Random Acts of Forex

FXA updated

2011-07-19T12:47:00.002-06:00

You have to love the move today. The diagnol spread discussed yesterday is up 45 cents or 25% today alone. It looks promising to continue. We will watch for an opportunity to take of the short side or the whole position, depending on how it stalls at near term resistance.

Buy on FXA options

2011-07-18T09:17:00.003-06:00

The options on the forex ETFs are pretty cheap right now. I was looking at the fact that the AUD/USD has fallen back to a key support. The cost for a 105 September call would only cost $2.40 today. That is $240 per contract, the nice thing about an option here is we can sell an August call above the last resistance area near 108 for 60 cents and lower our cost to $1.80 or $180 per contract. Though the spot market may drop and could stop out a 180 pip stop loss, this would not be a concern to this position. We could see price fall as far as it wanted to and as long as it rallies back, back above 108, we can and will gain $120

GBP setting up for a pounding.

2011-03-28T11:49:00.002-06:00

The GBP has pulled back to key support again. Sellers have not been able to get the GBP/USD to break through this support ner 1.50 over the past 3 months. With today's doji, tomorrow should provide the next directional move. A move above the high today should see the pair retest 1.63 but I am anticipating this is the time we see support broken and a drop to 1.56 if not 1.54

EURO Euphoria?

2011-03-24T11:55:00.005-06:00

The euro rallied today on "optimism European policymakers will be able to control a political and debt crisis in Portugal". Now why would you rally on the ability to control a political and debt crises. That is like saying "I just cut off 3 fingers but I am confident I can control the bleading, hurray!!!" I expect the joy to be short lived which should lead to a drop in the euro in the near term. In fact, i really like the EUR/CHF short here. Take a look. Shorting EUR/CHF at 1.2870 stop of 1.3010 and an easy target of 1.250

Pounded the GBP/USD

2011-01-10T08:19:00.003-07:00

We called the GBP/USD trade on the 29th expecting it to hit in 2-3 days but we hit in 1 day, a little quicker than expected but who can complain.

The pair has consolidated now and a break down below 1.5440 will see the pair test 1.5350 for a scalp. A break below 1.5350 will likely see the pair fall 800 pips or more. I, however, am expecting to see price break below 1.5440 and give a head fake to the 1.5350 followed by a bounce and a reversal.

Buy on GBP/USD (or FXB)

2010-12-29T12:34:00.002-07:00

The GBP/USD has shown a lot of strength as the dollar has sold off today. If price clears the high 1.5520, price should continue to 1.5630 within 2-3 days. This is a 1 to 1 risk reward as we will be placing our stop below the lows of 1.5350.

A trade on FXB, scalping options on a currency ETF, we would buy a 155 call near 1.10 and we should be able to see it for 1.60 within the 2-3 day time frame.

Buy Puts on Boston Scientific

2010-12-29T12:31:00.000-07:00

This is a quick scalp trade for a quick gain. If BSX closes below 7.61 on the hourly charts, I am planning on buying the 7.50 put for approximately 19 cents. Price should fall within 2 days to at least 7.10 if not lower. This move will increase the value of the put to 40 cents for a quick doubling of the trade. If price goes above 7.90 after triggering the trade, exit the trade at about 8 cents. This is about a 2 to 1 RR and I would give it 75% probability.

Head and Shoulders on CMG

2010-12-27T10:36:00.002-07:00

Looking at CMG they have completed a nearly perfect, symmetrical head and shoulders pattern. The neck line, which has been violated today, gives more than $35 for the target. A Feb, at the money put could generate a $22 gain on a $13 investment. An out of the money short call may be a better way to trade this, selling the $230 Jan for $4.60 and letting it decay for the next 25 days.

The comming collapse of the Euro?

2010-03-01T10:03:00.006-07:00

The euro has traded in a 200-300 pip range over the past 20 days. The swings have been wide and volatile. This has been difficult to trade in the short term but is setting up for what may be the next big move. The consolidation is testing a longer term fib and short term fib levels. If price break through the 1.35 we expect price to drop 750 pips if not 1000 pips back to the previous annual support at 1.25.

Though some feel the problems with Greece or minuscule for the euro zone economy as a whole, this may be a symptom to a larger economic condition. Spain's debt was already down graded and Germany is discussing leaving the euro. If many more negatives appear economically, the euro zone may spin into a major downward trend and possibly a 50% correction.

A couple of random scalps

2009-09-14T12:13:00.002-06:00

Here are a couple random scalps I took on the 15 minute candles when prices became overbought and oversold.

USD/CHF bought on the break, targeting a 25 pip move as shown by the higher trend line.

The Gold position already broke and hit my profit target. I won't be surprised to see a larger move in gold back to 995 and just as likely 986

CAD/CHF long?

2009-08-17T21:00:00.004-06:00

I am really liking the consolidation on this pair right at the 50% channel area. I am watching for a bounce and a break above the short term resistance to run back up to the top resistance channel. If the pair doesn't break by morning I will tighten my entry further.

Maybe an entry at .9770 and a target of 1.0050. Stop below the trend line and tightened to below the most recent low after I make a new high.

When is the best time to trade forex?

2009-07-30T11:04:00.002-06:00

I have been asked when is the best time to trade in the forex market. That is similar to asking when is the best time to exercise. Some people like to exercise in the morning and watch the sun rise, others like to go to the gym during the best meat market times and flex in the mirror. It comes down to preference and what you are trying to accomplish.

My preferred trading times are between 8am - 11am EST for scalping/intraday trading and around 5pm-8pm Eastern. The earlier times gives me the best volatility for the scalping and the later times gives me the quietest market to plan the longer term, multiple day trades (the price action from news is already shaken out).

This is just my view, what's yours?

Boy that looks swollen

2009-07-30T06:51:00.002-06:00

The CAD/CHF has run from 92.75 up to 1.0050 in the past 3 weeks. The price looks very extended. The question is when is it coming back down and how far. If price breaks and closes (daily candle) below 1.0000 again, this is the confirmation to a short position back to 97.85. After a pull back like that, the swelling will have gone down enough to get back into bullish trades on this pair.

I am the ShadowTrader (fx)

2009-06-02T19:19:00.000-06:00

www.shadowtrader.net

I've got a secret...I've been hiding...

2009-05-29T09:13:00.002-06:00

To quote Mr Roboto, I I've got a secret...I've been hiding...Can you guess what it is? We will be revealing the secret next week. For those interested, can you guess what it is? and yes it is trading related.

The "Right Question"

2009-01-05T12:52:00.001-07:00

I love the book by Isaac Asimov, i Robot. In the movie, there is a repeated pattern of interaction between Detective Spooner and the hologram of Dr Lanning. In the interactions, the detective can ask the hologram questions but many times the hologram responds, "I am sorry my responses are limited, you must ask the right question..." and when the detective asks the question that will lead him to the information he needs, the hologram answers, "That, Detective, is the right question." The hologram never gives the answer just tells him that he has asked the right question. So let me propose some thoughts with a recent report I saw on CNN and leave it up to you to ask the right question.

In 2008, the FOMC has been approved to spend 7.2 trillion dollars and spent 2.6 trillion dollars. Having spent 2.6 trillion dollars, how will this affect the economy?...I am sorry my responses are limited. How will the 2.6 trillion dollars spent affect the strength of the dollar?...I am sorry my responses are limited. How will the 2.6 trillion dollars spent affect the world economy?...I am sorry my responses are limited.

So faithful reader, what is the right question?

(feel free to post what you believe is the "right question" here and I will let you know detective(s) if that is the right question or not.)

Back with some trades

2008-03-17T17:00:00.003-06:00

Busy, busy week last week. Busy week this week. Lots of announcements including the Fed and Bearstears being bailed out by the Fed, I mean the government, I mean your tax dollars, I mean JP Morgan (whew I almost said what I thought).

Anywho, last week I lost about 14k in just over 2 days and clawed all the losses back and netted out 3.5k so all in all I was happy with last week, we shall see what this week holds.

No color coordinated images, just longs and shorts.

Feeling a little guilty..but only a little

2008-02-28T10:50:00.003-07:00

I feel a little guilty because I didn't get yesterday's positions posted. It was a very very busy day. I did however take all of my trades. As such I had a nice winning day. To prove that I am not making this up, I have included the positions and an image of my account realized P/L and the unrealized P/L. My guilt comes from anyone that may have been trying to trade all of my trades.

The reason I feel very little guilt is because, as you can see here, trade signals are only good if you can execute on them... they are also only good if you understand how the signals are coming so you can trade them when the trade giver misses a posting. I also feel little guilt because the $$$$ are like salve to my guilt, it is hard to feel sad on a good trading day.

Sorry for the miss, I will strive harder to get today's signals posted later this afternoon.

Please also note that the positions in my account are 5 minis per position (the Eur/Jpy is 2 -5 mini positions). The gains posted today are rougly equivelant to seeing $330 realized P/L and about $290 unrealized P/L per mini contract.

Morning update

2008-02-27T07:53:00.002-07:00

I may get stopped out in the next few minutes on many of these trades as new home sales come out and as Ben Bernanke talks (adding volatility) but... here they are as is. We have given a few hundred back from last night but considering we had gained about $1000 (based on 1 mini) I am good with today's move so far.

New Forex Trades for 02-26-2008

2008-02-26T20:23:00.003-07:00

Here are the new trades for today with the ones not closed out from previous day.

Remember you can click on the image to blow it up bigger.

Update of yesterday's

2008-02-26T15:51:00.002-07:00

This is the update of yesterday's positions, closed out and open P/L. The new trades will be published shortly. It was a great day.

This is based on 1 mini contract so making nearly $1000 in one day with minimal risk it is pretty dang good.

quick update, things are moving

2008-02-26T10:20:00.003-07:00

Here is what we are looking at now. Eur/Usd limited out (could this be the break out?). Everything else is looking great. I am tempted to widen my profit targets (it is ok to widen limits not to widen stops) I will leave things alone for the next couple of hours but it was looking good so I thougth I would get hisupdate out. I will not be surprised to get a couple of additional limits in the next few minutes.

Great Book to Read

2008-02-26T10:04:00.004-07:00

I read a new book over the past 3 trips. It is called Confessions of an Economic Hit Manand I must say it is one of the more compelling and intriguing books I have read in a long time. I am sure there is some embellishing that goes on in the book but I am also fairly sure that even though all of it didn't necessarily happen to the author, most if not all of it did happen to himself or colleagues. Very good book and definitely worth the read.

what a great 8 hours it's been

2008-02-26T07:22:00.001-07:00

Here is the update from last night's positions. As you can see I am tightening all the positions stops, we are risking next to nothing of our account but we are risking about $500 if we include the profits gained from last nights'/this morning's move.

Depending on how the next hour orso goes, I may just take profits and call it a good day, many of these are next to resistance or support areas.

Here are the trades for today

2008-02-25T23:30:00.002-07:00

As you can see I have added a column to try to make this easier for me to track. If anyone wants to assist in tracking the results we can get these posted in a reasonable time frame. I am up a little for the last week but I am really liking what this week is looking like. We could see the channeling I feared would last 8-10 months come to a quicker end. I am personally watching for a short term break out in these channels against the dollar before a pull back to retest the top or middle level of these existing channels. Just a thought.

Update from yesterday trades

2008-02-22T15:14:00.003-07:00

Here is the updated positions. In addition to the limited out trades, I am currently sitting on $254 of unrealized profits. All of the stop adjustments in yellow are very tempting to get out and take the profits as it got so close to the limit target and are showing some signs of pull back. I will look to place more trades on Monday morning, possibly pre market open.

Though it has been win a little lose a little win a little more lose a little more, I am very content with the results so far. It has been a rough market of sudden swings and changes. The fact I am up slightly taking so many intra-day scalps makes during a volatile market give me confidence when we see some directional days we should makes some good, solid returns.

OUCH what an ugly day

2008-02-21T16:04:00.002-07:00

The gbp surprised and rallied on good retail sales, the dollar got crushed a lot of surprise reversals set us back about $300 for the day so far. I will get that update shortly but here are the new trades for today.

Back from NY

2008-02-20T20:34:00.002-07:00

Just got back from NY late last night. To catch you up on the scalping methodology, we had some winners and some losers and we are back to about break even, rather than trying to catch up 5 trading days and 60 trades, we will start again with tonights. All of these are market orders to get us going. Just look at the hourly charts from roll over to determine that you haven't moved too far from the daily roll over rate.

Here are the trades

pre market adjustments

2008-02-14T06:31:00.000-07:00

stops and entries adjusted pre market open in the US

New trades and yesterday trade updates

2008-02-13T19:21:00.002-07:00

Here they are, 24 hours later, 12 new trades, 10 exited trades from yesterday and 2 trades still open. If you have questions about how I am tracking them, please put it in the comments.

Morning update of Feb 12th positions

2008-02-13T07:38:00.003-07:00

Just to clarify again, the yellow shows changes. In other words we tightened our stops on two trades. The USD/CHF entry was a typo from yesterday, it was suppose to be 1.1030 entry limit long, similar to the other trades. Now if you had typed it the other way you would not have been entered in the trade. If you were following along, this is one to kill and not chase.

This system is built on creating numerous long and short positions on similar pairs and counter positions on specific currencies.

Some of the trades are not closed out as of yet but those that are closed out are up $100. I know this is only about $12 per trade net profits but it is $12 per trade after all the losses and $100+ for one day and about an hour of week.

Later I will post the new trades for today and I will include a separate running total of gains and losses(just the dollar amount, not a recurring list of the trades). There are some interesting dilemma with this methodology but I will address them when we encounter them.

New bracket trading methodology

2008-02-12T15:57:00.000-07:00

The long term trades are trying to shake out. With volatility in the stock, bond and futures market, many traders are uncertain. While the world wonders what will happen next, I am adjusting my trading process to fit the current times. While waiting for long term trends to continue, I am trying a methodology that is based on bracket trading for shorter term targets and profits.

I will post the initial trades and adjustments as shown in the colors below. If you can figure out my methodology, more power to you. In the past month the methodology has worked great in intermediate trends and has been close to break even in rough times (meaning this past week for me). You should be able to click on the image and view it bigger.

Diverging dollars and $145 billion stimulus

2008-01-18T14:45:00.000-07:00

I would guess that most of the intelligent readers that visit my blog are fairly intelligent and probably already know the meaning of diverge and divergence but just to be sure. di·verge / [ di-vurj, dahy-] verb, -verged, -verg·ing. –verb (used without object)

1.to move, lie, or extend in different directions from a common point; branch off.

2.to differ in opinion, character, form, etc.; deviate.

3.Mathematics. (of a sequence, series, etc.) to have no unique limit; to have infinity as a limit.

4.to turn aside or deviate, as from a path, practice, or plan.
–verb (used with object)

5.to deflect or turn aside.

I am going to use the first definition to describe what I believe happened and the other 4 I will use in a sentence and reference the definition by # at the conclusion. What happened this week? The dollar strengthened against most pairs (except for the yen) why is that? I have heard many people say the dollar is over extended, I highly disagree.

The commodity market pulled back significantly. There have been a lot of concerns about inflation, so when the market sees a5% pull back in gold a 10% pull back in oil and an almost 13% pull back in the commodity related indices, many have felt, wrongly as it may be, that the inflation concerns may soon be over.The dollar move was driven by commodities falling and nothing more.

The bearish dollar trends are continuing and the antidollar fundamentals are still strong. This week alone, the US economic data was mediocre at best. The "good" new or upside surprises were nothing more than someone trying to lose weight and saying "hey, sure I ate three big macs but I had a diet coke, that's a positive right?" The economy is slowing (probably due to eating those extra big macs and falling asleep at the wheel), the housing market is still pulled over to the side of the road blowing chuncks from the nasty hangover from last night's party(think real estate boom, you know the climbing housing prices had to be alcohol and drug induced) and paramedics are still trying to use the jaws of life (see FOMC rate cuts and Presidential Economic Stimulus package) to get our credit market out of the tangled wreckage it is trapped in.

If the dollar is gaining strength when the dollar should not be gaining strength this is a divergence (1). It has extended in a different direction then where it should be. Add to this the FOMC rate cuts and Presidential Economic Stimulus Package. What is going on here? Fed Fund Futures show 50 bpp cut in Jan and a 100% of another 25 bpp in Feb and an almost 30% chance of a 50 bpp cut. Add this to the announcement by President Bush today. Our executive branch has asked for a stimuli package to the tune of 1% of GDP, in case you didn't know GDP is over 14 trillion, therefore a cash injection into the market of about $145 billion dollars.

***DRAMATIC PAUSE***

That's right, flood the market with US dollars, weaken the dollar further, in the midst of inflation concerns, go the wrong direction, cut rates which will drop demand for theUS dollar (first time in 15 years the US rate will be lower than the european interest rates) which will further weaken the dollar, making everything that much more expensive, making it less possible for us to have expendible income (despite the capital injection, $800 won't go very far when the dollar's value is cut in half) making us Americans buy less things, making companies produce less which will induce them to lay off workers, and further increase unemployment, drop GDP, and put the final nail in the coffin of the economy ("put away the jaws of life boys, there is no hope, time of death…").

OK enough already, the other definitions.

If you diverge (2) from what I have just written, you need to understand my intelligence is divergent(3- that's right having no finite limits). So ifyou so choose to diverge(4) from truth it will be very easy for me to diverge (5) your poorly backed opinions.

The Proof is in the Pudding

2007-11-09T15:47:00.001-07:00

The phrase ‘The proof is in the pudding” is a shortened version of “the proof of the pudding is in the eating”. This phrase comes from an old parable where we are taught that the real proof is in the test. Last week I stepped out on a limb and stated that there was no real job growth that the non-farm payroll numbers were reflecting second jobs more than new jobs and more employment. I had a number of comments on this matter, many complimentary but there were some that weren’t confident in my analysis. To those who were not confident and to those who want a second serving, open up here comes the pudding.

First of all price, how can you argue with that. The dollar hit record or multiple year lows against the euro, the pound, the aussie, and the loonie (by lows I mean as compared to these currencies no forum posts pointing out the obvious record highs on some of these pairs, it was the dollar weakness or lows that caused it). If the economy were strengthening, GDP were truly rising, and new jobs were everywhere, would the dollar continue its collapse?

Second, Ben Bernanke backed me up yesterday, giving clear indications of economic slowing and probability of further more “severe” problems in the housing and credit markets’ already poor situation.

Not enough?

Third, and the one none can argue with, the actual data. Last week the non-farm payrolls report surprised everyone. Septembers new jobs were 110k new jobs, October was expected to be 82k but the report came in at 166k, 84k more jobs than was expected. The Burea of Labor and Statistics October report for multiple job holders over the age of 16 came in at 7852k (that is right a ‘k’ meaning thousands) which is up 231k from September (0.2% higher).

Now for some simple subtraction 166k new jobs minus 231k more people with multiple jobs equals -65k jobs or in other words, less total people are employed and more people are picking up second jobs. You may be thinking ah-ha I caught you Blake, they said that unemployment didn’t go up, true the percentage didn’t but the number of employed individuals went down 250K people in October. This is off 11k, but notice I said there were 250k less employed not 250 more filing for unemployment, that is a different number. Unemployment filings went up in October by 38k, not enough to change the 4.7 rate to 4.8.

Mmmm, tastes like pudding.

Suspended Account - I think not

2007-11-09T08:32:00.000-07:00

If you have tried to stop here this week you may have been redirected saying the blog was suspended. Well, "they" can NEVER SILENCE THE TRUTH!!!

Oh wait, it was just a java script in the pivot point that was crashing. So no more pivot point calculator here and things should be fine again. I am writing a post similar to last week today so if you can suffer through a long post then come back later on.

Oh wait, before I stop for the moment, let me point something out to the nay say-ers. Remember the Gbp/Chf trade??? You may have forgot, it has been a month now. On October 4th I said that no comment was not a good thing out of England and it would hurt the pound and I liked the Swiss Franc as a counter part. A number of people questioned my logic and sanity in chats, emails, and phone calls. Well, this is just another one of those I was right situations isn't it? He He and Ha Ha, laugh my way to the bank.

Now were are we? At a support level. If we see consolidation or a bounce, get out. If we see a break of the 2.35 level hang on for a couple of more days to see where it goes. It took a month but for 500 pips, that is alright.

What really happened with nonfarm payroll?

2007-11-02T14:56:00.000-06:00

This is a longer post but it needs to be said.

I have heard a lot of people questioning why the dollar weakened when the nonfarm payroll jobs data was so strong and such a positive surprise. You may find an article by John about the nonfarm payroll last month, interesting as well. In John's article the basic conclusion was the number is not just the number, we need to dive a little deeper.

To do this let me point out a couple of specific announcements from this week that tell a very interesting story.
First ADP gave a glimpse of up and coming nonfarm payroll with expected 60k actual a whopping 106k
Second annualized GDP q/q with expected at 3.1 and actual coming in at 3.8, healthy growth and a surprise.
Third nonfarm payroll expected 82k new jobs, actual 166k.

That is the positive I want to focus on. The neutral is unemployment rate, expected 4.7 and actual 4.7

With all of this good news, why did the dollar weaken and what is really happening with the economy. Keep all the above in mind and remember what you already know.

In case you don't know what you already know, let me remind you. You know that the economy appears to be slowing (in spite of the above information), you know that the housing market is collapsing and you know that there is a significant credit crunch. You may be thinking, "yeah and..." Well let me give you a couple of additional numbers also from this week.

Fourth, Interest rate decision cut to 4.5 as expected (sign of slowing econo-credi-housing industry needing a boost)
Fifth, Personal spending expected 0.4% actual 0.3%.
Sixth, Average Hourly Earnings expected 0.3% actual 0.2%

OK, so with what you already knew, we added 3 positive surprises, 1 neutral, and 3 negative surprises. Those all should cancel out and we should be able to just go with what we know right? Maybe.

Let me paint a picture: Bob Jones is an average guy with an average job that last year decided to buy an above average cost house (market conditions last year) with a below average (subprime) loan just like the average Joe.

He has one of these ALT A subprime loans. This loan not only doesn't require any principle paid but has a variable minimum payment very similar to a credit card payment. His intent, like the average Joe, is to make the minimum payment and invest the rest. Like an average Joe, this didn't actually happen (see articles with titles like, "Falling into the Real Estate Trap", "I'll Invest the Payment I Would Have Made and Other Lies We Tell Ourselves", and "Real Estate's Sucker Bets").

Bob buys his $300,000 house with a monthly minimum payment of $700. The payment on a normal amortizing loan would have been $1700 and the interest on this payment would have accounted for $1300 of that payment in the first year. During the first year Bob only makes the minimum payment, makes no extra payment and invests no money. The amount of accrued interest equates to $7200 for the year and is added, compounding each day, to his $300,000 principle balance.

Because of the credit crunch, Bob's minimum payment jumps to $1400 (still no principle payment) and he decides the payment is getting too rich for his blood. The housing market around the United States has corrected/dropped 15% on average (some places less some places much much more) making the market value for his house $255k. He owes 307,200. What are his choices? Under new bankruptcy laws he can't just walk away from his negative equity. He could sell it for a loss and negotiate payments on the $52,200 or he can try to continue to make the payments. What to do what to do? I know, get a second job.

Bob goes and finds a second job. What are second jobs usually? Usually a second job is a job that is not in a "professional field" that is why they call it a second job. Second jobs usually pay less than principle jobs. Where do you find a second job easily? The service industry (retail, sales, construction, food, grocery, etc). Which sector contributed most to this month's nonfarm payroll? Service...hmmm...a connection?

So more people get second jobs, more service jobs are created, we see that in the numbers. Do we see more spendable income? No, less consumer spending, where is the money going, to pay for our over leverage debt ridden society. Average hourly rate goes down, due to second jobs (primary job pays $20 an hour second job pays $10 for 20 hours a week, average hourly? $16.66, lower average hourly rate). Production goes up (GDP) because everyone has second jobs and are working more. This is not good job growth, it is not good GDP growth because all of the growth and improvement is being spent on keeping the econo-credi-housing industry's head above water via paying our outlandish credit payments on the exorbitant debt.

Did I miss anything? I don't think I did. Basically, as a society we are scrambling not to lose our homes that are upside down because we would rather do that than pay for something we don't own and yet 1 out of 65 homes in Nevada are in forclosure (3% of all homes in Las Vegas are in foreclosure) so we still aren't doing that well at it.

Conclusion, the jobs data was great data if you understand it wasn't positive for the economy, in fact it was similar to a drowning man's head coming above water for the third time(maybe only the second time).

The moral of the story, stay out of debt and sell the US dollar.

Scared out of the USD/CAD trade?

2007-10-31T15:51:00.000-06:00

I told you I tightened my stop and my limit and today I was limited out of my trade at .9450 for a total gain of 551 pips. The pip value had an average value of about $1.02 so we gained 563.70 minus a little interest of $13.70 so we netted $550 and the trade lasted 27 days (sold the pair on October 4th at 7:24am). So here is the big question. Were you patient enough to trade this trade? Were you willing to risk $80-$100 to make $550 and sit on the trade for 3 almost 4 weeks? Were your stops too tight and you got stopped out. Did you get bored and walk away from the trade early? Did I get out too soon? Do I like using question marks? Well do I???????????

Happy Halloween everyone.

On a related note.

2007-10-30T15:37:00.001-06:00

Usd/Cad up against support now as we see oil possibly rolling over. Remember that a sell off in oil will jointly hurt the USD and the CAD. Why you may ask? Canada exports a lot of oil, falling oil prices will reduce the amount of oil being purchased, therefore less demand for Canadian dollars as the prices fall. Oh but wait, oil is denominated in the USD, the oil standard currency. So if less oil is being purchased or even shorted, the dollar will feel this as well. What does this mean? Who will take the bigger hit? The CAD should take the bigger hit but the pair should become more volatile if there is more profit taking. CAD due to falling oil prices, USD due to falling demand of the currency that dominated or denominates oil prices. Higher volatility with oil prices, higher volatility with FOMC talks tomorrow. Watch for the pull back.

Oil also has a lovely divergence formed today. I believe this last push was likely an over extension of the oil prices, making me believe oil should pull back near $90 a barrel over the next day or so if not $87.5o. I could be wrong and oil could find support, kill the chance for a bearish divergence to play out and move to $95 but.....I am not holding my breath. If oil drops, expect that GBP/CHF trade to play out. I think we could see this pair finally move with the pressure it is under, it has to break sometime.

Usd/Cad resistance levels?

2007-10-30T12:17:00.000-06:00

I had a question of where I see resistance for potential sell or add points for the USD/CAD as the negative news from the FOMC tomorrow may see some volatility but no real trend reversal. Here is what I see.

Short term resistance at or near .9700
Next level resistance at or near .9810ish
Most significant level of resistance 1.0000

These are not guaranteed but I certainly feel that the trend, the fundamentals and the monetary policy of rate cutting will keep the downward pressure on the USD/CAD.

I also like the idea of playing the CAD/JPY long as the USD/JPY is having trouble going beyond the 114 mark. If the USD can maintain strength and support versus the JPY and the CAD is stronger than the USD, I like the CAD/JPY long positions (include the AUD/JPY with similar analysis of the AUD to the USD to the JPY)

I didn't like that picture

2007-10-29T14:06:00.000-06:00

So here is a new picture that goes in to my profile. We took it a few weeks ago with family pictures up the canyon by the river with all the amazing fall colors (though you can't see that in this picture.

I am tightening my stop and my limit on the USD/CAD. Stop now at .9620 and limit now at .9450, I may change this to .9500 to book these profits. As I said before, I am expecting some volatility over the next couple of days.

Great move by the CAD and upcoming Fed Announcment

2007-10-29T11:48:00.000-06:00

The USD/CAD pushed to record lows again today. I hope some, if not all of you are still in the trade. The money I manage is still enjoying a great run on this pair and will account for nearly a 10% move on the entire balance for the month. I'm good with that.

Now the concerns, the Fed announces rate decisions this week and my anticipation is obviously a rate cut, me and the rest of the bond commnunity. If you want a glipse of what is coming based on the bond trader's perspective (which I might add is very effective), check the CBOT for the 30 day fed funds rate.

07Oct 95.2550 4 3/4%
07Nov 95.4900 4 1/2%
07Dec 95.6100 4 3/8%
08Jan 95.6650 4 3/8%
08Feb 95.7900 4 3/16%
08Mar 95.8350 4 3/16%
08Apr 95.8950 4 1/8%
08May 95.9600 4 %

The Fed cuts rates in 1/4% or 25 basis point increments. With that in mind the expected rate should be near 4 1/4% by first quarter next year. We are not dealing with just one rate cut but many.

This should all mean weaker dollar but I am expecting some volatile times over the next 2 weeks, possibly volatile like August and September again.

Two choices: Keep your stops really loose so you can ride out the storm and stick with the bigger trend or tighten your stops, get stopped out of your trades and wait for the wind to stop blowing. If you are more agressive, there could be a lot of scalp/intraday trades with the potential volatility.

Side note, GBP/CHF is still channeling in the same rough range.

When is the end of this scalp trade?

2007-10-25T13:19:00.001-06:00

Watch for the down trend to end? Simple enough right? Wrong? Which down trend? The fib fan line? The longer term trend line? Here are the lines I am watching right now.

A continuation here is expected but a strong support lies at .9630. A sold resistance sits near .9700 and the longer term resistance stands at .9800. Keeping with the terminology here, put your trade to rest at support where it lies. Sit tight at the intermediate resistance and stand and run away if we break above the .9800 from along term point of view (or stand firm at .9800 for another selling opportunity, whatever you like best there).

This is a fun little exercise of analyzing a short term trade. The way I look at trading in general is this... it took me as much money in spread and even more time, focus and energy to trade this scalp as it did the trade I shorted at 1.0000 a few weeks ago. So for my time, focus and energy, and really for my money, I'll go with the long term trade. Some of these will line up in the future as this has but I won't be discussing them nearly as much.

Rocky VI - "Never Say Brain Damage"

2007-10-25T09:41:00.000-06:00

He's down..no he's up... he's down. The Usd has taken it's lumps over the past weeks and like a tough hardened boxer...he doesn't know when to stay down. And you thought I would say something about it being strong and never ending spirit...no just too many hits to the head to know better. So the USD/CAD has been down and up and down and up again over the past 3 days. A break and close above the .9670 mark would make me think a move back to .9710 would be very likely. Another bounce and I think we could see the break below .9620 which has acted as support at least 4 times already.

What did I tell you?

2007-10-24T14:02:00.001-06:00

It is question day here at Random Acts. I feel like I am giving out all the generic chastisements. First what do you want and now what did I tell you? So what did I tell you? I told you to sell the Usd/Cad about 4 1/2 hours ago at a price near .9720 for a scalp trade. The price is now at .9688. If you listened and followed the trade you have two choices. One get out near .9680 for a quick 40 pip trade or if it moves through .9670 hold on to it for a move down toward .9615-ish by sometime tonight or early morning tomorrow. It could happen quicker but it is hard to predict both price and time of day.

In essence I am watching for the cross below the fib fan for a continuation and a move down to a collision of longer term trend lines and older fib fan lines as the next target. If it bounces here, I would consider an exit of the scalp trade.

Longer term traders following the previous posts, disregard this post. This is a scalp trade. Don't confuse the two.

What do you want?

2007-10-24T09:38:00.000-06:00

So here is the question of the day, I would like responses in the comments, as many as you would like to place is fine, anonymous or otherwise. What would you like to see here. I am going to continue to add my trades and my analysis, but what is it that interests you as a individuals and as a group?

Are you interested in the in depth fundamental pontifications like the deciphering of the BoE? Pure technical trades? Scalp-ish trades ?( I usually won't post too much that way but sell the USD/CAD today off the .9720 level). Longer term trades like I usually look at?(5 weeks on the 2 trades we are in for a lovely profit right now). Wise cracks with pertinent commentary? (I like doing that but some don't like reading it)

What do you want? Post it the comments please.

and Thank You

Deciphering the Bank of England

2007-10-17T12:11:00.001-06:00

The Bank of England released the minutes I have been waiting for. What could all of this mean? If you want to read it yourself, go to the Bank of England site at http://www.bankofengland.co.uk/ and then click on minutes. Or you can read this highly informative and even higherly (new word) biased view of the minutes.

Information item #1: The Bank of England (BoE) voted 8 to 1 to leave rates alone. If you were to read this, your first thought may be to assume that this is very bullish for the GBP for the fact they were so united (there is always one rebel mixing things up). But to know why they voted to leave it the same is even more important.

Information item #2: The BoE said, "The preparation of the November Inflation Report and its projections would give the Committee more opportunity both to assess the impact of market turbulence and other developments in order to reach a more considered judgement and to explain its policy stance." -Translation: We need more information so we can make an informed decision. In fact in the minutes they specifically said they wanted more time and information before they take a rate cut. No discussion of leaving it long term, no discussion of raising rates, just timing a cut.

Information item #3: CPI has now reported in under 2% for 3 months now. This is not growth, this is slowing to a point that is teetering on recessionary if the CPI can bleed into GDP.

Information item #4: The BoE said, "It was possible that a cut in rates this month could be misinterpreted as a signal that monetary policy was focused on supporting the financial system and not on meeting the inflation target." - Translation: We wanted to cut rates because we thought it would be a good thing but we were afraid that it cause a misdirected focus on the balancing act we have to follow as the BoE, hence the "No Comment" two weeks ago.

Information item #5: The BoE said, "A reduction in Bank Rate this month was not widely expected. There was a danger that such action would be misinterpreted as a signal that the outlook for growth and inflation had shifted decisively to the downside." -Translation: The market didn't expect it and this would have been a huge shock, so we didn't do it. Note, the outlook for growth and inflation has shifted decisively to the downside.

Information item #6: Oil record highs, from August 1, crude oil has risen 13%. The GBP/USD is no higher today than it was on August 1. If 10% of what drives this economy growing at 13% can't help the GBP what can. Dive a little deeper, if you assume that oil prices account for 10% of GDP for the GBP and oil prices have risen from 40% since January 1, near $55 at the beginning of the year to $87 a barrel, then there should be a similar move in the GBP. Just in the past 2 months the 13% would equate to 1.3% growth of GDP based on oil alone. GDP for the entire quarter reported in September was 0.8% and expected to come in at .7% for the October quarter over quarter report. Take out oil growth and what do we have? 90% of the GDP is shrinking or decreasing by roughly .5%. Two quarters of negative GDP is considered a recession.

On the surface it appears there is growth and concern about inflation. Diving deeper, adjusting for climbing oil prices, the British economy may be in a hidden recession. What do I expect...weakening pound. This is why I still would expect a GBP/AUD short to play out if time right, a EUR/GBP long trade if timed right, and the GBP/CHF trade as referenced earlier in this blog to play out.

~~note: anything underlined in this blog is a hyperlink to view more information.~

Leverage and Margin Examples

2007-10-16T15:13:00.000-06:00

My friend posted a great video on explaining leverage and margin and common pitfalls. Here is the link to view the video.

So when you are thinking of Leverage And Margin Examples or of my friend John, just remember this handy acronym---LAME

You are my hero John.

~~~It appears that many of you felt my playful jab at my friend was an indication of the video. The video is very informative and not really lame, it was a joke, I was laughing anyway. I don't know if John was, maybe I was the only one... oh well live and learn and learn some more. Go watch the video by clicking the underlined link above.

Big winner and another chance?

2007-10-16T10:23:00.000-06:00

A few weeks ago, I published a trade with both the spot market and the CDD ISE options looking for a bounce off of the 1.00 mark for the USD/CAD. If you would have bought the 100 November puts as described in the post, your position would have moved from 1.35 to 2.45. You would have had a maximum risk if $135 per contract and based on your risk you would be up $110 or 81% return on your maximum risk. Not too shabby. The spot market, if sold at 1.00 would be up $220 with variable risk available based on where a trader determined was the appropriate stop loss. Does this sound like you? "I frequently am right about direction but get stopped out of my trades." If so, lean to the options, if you are frequently right and don't get stopped out, go with the spot. If you are frequently wrong and always get stopped out, please send check to Blake Young's Tahiti trip fund, this way at least one of us will get benefit from your money.

I hear it frequently, if you set your stops too tight, start looking at these options, if you are giving yourself enough room in your trades, the spot usually makes them most sense and money.

Today, what are we looking at? The USD/CAD has pulled back to a short term resistance level. The pair has not moved a lot when it probably should have. So here is the trade and the fundatechnimentals behind it. Oil- record highs, should benefit the CAD. No rate change from the BoC, this is better than the FOMC cutting rates, should benefit the CAD. TIC data for the US not only didn't show the expected $60 Billion of foreign investments coming in to the US but showed a withdraw or fleeing of $69 Billion in foreign monies, bad for the US dollar.

No significant move from the pair, this could be a chance to sell will minimal risk or buy in to the CDD put. I like the December 97.50 put for $1.35 or $135 per contract. Fixed risk lots of potential 8 weeks of time to play with. The USD/CAD would probably need a little wider stop on this one 99.15 or even back above the $1.00 mark. Pick your poison.

NO COMMENT!!!

2007-10-04T11:37:00.000-06:00

OK, think this through with me. When is the last time on television or radio or in the newspaper, any where for that matter, you heard the phrase "No Comment". Now, when is the last time you hear the phrase "No Comment" and that was a good thing? Let's imagine..."You just won the Superbowl, what are you going to do now...(reply) No Comment"..."Oooohhh, how cute, congratulations on the birth of your new baby...(reply) No Comment"...Doctor Rosen Rosen invented a cure for cancer and won the nobel peace prize and as he goes up to the podium he modestly says, "No Comment."...

None of that makes sense. The term "No Comment" is primarily reserved for the accused, politicians, and attorneys (just typing that makes me realize those three groups share a similar lack of scruples) or someone that is hiding terrible news.

This morning at 7am Eastern, the Bank of England left rates unchanged and said, "NO COMMENT". What is the likelihood that it was No Comment because they didn't want the world to know that it was a unanimous vote to leave rates unchanged, they didn't want to tell the world how great the British economy is doing or they had no concerns of the credit crunch and housing market? Could it be they left a no comment because they are concerned about how bad the news is and how much it would shock their currency if they exposed the whole truth of their decisions (minutes will be released on October 17th). I am betting on the second and I am a little surprised that the world market didn't read between the lines on this one. Lots of bad news and a weakening pound but No Comment must have been because they were tired and didn't want to say anything today.

Looking at the previous blog on why I thought the pound should weaken and why we should have heard dovish comments out of the Bank of England, I began my search for the right pair to trade and I found it in a peculiar place. I found it on the Gbp/Chf. This is not necessarily because I think this will be the most profitable trade, more that it is one of the easiest pairs to analyze and control risk. In the chart you can see a nice down trend over the past couple of months with an approach and likely bounce off of resistance.

Risk can be controlled with a 200 pips stop and a potential reward of nearly 500 pips if not more. As time goes on and if the lower trend line is reached, the lower trend line could be as low as 2.32 for a 750 pip move.

The problem with this trade is that the CHF is a weak currency. The benefit is, if I am right about the GBP, the minutes will reveal the dovish sentiment and further unwind "carry trade" pairs including the GBP/CHF pair.

Falling Ethanol, Diverging Oil, and the pound getting pounded...Maybe?

2007-10-02T13:31:00.000-06:00

I am going to make this a brief analysis and looking at 3 correlations occurring right now. Starting with Ethanol, Ethanol is a corn based fuel that acts as a direct substitute for oil based products. Looking at the December 2007 CBOT Ethanol Futures, there are two things to note. First note, a high point in March/April time frame and second, a consistent downtrend to today.

If the demand is decreasing for the primary substitute for oil, this causes me to believe the demand in general has been falling recently for oil. What has oil been doing in the time from March until now? Climbing, surprisingly enough.

Oil has climbed up and hit record highs over the past couple of weeks. If you look at the price at the pump, at least here, retail gas has not increased while oil has climbed up approximately 26% or climbed from $65 to $82.50 a barrel. Retail prices should have increased by about the same or higher. Why hasn't it? No increased demand while price is rising. This is a divergence in the inter-market analysis.

As seen in this image, both the CCI and the RSI (differing times) are diverging from the price. In most cases the price snaps back in line with the indicator, if this is one of those times, I would expect oil to fall.

The pound has not really benefited as of late on such a significant move on oil. Why? Possibly the concern of the housing market, slowing global economy, maybe the fact that the price is going up but demand is not means less purchases from British Petroleum.

Now what does that have to do with anything going on right now? This week we are going to hear the Bank of England rate decision. If I my assumption of slowing demand and increasing price is correct, the lower than expected trade balance we saw 3 weeks ago from Britain would be correct. If the GDP is slow, PPI has been low and housing is still struggling than the economy is not growing enough to be concerned about inflation. Sound familiar? It should, this is not far off from what the FOMC was looking at, slowing economy, inflation not as much of a concern as housing and BLAMMO, a rate cut.

I don't expect a rate cut from the B of E, but I wouldn't be surprised if they became very dovish in the comments which could weaken the pair near a resistance level. Look for a short oportunity, not necessarily against the USD but maybe against the AUD or the EUR or the CAD or anything that has shown recent strength. You have between now and Wednesday night (US Wednesday Night) to find a good risk position...

...or what about an option on the BPX?

How did you know?

2007-10-02T09:21:00.001-06:00

I received an email this morning asking how I knew not to chase the USD/CAD and that it would retrace early in the week to test 1.00. Simple, buy good hardware.

Remember the 1.00 is a strong psychological barrier and likely will hold. At this point simply watch for it to stop going up, look for a peak with low risk and trade.

$40 billion for swimming lessons

2007-09-27T15:24:00.000-06:00

I compared the move by the fed to dump $40 BILLION into the market to add liquidity like having 3 drowning people in shark infested water. The housing market, the economy and the dollar are all drowning simultaneously, offering $40 BILLION in essence has the housing market and the economy trying to climb on top of the dollar to keep from drowning. Not only does this force the dollar to drown quicker but the life saving benefit is so temporary only offering maybe one or two more breaths for the two at the expense of the third. In the end, if nothing or no one can save the three of them, they will all suffer a similar watery, shark bate-y death.

You would think for $40 billion you could buy some pretty sweet swim lessons. Watch the fed with the $40 billion in swim lessons below.

"So, how do you like my swimming?"

Torn

2007-09-27T14:53:00.000-06:00

I am very torn on this trade. We discussed the USD/CAD from the view that it could be in a bear flag but I expected a bigger move to the top side. Well it broke out of the bear flag we were watching and bounced off the 1.0000 level, proving a worthy foe to my bearish stance. Now that it has bounced, what do I really expect? A retest, maybe. A break down, probable. A bullish run, not likely but possible.

The interesting thing about this trade is that even though the price has dropped nearly 40 pips from yesterday, our put doesn't really cost us anymore than what we were looking at. So there is the dilemma. Do I take a short position now or wait for a bounce higher. I favor a bounce higher, this bear flag confirmation with a bounce off of the 1.000 level is exactly why I don't like trading break outs. I like selling resistances. The put would allow me to just buy the put, take the same basic trade, allow it to run for nearly 8 weeks with no more worry than a 150 pip stop max. That is very promising but now I have to wait until the morning to buy my put.

Fundamentally, New Homes came in worse than expected and the Fed dumped 40 billion on the market, both should have trounced the dollar, but instead the dollar held it's fleeting foothold. Tomorrow GDP for the CAD comes out, I wouldn't be surprised by a better than expected GDP and a worse than expected on the CPI from the USD both potential catalysts to break this pair out for another run, to be seen in the morning. If you are going to trade the put you will have to be right at your computer when the market opens, if you are trading the spot, watch for a retest near 1.0060ish.

No registration necessary

2007-09-26T14:15:00.001-06:00

I have removed the need to register to add comments. This is for all you "anonymous" types, you know the kind that like to make anonymous phone calls, anonymous letters, anonymous subscriptions. You know who you are. At least now you have one more outlet to hide your identity yet let your voice be heard.

Just click on comment, write up your comment, and submit. Don't be shy and don't be over sensitive.

Longer term fib fans and estimated times to sell UsdCad

2007-09-26T13:27:00.000-06:00

So here are the slightly longer term fib fans I am watching. How close are your line's to mine? Trade yours, not mine, yours will be more accurate for your trading.

I changed this to an 8 hour candle so the image is more visible but let me tell you the times that these fan lines cross the resistance levels as potential times and levels to sell into this trade.

The times I see on the 2 hour chart show 8am Eastern tomorrow morning at a price near 1.0100. The next cross happens at the same time, 8 am Eastern on October 1st (Monday morning). How predictive will these be. Are you feeling brave or disciplined enough to buy it now with the hopes or expectations of the price going up to 1.0100 by tomorrow morning.

I want you to be disciplined and not brave and I want you to be expecting the specific move and not hoping. Yes there is a difference. I personally am willing to wait until it gets up a little higher and then trade it rather than taking the short term trade. If you drop it down to an hourly chart there is plenty of opportunity to trade this in the channel, just make sure you are getting out of the trade at the right time.

Predictive power of forex options

2007-09-26T10:43:00.000-06:00

The price has remained fairly stale in the past 18 hours. This doesn't mean there aren't some messages being put together in the mean time. First look at the changes in the price and where it to and returned to. What does that mean? The price has pushed beyond our short term fib fan line, a longer term fib fan puts resistance levels meeting fan lines near 1.01 and 1.02. Try it yourself and see if you get similar levels, I will post my long term fibs later.

If the bear flag confirms as indicated by the yellow line, 0.9750 is a fairly easy target that could play out in a matter of a couple of days. I have commented to those I work with a number of times that I think the Usd/Cad could trade in this range for most of the week or longer. So far so good. This leads me back to the idea of using an option trade. Before we get into the intricacy of option pricing, note that the at the money, and you can't get much more at the money than one one hundredth of a penny, is the same for both the November 100.50 call and put.

Call Bid Ask Put Bid Ask

CNJKA 1.35 1.50 CNJWA 1.35 1.50

So the 'at the money' costs the same. In theory the market has it priced equally the same risk wise. This is true but not not true. Looking a little deeper at the implied volatility shows nearly double the implied volatility on the puts than on the calls. This is not normal. The open interest is 8 times more on the call options too. How can implied volatility be higher and not price for the same options. I like the idea of selling a call or buying a put. What are your thoughts. Put them in the comments.

It's the CAD or the CDD

2007-09-25T14:14:00.001-06:00

The chart was the Usd/Cad intra-day. As you can see I told you not to chase the trade because I expected it to come back up. Because it has come back up, is there a buy or a sell in this trade. I don't think we have seen any reason to be looking for a long trade on this pair. It is a pull back that can make money management difficult but could be a great longer term trade. How far will it pull back? Since I did this screen shot the price has risen back to 1.0035 and is still climbing slowly. I would like to sell this again but at the right time. Maybe near 1.0050 or 1.0075 but I wouldn't be surprised with a pull back to 1.0100 or even 1.0200. I seriously doubt a move to 1.03 before a drop.

So here is the trade I am looking at...a put on November 100.00 CDD. What is that? CDD is the International Security Exchange (ISE) option that trade the major currency pair. As you can see on the daily charts of the CDD, the price is in line with the spot market. The stochastic is possibly setting up for a short term divergence to sell of this pair. The advantage of the CDD over the spot market in this situation is being able to sell with a max loss, similar to a stop loss but the price can move beyond a traditional spot stop loss and still come back down and make you money as it move toward your price.

Currently the price is sitting at 1.0040, as I type the price is rising slightly, if I sold the pair now in the spot market with 150 pip stop, the pair could move to 1.0200 and push 10 pips past your trade and then move all the way back down and through the key 1.000 mark and potentially down to 0.9800 or lower.

For the CDD position, first let's recognize that the 1.35 price of the 100.00 put will cost $135 per contract because we buy them in 100 unit contracts. So when I reference pennies and dollars on the options contract, multiply it by 100 to get the per contract value. Now, let's use the 100.00 put this is the same as the 1.0000 price level on the spot market. If my anticipation is that it could go down to .9800 the value of the put at expiration in November could be worth 2.00.

The difference between the purchase (1.35 for the November 100 put) and the estimated value at expiration is only .65. That may not sound that great, but remember I am saying at expiration it would be worth that. Hopefully as it nears your limit you will step out with more than the 2.00 per option price. If you set this up as a bear put spread and sold the 98 put and bought the 100 put, the net difference of the spread is a cost of .85 with a max gain potential of 1.15. It nearly doubles the expected gains but it does cap the trade on both sides.

Max loss .85 (similar to a 85 pip stop but it can go beyond the level without getting stopped out) and a great target. Take a look at the prices here and we will watch this trade over the next couple of weeks. We will track it both as a spot trade and an option trade to measure both risk and reward for both trade potentials.

Good luck, more tomorrow.

Come on now, be brave, we're all friends here.

2007-09-25T13:51:00.000-06:00

Answer the poll and put in comments. What would you do with this chart. I am going to put together an option trade in the next few minutes but I want your views and comments.

Can you guess what this is?

2007-09-25T13:28:00.000-06:00

What chart is this? How would you play it? What does it mean in the short term? What does it mean in the long term?

Break and test

2007-09-21T09:01:00.000-06:00

The Usd/Cad did what I said I thought it would yesterday, it bounced a number of times off of the 1.0000 range and then broke and has come up to test that level as resistance. It may be a little early to tell as we could see further consolidation near the 1.0000 level but it is responding as one would expect and a sell near here could be a good play. The big question I have is whether the divergence in oil will confirm and bleed down into the GBP and CAD trades as oil readjusts.

Another great article today by John on the divergence in oil is available. To see it, go here.

Don't Chase It

2007-09-20T08:07:00.000-06:00

I posted this image a while back in the blog, I wanted to find a picture of a little fat kid chasing the bus and having his friends laugh, but because my mom loved me enough she didn't take pictures liked that.

The Usd/Cad is very likely a school bus. If you missed it, don't chase it. I think there is a very good chance that we see a bounce, a psychological bounce, here at the 1.00 level. Even if I am surprised and it breaks through to 0.9800 then I still would expect a pull back to the 1.00 level as a retest of the psychological level. Either way a bounce could be a better sell opportunity and a break would put still give you a chance to short this near 1.00 again. I personally am trying to decide to exit and take the profits. Decision made. Stepping to the side and watching for a bounce or a break and retest.

PARITY!!! PARITY!!! PARITY!!! (yell this like your yelling sanctuary)

2007-09-20T07:28:00.000-06:00

We have hit it at last, parity for the USD/CAD. The low in the last hour reached .9998. Let us review the last week and then what that means. I was looking at the pair last week and even prepared an image on the 12th to discuss that this was going to be the run down to parity. Too bad I didn't get this posted then. As you may be able to tell, I got in the trade at about 1.0480. Not too shabby. Today the pair is just a continuation of that move. Rather than looking at the daily candles showing you the last week of the price dropping, here is the intraday chart looking at the hour candles so you can see the magic of hitting the $1=$1 mark for the pair...a moment of silence if you don't mind... Ok that is enough, back to work.

What does it mean? Why have I had a focus on this level? Why can't I think of anything witty to say? The whole world is full of puzzling dilemmas today.

Here is a historic perspective and a trivia question that will make you look smart at the water cooler or your next dinner party. When was the last time the USD and the CAD were at parity? Many of you may be saying never, you're wrong. It was 1976. Now I need you to start thinking of what was happening during the mid to late 70s. If you are not old enough or informed enough, let me help you. The mid to late 70s were riddled with high inflation, high gas prices, high interest rates and rising unemployment. Could we be heading toward similar times? Let's see, inflation and commodities are high, check. Oil is near record highs as well as gas, check. Interest rates were cut by the fed by home interest rates are on the rise, check. Unemployment...we are still OK but we did see our first layoffs in the non Farm payroll numbers this past month. hmmmm interesting.

What does the future hold, short term doesn't look so bright. Future could be "totally awesome to the max." More on that in my next post.

Great information and big day today

2007-09-18T16:57:00.000-06:00

I was watching my good friend, John's, video post today and thought all of you should take the time to go and view it, if you haven't already.

Watch this about trading options and today's 50 bpp cut by the fed.

Also, I made some good returns today but now I am watching for an add position and new position on many trades, especially the carry-ish trades. Keep an eye for pull backs to key positions and then watch for a couple of longer term trades.

...Hello Friends, the game continues...

2007-08-22T13:15:00.000-06:00

I have been away on vacation last week and out at a conference this week. I am back in the saddle and things are looking great. Could I have taken a better time for vacation, I think not. I got stopped out of 2 trades with reasonable losses and then haven't got back in to chase this volatility. After these past 2 weeks, I have looked at the fundamentals and the fundamentals have not changed the overall trends we have been watching. Prices appear to be testing similar channels or echo channels as I have called them in the past, still matching up to longer term support and resistance. Look at the 5 year charts on about any pair and determine your trend from the long long term view, if you see the same trends I do, then you will see great longer term opportunities setting up over the next couple of days.

I hope your accounts are doing ok with all the excitement.

How do you like them apples?

2007-08-08T12:26:00.000-06:00

I said that the 100.75 to the 101.25 range was a good time to buy. The Aud/Jpy is playing well off of the support as the trend continues from prior. If you got in mid point you should be up about 240 pips as of today. Not too shabby for a few minutes of reading.

Now with the USD/CAD. I have been pro Canadian for months now and the pull back has played out well. We talked about selling off on August 1st, price was near 1.0600 but I didn't get any graphs posted. Now we have had a good move and a pull back. I think 1.05 is a good resistance and shorting point. 1.0630 is the next resistance level with some wiggle room to watch out for. We may see some consolidation and slowing near 1.0400 and again near 1.0350. If we can clear these levels, the 1.02 and even parity is possible. This graph is a 4 hour chart.

Gbp/Nzd is close.

Pivot Points and the Gbp/Nzd

2007-08-07T14:21:00.001-06:00

I found a pivot point calculator as a widget I could install. What I like about pivots is the ability to take discretion out of support and resistance. Here pivots are calculated using the high, low and close of a specific time period. I have punched in the high, low and close of last week on the Gbp/Nzd. As you can see the values are:
Pivot 2.6638, R1 2.7037, and S1 2.6413 , where R1 = Resistance and S1 = Support.

Looking at these values and dropping down to the shorter term daily or 8 hour chart, you can start to see how these values apply to the chart pricing. The prices will not hit exactly the key points but if you have trouble defining support and resistance levels, give pivots a try.

At the bottom of this page you can input any values from any pair. It works well on monthly candles, weekly candles, daily candles and intra-day candles. The basic premise is to expect the price to be bullish above the pivot to the resistance levels above the pivot. The other side of the equation is to be bearish below the pivot and use the values below the pivot as potential support levels.

As those who have followed the blog know, I like to buy at support levels and sell at resistance levels. As i look at the GBP/NZD, I generally use my own support and resistance levels but looking at the pivot points they match very close to some of the key levels I am watching. It would have been great to sell of the 2.7037 level and a close below the 2.6638 level could be an indication of bearish sentiment to the next level.

The key with these levels, in my opinion, is use closed or completed time frames for the values to start the calculation and then remember to control your risk by selling off of resistance levels and buying up support levels. Add some of your own discretion and some fibs and I think you have a decent trading plan.

I CANT BELIEVE IT DIDN'T POST

2007-08-07T13:19:00.000-06:00

I typed all of this up an hour and half ago and hit post and then went into a meeting. Unfortunately, it didn't post. In the end I was right about the fed decision but the volatility could have given you some sort of a mean shake if you took the chance on the trade. The Aud/Jpy has benefited from the recent moves as well as the USD/CAD.

There is surprising amount of buzz about the Fed interest rate decision today. I have looked at the CBOT fed fund futures and it appears we have a rate cut priced in toward November or December. My first response based on what the futures show would be, we could hear dovish comments from the fed. My next response is, the fed is stuck between a rock and a hard place. We are finally seeing some slowing in the economy and the real estate market is being further hammered as well as a significant credit crunch. By lower rates that would definitely stimulate the economy and some spending but it could also spurn stagflation. Stagflation occurs when inflation is going up while economic growth is not. That is what we have setting up now. Commodities are still high, sure we have seen some pull back but it is still in a growth market. The best choice from the fed would be to leave things alone. Ben Bernanke has shown he is willing to stand his ground on

In case you missed them

2007-08-07T08:02:00.000-06:00

The Aud/Jpy has pulled back again and all the prior analysis still stands. The buying range as I see it is somewhere between 100.75 and 101.25. We are at the top of this range but I don't know how deep into this area the price will go.

Usd/Cad has given a pull back and I like the idea of selling it.

Gbp/Nzd... not as convinced. It is stalling out at 2.6540 and has been within 50 pips either direction for the past 16 hours. 100 pips is a large "stuck area" for most pairs but not for this pair. That is hardly a shadow worth noting when the pair can move 600 pips or more in one day.

More on these developing events...

Follow up on the Aud/Jpy

2007-08-02T13:37:00.001-06:00

Yesterday I commented I like the Aud/Jpy when the price was near 101.30. Right now it is at 102.36, do I still like it? Not as much frankly. We have slowed just outside of the past 3 day highs which also match up to our Fibonacci retrament levels. If I am going to be comfortable with a position I want to get in closer to a bounce or support or after we break above this short term level with a bounce above the level. I wouldn't be surprised if we blast right through and make the previous trade very profitable but I certainly not looking to add a position here. Not yet anyway.

Now if we can get that upward mobility, 105 is certainly not out of reach and possibly back to the 107 level as we discussed a couple of days ago. Potential bounce levels? 102, 101.40, 102.70

Usd/Cad Short, Aud/Jpy Long?

2007-08-01T14:43:00.000-06:00

Both of these are looking good. Short term we could see a little pull back on the Aud/Jpy to keep our risk in check. Usd/Cad is looking good to me. I will post with graphs later.

Aud/Jpy Trade

2007-07-31T15:01:00.000-06:00

In the comments from of yesterday's post, I mentioned the idea of not chasing the trade. Let it come back to you. So here it is back to us. To gather further insight to the trade set up, first look at John's posting at Forex Factory on the AUD/USD. Half of the trade I am looking at is tied up in the strength of the AUD.

Next let's look at the long term view of the AUD/JPY. The pair is still trading in the channel that goes back to Feb/March time frame. It is testing the channel support, approaching the 100% fib retracement level and the 38% fib fan "supports" the trade for the same time frame (groan... I can't believe Blake went for the cheap pun). All of these favor the setup of a long position. From the risk and reward stand point, a 100 pip stop could allow you to trade the pair back to 107.50 level. Risk 100 pips gain 650. Mmm tasty. But the upside trend line is moving higher as time goes on so the target could becom 110.00 now we have a 900 pip target for the same 100 pips stop...yummier.

I have talked a lot about giving yourself more room to trade than you think is necessary. What about a stop in the 97.50 level. We now risk 350 pips for the same 650 or 1000 pips. Though the risk to reward isn't as appealing, I think the view of taking bigger stops will make you more right more of the time. It only takes one more winning trade in 8 trades to make up for the additional exposure.

To be more conservative and time the trade, let's drop down into an intraday view. Waiting for a move to break the 102.50 level for confirmation of the break of the fib fan and getting back into the fib retracement from prior would be a good idea. BUT, WE SHOULD BE MUCH MORE WORRIED ABOUT THE LOWS AND NOT THE HIGHS. If we are going for a long or bullish trade then we concern ourselves with the lows or support levels. If those support levels are broken then our trade is over. The reverse is true in down trends. If we bounce off of the 101 level then we have a higher low and continuation of our trend. I will then use a fib fan and the 61% line to draw a support line off of the bottom of those two lows. The fib fan will give me a quick controlled out of the trade as well as a target for the next high. After we see a bounce I will post again.

Added insight

2007-07-30T13:23:00.000-06:00

Adding to my encouragement for you to look at GLD, and the AUD/JPY, take a look at the video and blog on the Profiting with Forex home page and today's blog title Watching Stocks to Trade the JPY. Add that to the Aud/Usd analysis and put all the pieces together.

I am not kidding, take a stand, make a comment, show you have an opinion. No one is wrong, some of us will just be "righter" than others.

No time for graphs

2007-07-30T12:59:00.001-06:00

See if you can see what I am seeing. I like the idea of a buy on the Aud/Jpy near 100.70-101.30.

Look at the long term trends, look at fib levels, look at gold... then post in the comments and let's talk about this one. What is the appropriate stop level? What would you expect long term? Is the pull back over? Is it time for a trade? Am I a few sandwiches short of a picnic?

This and more in the next blog post.

Stopped out?

2007-07-24T19:53:00.000-06:00

Were you stopped out? We have experienced a shadow up to 2.5738 which, depending on if you gave your trade any room from the 2.5700 resistance, you could still be in the trade but, more likely than not, you were stopped out.

Now What???

It's payback time of course. That's right get mad, show the Gbp/Nzd who is boss. Throw your money at it and see if it bleeds... oh wait, that's your blood...hmmm... scratch what I just said.

I am still bearish on the pair but now I have to wait for a good risk to reward again before I take the trade.

Is it here at the 2.5650 level? Only time will tell. Exactly 2 hours and 3 minutes to see if the close price takes me outside of my fib fan level and the resistance level. If not, I am good to watch for another entry. If it is closer higher, I like 2.5800 as a possible new short.

As fortune would have it, I am still in the trade and it got within 12 pips of stopping me out. If we close higher I will exit the trade with some profits and watch for the new entry.

If you got stopped out, cry me a river and wipe your eyes with dollar bills. You made about $140 per mini contract for a couple days of reading my blog.

Happy trading

You have two choices

2007-07-24T16:36:00.000-06:00

To quote Morpheus from the matrix, "This is your last chance. After this, there is no turning back. You take the blue pill - the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill - you stay in Wonderland and I show you how deep the rabbit-hole goes."

So here are your choices, the trade is profitable and you can walk away with 170 pips or you can tighten your stop and risk 100 pips of your trade to see how deep the rabbit hole goes.

I see a short term resistance level right where we are at and the next suppor level is our low we were at earlier today with a potential move closer to 2.5300. So even treating the trade as a new trade we are close to a 3 to 1 risk/reward ratio. A potentially good trade set up... or is it.

If you forget why we got in the trade and what were were looking at prior you can see the Gbp/Nzd short, original blog posting here.

Fixed Link

2007-07-24T10:09:00.000-06:00

If one of my links doesn't work, please put it in the comments and I can fix it. Here is the link to the special report that probably didn't work for you you yesterday.

Click here for the special report page with the protective puts article.

For you options fans

2007-07-24T08:45:00.000-06:00

The options addict link to the right is a great site for options traders. I personally stick to the forex in about 85% of my trading. If you want a fun site and good in site into the options world, consider Jeff Kohler's option addict blog.

Holding steady.

2007-07-24T08:43:00.000-06:00

Dropping the stop loss to 2.5700. A close above 2.5600 will push me to a close or a break below 2.5450 will get me to stick to this trade for days and weeks to come.

Tightening one more time tonight

2007-07-23T17:19:00.001-06:00

It's running nicely and I am using a fibonacci fan for the recent run and one from the last week and I am adjusting to where they cross roughly and where you can see my cross hairs. Stop tightened to 2.5800. I know this isn't a big adjustment but the previous stop tightening was temporary until I could further analyse the trade. I didn't like risking over 500 pips from the current price. I will be adjusting it again as soon as we get a 4 hour bullish candle.

Article on Protective Puts

2007-07-23T14:00:00.000-06:00

Are you interested in hedging your long term trading strategies in the FOREX? My friend, John Jagerson, wrote an article on protective puts.

You can get to this free special report by clicking the link here or by going to the link on the right side of this page and then going to the special reports section of the PFX Global site.

If the links in the web page don't work for you , you may need to copy and paste the URL here.

http://www.pfxglobal.com/index.php?option=com_content&task=view&id=48&Itemid=96

Tightening the stop

2007-07-23T13:27:00.000-06:00

I am not expecting to get out of this trade quite yet but I want to be protected from a big surprise. I am tightening my stop to 2.5830. This will lock in about 50 pips but remember the amount of profits locked in has nothing to do with where I am moving my stop loss to. I am moving the stop loss based on seeing the break out, going to the trending resistance line at the point of the break out and making it a tight stop to the candle just before the break out occurred. We will update this later after we see where this plays out over the next day or two.

Never Never Never let them see you sweat

2007-07-21T08:45:00.000-06:00

Were you sweating before the weekend. Looking at the 8 hour chart you can see a range of 180 pips in the 8 morning hours. watching your potential or initial gains go from $100 down to a loss and then back to profitable in that short time period can make you nervous and make you sweat. Remember your initial analysis. The arrow is roughly where most of us got into the trade. The "small" intra-day moves don't matter in the big picture of your trade. If you are going to take a stand, stand your ground. Things are looking about where I would want it to be or expect it to be at this point. Have a good weekend.

Kiwi video at the bottom of the page

2007-07-19T14:14:00.001-06:00

For a 3 minute break check out the video at the bottom of the page.

mmmm Golden Kiwis

2007-07-19T13:42:00.000-06:00

The Gbp/Nzd trade continues to test both upside and downside in the short term. I will feel much more confident of a big profitable trade if we can get a solid close below the 2.5700 area. Gold is on a move and has done so strongly finding support and breaking the downward resistance trend line. This could be a bonus to the Gbp/Nzd trade as well as the Aud/Jpy, Nzd/Jpy, Aud/Chf, Aud/Usd or just gold. There is still room to move to the top side.

Any other Gold traders out there besides me???

Letting my mullet down

2007-07-18T10:53:00.001-06:00

Back by popular demand, here is the trucker picture. Yes that is me, yes that is my real flannel, yes that is my real stash.

How 'bout now?

2007-07-18T10:23:00.000-06:00

How 'bout now, can I trade it now...no how 'bout now...how bout now...and now?

So what do you do when it is near either a break out in a short term uptrend or resistance in longer term trend. GO WITH THE LONGER TERM TRADE!!!

I like the risk level now. It is about where it was yesterday as it is testing this 60 pip range going back and forth. A short position near 2.5880 with a stop up about 2.6100 seems like huge risk. Remember that the risk is 220 pips at about a 80 cents per pip or $176 per mini contract and realistically if I see a solid move beyond 2.5900, I will watch for an early exit. There is a solid resistance near 2.60 as well. These are all key levels to moderate risk for the potential target. If you are only risking the move to 2.60 that is about $100. Potential target...2.5560, 320 pips, $256. 2.5:1 risk to reward.

It is time we met.

2007-07-17T13:47:00.000-06:00

If you would like to sign up for this community, we can share pictures, thoughts and trades. Join the community down at the bottom right and let's meet.

GBP/NZD still a good short?

2007-07-17T12:05:00.000-06:00

I had an email questioning whether someone in GBP/NZD trade short could hang on to the trade. It is easier for me to show my point using my blog with some images so here we are.

First, it depends on where you got into the trade. If you went short and sold near resistance (at 2.6100) you are still very profitable, if you got in the trade lower and losing money you are probably struggling right now and looking to get out.

Second, it doesn't matter where you got into the trade, either it is a good trade now or it isn't. If you are in the trade now where do you see resistance. Money gained or lost in the trade at this point has nothing to do with the current set up.

I see the resistances at 2.6100, 2.5870 and 2.5880. Any of these points could be considered for shorting opportunities. You may note that we are at or near the lowest resistance level listed which correlates to the consolidation and resistance level 4-5 days ago and the support level tested on June 28th. I like this position from a risk stand point but I like this pair has a tendency to give large shadows and test your tolerance of larger stop losses. If you aren't short a position here with a 125 pip stop seems appropriate. If we close beyond the fib fan and the 2.5900, I would still be comfortable selling it near the 2.6100 again. Low risk--Great Potential.

This pair is great for practicing your long term trading strategies and getting better at understanding risk to reward ratios.

Good luck and Good Trading.

Just checking in

2007-02-12T13:12:00.000-07:00

I am just checking in as I have been able to free up a little of my time. If you are out there and still checking this blog on occasion or consistently, will you please email me at actsofforex@gmail.com or post a comment to this post?

Thanks
Blake

Another great site and a great book

2006-11-15T10:42:00.000-07:00

WWW.PROFITINGWITHFOREX.COM

Profiting with Forex introduces you to all the advantages of the global foreign exchange market and shows you how to capitalize on it. You will learn why the Forex is the perfect supplement to stock and bond investing; why it is unrivaled in terms of protection, profit potential, and ease of use; and how it can generate profits, whether the other markets are up of down.

You can get there by clicking above or the link to the right.

In case you haven't gone their yet.

2006-09-12T12:40:00.000-06:00

I have been posting to the INVESTOOLSCT.BLOGSPOT.COM site. This allows for you to see my postings as well as some other great traders. I will still occasionally post to this site but you should definitely visit the other too.

Boom Baby!!! GBP/JPY Bounce confirmed

2006-09-12T12:39:00.000-06:00

We always tell people, don't try to pick the top and bottom. Play the middle. Rules were meant to be broken. I have been fortunate enough to pick near the top (click here for the top) and bottom of the recent moves on the GBP/JPY. If you would have followed my trade yesterday. (click here to see yesterdays blog) and not been "faint of heart" you would be up 150 pips and climbing. Watch for the pull backs, understand your risk and then get rid of the emotion.

Gbp/Jpy going higher?

2006-08-31T15:06:00.000-06:00

The Gbp/Jpy is climbing apparently in an unstable undiminished run. Analyzing the pair a little closer, there have been and will continue to be plenty of signals of reentry/position adding as the pair rockets up. Many traders are sitting on the sidelines ahead of the non farm payrolls, there is no reason to avoid trading the crosses.

From a fundamental view, is there any reason this pair will stop running in the short term. Answer: NO. Many have said the pair is too high. Let's look at the components. Is the Bank of England OK with continued strengthening of the Cable? Of course, strong currency is a good thing for the Brits. Is the Bank of Japan OK with continued weakness in the Yen? They couldn't be happier, weak currency means strong exports and strong economy for Japan. Neither of the involved reserve banks have the intention of reversing this trend. If the non farm payrolls come out tomorrow negatively or low for the US showing continued slowing in the economy, what will happen to the pair? The Gbp will strengthen a lot as it is a strong currency right now. The Yen has been weak against the USD, a weakening currency matched with a weakening currency will not cause much change and what change occurs will be outweighed by the difference between the Gbp and Usd. No worries for the announcement or current fundamentals then.

Technically, we agree with the fundamentals (see graph). We have had a consistent bouncing at the Fibonacci levels throughout this climb. It would not be surprising to see a pull back tomorrow or Monday of upwards of 250-300 pips, giving an awesome entry position before running up to the -61.8% level or to the -100% level as market on the graph. If by chance we blast through the -38.2% Fib (223.85) in the next 2 days, I would not expect the pull back until the 226 level. If the pair was aggressive enough to reach the 226 level without a pull back, I would expect the next pull back to be more dramatic, possibly to the 222 or even the 221 level from the 226 ceiling. If we get a pull back now, the odds of another aggressive 600 pip climb is greatly improved.

Gold at a cross road

2006-07-18T17:48:00.000-06:00

When looking at gold, I see it standing at a cross road. One direction promises a brilliant bright shiny metal future, the other direction, dimming oxidation and a lack luster existence. As gold tests the bottom of this trending support, we see a divergence has formed on the 14.3.3 stochastics and has also moved to just barely out of the upper reversal zone (78%ile at close). If Gold continues down tomorrow, I will expect drop to $600, matching the width of the channel, the gap from 2 weeks ago and the consolidation in April. A further move could push Gold lower to $550, 2 channel widths and the prevailing support level from January through March.
A bounce off of the current channel or the 38% Fibonacci line at about $620 could be the confirmation to see Gold continue the bullish run back to the top of the channel near $680 if not the highs hit in May at $740. I would be willing to accept either direction with some confirmation. Tomorrow very likely will offer the clarity needed for a big move and sizable profitability.
My personal bias is to see Gold follow the divergence and stochastics losing ground and pushing to the bottom side. If you don’t have a futures account or account to trade spot gold, look at the AUD which is back in line with gold pricing after fighting the bullish move in gold previously in the year, the AUD seems to be correlated again. If you are looking to play gold weakness with the AUD but aren’t convinved that the USD can continue, look at the set ups with the AUD/JPY and the EUR/AUD, both are also at key levels of support/resistance.

USD/JPY

2006-06-26T16:04:00.000-06:00

Entry order expecting a break above highs over the 116.60 market with a target 118.30. This plays into major resistance and fibonnaci retracement levels. Stop near 115.50

The Eur/Usd is trying to tempt me to trade this long yet I am not really comfortable with the FOMC meeting on Friday. I am thinking of putting 100 pip entry orders both directions on the pair. Expecting a significant move back to the top of the channel or a breakout. It may remain flat all the way through Thursday.

Gold is relatively flat. Watch for a break above 602 and then a move to 610. A break above 612 watch for a move all the way to 635. The Aud/Usd is right near the 61% fib. If this bounces and gold breaks it could be a major reversal all the way back up to .7600 or higher over the next month or two. A break below could drop us to .7000. Short at .7250 with a stop .7380. If it breaks up with gold through .7430, I will be more aggressive and get in long.

Watch the Usd/Cad. Appears to be setting up for a bounce down. Pivotal point.

Blake Young

Random Acts of Forex

Eur/Usd

2006-06-13T10:44:00.000-06:00

Still waiting for a break/close below the 1.2550 level on the Eur/Usd. Same level mentioned earlier. Maybe an entry today, we are only 17 pips away right now. I am also looking at the Usd/Cad for a short position. This pull back could give a good entry price. Let's see what happens in the next 5 hours.

Blake Young

Random Acts of Forex.

He's ALIVE!!!

2006-06-07T22:22:00.000-06:00

Surprisingly, I am back. After finding good homes for my dogs, selling my house, moving to another house and launching trading rooms and the new OEC, I have carved out time for a posting. I felt this was very important to do as the ECB rate decision is due out in the morning. This decision comes at a very critical time. We had nearly a 750 pip run on the dollar but sentiment is uncertain. Many traders are still very bearish but I wonder if that is nearing an end. If the ECB raises rates higher than the expected, this could lead to a possible dollar catastrophe/panic. If the announcement is disappointing, it could be the catalyst to reverse the run. Taking a more conservative approach to the trade and waiting for a clear break out of the bull flag I see an entry at 1.30 with a target of 1.36 over the next 2 months, the reverse would be a close below 1.2550 and a target of 1.1950. See chart

6/8/2006
7:45 est
EU
ECB Announces Interest Rates
2.75% expected
2.50% previous

The other big trade I am watching is the Chf/Jpy. The pair has broke out of the ascending triangle and appears to be going for a small retest. A sudden move up could be justification for a long position and 250-350 pip target. See chart

I hope all is well, wish you the best of success and hope you are able to "print" some money on tomorrow's announcement.

Blake Young
Random Acts of Forex
actsofforex@gmail.com

Bad time for an update

2006-05-16T22:04:00.000-06:00

I know this is not the most opportune time for an update but I haven't had much time the past 2 days. I was stopped out of all my trades over the weekend and on Monday. I am getting back into gold. Looking for an entry on silver near 13.90 and then again at 14.05. Looking for a short position on the Cad/Jpy at 98.22. I am looking for a long position on the Eur/Usd at 1.2881. Looking for a short position on the Usd/Jpy 109.20. Straddling the Eur/Aud-- Long if it goes over 1.6860 and short if it goes below 1.6650.

I am really deliberating on a short position on the Eur/Chf. Gut feeling says it is a short position right now.

Instead I think I may just short the Usd/Chf. Can decide yet on this one. This would be a short 40 pip grab. If I wait and see the Eur/Chf go below 1.5450, this would be more sizable and maybe take us down to 1.5260 .

While typing this, my gold position has moved positive making up a large night time spread and is up $30 from yesterday's lows. Could be big day for the Aud/Usd. A push above 0.7740 will place me in a long trade anticipating a move higher to 0.8150 over the next 2 weeks.

Best of success

Blake Young

Random Acts of Forex

Updated Positions

2006-05-11T22:02:00.000-06:00

Got stopped out of most of the trades during the night. Re entered Silver and the Eur/Usd both long. See positions. I will try to write some comments on the week to come tomorrow. Remember trade balance is due out tomorrow. I may scalp a little in the morning if we get a strong movement.

Wild ride from the FOMC

2006-05-10T15:24:00.000-06:00

Up and down up and down,... up??? The news appeared to have a net zero effect on the market. Lots of whip saw on the event. I was stopped out of the Eur/Usd again and then got back in. So I grabbed a couple of dollars and re-entered the trade. Also added to the Gold and back in on Silver. Remember you can trade IAU and SLV if you would like to trade the ETFs/iShares for gold and silver.

We are back over 200% again and still have 2 weeks to go for the end of month two. With gold and silver breaking out, I think we have a good chance.

Good luck in your trading.

Blake Young
Random Acts of Forex