visiting the malls and stressing-out over what to buy whom and where to get it for the very best price. And, with this in mind, I’m going to help make things simple and easy for you this year– I’d feel pretty darn guilty if I didn’t. So, know this: I love and appreciate gift cards to restaurants and even Starbucks. So, PLEASE don’t worry about getting me that “perfect” something; just pop that little card into the mail and, when it comes to me, you’ll be done. I thought you’d appreciate this selfless consideration and, yes, you’re very welcome ;- )

Okay…

It’s a week from the normal two-week break see usually see this time of year, but, as in the past, we’ll likely see activity thin in prior to Friday. This doesn’t mean the market won’t move; if fact, if history is any indication, there’s a great chance we’ll see plenty of tradable swings. It’s just that there will be fewer participants. Here’s what’s happening regarding the COT:

(Get this week’s COT  charts here)

As I mentioned last week, the specs were buying AUD and might take another shot at the November high vs. USD. And we saw some buying, but nothing to get excited about. Same goes for CAD. Remember, both of these are commodity currencies and China and India need what they’re selling. So, as long as this relationship is in place, it’s good news for CAD and AUD. New Zealand, NZD, on the other hand, another “commodity” currency, hit extreme levels (i.e., the commercials and specs were 180-degree out from each other) and is continuing its slide. For anyone trading the kiwi, this shouldn’t have been a surprise, especially if you followed what I’ve written.

The euro is dealing with its five little PIIGS (Portugal, Ireland, Italy, Greece and Spain); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES and keeps getting the snot kicked out of it. Overall, the specs are selling, even though we witnessed a pullback and some consolidation. Based on the charts, it looks like the euro will continue to nosedive. The same goes for the pound, which (like the kiwi); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES was extremes not too long ago.

The US dollar has been the benefactor of all the bad news coming out of Europe, so, while its COT chart is a little muddy, I expect we’re going to see more strength as we head into the New Year.

The shiny metals, gold and silver both hit highs not too long ago, but haven’t made new ground recently. When it comes to silver, the commercials are buying and the specs are selling—remember, these two were 180-degrees apart not too long ago, which indicated price would likely turn. Have tops been made in both? Well, if you listen to 99.9% of the population, the answer is a resounding, “NO WAY”. But, personally, I try not to pay too much attention to what everyone is saying, because “everyone”, that is the general public, which includes the media (which includes CNBC); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES has amassed quite a track record when it comes to being wrong. So, thankfully, we have the charts. And, as you might agree, “a picture is (or can be) worth a thousand words”.

That’s it for this week. Whatever you celebrate, please enjoy the magic and the spirit of the season. Across the miles, I wish you and yours my very, very best!

Be well and keep living large,

Clay

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Using The 24-hour VWAP Tool for Forex Trading

Thursday, December 16th, 2010

There are a variety of ways to use the 24-hour VWAP (Volume-Weighted Average Price) as we teach it. This is a unique tool to Tradesight in the FX arena (although commonly used in stocks and futures). The importance of the VWAP level as it moves throughout the session can never be overstated.

One of the ways to use the tool is to wait for the market to start to get a move and have it bounce once or twice off of the VWAP. Once that happens, you know that the market has addressed the VWAP for the evening and is using it. This happened last night fairly early on the GBPUSD. Keep in mind that these charts are MST time zone, so two hours earlier than EST.

As you can see here, the GBPUSD got two bounces precisely off of the purple VWAP line at point A, just as it was starting to curl up:

From this point forward, each TOUCH of the VWAP can be traded by then buying if the pair trades above the high of the 5-minute bar that touched the VWAP or shorting if the pair trades below the low of the 5-minute bar that touched the VWAP. So, here’s the next touch of the VWAP an hour later, and I’ve drawn black lines at the high and low of that bar:

In this case, it turns up, and the buy point is the black line, but you can see how it played out, running up about 30 pips and stalling at the Value Area Low level:

About an hour later, we roll back to the VWAP and get another “touch” bar, and I’ve marked off the high and low again:

The next move takes out the high of that bar:

And that leads to…another run up just over the highs of the prior push and another winner:

SIX HOURS later, the GBPUSD comes back down to the VWAP and touches it. This charts shows the “touch” bar and then the next bar, which triggers to the short side by moving under the black line:

This leads to about a 25-pip move downward to the LBreak level. Note that we get a 9-bar Seeker setup on that move down against the LBreak red line, which coils the spring for the move back up:

And that move back up looks like this:

Very technical action all night on the GBPUSD despite light ranges.

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COT 12-10-10

Monday, December 13th, 2010

Hi Traders,

It’s “Brrr cold” here, in Tampa Bay: a balmy 44-degrees… and it’s not even 7:00 pm. Yes, it may be time for a move south. And, that’s about all I can say about that. Okay, let’s stop messing around and get to the COT.

Click on this link for the latest COT charts.

The US dollar has lost a little footing, but overall, the markets only look like they’re correcting, meaning, I believe the dollar will continue to move higher. From a fundamental view, while the US economy isn’t exactly on solid ground(the understatement of the year?); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES Europe, with Greece and Ireland having already been thrown a life jacket, Spain, Portugal and Italy are off the boat and furiously treading water. And, this is what everyone is looking at. So, the US is kind of “off the hook” for the moment, or at least not in the spotlight. Note the specs are selling the euro and the commercials are buying right now (this is not just euro vs. USD, but all other currencies).

Two commodity currencies (AUD and CAD) can’t really get traction, especially CAD, which is flummoxing, as neither the commercials nor specs appear certain about what to do. The aussie is a little less confused, but not much. After hitting parity with USD, and with little surprise, it moved south. Currently, though, the specs look like they’re gunning for the November highs. That said, it doesn’t look the same for the USD vs. CAD. The third commodity currency, NZD, has behaved perfectly. When the commercials and specs where 180-degrees apart, price reversed and the move has been very clean so far.

The swissie had turned, with the commercials buying and specs selling, but the current charts show a shift in sentiment. The yen while not as pronounced, is in the same position. The pound is another story; the specs are selling and the commercials are buying. pretty clear, according to the charts

Gold and silver are trying to move higher, though, with silver, the specs and commercials are holding right now. The chart shows the specs buying gold last week and the commercials selling it, and I’m watching to see if the last highs will be broken. The double top (November’s high and December’s high–so far); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES came with bearish divergence; so, momentum is declining as price approaches these highs, telling us that specs are skittish.

That’s it for now.

Stay warm, and trade to trade well,

Clay

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COT: 12-03-10

Monday, December 6th, 2010

Hi Traders,

Well, I don’t know what it’s like in the rest of the civilized world, but it sure is cold here in Tampa Bay. Believe it or not, I actually wore socks on both Friday AND Saturday night. And, today, while I’m not wearing ‘em, I probably should be. But, I’m loving the weather… it’s apropos for the Season: Kind of “merry”, which is putting me in the holiday mood.

About this week’s COT:

Interesting, but no surprises. The US Dollar has gained strength as the specs have been buying it, especially against the euro and pound. And, I say “no surprises” because we saw the turn setting-up on the charts as the commercials and specs were recently 180-degrees out from each other. Personally, I’m glad, as who really wants to see their home currency get the tar kicked out of it? Of course, fundamentally, dollar strength makes little sense, but I’m following the charts:

They never lie.

The New Zealand kiwi, aussie and swissy are being sold but the specs, currently, which, again was foreshadowed by the COT charts, while the Canadian dollar is in a gray area. Still, I’d expect the dollar to gain strength against it, too. Are these long term moves? I don’t believe they are. Remember, fundamentally, US Dollar strength makes little sense when compared to the commodity currencies, such as New Zealand, Australia and Canada, whose countries actually produce and export something.

Gold and silver are at all-time highs, but I have to keep asking, with all the attention they’re getting, is a top (even if just in the shorter term) coming? Remember, markets top on enthusiasm and there’s certainly a lot of that for both of these shiny metals. I say, keep an eye on momentum, which looks to be waning.

Go here to see this week’s charts:

http://www.tradesight.com/wp-content/uploads/2010/12/COT-12-3-10

That’s my take on the COT for 12-03-10, until next time…

Be very well,

Clay

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Forex Recap 11/16/10

Tuesday, November 16th, 2010

Every night, we call two primary trades. Last week, we were 5 for 6, although none of the trades really extended out to big winners as the market was narrowly-contained. We started Sunday night with a winner, but Monday night was much better. Unfortunately, the long triggered completely at A and stopped, no chance to work, so that cost 25 pips.

However, the short triggered at B, hit first target at C, and I’m currently holding the stop at D for at least an 80 pip winner, but we are more like 150 pips in the money at the moment:

Our system is designed to try to keep half of these positions on when they occur. Note that in the short-term time frame, we had a 13-bar buy signal at the S2 level at the low of the session, but that doesn’t mean we can’t head lower tonight, and we’re going for a multi-hundred-pip winner.

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Forex Calls Recap for 11/10/10

Wednesday, November 10th, 2010

No complaints so far about this week. Two triggers this session, two clean winners. Be even better if one would keep going, but we’ll take it. See EURUSD and GBPUSD below.

We will post Levels and calls tonight, but keep in mind that France, Canada, and the US have Bank Holidays tomorrow, so there isn’t much chance of a move.

EURUSD

Triggered short under LBreak (a key Gann Level in this case) at A, hit first target at B, closed second half at C:

GBPUSD

Triggered long over UBreak (a key Gann Level) at A, hit first target at B, raised stop and stopped at C:

For a complete look at all ten of the pairs that we cover and how the Levels played out against them, take a trial of our Forex service.

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COT 11-05-10

Monday, November 8th, 2010

Good Morning,

It’s a chilly one here in Tampa Bay; I actually had to turn the heat on last night! Not a bad thing; in fact, I enjoy it… as long as socks don’t become a necessity. So far, so good!

Onto the COT (click here). Man, watching USD this past week was brutal. It got no love. And, it’s treading water, hoping…just hoping… someone will toss it a lifeline. Is one coming? I can’t say at this point that there’s a lifeline on the way. But, maybe, just maybe, a pair of those goofy, florescent arm floaties are sitting by the side of the pool and some kind-hearted lifeguard will kick them into the water. Let’s hope.

That said, with all the bad news surrounding USD, it might be prudent to think “contrarian”. I mean, everyone and their great aunt Nellie is kicking sand in the dollar’s face. And, hey, you can’t blame ‘em. But, when this happens, we’re usually (i.e., “historically”) getting near a top (or bottom).

Why? Because the GENERAL PUBLIC is always LATE TO THE PARTY or just flat-out WRONG. The mainstream media is the same–after all, one feeds the other. It’s a sick, co-dependent relationship.

Somethings to consider:

AUD hit parity with the dollar, but the specs are going short and commercials long. Swissy, USD Index, gold and silver too. What gives? I mean, wouldn’t you think just the opposite would be happening? Could COT be telling us something? I think it might be.

GBP and NZD are at extremes, with the commercials net short and specs net long. So, I’m looking for a potential top. Of course, these things can take awhile and time is not on the side of USD. I mean, even if those floaties make it into the pool, they’re only going to work if there’s air in them.

A quick note on EURUSD. It broke out of a pennant formation (Daily) and is on it’s way to a .786 Fibonacci retracement from last year’s high. And, the pennant projection aligns perfectly with this price level and a monthly pivot; so, I like the target.

Oh, about Friday’s Non-Farm payrolls number…

How is it the US added 151,000 jobs last month (way beyond expectations) but the unemployment rate didn’t budge? Is it me, or does anyone else thing something isn’t adding-up?

Okay, it’s time for a cup of coffee to take this icy edge off. Make the rest of your weekend GREAT.

Be well and live large,

Clay

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Today’s GBPUSD Calls…Why You Need Plays in Both Directions

Tuesday, November 2nd, 2010

One of the main things we teach at Tradesight is that it isn’t our job to guess which way the market is going to go. It’s our job to find the best technical setups either way and be prepared to take advantage. Last night’s action was particularly interesting in this regard as the GBPUSD calls were 80 pips apart (long entry for weakness in the USD versus short entry for strength in the USD). Both were using the “FX-aligned Pivot series,” or to be precise, a long over R1 and a short under S1. Ultimately, the long entry was tested to the pip but never triggered, while the short play, over 80 pips away, triggered a short time later and worked. Not only did it work, but the first target on the play was S2, which hit to the pip. So in a window of a couple of hours, the GBPUSD move from R1 to S2, about 120 pips, and address one entry without triggering while later using the other precisely.

Here is a recap from today’s report:

After inching up and stopping right at the long trigger at A, the GBPUSD dropped sharply and actually triggered the short at B, hit the first target at C exactly, and stopped the second half at D. Quite a use of the Levels:

Again, not our job to judge, just our job to spot key entries.

Also, I’d like to welcome everyone to our new website. Have a look around.

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Tradesight Forex Pick Review for 10//27/10

Wednesday, October 27th, 2010

Not too many triggers off of our calls today, but here is the review from the Tradesight Forex report of the GBPUSD short, which triggered twice:

Triggered short at A, went 45 pips exactly to B and reversed. We tend to take our partial at the 45-50 pip area if there is that much room between the Levels, so you might have covered a piece depending on where you put the order. But, for counting purposes, we’ll say that it just stopped. I then said to re-enter in the morning, and it triggered at C and hit first target at D and more. Holding short with stop over LBreak at the moment:

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Tradesight Forex Calls Recap from 10/25/10

Monday, October 25th, 2010

Now THAT’S what we like to see!

Including the three Value Area plays that we pointed out in the Messenger yesterday, we had five winning trades to start the week just as we went back to full size. That’s good stuff. See GBPUSD, EURJPY, GBPCHF, and USDJPY below. All Value Areas triggered at the correct time for the pair.

New calls tonight and Chat. Still working on the last pieces of the new site to get everything connected.

EURUSD:

USDJPY:

Clean Value Area in the Asian session from A to B, entry was under the Pivot (dark blue line) which was just under VAH:

GBPUSD:

Main call triggered early at A, hit first target at B, raised stop and stopped higher, but all of that was pre-European session. I therefore made additional calls and the short triggered at C, hit first target at D, lowered stop in the morning and stopped last piece at E, right over the entry:

USDCAD:

AUDUSD:

NZDUSD:

GBPJPY:

EURJPY:

Value Area worked here from A to B on the European session for about 30 pips, and look how precisely it hit the VAL:

GBPCHF:

Same here, very precise, right at the start of the European session from A to B for 50 pips:

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Forex Trade Recap 10/20/2010

Wednesday, October 20th, 2010

EURUSD:

Perfect Value Area in the European session triggered at A and crossed to the Value Area High at B for 120 pips:

GBPUSD:

This one is unfortunate. There was a very early short trigger at A. Then after B but before C, we stopped out of the last half of our short from the prior session for 150 pip winner. Then the new long call triggered at C, and unfortunately stopped out on the dip to D (which also triggered part of the short again). This is unfortunate because without the dip to D, the long would not have stopped, and the trade ended up working beautifully for almost 200 pips. If you were awake, you could have retaken, but I was not:

NZDUSD:

Value Area triggered at A and almost covered Value Area to B:

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Tradesight Forex Calls Summary for October 19, 2010

Tuesday, October 19th, 2010

Nice night. See AUDUSD, EURJPY, and GBPUSD below for winners. Only thing that didn’t work was the NZDUSD Value Area. Still short GBPUSD with at least a 125 pip winner working.

New calls tonight and Chat. Great week so far AND ranges have been average or better two days in a row. If this continues, we’ll be moving back to normal size next week finally.

24 Hour EUR/USD
24 Hour USD/JPY
24 Hour GBP/USD
Triggered long early (half size) at A and stopped. Triggered short at B, hit first target at C, and lowered stop several times, currently short with stop a few pips over S2 which is being used as resistance at D:
24 Hour USD/CHF
24 Hour USD/CAD
24 Hour AUD/USD
Value Area worked nicely from A to B:
24 Hour NZD/USD
This is the Value Area that didn’t work:
24 Hour GBP/JPY
24 Hour EUR/JPY
Value Area worked PERFECTLY, no risk, from A to B:
24 Hour GBP/CHF

To receive these reports daily and the trade calls that led to over 200 pips in winners tonight, take the $2.99 trial of our service (two weeks) or sign up for the Forex package today. Prepare for the launch of the new Tradesight website this week!

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Market Outlook for October 19, 2010

Monday, October 18th, 2010

The SP made a new high close on the move, adding 3 points to the intermediate rally. The 13 exhaustion remains active but has yet to qualify itself. To qualify the signal, price needs to either close below the 10ema or register a “price flip” by closing below the close 4 bars ago.

Naz was weaker than the broad market, losing a small fraction on the day. Price has settled above the risk level (magenta line) so if Monday’s high is exceeded by on tick the sell signal will have failed.

Multi sector daily chart:

The weekly cumulative NYSE A/D line remains very positive. This indicator usually leads price by weeks or months.

The 10-day Trin remains much closer to the overbought area than the oversold threshold.

The BKX was the top performing sector closing up 3%. The chart is still technically negative until price exceeds the recent range (approximately the 200dma).

The BTK has finally broken out of the trading range. Since a great deal of time was spent in the consolidation, there could be multiple days’ worth of price advance.

The OSX did little and is currently having trouble with the 210 level.

The XAU has declined to the bottom of the recent trading channel. If price begins to rollover and follow through then the recent static trend line will be in play. Note that the MACD looks vulnerable.

The SOX was the weakest major sector. Price continues to badly lag the SPX and NDX. Price broke out above the DTL but has been very reluctant to get upside momentum.

Oil had a strong day, especially considering the early strength in the US dollar.

Gold remains positive but very extended. A sharp correction could be very close at hand.

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Tradesight Stock Triggers from October 18, 2010

Monday, October 18th, 2010

No triggers off of the report, but a great session overall in the Messenger. Note that market direction matters…and it was UP all day (see below).

Rich’s BIDU out of the gate worked great:

RIMM short (against market direction) didn’t do much:

FSLR long worked great:

Rich’s FFIV short was a huge winner and the one short that worked despite the market (which is why we try them all and keep tight stops):

GS long worked great:

EBAY short (against market direction) didn’t work:

Rich’s FAS worked:

Rich’s CRM short (against market direction) didn’t work:

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Tradesight ES Winner Under S1

Monday, October 4th, 2010

This morning, we monitored the early action in the index futures without making a call as no clear pattern or setup emerged in the first 30 minutes that we could commit to. However, taking a step back and looking from a wider perspective, we called the short under the S1 level with a 7-tick stop. Notice how today’s blue S1 line was used on Friday by the market:

ES

The trade triggered short at A, we took half off for six ticks to build a cushion at B, and continued to lower our stop throughout the day until the trade closed at C for a 16-tick winner on the second half of the play.

Sometimes, patience is the best plan.

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Tradesight September 2010 FOREX Results

Friday, October 1st, 2010

One of the things that I have resisted in the past is “track record” type of stuff, especially in the FOREX market where so much is dependent on which hours you have available to focus on the market. It’s not real fair, in my opinion, for you to try to match my trades if I’m staying up until 3 am your time and you have to go to bed at 11 pm. That’s why we prefer to teach people how to trade rather than just to have them follow the trades.

However, at some level, there has to be evidence that the calls that we make each day in the Messenger using the Levels create a working system, even if the idea is that you should tweak that system to work on your own time.

So, I spent a lot of time thinking about what would be a fair way to track the results. When you do tracking, it is important to lay out the exact methodology of how you are tracking the results so that someone can look back going through the reports and come to the same number. At first, I was considering factoring in everything about trade size and time of day, but again, that starts to factor in items that mean that some people might not be able to follow directly.

And then I came to a very basic statistical conclusion. In the end, what we just want to do here is count pips with the LEAST complex set of parameters. Conversations about trade size, etc., is all important and should be overlaid into these results. But without making everything a matter of “well I was full size on this one but you should have been half size,” we can start by just saying “What would have happened if you would have taken all of these calls, sold half at the first target, kept the stop where it should be, and adjusted based on what is in the Messenger?”

And once I stopped trying to make it complicated, well, it got uncomplicated.

Here are the rules.

1) Calls made in the calendar month count. In other words, a call made on August 31 that triggered the morning of September 1 is not part of September. Calls made on Thursday, September 30 that triggered between then and the morning of October 1 ARE part of September.

2) Trades that triggered before 8 pm EST / 5 pm PST (i.e. pre Asia) and NEVER gave you a chance to re-enter are NOT counted. Everything else is counted equally.

3) All trades are broken into two pieces, with the assumption that one half is sold at the first target and one half is sold at the final exit. These are then averaged. So if we made 40 pips on one half and 60 on the second, that’s a 50-pip winner. If we made 40 pips on one half, never adjusted our stop, and the second half stopped for the 25 pip loser, then that’s a 7 pip winner (15 divided by 2 is 7.5, and I rounded down).

4) Pure losers (trades that just stop out) are considered 25 pip losers. In some cases, this can be a few more or a few less, but it should average right in there, so instead of making it complicated, I count them as 25 pips.

5) Trade re-entries are valid if a trade stops except between 3 am EST and 9 am EST (when I’m sleeping). So in other words, even if you are awake in those hours and you could have re-entered, I’m only counting things that I would have done. This is important because otherwise the implication is that you need to be awake 24/6.

You can go through the reports and compare the breakdown that I give as each trade is reviewed.

Each month, I will copy those instructions, then give a basic breakdown, and then discuss the specifics. We also will include a “worst losing streak” number. This month, we had a period late in the month losing 5 in a row. I always focus on that because people need to understand that when figuring out their trade size. 5 losers in a row = 125 pips that you are underwater out of the gate if those were the first trades you did.

Tradesight Pip Results for September 2010

Number of trades: 38
Number of losers: 16
Winning percentage: 57.8%
Worst losing streak: 5 in a row (September 27-28)
Net pips: +308

One other thing we want to consider in reviewing the calls each month is the overall environment, and we have a very easy way to consider this, which is to look at the ADR (Average Daily Range) changes during the month. Remember that the ADR takes the daily range (high minus low) and averages that over each day for the last six months or so. Whether the ADR moved up or down during the month tells us whether ranges were, on average, better than average or not.

For example, on August 1, the ADR on GBPUSD was 173 pips. By the end of August, the ADR on GBPUSD was 167. A 6 pip drop in the ADR over one month when you are averaging six months of data is pretty significant. That makes sense given that August ranges were the worst of the year, as expected.

So how did ranges fare in September? At the end of the month, average ranges were all within 3 pips of where they started the month. Meanwhile, the GBPUSD, for example, moved up 2. So basically, we can read into this that ranges were slightly better than they had been in August, but not noticeably so. This fits with the fact that I haven’t yet adjusted my size back up because we never really saw even a week where the pairs traded above ADR 3 out of 5 days. In many ways, this activity still feels like summer volume activity, maybe just a little bit better.

One of the reasons that I decided to start tracking this is that I know once we have several months of these logged, there will become some obvious statistical relevance to the data. For example, I would anticipate that in a month where ranges improved, our win/loss ratio will push up closer to 65% (might even get higher sometimes) over September’s 57% and our net gains should be higher.

Remember that trading systems aren’t based on luck, they are based on doing as close to the same thing over and over that you can based on a system that works and letting it play out. A winning system nets you money not just because of what happens in one week or one month, but what happens over an extended period of time that covers good and bad environments for the market.

And now, on to October and the last quarter of 2010.

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A Night of Scalping…

Wednesday, September 22nd, 2010

Lots of little winners on calls and scalp calls based on what I said up front were pretty limited setups for the night. See GBPUSD, USDCAD, and NZDUSD below.

I put a note in the Messenger today, but I will repeat here. As we draw closer to the launch of the Tradesight 4.0 website, you will start to see some promotional emails and newsletters go out. There are two price changes on the new site (Swing and Forex). The main Forex service is going up $20 per month to $149. This will NOT affect current subscribers at all. You will continue to get the $129 rate indefinitely, as will anyone that signs up before the new site is in place (sometime before Halloween). Also, the Total FX package (the one that includes the Seeker/Comber for advanced active traders) will also go up $20 to $219. If you are currently an FX subscriber ($129 per month) and later want to bump to the Total FX, we will still allow that upgrade to the existing $199 price (instead of the new $219). No rush. This is not about current subscribers. This is related to some new relationships and items that Tradesight has recently entered going forward. We like you guys just the way you are. ;-)

New calls and Chat tonight.

24 Hour EUR/USD

EURUSD

24 Hour USD/JPY

USDJPY

24 Hour GBP/USD

Triggered long very early at A, hit first target at B and beyond. Added additional call later, triggered short at C, hit first target at D, second half stopped:

GBPUSD

24 Hour USD/CHF

USDCHF

24 Hour USD/CAD

Perfect Value Area move from A to B:

USDCAD

24 Hour AUD/USD

AUDUSD

24 Hour NZD/USD

Scalp Idea in the Messenger early yesterday evening triggered over UBreak at A, hit R1 exactly at B. Although that’s about all you want out of a scalp, just note how well it later used R2 at C:

NZDUSD

24 Hour GBP/JPY

GBPJPY

24 Hour EUR/JPY

EURJPY

24 Hour GBP/CHF

GBPCHF

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GBPUSD Winners in Both Directions

Tuesday, September 14th, 2010

At Tradesight, there is a reason that we make two calls every night. It isn’t our job to guess whether the US Dollar is going to get stronger or weaker. We should have trades in place for either option. This worked to our benefit last night as we collected over 100 pips (and still going on one trade) without having to watch the market. Here’s the summary from our daily report:

A nice night based on our calls in the GBPUSD. First, it triggered short early at A, which would be for half size due to the time of day, but it came back, never stopped (stop was over black line); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES gave you another entry chance at B, and hit the first target at C. We adjusted our stop to breakeven on the second half and that stopped overnight. The long call triggered at D, hit first target at E, and we still have the second half with a stop under 1.5525, which is holding nicely in the money:

GBPUSD

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ES Classic Futures Calls with Value Area, Pivot, and Gap Fill…

Wednesday, August 25th, 2010

It’s been a slow week or two in the markets with volume on the light side and afternoon activity much flatter than normal. That doesn’t mean any one day can’t give you a surprise, and fortunately, Mark Likos spotted a classic ES setup today and called it for our subscribers.

The market gapped down in the morning and was mostly flat over lunch. It rallied up after lunch to fill the gap, hitting the Pivot (dark blue line); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES which was just above and inside of our Value Area Low:

ES 1

What does this set up for us? When a market fills a gap, it is the resolution of a necessary technical move (80% of gaps fill the same day). When they stall out at the Pivot, they are identifying that level (the “Balance of Play” from the prior session) as important. Those two items basically set a very specific wall and complete the energy move of the gap fill. This means that the market is now free to head either direction, but in this case, a move to new highs gives you a break above the Pivot now that the gap is filled, and it gives an entry into the open part of the Value Area. So, Mark called the long above that level, and the move worked perfectly to the other light blue line, which marks the high of the Value Area:

ES 2

These are the types of high-probability setups that we like to keep our subscribers focused on, even though they haven’t been happening as much in August. Don’t forget, wait for the market to do what you need, because it isn’t going to move how you want. Clean setup, one of the best of the week, and thus, a clean winner.

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A Tale of Two MoBs

Friday, May 28th, 2010

One of the tools that we follow closely is the Make or Break projection lines in e-Signal. This tool can be used to give you powerful targets on any trading symbol based on the most recent swing high and swing low. The tools plots price and time targets that are support or resistance if they are achieved.

Sometimes, you can have MoB lines in both directions that are spaced far enough apart that both can hit. Let’s take the example of the GBPUSD back in March. In this daily chart, I’ve drawn the MoB lines off of the swing high at A, which projects out as you can see, and the swing low at B:

GBPUSD MoBs in March

In this case, it is potentially possible that both lines could be hit. The ideal calculation is that the price will hit during the bar itself (not before or after); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES with a real focus between the two black lines. Since these lines are spaced out, it would be possible, though certainly not necessary, that both could hit. Remember that the point of a MoB is a “potential” target if the market heads that way, not a likelihood that it will head that way.

As we moved into April, take a look at where price went:

GBPUSD MoB April

GBPUSD smacked right into the MoB between the two black lines, as projected. And as the month continued, it used that line as specific resistance:

GBPUSD April 2

The question becomes, will that resistance point finally break, or will the trend resume? It is also important to note that the lower MoB was a thicker, making it a stronger projection. Here’s the movement in May:

GBPUSD May MoB

Right to the lower MoB…and…during the ideal time target between the black lines. Very interesting when you consider all of the news over the last month that a level projected in March could be hit so precisely.

The rest of the month through today was spent using that MoB as support:

GBPUSD May 2

So now that we have new swing highs and lows, where are the new MoB projecting going forward? This is a little more interesting of a story. Have a look:

GBPUSD MoB Projections May

This time, both of the projections play out against the same timeline. The LOWER projection is much smaller and shorter, and obviously easy to hit. The upper line in general could be hit and would represent a change in trend if it were over the longer haul. But it isn’t likely possible (although it is theoretically possible) to hit both in their ideal time projections, which makes this a battle.

We also are on the verge of a 13-bar sell signal on the US Dollar Index, which would be a powerful reversal signal if it fires in the next week or so. That would definitely increase the odds of a change in trend and point to that upper line hitting. We will continue to monitor.

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Why The FX Day Starts at 5 pm EST

Tuesday, May 25th, 2010

It is very important when trading Forex to understand the importance of the “start of the day” even though it is essentially a 24-hour market. In the equity and futures worlds, when you calculate key indicators such as the Pivot series and Market Profile (Value Areas); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES you use the prior day’s data from start to finish. In order to do the same in Forex, you have to establish what point is the end of the day and start of the next day so that you properly use the data from the trailing 24 hours.

Many charting platforms can be misleading because they allow people to set the timeframe axis of their chart up for their own timezone, and then they end up with calculations that are based on “midnight to midnight” in their zone. Many people also force their charts onto EST, which does not provide a good “midnight to midnight” day in Forex. If you do it that way, you’re splitting the day in half.

The proper time for end of session/start of session is global rollover, which is 5 pm EST. Asia has not yet started, Europe is asleep, and the US banking day is over. This is the point of the lowest volume. It is also the point that banks in the intermarket system shut down to “settle” their trades from the prior 23 hours and 55 minutes or so. When you realize that technical evaluations and calculations need to be based on fixed factors such as a “day” of data, it becomes very important to recognize that this specific point is the start/end of a day. It also means that Forex can really be mapped into 5 clean daily bars as it opens at 5 pm EST on Sunday and closes at the same on Friday.

Tools that you use need to be able to make this adjustment to be valid. For example, we have an Average Daily Range tool that plots a range each day that is the six month average on each of our key Forex pairs. For those of us on the West Coast of the US, we need to be able to set that tool to start at 2 pm, which is 5 pm EST. By doing so, the tools starts drawing at that point and goes for 24 hours.

The chart below shows you today’s GBPUSD with the Average Daily Range lines. The top line anchors to the high of the session since 5 pm EST (2 pm PST) because we’re in the lower half of the day’s range. The lower red line is the Average Daily Range target, which is often a key support point in the market. As you can see, during the “day” when you start this tool running at the right time, the GBPUSD moved exactly to that lower line and bounced:

GBPUSD ADR

Had you used a different start of day, one that has less technical meaning to the market, the tool wouldn’t have worked.

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Even in Chaos, Average Daily Range Matters on GBP/USD

Tuesday, May 4th, 2010

The markets had a wild session today, driven by a variety of news and global economic concerns. While US data this morning was good, concerns about the oil spill in the Gulf and a widening debt problem out of Europe led to a big push for strength in the USD. Despite all of that, one of our most basic tools helped guide us on trade management today in the GBP/USD, our favorite pair.

The tool is simply the Average Daily Range tool, which basically shows the six month range average on a pair. What is remarkable is how closely the market uses this point as a pause and potential reversal each day that it hits it. Currently, the GBP/USD trades an average of 162 pips per day (over the last six months). So, if you just take the GBP/USD trading in the current session and anchor the top of the range with the ADR High line, you’ll see where the lower line ends up (162 pips lower):

GBP/USD Average Daily Range

Quite simply, this area, within a few pips, was about all that the market had the strength to cover. It’s amazing how such a simply tool can help you qualify where exhaustion of a move might occur. How did that play out with our short trade today? Let’s have a look at the chart with some additional key support and resistance levels:

GBP/USD short trade

In this case, our short trigger was under LBreak (a Gann Level) at 1.5227 (triggered at point A) with a 25 pip stop that never hit. Our first target where we cover half was S1 (point B); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES and that hit fine. We proceeded much lower overnight, and then in the morning took off another quarter of the trade at C, which was the ADR line. In addition, our Seeker tool completed a reversal setup box at D, which represented the turning point off of the lows around the ADR. We move our stop over S2 and stopped the last quarter of the trade at E.

Note that understanding where the average daily range lines landed got us our best exit piece of the trade.

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Some Basic Pointers on Stops for GBPUSD

Tuesday, April 27th, 2010

One of the things that we like to focus on is something called Market Direction. We utilize a tool in Forex, Stocks, and Futures that measures three levels of market direction for the day, starting with the open of the market. In Forex, the open is considered 5 pm EST, or global rollover. From that point forward, we compare where the market is compared to the opening price, the midpoint of the session so far, and a 10 EMA. We end up with three lines. If we are above two, we consider market direction to be green. If we are below two, we consider market direction to be red.

Today, we had a short entry on the GBPUSD under a key Gann level at 1.5425. This triggered heading into the European session (charts here are in Pacific Standard Time) at point A. We covered half of the trade approaching S1 at B and kept the second half on, looking to adjust our stop for later:

GBPUSD

By then monitoring the US Dollar Index with our market directional tool as described above, we can see the point in the trade where we would want to exit the final piece of the GBPUSD. Here’s the US Dollar Index on a 5-minute:

US Dollar Index

Note how it was approaching the midpoint around 7:30 am PST at A. A move under that line would flip market direction to red, thus signaling us to exit the GBPUSD trade and lock in the gain. That would have occurred around the 1.5360 on the GBPUSD chart above, which I’ve drawn with a black line.

The midpoint on the US Dollar did not break, and thus we did not stop out of the trade. This kept us in the trade for the next spike, which was a news spike based on debt downgrades. Very important to use logical stops in your trading and not just exit because you feel like things might be reversing. Take a top down approach and let the market be your guide.

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A Classic Value Area Example on GBP/USD

Thursday, April 22nd, 2010

For today’s Blog commentary lesson/review, we wanted to show off a key play from last night’s action that works about 70-80% of the time on a proper setup, which was the Value Area play on the GBPUSD. The main component here is that the pair started above the Value Area during the European session start (this chart is PST, but you can see volume as to when the European session started). Here is the 5-minute chart. The lines that we care about for this discussion are the light blue (or cyan) Value Area High and Value Area Low:

GBPUSD Value Area

What you can see is that the pair came down to the Value Area High at A, which provides a short entry and a 70-80% chance that a move to the Value Area Low will occur. In this particular case, based on the prior day’s ranges and the Levels as provided, we crossed 30 pips to the Value Area Low at B perfectly, and there was some initial support around that area.

Value Area plays are extremely easy to spot with the right tools and provide a simple strategy for traders with a basic stop entry and t/p target. Risk level should be half of the Value Area range.

Think that one was just a coincidence? How about the same concept on the NZDUSD last night, which triggered into the Value Area at A and crossed to the VAL at B for a perfect trade:

NZDUSD Value Area

Note that the NZDUSD stopped right at the VAL at that point TO THE PIP. The market knows these numbers.

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Forex Special Weekend Report Topic Log

Sunday, December 26th, 2004

10/10/2010 – The Final Tradesight Forex Educational Report and the Launch of Tradesight 4.0
10/03/2010 – September Forex Results
09/26/2010 – Daily Chart Breakouts
09/19/2010 – Competing Timeframes
09/12/2010 – CFTC 50:1 Ruling and It’s Implications
09/05/2010 – No Report for Holiday Weekend
08/29/2010 – iPads and More
08/22/2010 – Trade Walkthrough Series Part 2
08/15/2010 – Trade Walkthrough Series Part 1
08/08/2010 – Dull Market Trading Example
08/01/2010 – New FX Levels Tool, ADR Historic Tracking, and R3 and S3
07/25/2010 – A Discussion of Trade Robots
07/18/2010 – No Report, Weekend Educational Event in San Antonio
07/11/2010 – The Importance (Again) of Ranges
07/04/2010 – No Report for Holiday Weekend
06/27/2010 – FOREX Volume – Summer is Here
06/20/2010 – Intro to Futures
06/13/2010 – Using Different Tools in Different Ways
06/06/2010 – Current State of the Dollar Index
05/30/2010 – No Report for Holiday Weekend
05/23/2010 – Money Supply Discussion (Part 2 of 2)
05/16/2010 – Unemployment Discussion (Part 1 of 2)
05/09/2010 – Trading is About Probabilities
05/02/2010 – Additional Seeker/Comber Discussion
04/25/2010 – Tradesight Tools New Sound Alerts
04/18/2010 – Forex Ramblings
04/11/2010 – Guaranteed Stops in Forex
04/04/2010 – No Report for Holiday Weekend
03/28/2010 – Post-Healthcare and the Market
03/21/2010 – No Report (Personal Vacation)
03/14/2010 – Average Daily Range Discussion
03/07/2010 – Two Key Examples with the Seeker Tool
02/28/2010 – Comparing Three Trading Styles
02/21/2010 – Short Term Analysis of the US Dollar Based on Higher Rates (post-Fed raising Discount Rate)
02/14/2010 – No report for Holiday weekend
02/07/2010 – Current State of the US Dollar
01/31/2010 – Thoughts on the New CFTC 10:1 Proposal
01/24/2010 – Technology Update (Trading Computers)
01/17/2010 – No report for Holiday weeked
01/10/2010 – Some Uses of the Seeker Tool
01/03/2010 – 2009 End of Year Recap
12/27/2009 – No Report for Holiday Weekend
12/20/2009 – Overview of a Profitable Trading System
12/13/2009 – Back Side of the Wedge
12/06/2009 – Why Trading Less is More
11/29/2009 – No Report for Holiday Weekend
11/22/2009 – Current State of the US Dollar and Forex Pairs
11/15/2009 – Find the Trade, Not the Pair
11/08/2009 – Not Reacting to Sunday Gaps
11/01/2009 – No Report for Holiday Weekend
10/25/2009 – Tradesight Comber Review
10/18/2009 – Current State of the US Dollar
10/11/2009 – Putting in Early Orders
10/04/2009 – Introduction to Tradesight Seeker and Comber Tools for FX
09/27/2009 – Rich’s Intro to Tradesight Comber Tool
09/20/2009 – Trade Entry Parameters
09/13/2009 – Seeker Counts and the Charts Going Forward
09/06/2009 – No Report for Holiday Weekend
08/30/2009 – Current US Dollar Index Setup
08/23/2009 – Summer Term Review 5: Stop Adjusting
08/16/2009 – Summer Term Review 4: Minimum Risk with Spreads
08/09/2009 – Summer Term Review 3: Staggering
08/02/2009 – Summer Term Review 2: Fading
07/26/2009 – Summer Term Review 1: Setting the Level
07/19/2009 – Current US Dollar Index Setup
07/12/2009 – Intro to Timeframes and the Tradesight Seeker Tool in FX
07/05/2009 – No Report for Holiday Weekend
06/28/2009 – Mid-Year All-Market Update
06/21/2009 – An Update on Forex Broker Execution
06/14/2009 – First Glimpse of the Tradesight Gann Tool
06/07/2009 – Classic 9-Bar Move Against an ADR
05/31/2009 – Fading Key Levels in the Summer
05/24/2009 – No Report for Holiday Weekend
05/17/2009 – Three Key Terms and What They Mean
05/10/2009 – Other Reasons to Watch the Value Area
05/03/2009 – The Current State of the Market
04/26/2009 – Advanced Look at Tradesight Seeker Tool
04/19/2009 – The Psychology of Trading and Stops
04/12/2009 – No Report For Holiday Weekend
04/05/2009 – Tradesight FOREX Average Daily Range Tool
03/29/2009 – Technology Report
03/22/2009 – A Week of Risk/Reward Recaps
03/15/2009 – First Target Risk/Rewards
03/08/2009 – The Impact of Daylight Savings Time
02/29/2009 – The Pivot
02/22/2009 – EUR/USD Session Walk-Through
02/15/2009 – No Report for Holiday Weekend
02/08/2009 – Federal Stimulus Bill
02/01/2009 – Website Moved Over Weekend – No Report
01/25/2009 – Tradesight Archives vs 6-Hour Course
01/18/2009 – No Report for Holiday Weekend
01/11/2009 – The Importance of Spreads
01/04/2009 – 2008 Year in Review
12/28/2008 – No Report for Christmas Holiday
12/21/2008 – End of Year Trading Tools Advice
12/14/2008 – 9-bar Counts on 15-minute US Dollar Index
12/07/2008 – The Current State of the Dollar Index and the Market
11/30/2008 – No Report for Thanksgiving
11/23/2008 – The Importance of the US Dollar Index
11/16/2008 – Gaps in Forex
11/09/2008 – Signs of Life
11/02/2008 – Election 2008 Report
10/26/2008 – A Reminder of What We Do
10/19/2008 – Spreads in the Bank Crisis
10/12/2008 – No Report for Veteran’s Day
10/05/2008 – Follow Up On “Going Full Size”
09/28/2008 – When To Increase Size
09/21/2008 – The Federal Bailout Package
09/14/2008 – Margin Leverage in Forex
09/07/2008 – Sitting Out
08/31/2008 – No Report for Holiday Weekend
08/24/2008 – Current State of the US Dollar
08/17/2008 – Current Comparison of ECN versus Deal Desk Platforms
08/10/2008 – Why Don’t We Call More Trades
08/03/2008 – The Big Three Economic Numbers Each Month
07/27/2008 – More room on Cross Pairs
07/20/2008 – Technology Leaps, Non-Market-Related
07/13/2008 – Value Area Follow-Up
07/06/2008 – No Report for Holiday Weekend
06/29/2008 – Setting Expectations and Adjusting Size
06/22/2008 – Adapting to Slow Markets
06/15/2008 – End of Week Bank Moves
06/08/2008 – Taking a Retest of a Trigger
06/01/2008 – Using Common Sense in Combining Strategies
05/25/2008 – No Report for Holiday Weekend
05/18/2008 – Analysis of US Dollar Index and the Ten Pairs
05/11/2008 – Dull Markets
05/04/2008 – Trade Size
04/27/2008 – Tradesight Messenger 2.0 Launch
04/20/2008 – Consolidation Patterns
04/13/2008 – Why I Love This
04/06/2008 – Tri-Star Levels
03/30/2008 – Status Update on US Dollar
03/23/2008 – No Report for Holiday Weekend
03/16/2008 – Fading Key Levels Early
03/09/2008 – Demark Counts on the 15-minute
03/02/2008 – End of Week Bank Moves
02/24/2008 – Appropriate Triggers Based on Time Zones
02/17/2008 – President’s Day Weekend (no report)
02/10/2008 – Trailing Stops Redux
02/03/2008 – Dual- and Tri-Star Levels
01/27/2008 – Current State of the Forex Markets
01/20/2008 – Martin Luther King Weekend (no report)
01/13/2008 – Daily Expectations
01/06/2008 – Why Average Daily Range Matters
12/30/2007 – 2007 End of Year Recap
12/23/2007 – Christmas Weekend (no report)
12/16/2007 – When To Trade Full Size
12/09/2007 – Current State of the US Dollar Index
12/02/2007 – Personal Comments About Working With EFX
11/25/2007 – Thanksgiving Holiday (no report)
11/18/2007 – Omega Part 4 -
11/11/2007 – My Strategy
11/04/2007 – Omega Part 3 – The New EFX Website
10/28/2007 – Omega Part 2 – The Quote Board and One-Click Trade Management
10/21/2007 – The NFA
10/14/2007 – Omega Part 1
10/07/2007 – TDFX, MBTF, and EFX
09/30/2007 – Key Point in the US Dollar Index
09/23/2007 – Trailing Stops
09/16/2007 – Waiting for a Candle to Close
09/09/2007 – Current Position of the US Dollar Index
09/02/2007 – Labor Day (no report)
08/26/2007 – Member Firm Net Capitalizations
08/19/2007 – Tradesight’s General Mentality on Forex Trading
08/12/2007 – R2 and S2
08/05/2007 – Expectations of August
07/29/2007 – Current State of the US Dollar Index
07/22/2007 – Piecing Into Trades
07/15/2007 – Overtrading
07/08/2007 – Fourth of July Holiday
07/01/2007 – Differences between ECN and non-ECN charting
06/24/2007 – Tradesight History
06/17/2007 – When to Enter Your Trades
06/10/2007 – Poll Question about Which Pairs to Add to Levels Service
06/03/2007 – Tradesight Levels Policy with FX Ticker Trading Lab and Intro
05/27/2007 – Memorial Day Weekend
05/20/2007 – Intro to Tradesight – Redux
05/13/2007 – Current State of the Pairs
05/06/2007 – The Big 3 Economic Numbers – CPI, Trade Balance, Non-Farm Payrolls
04/29/2007 – Implications of Gross Domestic Product
04/22/2007 – Vacation
04/15/2007 – GBP/JPY
04/08/2007 – Good Friday/Easter Holiday – No Report
04/01/2007 – Demark US Dollar Index update
03/25/2007 – FX Ticker Introduction
03/18/2007 – The Other Trouble With Averaging
03/11/2007 – FX Ticker Market Page
03/04/2007 – Current Look at the US Dollar Index
02/25/2007 – Deal Desk versus Non-Deal Desk Charting
02/18/2007 – President’s Day Holiday (No topic)
02/11/2007 – Current Status of Advanced Orders on EFX
02/04/2007 – Why “Errors” Seem to Never Work in Your Favor in Forex
01/28/2007 – Ranges in the Second Half of 2006
01/21/2007 – Playing Between the Breaks on the AUDUSD
01/14/2007 – Why We Don’t List Trades for US Holidays
01/07/2007 – Tradesight changes related to FX Ticker launch
12/31/2006 – End of Year Summary of All Markets
12/24/2006 – Christmas Holiday
12/17/2006 – Chart Analysis #4
12/10/2006 – Chart Analysis #3
12/03/2006 – Chart Analysis #2
11/26/2006 – Thanksgiving Holiday
11/19/2006 – Chart Analysis #1
11/12/2006 – Current State of the Forex Market
11/05/2006 – Election 2006

10/29/2006 – Why You Should Never Average Down (especially in Forex)
10/22/2006 – Demark Studies and TDFX quotes
10/15/2006 – US Dollar Breakout and Current View of the Forex Pairs
10/08/2006 – Pivot Plays Continued
10/01/2006 – New Trade Type: Pivot Plays
09/24/2006 – What is a pip?
09/17/2006 – Subscriber Q&A
09/10/2006 – Measuring the Odds
09/03/2006 – Labor Day Weekend Break
08/27/2006 – Stop, Limit, and Stop-Limit Orders
08/20/2006 – The Spreads of EURUSD vs. USDCHF
08/13/2006 – Where To Start Entries Beyond the Trigger
08/06/2006 – Forex Pro Release and Update
07/30/2006 – Current Outlook on the Forex Market
07/23/2006 – Forex Pro Update and ECN Discussion
07/16/2006 – Oil and the Forex Pairs
07/09/2006 – Vacation
07/02/2006 – Three Types of Trailing Stops: Wide, Medium, and Tight
06/25/2006 – Trend Plays
06/18/2006 – Things to do if you are awake 24 hours a day trading forex
06/11/2006 – Trading one system for a year
06/04/2006 – Deal Desk Trading: A-list versus B-list clients
05/28/2006 – What the Tradesight/EFX Front End will have later
05/21/2006 – First look at Tradesight/EFX Front End features
05/14/2006 – Value Area Refresher and FXTicker.com
05/05/2006 – Why Forex is best traded with automation
04/30/2006 – Trading All Markets
04/23/2006 – New EFX Function: Measuring stops by bid or ask?
04/16/2006 – Two conflicting views on trailing stops
04/09/2006 – Current Outlook on the FOREX Pairs
04/02/2006 – The Tradesight Front End Preview
03/26/2006 – Trading Rangebound Markets
03/19/2006 – Trading “News Events”
03/12/2006 – Update on Trailing Stops – Part 2
03/05/2006 – Update on Trailing Stops – Part 1
02/26/2006 – Current State of the FOREX Pairs
02/19/2006 – Why Risking 50 to Make 10 is Wrong
02/12/2006 – Key Times of Week
02/05/2006 – Extra trading calls and hours in the Trading Room
01/29/2006 – FOREX Terms and Concepts That MUST Be Understood (Part 3 of 3)
01/22/2006 – FOREX Terms and Concepts That MUST Be Understood (Part 2 of 3)
01/15/2006 – FOREX Terms and Concepts That MUST Be Understood (Part 1 of 3)
01/08/2006 – Goals of the Tradesight FOREX Service
01/01/2006 – 2005 Year in Review link

All Reports Prior to January 1, 2006, can be found by clicking on the Forex link under Report Archive (Pre-2006) in the Navigation Menu on the left of your Tradesight screen and then going back to these dates:

12/25/2005 – Christmas Holiday, no report
12/18/2005 – Entering a trade late
12/11/2005 – EFX adds Stop Limit + Trailing Stop Orders
12/04/2005 – How much money you are using on a trade
11/27/2005 – Using tight trailing stops for extra pieces of the trade
11/20/2005 – Trade trigger proximity
11/13/2005 – Analyzing Ranges and Their Importance
11/06/2005 – The Importance of the Pivot
10/30/2005 – Complete discussion of Value Areas
10/23/2005 – Current state of the FOREX markets
10/16/2005 – Changing orders on EFX
10/09/2005 – Dual entry level trades
10/02/2005 – Analysis of one-year track record
09/25/2005 – Trading on Sundays
09/18/2005 – Trailing Stops
09/11/2005 – Why A 2-Rated Trade Can Work Better Than A 5-Rated Trade
09/04/2005 – Brief Topic: The Coming Weeks
08/28/2005 – August
08/21/2005 – Trade Entry Shorthand
08/14/2005 – Value Areas Continued, including Time of Day
08/07/2005 – My Pet Peeves…Hedging and Fixed Spreads
07/31/2005 – Intro to Value Areas in FOREX
07/24/2005 – Subscriber Q&A 20 Questions
07/17/2005 – Why the Pairs are Largely the Same Each Night Based on USD
07/10/2005 – Most Important Feature of the New Platform
07/03/2005 – Three Pieces of a Trade
06/26/2005 – Anticipating Spreads at Time of Entry for Order Placement
06/19/2005 – USD strength analysis
06/12/2005 – Three EFX Announcements
06/05/2005 – Scalping and USDCAD/AUDUSD trades
05/29/2005 – Holidays and Spacing of Orders Past a Level
05/22/2005 – How to Find 4- and 5-rated trade calls and what are Break levels
05/15/2005 – EFX New Platform Order Entry
05/08/2005 – Levels as Areas and Order Spreading
05/01/2005 – Further discussion of trade size
04/24/2005 – Order diversity/staggering entries and exits
04/17/2005 – Trade Call Format and the Reasons For It
04/10/2005 – Dual Level Areas
04/03/2005 – Brief discussion of cancelling orders ahead of certain economic news
03/27/2005 – Why no-range days our the worst for our style of trading
03/20/2005 – Time and Sales in FOREX
03/13/2005 – General comments on stops on 4- and 5-rated plays
03/06/2005 – Shorting against resistance
02/27/2005 – New platform versus old systems
02/20/2005 – Trade size versus trade rating
02/13/2005 – A discussion of range expansion
02/06/2005 – Percentage of account allocation
01/30/2005 – A few comments on narrow ranges
01/23/2005 – Update on EFX platform (LOL)
01/09/2005 – Putting in trades on all of the pairs
01/02/2005 – Intent to swing versus “willingness” to swing
12/12/2004 – Brief discussion of chart pattern plays
12/05/2004 – Raising size for the 4- and 5-rated plays
11/28/2004 – Bank Interventions
09/12/2004 – Specific comments about use of the service
07/11/2004 – 07/22/2004 – First Ten Reports, Overview

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