This is a video summary of the Live Forex Trading Room session on October 8, 2007.

Today’s Summary, by Sunil Mangwani:

Besides the trades that we execute, these recaps are becoming more and more important for the procedures which we use to analyze the trade, and the different tools we have in our toolbox to correctly assess the situation and make a good trade. Lets go over the different procedures we follow which hopefully culminate in a profit.

On the GBP/JPY, 1h charts, what we were looking for is a Hidden Bullish Divergence - waiting for price to come and find support at a Fibonacci Fan level. When it did so, we went Long on this pair, and managed to capture some profit on the upmove. This was a decent trade, but he point is that we identify a situation and use our tools to let price give us a confirmation.

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This is a video summary of the Live Forex Trading Room session on October 5, 2007.

Today’s Summary, by Sunil Mangwani:

The first Friday of the month always has big fundamentals, along with NFP (non-farm payrolls) data, setting the tone for the month. On that day, generally price moves in a range until the release of the economic data, and then you do get a lot of movement. A lot of folks wait to trade this data - should you or shouldn’t you? That is the question.

Normally we do not advise trading such news unless you have a very good broker that can fill you in with minimal spread, which can be very difficult to find.

Is it worth trading the NFP? Can we find some method that makes trading this important news release palatable? At the release of the data, we do not go into a trade to catch those big 150-200 point spikes - we wait for the dust to settle. Being technical traders, we rely on technical patterns. Call it coincidence, or technical trading at its best - either way you look at it, this could be one way you could look at trading the NFP data.

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The Pivot Point System is a technique developed by floor traders, to help ascertain where the price is relative to previous market action. It can be classified as a technical indicator derived by calculating the numerical average of the high, low and closing prices, of any currency / index / stock etc.

A look at market movement tells us that price always fluctuates between a level of support and a level of resistance. Properly identifying key support and resistance levels can improve the ability to enter, exit, and manage your trades.

The pivot point is a level at which the sentiment of the market changes. It can tell us where the sentiment of traders and investors changes, from bull to bear or vice versa.

The main advantage of this technique is that it is price-based as opposed to indicator-based. By the time most indicators generate a signal, the move is already well under way. By following this system, one can get into a trade before the indicator-following traders, and be well into the trend when a signal is just being generated on a stochastic or other oscillator.

In its basic interpretation, we can say that if the market breaks the Pivot level up, then the sentiment is said to be a bull market and it is likely to continue its way up, on the other hand if the market breaks this level down, then the sentiment is bearish, and is expected to continue its way down.

Also at this level, the market is expected to have some kind of support/resistance, and if price can’t break the pivot point, a possible bounce from it is plausible. (more…)

This is a video summary of the Live Forex Trading Room session on September 27, 2007.

Today’s Summary, by Sunil Mangwani:

Good day today, with several good moves and great trades. Lets start right off with continuing where yesterday’s recap left off.

The GBP/USD has been Long into a trade since yesterday, based on our Divergence strategy. The price went up and reached our Fibonacci targets exactly as we estimated. The fib ratios and systems we use are very, very effective. Price paused at the 127% fib retracement level, and went up to the 161.8% level, where we closed off our trade for a profit of about 170 points. An excellent trade.

On the intraday basis, we had another trade on the EUR/USD. We went Long at a Hidden Diverence - higher lows on price, double bottoms on stochastics. This Hidden Divergence is supported by Fibonacci Fans, and we calculate our targets based on Fibonacci Expansions. You can see the accuracy of this long move up - price stopped right at the expansion level of 127%. Another excellent trade for about 50 points.

On the intraday basis as well, on GBP/JPY we were looking at a Triangle Break. We had plotted a Triangle on the 4h charts and were waiting for a break based on our Rules of Thumb for Triangle formations. Another effective trade of about 150 points. An excellent trade for our students and instructors.

I also want to show the effectiveness of our custom FXI Pivots indicator, usable on both Daily and Weekly periods. In this case we are using it on Weekly data, and it has proven very effective. The levels of support and resistance and the range for the week give us signals to enter a trade on the EUR/CHF, for a profit of about 120 points. As one of our members put it - a “walk in the park”.

All in all, an excellent day more than compensating for several slow days.Enjoy the video and see you next time at our Live Forex Trading Room!

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