It’s that time of the month where we invite one of our readers to put pen to paper (or mouse to screen in this case) and give us an account of how they manage to find their way through the trading game.
This week Aaron will be bringing us his views all the way from Singapore so I’m sure you’ll join me in wishing him all the best this week.
Name (real or ForexLive name)
Aaron
Age 26 this coming August.
From Singapore.
Occupation (detail optional otherwise whether full or part time trader)
Metals Trader at Local commodities trading firm.
Trading experience*
5 years. Started monitoring stock markets during the big crash of 2008-2009 through the influence of my parents looking to invest
Started self learning FX and I must say much of my knowledge on FX was learnt from ForexLive.com. Grateful for such a wonderful site.
Currently trading LME Base Metals Derivatives for my full time job and still monitoring equities indices and fx markets on a daily basis.
Why you started trading?*
Interest in Macro economics and how changes in events affect price movement of financial assets.
Time zone you trade in*
Asian to close of London
Methodology* (Scalper, short, med, long term)
Short to medium term time frame. In terms of fx, looking at around 1-2% of price changes. Trend follower strictly, more on the immediate momentum time frame as I do not want to be a poor salmon swimming against the tide. It feels damn sick and tiring being that poor salmon trust me.
Using a lot of trend lines, fibo retracements. Patterns like wedges and H&S. Support turn resistances setup.
Just the old school stuff, nothing complicated to get those 100-200 pips out of the market.
Trades you are in or looking at*
Before I start on trades I am looking at I would like to put up my views on how I do trading.
Let’s focus on just the FX markets. Fundamentals or Technical’s will prevail? I must say it will definitely be the techs for me. Reasonable being techs shows us exactly how the market is trading right now. Where does the market go. And there is only one trader who is right when it comes to trading. And that’s the MARKET itself.
I am sure all of us have been confused by the markets countless of times. A good NFP report, yet USD can lose 1% on the news for some reasons such as over expectations on the markets coming into the report. Such factors are hard to predict by the average retail trader like myself. And I got to admit I am just too much of a lazy ass to really look at fundamentals and place a trade for fundamentals to occur and prove I am right.
Well than again, how can I be so sure that I am right with my fundamental analysis to start with?
Look at how many analyst have called for EURUSD to be at 1.20, since 12 months ago. And the trend has been just for EURUSD to be up. Nearing 1.4 over the weekend. Ok maybe Mr Mario bubbly coming out over the weekend to comment on more stimulus might be the game changer, but how much pips have been lost if one will really listen to the professional analysts who earn big bucks at the banks and all they can show us is a losing trade, compared to trusting the techs and stay long from 1.3.
To have more winning trades than losing ones, to ensure profitable trading, I guess a trader will just need to look at techs itself and not be affected by an fundamental news. This is applicable for all time frames in my views, with less application in longer time frames. But these days who trade long time frames? J Long time frames are also equally prone to whipsaws in time of large volatility.
Ok now enough of my crap. Let’s move on to the trades I am looking at.
USDJPY
No need to look at the chart of USDJPY as its not showing any trend at all. What it’s doing is basically in its range of 101-104 since the end of Jan 2014.
USDJPY 14 04 2014
It’s not showing any trend so this chart is useless for trend followers. Looks like good buy now for range players given we are at the lower band of the range. However, I am not a buyer here due to the fact that I am not a confident range trader, and also other markets which have correlation (S&P500) or positive correlation (Nikkei225) are showing me warning signs. Charts as below.
Chart of Weekly S&P500 from Q3 2012 to close of 11/4/14
Now this is interesting. The S&P500 have broken and closed under a long term trend line going back to June 2012. AND ON NO NEWS! Ok sorry for being contradicting when I tell you guys not to look at fundamentals. But let me do some simple analysis here to add into my story and view. The stock market was sold on no news. Winners are sold first (The generals of the bull market are the first on to be shot this time. Looks like it’s extremely shaky for US Equities bulls this time. And the possible downside story is the weak earnings that are coming in so far. + Russia of course bad ass Putin.
Immediate downside from chart prediction is 1800 which looks surely to be hit this week based on the previous range of 50 points. 1840-1890, followed by 1770 area base on the fibos. That’s another 3% off from Friday close. Certainly possible given the immediate bearish momentum.
Next the Weekly Nikkei chart.
THE ALL WONDERFUL H&S PATTERN!! ROARRR!!!!!
I can’t say we have broken the neckline of 14000 thoroughly enough to cause a big sell off. But it’s very near and any more falls in global equities markets will be a catalyst for further falls in the Nikkei225.
16300 head – 14000 neckline = 2300 points.
14000 neckline – 2300 points = 11700 target.
I really wonder. What price will USDJPY be if this H&S Pattern works out on the Nikkei? Looks like below 95 to me.
Not forgetting stops under 101.3, big stops below 101 and bigger stops under 100.7 for the USDJPY Pair.
I think its time to pay attention. Easy pips to be made if these levels do not hold. Traders can place sell stops under these levels with 100 pip stops. Each successful break of the mention levels will increase bearish selling for USDJPY. All hell will break loose under 100.7 followed by 100.
Of course, all this is based on the fact that global equities continue their blood bath from last week. The techs are on this side. It’s the bear’s playground now, which is what the techs are telling us.
Will this trade work out? Will we get the massive stop loss orders trigger for the long term USDJPY Bulls? I think we will know it this week. This is certainly something I am watching closely and if I must make a bet, I will trust the fall in global equities to continue given what the S&P500 and Nikkei Charts are showing at the moment.
Before signing off, I would also like to take sometime to pray for all the innocent children and civilians who are affected by the Russian invasion of Ukraine.
BBC report that both side of the forces have fatalities and it seem likely that this event escalates over time, now that Russia is proven to be hungry for more states other than Crimea. May the world be a more peaceful place.
I appreciate any comments on the comments section itself and I will do my best to follow-up when I can.
Thanks!
Aaron
