Thursday, January 5, 2012
For the past 2 days we've been observing massive weakness in the Euro across multiple currency pairs over more concerns with European Sovereign Debt and Bank recapitalization issues. Although Mario Draghi & the ECB stepped in to offer cheap money through the 3-year LTRO (Long Term Refinancing Operation)back in December, was this still enough to backstop all of Europe's financial woes?
For today, we saw a ~150 pip slide in the EUR/USD pair to a 15 month low, despite the decent French bond auction and surprising ADP Employment number of 325K that beat economists expectations by 149K. Although this headline number far surpassed it's forecasts, we did not see a huge market reaction to the report. This proves that most of your institutions & hedge funds were sitting on the sideline to see what tomorrow's NFP (Non-Farms Payroll) report would say about December employment, in comparison to today's ADP number.
We started today's webinar by discussing how to trade news events using the Slumdog Forex Trading System. During news releases or economic reports, you may see a surge in volatility, and you may have to adjust your trading plan accordingly. However, there are times when you may not see a reaction at all. Rather than predicting where price should go during an economic report, it is recommended that you wait a few minutes until price action shows you where trend sentiment lies.
Towards the end of this video, we entered a few live trades in the EUR/USD pair.
Tuesday, January 3, 2012
We start the first webinar of the year by introducing traders to the 100 Simple Moving Average & 200 Simple Moving Average lines Both of these moving averages serve to identify good areas of support & resistance, as well as, trade entry & exit points. We also briefly discuss the ATR (Average True Range) & Bolinger Band indicator and how they are used to measure market volatility. However, the best indicator for analyzing volume, momentum, and volatility is in observing current price action, or how price is moving over time. Understanding how price behaves around areas of support & resistance is key to being successful in your currency trading.
Since late Asian Trading Session, we have seen a ~140 pip rally in the EUR/USD pair due to an increase in market risk appetite. The US economic data is showing signs of slow improvement and this is causing equities, and some commodity currencies to rally as well.