Technical Analysis - NZD/JPY

Hi readers

Today were going to take a look at a very nice setup on the NZD/JPY

As with yesterday’s technical analysis were going to use 3 charts for our technical analysis, The daily, 4 hourly and the hourly charts.

If we take a look at the daily chart below we can clearly see we are nearing a previous bottom that has failed to break several times forming a very strong support level.

On the 4 hourly charts we can see a potential double bottom forming.

Finally On the hourly chart we can see the pair has been ranging very strongly with 58.75 acting as our main support level for over 6 hours now giving us our long entry point.

Now for our entry!

We are looking to enter our trade at or just before the short term support level at 58.75; I personally have entered at 58.78.

For our stop loss we are looking to place it a short distance below our major support level on the daily chart, I’ve placed my stop 40 pips away from my entry at 58.40.

As for our take profit we have plenty of potential for a strong upward move, initially we will target 120 pips at the 50% Fibonacci retracement level of the latest downward move which happens to coincide with the psychologically significant 60.00 price level.

This trade gives us an approximate Reward: Risk ratio of 3: 1.

Remember to leave your thoughts and feedback!

Happy trading, Lee J Brown

http://www.profxblog.com/

Technical Analysis - NZD/USD

Hi readers

After last weeks failed Trade on the NZD/USD we are going to make another attempt to short the major pullback we saw after Friday’s news release and Bernanke's speech.

At the start of this month the NZD/USD clearly broke the strong uptrend we see form since the start of June as can be seen on the daily chart below.

Now if we look at the 4 hourly and the hourly charts below We now have a Fibonacci retracement drawn from the high of the 18/08/10 which also acted as a support level turned resistance to the low of the 25/08/10.

The pair has since tested the 78.6% Fibonacci retracement level where price was then rejected and has now broken below the 61.8% Fibonacci level in conjunction with the psychologically significant 0.7100 price level.

Now for our entry!

Ideally We were looking to enter on the break of the 61.8% Fibonacci level, i personally managed to just get in at 0.7098 but anywhere within 10 pips or so would still be ok for entry on this trade.

As for our stop loss we are looking to place it slightly above the most recent high at 0.7133, i personally have placed my stop loss 50 pips from my entry at 0.7146.

we are looking to place our initial take profit just above the most recent low at 0.6946, I have placed mine 140 pips from my entry at 0.6956.

This trade has an approximate reward : risk ratio of 2.8: 1

Don’t be a stranger and remember to leave a comment with your thoughts and feedback!

Happy trading, Lee J Brown

http://www.profxblog.com/

Forex Technical Analysis - USD/CAD

HI readers

Today we have a very basic yet effective setup on the USD/CAD!

Today’s technical analysis is nothing more than a couple horizontal support and resistance lines keeping the USD/CAD in a pretty nice range on the daily chart.

our major resistance line is drawn across the highs of the 07/06/10, the 05/07/10 and the 24/08/10 which as you can see below is holding very nicely!

We then have two major support lines drawn up, the first connecting the lows of the 10/06/10, the 13/07/10 and the 18/08/10 which has been broken several times and then acted as resistance given us a bearish bias.

The second of the major support levels connects the lows of the 03/05/10, the 13/05/10, the 21/06/10 and the 05/08/10, a price level which has not been broken since the end of April this year.

Ok now for our entry!

I personally have entered short at 1.0612, ideally you would want to enter anywhere above 1.0600 but as this is a longer term trade a late entry shouldn’t dent your reward: reward ratio too much.

As for our stop we want to place it a little further than the major resistance level we’ve identified, I personally will be placing my stop at 1.0690 giving me a stop loss of just under 80 pips, however if you wanted to be a little more conservative in your stop placement you could place it 10 – 20 pips further than the psychologically significant round number at 0.0700.

We have plenty of downward room for a nice 300+ pip take profit, I personally will be placing my initial take profit at 1.0300 but if the pair gathers some momentum I will consider moving it down to 1.0180 and possibly even further.

Hope you guys have enjoyed reading

Happy trading, Lee J Brown

http://www.profxblog.com/

The importance of keeping a trading journal!

Hi readers

Today i wanted to address something you probably hear over and over, and that’s the importance of keeping a trading journal!

now i know most of you find this a very tedious task and you may not see the importance of it, to most of you keeping a trading journal most likely means a spread sheet of all your trades and calculating a number of factors, etc. which can be extremely time consuming however there are a number of websites that offer free software to analyse all your trades and give you detailed summaries, percentages, charts and much more features that will greatly boost your trading results.

One of these websites that i use personally and can only praise for their excellent software, customer support and continuous updates is http://www.myfxbook.com/.

After going to the above website simply follow the instructions for setting up your account, the software will then generate a page based on your trading history to include all useful statistics and summaries of your trading, the software will also automatically update itself every hour to show your latest trade statistics.

Now let me get to the actual importance of a trading journal and the many benefits it can add to your trading!

As most will already know Forex trading is a numbers game with no certainties just probabilities, a successful trader has to put the probabilities in his/her favour to give them an "edge" making them profitable in the long term.

In order to be profitable in the long run a trader has to know their edge and in turn has to know their win ratio and their average reward: risk ratio in order to give them a positive expectancy.

Once you know these statistics you can then begin to tweak your system further using more advances statistics such as which pairs have the highest win rate and Reward: Risk ratios or at which times of the day are more successful than others.

Without a trading journal or software that offers you detailed statistics you are trading blind, not knowing your edge is a recipe for disaster.

So if you do not already keep a trading journal or use some sort of trading analytical software or website start now!

You will reap the rewards in the long run!

Hope you've enjoyed reading

Happy trading, Lee J Brown
 
http://www.profxblog.com/

Today's Forex Technical Analysis - USD/JPY

Hi readers

For today’s technical analysis we have another one of my favourite pairs, the almighty yen!

I've been trading the downtrend on this pair for several weeks now with great success as it has become very predictable, following the same pattern time and time again.

First thing is the channel it has been in since the start of june which it has failed to break several times.

You may have also noticed the pair has been respecting support levels turned resistance very strongly as you can see in the below chart with the 85.10 as it did previously with the 86.20 price level.

There are no apparent signals showing an end to this strong bear market, fundamentally the yen has gone from strength to strength providing plenty more down room for the pair, it continues to make new lows and potentially reaching price levels we haven't seen since April 1995!

So now for the entry!

We have a Fibonacci retracement drawn up from the highs of 20/08/10 to the lows of the 24/08/10

We are now looking to enter on the pullback between the 50% and 61.8% Fibonacci retracement level, price has moved past the 50% fibo level and failed to reach the 61.8% level so we will be entering at the retest of the 50% price level at 84.69.

As for our stop we want to place it a reasonable distance above the most recent major resistance at 85.10 so i am going to place my stop 50 pips away from our entry and 10 pips above the major resistance at 85.20.

As for our take profit we have plenty of room for a further downward move, i will be placing my initial take profit at 83.00 but will again be looking to re-enter on another pullback!

This trade gives us an approximate reward to risk ratio of 3.4 : 1

Hope you've enjoyed reading and if you have any comments please feel free to leave them below

Happy trading, Lee J Brown

http://www.profxblog.com/

Forex Broker Review OANDA

I have been trading with Oanda for a number of years and i have to say they are by far the best broker i have ever traded with so i feel they deserve the honour of my very first review here at ProFXBlog.

Im sure many of you will have already heard of Oanda as they are one of the worlds largest and most reputable brokers, If not then you definately need to read this review because you are missing out!

Oanda has by far some of the best spreads in the business, Although spreads are not fixed they do tend to stay consistant during normal market hours and only widen when all markets are closed or for a few brief minutes during major news releases such as the Non Farm Payroll Reports or Interest Rate Decisions.

Their typical spreads are:

EUR/USD 0.9 pips

USD/JPY 0.9 pips

USD/CHF 1.3 pips

AUD/USD 1.4 pips

EUR/JPY 1.5 pips

GBP/USD 1.6 pips

NZD/USD 2 pips

GBP/JPY 2.2 pips

Yes you read those numbers right, some are actually less than 1 pip!


Not only does Oanda offer extremely tight spreads they also offer something no other broker does, Flexibility!

Oanda dont just allow you to trade standard lots (100,000 units)

Oanda dont just allow you to trade mini lots (10,000 units)

Oanda dont just allow you to trade micro lots (1,000 units)

They allow you to trade individual units!

yes thats rights you can only actually trade 1 unit, 12 units, 542 units or whatever amount fits in with your money management for your account balance!

Oanda offers a max leverage of 50:1 which is more than enough for any experienced trader and also helps prevent the inexperienced from overleveraging themselves and blowing their account.


Oanda allows you to open an account with as much or as little funds as you want, you can choose which currency you would like your account balance in and you can also create up to 13 sub-accounts in case you want to try different strategies, hold accounts in several different currencies or anything else you can think of to use these sub-accounts for!


Oanda also offers an unlimited demo account to try their platform as well as a facility for account managers to manage client funds!

Oanda has a free mobile trading platform for both the Iphone and the android market, i use the app on both my G1 and HTC wildfire and it is a simply amazing app.


There are also many other free tools available to download at Oanda's FXlab which is constantly being updated by their programmers.


So in conclusion Oanda is by far the best broker i have ever had the pleasure of dealing with and i would recomend them to any trader new or experienced.

Lee J Brown
 
 
http://www.profxblog.com/

Technical Analysis - NZD/USD

Hi Readers

Today were going to take a look at one of my favourite currency pairs, The KIWI!

Now i've been eyeing this setup for awhile but i think were finally ready to see a major break lower, The bearish pennant is tightening and has held well over the past few days.

The pennant seems to be forming slightly above a previous strong resistance level and also the psychologically significant price level of 0.7000 forming somewhat of a support area between 0.7000 and 0.7025

We should be looking to enter above the support area somewhere in the region of 0.7030 and 0.7040.

We should place our stop just above the previous significant high at around 0.7125 - 0.7130 giving us a stop of under 100 pips.

Our take profit should be placed just above july's low 0.6825 giving us a take profit of just over 200 pips for a total reward to risk ratio of over 2:1.

Hope you've enjoyed reading and if you have any comments please feel free to leave them below

Happy trading, Lee J Brown

http://www.profxblog.com/

Discretionary Price Action Trading!

Hi readers

Today i wanted to cover the topic of discretionary price action trading, what it is, what it isn't and most importantly why you should be using it.

As most will have heard or know from experience most indicators are lagging indicators, lagging indicators use previous price behaviour to paint a more visual image of what the market has already done. people trade these lagging indicators with the assumption that the market will continue in its current direction just because their 13 period Exponential Moving Average has crossed over their 50 period Exponential moving average for example.

Another example of lagging indicators being Stochastics and the Relative Strength Index, these indicators simply tell you that there has been a lot of buying or selling of a particular currency during a particular timeframe. Again traders will trade these lagging indicators on the assumption that price can only move a particular distance before becoming "overbought" or "oversold" and run out of momentum.

These lagging indicators are all based on assumptions, mathematical formulae, inflexible systems and give you no idea of what the market is actually doing in that point of time, Lagging indicators give you no indication of where you should place suitable take profits or stop losses, they simply attempt to predict the direction the market is going to move.

There are many reasons why these systems just simply wont work in the long run.

The forex market as with all financial markets are forever changing and we as traders need to learn to adapt
to this, be flexible and willing to constantly read what the market is telling us.

Technical systems based on lagging indicators dont have the capability of doing the above, as i mentioned earlier they are inflexible and cannot be programmed to adapt everytime the market has a shift in sentiment or volatility.

ok So now we've established all the Moving averages, MACD, Bollinger Bands and all the other technical indicators in the world arent going to make you a successful trader what will?

Discretionary Price Action trading!

For those of you that dont know what this is, its definately time you learnt, and fast or you will inevitably blow your account chasing the elusive holy grail forex system.

Discretionary price action trading is not a technical indicator, its not even a combination of indicators, its reading what the market is telling you about price behaviour and movement in the PRESENT.

It can tell you when the current move is running out of momentum through candlestick patterns!
It can tell you when the current move is going to continue at a rapid rate on the break of important support or resistance!

It can highlight possible retracement areas with the fibonacci ratios!

It can warn you of a major move even before it happens with breakout chart patterns like flags and pennants!

So if Discretionary price action trading is so great why isn't everyone using it and why is it not all over my forex brokers website!?

The simple answer is you cannot buy Discretionary price action trading in a packaged, advertised and marketed commercial trading system. Learning to trade Discretionary price action requires skill, education, patience and time.

Discretionary price action takes years to master, and by master i dont just mean understanding and being able to use price action, i mean being able to feel the market, being able to use your own discretion when it comes to judging the strength of support and resistance, whether or not that particular fib level will hold, whether the preceeding trend is strong enough to trade that particular inside or pin bar , whether that potential candle pattern your watching will form or fail.

Discretionary price action trading requires you to constantly think, analyse and adapt along with the market
and this is why it is so powerful!

So from this day forth throw away your lagging indicators, pull up a naked chart and start looking at what the market is telling you right now, i guarantee you will not regret it!

If your not quite sure where to start when it comes to trading price action take a look over at my website, over at the daily technical analysis blog everyday i post my technical analysis and potential set-ups for a range of different currency pairs.

Happy trading, Lee J Brown

http://www.profxblog.com/

Forex Technical Analysis - AUD/USD

Morning fellow traders!

Here as promised is my first technical analysis post for the AUD/USD.

Looking at the chart below we can see a very clear head and shoulders pattern where the neckline has formed just above a previous resistance level!

Our bearish expectation is also supported by a very accurate trendline drawn from the highs of the 09/09/10 to highs of the 23/08/10.

As you can see price has already pierced our support level giving us a signal for entry and now were just patiently awaiting the much anticipated breakout!

I personally will be placing my stop loss at 0.8990 just above the latest high although you could be slightly more cautious with your stop and place it above the high prior to that at .9020.

I will be placing my take profit a very conservative 155 pips from my entry at 0.8700 but again for those slightly more ambitious traders you could target as far as 0.8600 - 0.8550.

Im looking forward to hearing some of your feedback and opinions on this call, come on dont be shy you all know where the comment box is!

Thanks for reading and happy trading to all!

Lee J Brown
 
http://www.profxblog.com/

Introduction

Hi and welcome to my First post!

I thought I’d start with a very brief introduction of who I am and what I do.

My name is Lee J Brown and I live in London, Uk.

I am a full time forex trader with a little over 4 years experience now.

As a full time trader I have a lot of spare time to spend with my son, friends and family but there are many hours in the day when trading can become quite a lonely and isolated profession, which is why I’ve decided to start this blog, here I will be posting general advice and tips on trading, everything from discipline and money management to technical analysis and weekly forecasts.

Everyday I will be posting my technical analysis and potential setups along with charts.

The technical analysis posted will range from short to long term trade ideas as well as just daily overviews of particular currency pairs current price behaviour and possible scenarios based on my analysis.

All of my analysis is based on price action, you won’t find any MACD or RSI here, Just plain old support and resistance, the occasional trend lines, candle and chart patterns along with my personal favourite Fibonacci.

Feel free to add your own opinions on my analysis by leaving a comment.

The daily technical analysis will start from tomorrow so bookmark this page and stay tuned!

I hope you all enjoy my work and i look forward to your responses.

Happy Trading, Lee J Brown

http://www.profxblog.com/