This is a video summary of the Live Forex Trading Room session on November 19, 2007.

Today’s Summary, by Sunil Mangwani:

This was the first day of the week, and as the market opens, we generally try to look for gaps. Weekend opening gaps are quite effective, and there is a method to trade it. It usually succeeds quite well.

AUD/USD opened with a gap. The general theory is that when price opens with a gap, the market will come back to fill the gap most of the time. If the gap opens to the upside, we tend to target short trades. Subsequent to price filling the gap, it gives further clues on the expected further movement.

The gap begins to act as a sort of channel. As we can see on the AUD/USD intraday, price closed the gap, went beyond it, and came back to retest it, which gave us the indication that price would remain short for some time.

Similar situation on the NZD/USD. Price initially did come to fill up the gap, and gave us some retracements and pullbacks, but ended up coming back down like the AUD/USD.

Intraday, we’ve had a look at the fast-moving GBP/JPY. There was a Double-Top trade taken by some of our subscribers. Double-Top can be considered a sort of 1-2-3 Formation. For this type of chart pattern, we plot Fibonacci Expansions.

We were targeting FE 161.8, where the price stopped quite accurately. It was also in the New York session where the GBP/JPY gave further downward movement, though this was mostly because the Yen-based pairs are closely related to the Dow Jones.

Tomorrow as the market settles down we should be seeing more trades to make. Enjoy the video!

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