This is a video summary of the Live Forex Trading Room session on November 6, 2007.

Today’s Summary, by Sunil Mangwani:

There was one intraday trade taken today which went off very well. I would like to concentrate on this trade today and the process which gave us the necessary confirmations to enter the market correctly.

It was a Yen pair on which we traded, but thats not how the trade started out. Lets have a look at the sort of correlations we were looking for.

We started off analyzing the EUR/USD. This pair has been in a bullish intraday phase, and we plotted some 1-2-3 Formations and applied our Fibonacci Expansions. Based on the Expansions, we knew that a certain level has yet to be satisfied. We were thus bullish on the EUR/USD, expecting it to go up.

From here, we went down to the Yen pairs, and compared the EUR/USD to the EUR/JPY - the two pairs should move in tandem. The Yen pairs have been on a rally today as well. We plotted Fibonacci Fans on the EUR/JPY 30 minute charts, and noticed that the price was close to breaking out of the top 88.6 fan level. We were very much bullish on this pair as well.

Moving further down to the GBP/JPY - one of the pairs we trade on a regular basis in the room. We call it “the green-eyed monster” - it moves really fast! We were looking for a proper entry to get into this trade. We plotted our Fibonacci Fans AND the Fibonacci Expansions - and found a confluence of two Fibonacci ratios at the same level, as an expected target, and entered upon the break of a Fibonacci Expansion level.

The conclusion we derive from this - Yen pairs are on the bullish side, EUR/USD on bullish side, GBP/JPY should also probably rally during the day. So which is the pair among all of this which is giving us the correct technical entry? We are technical traders - we don’t just enter a trade because we assume it will go Long or Short - the GBP/JPY fulfilled our probabilities very nicely.

We have looked at correlations. We applied our studies. We let price give us a confirmation about what its going to do and where its going to go, and then entered the trade based on our technicals. We knew where we must enter, we knew where to put our stop, and we knew where to take profit - only when you plan your trade will you be successful consistently!
Enjoy the video!

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