The Alba System Journal- EUR/USD intraday system

[Big Pippin]

Forex Trade- 8.02.06- 1 Trade Lost

Seeing as how there were no major news reports today I expected there to be a lack of movement. However, I did see an Alba signal at 9:20 am EST and I entered 3 lots long at 2813 with a stop at 2797 and a target at 2822. I felt good about the trade because my target was within the EU range but unfortunately it didn't work out for me. I ended up getting stopped out of all 3 lots at 11:00. Hopefully the rest of the week will be better. Cheers! ~Big Pippin

Results: -48 -9(spread) = -57 pips

 

[Big Pippin]

Forex Trade- 8.03.06- 1 Trade Lost

Well unfortunately even with the Interest Rate announcement I wasn't able to grab any pips today. At the close of the 8:40 candle (8:50) I saw an Alba breakout and I entered 3 lots long at 2825 with a stop at 2788 and a target at 2847. The Euro could not move any higher and made a sharp reversal and stopped me out on all 3 lots at 10:50 am EST. It was a pretty bad loss today but it's still early in the month so we still have a lot of time to make up for it. Hope you all had a good trading day today. Cheers! ~Big Pippin

Results: -111 -9(spread)= -120 pips

 

[ed45626]

Did you stop trading? I was watching to see how the results were -- especially since I do momentum trading and was comparing the breakout trading results.

 

[Big Pippin]

Wow! It's been awhile!

For the few of you who actually read my little journal, you've probably noticed that I have been gone for about a week now. Where have I been hiding? The answer is that I took a nice week of vacation in Las Vegas. Although it was extremely hot, I had a great time getting away from the norm of my daily activities. Needless to say, I haven't been trading since I've been gone and I actually had a little scare traveling back. The airline I was with lost my luggage (including my laptop) for a few days and it really had me frustrated and upset. Thankfully, they were able to find my bag and everything was still there and in one piece. So now I write to you on my newly recovered laptop and just want you all to know that I will be resuming my trading starting tomorrow.

Thank you for all your emails with your concern. I really appreciate them! Now it's back to reality and I'm refreshed and ready to get back to trading!

Cheers,

-BP

 

[Big Pippin]

Forex Trade- 8.16.06- No Trade

Well with the first day back, I saw no action. Actually, let me re-phrase that: there was plenty of action, but I didn't get any of it...hmm...sounds kind of like my love life!

With the narrow EU range, I knew there would be a breakout, especially with all the news coming out today. Sure enough, after the CPI report at 8:30, the Euro broke through the EU high. I saw a good breakout on the 9:10 candle but we also had news at 9:15 so I didn't take the trade. After that, the movement was pretty much done and the price hovered around the 2850 level. So there was alot of movement today, but unfortunately I couldn't find any good entries. I'll have to wait another day. Hope you all had good trading days today. Cheers! ~Big Pippin

Results: +0 pips

 

[Big Pippin]

Trying something new...

Instead of just posting my trades from one system, I'd like to start writing down my thoughts. In addition to posting my Alba trades, I will also try to make an effort to post more in-depth thoughts, not just on the EUR/USD but on any pair where I see potential trades. The idea is that hopefully my journal will serve as a guide for you if you trade full time or would like to see what goes on inside the mind of full time trader. You will see my thoughts, not just on the market, but my emotional thoughts. I will post trading rules, economic events, my game plan, and then I will analyze my actions and criticize what I did for the day. Did I stick to my rules? How did I feel about my trade? What can I do to improve? All these things will help give me a better perspective on myself as a trader and hopefully it will inspire you to do the same. By analyzing yourself you can figure out where you are in your trading career and make efforts to improve in your weaker areas. So with that said, this will be my first post


My overall view of the dollar right now is that it has reached a peak. We all know that the Fed is most likely halting its interest rate hikes, but the impact really lies in the fact that the BOE, ECB and BOJ seem to be on the verge of continuing to raise their rates. Interest rate differentials play a key part in trading and I can see the dollar going down throughout the next several months. We can already see the signs of it as US data is getting weaker. Strong data in other economies will also help accelerate the dollar decline so I would pay close attention to them.

Since it was my first day back to trading today I felt very refreshed and excited to trade. Normally, when I get excited, I tend to overtrade, but over the years I've learned to control my excitement and hold out until I actually see a good trade instead of just seeing what I want to see. I didn't take any trades today and although I would've rather had positive pips, I'm proud of myself for not making any dumb trades. It was especially tempting since there were plenty of economic reports to fuel the market movements but I did not see any good entries. I'm glad I controlled my temptation to jump especially since my chart was moving so fast during those times.

There is one pair that has particularly caught my eye and that's the AUD/USD. I see a potential for a good long trade on this pair. One reason is that I am dollar bearish and the second reason is that there is a perfect order lining up. If you don't know, a perfect order is when you have several moving averages ranging in different periods (fast MAs and slow MAs) and they all cross over each other so that they all line up. For example, if you have a 5, 13, 30, and 64 SMA, you would look for the 5 to be above the 13, the 13 to be above the 30, and the 30 to be above the 64 for a long trade and vice versa for a short trade. Perfect orders are great for determining trends and right now, the AUD/USD is showing a set up for a nice long trend. I am using a daily chart for this because this will be a longer term trade.

I am going to look to buy when the pair breaks its most recent high which is at 7712. I will place my stop a few pips below the most recent low which is at 7583. So I'll just place my stop at 7573. My target will be double my risk so that I will have a 2:1 reward to risk ratio. Since I will be risking 129 pips on this trade I will go for 258 pips. My target will be at 7970.

I'm not sure if this will happen tomorrow but I'd like to see this trade trigger within the next 2 days. If it doesn't I will re-evaluate the trade.

The only piece of news I will watch tomorrow will be the Jobless claims at 8:30 am EST. I don't know if this will have a strong affect on the market but if it's a big increase, look for the dollar to fall.

That's all I can think of for today. I don't see any other trades right now. I will continue to trade Alba, and I will also watch the Cable for potential trades.

-BP

 

[Big Pippin]

Dollar fights back

The dollar made a late comeback after the Philadelphia Fed Index came out at 12pm EST. The index came out at a much higher number than expected. Top that with the lower jobless claims and you get a pretty good fundamental day for the dollar. Add to that the weak EU data (CPI, and IP) and you can get an idea of why the dollar was able to gain its ground. I was also reading around and found that another thing keeping the Euro from rising is the fact that there are so many existing long positions right now. If you look at the daily chart (see below) you'll notice that there was a huge rally in the Euro from March to May and since then the dollar has been stuck in a range. Also notice how the price has bounced twice off of the 38% Fib level. This is telling me that the Euro rally may not be over as more traders are buying off of dips.

The widespread sentiment seems to be the at the Fed will most likely pause in rate hikes. The bigger question now is what will the ECB do? With weak data coming out like today for the Euro, the question of whether or not the ECB will raise rates before the end of the year is still up in the air. We are definitely in a range for the Euro albeit a wide range (2950-2500). I think traders will still be buying on the dips of the Euro so I will look at possible long entries on the 00's (i.e. 2700, 2600, and 2500). Short term, I think the dollar will gain a little more ground, but my longer term view on it is bearish.

My AUD/USD trade from yesterday did not trigger as the dollar made a nice gain against the Aussie. I am removing my entry order as I wanted the trade to trigger today. I will keep my eye on it and wait to see what happens before looking for another entry.

I don't really see any good trades right now, so I will not force anything. My goal is to see only what the charts give me and not to let my eyes fool me. I've looked at all my charts and have not seen any good setups for tomorrow so I will continue to wait. Tomorrow, my only trading will consist of the Alba system and I will look at the Cable. I am trying something new on the Cable so I am anxious to see if it will work out.

The only economic report that I will watch out for tomorrow is the University of Michican Consumer Confidence Index which comes out at 9:45 am EST. The number is expected around 83.8. I don't think it will move the market much unless there is a big drop in the index.

The Alba system once again kept us out of the range bound market from 8am-12pm. You can see from the chart that the Euro didn't go anywhere until after 12pm. Unfortunately by that time, I was already done trading for the day. I do feel "left out" as I wasn't able to grab any pips as the dollar made its move but once again, I stuck to my time frame rules and stayed out because it was already past 12pm EST.

Alba result: +0 pips

That's it for me today. Have a great day everyone!

Related charts:

 

[Big Pippin]

Start your weekend early with "Boring Friday"

This entry will be shorter than normal. Why? Well today was about as boring as having to actually do "real" work.

Let's see, the University of Michigan's Consumer Confidence report came out today at a lower than expected number at 78.7. Even with the low number, the Euro failed to make any new gains against the dollar. My theme is still the same as it was yesterday. From what I've read, it seems that the Euro will have a hard time gaining more ground on the dollar because of all the existing long positions in the market. 2700-2900 seems to be the buy/take profit levels. My gut tells me that the dollar won't be able to make it lower than 2700 and if it does, I seriously doubt it will go any lower than 2500. With the dollar sentiment getting weaker, I think that when these levels are hit, traders will add or go long to get in at a good price. I read that less than 20% of traders believe the Fed will raise interest rates so I don't see how the dollar will make any strong improvements.

On the other hand, the Euro-zone data isn't looking so hot either so an interest rate increase is still up in the air. This, coupled with the high number of existing long positions leads me to believe that the Euro will have a hard time getting past the 2900 level at this point.

As far as the other pairs I am watching, I don't see any good setups yet. Everything seems to be in range which makes sense to me as there are no clear fundamental trends yet. All my technical analysis shows consolidations at this point. I will not force anything and will wait until I see something worthwhile.

Trading for me today was pretty boring as I stared at my charts waiting for something to happen, but nothing ever did. Not everyday can be exciting and sometimes, boredom is just part of the game. The key is to take it in stride and not to get frustrated when you can't find a trade. Don't ever feel like you "have" to make pips everyday. This will most certainly get you into trouble. I used to struggle with this for a long time even though I heard the warnings of other traders. Sometimes you just have to learn it on your own but if you can learn to be patient now, you'll have a jump start to a successful trading career.

Alba was also uneventful today. You can see from the chart that the Euro stayed within the EU session range and I didn't see any breakouts. According to my rules, there was an Alba signal at the 9:40 candle but if you read my post yesterday I was watching out for the Consumer Confidence report at 9:45 so I did not take the trade. Other than that, there was really nothing too exciting.

Results: +0 pips

Well that's my ramble for today. Hope you all have a great weekend!

-BP


Related Charts:

 

[Big Pippin]

Rules are made to be broken

This week looks to be a quiet one as far as economic reports is concerned but that doesn't mean there won't be any excitement. The Euro has already made some moves today as it made a new 20 day high against the dollar. Today's move was probably caused by 2 things: the first is that traders' expectations for the Fed to increase interest rates is reducing, and the second is the better than expected trade balance for the Euro-zone. But even with the new high, notice how 2900 still seems to be the level to break. As I write this, the Euro is slightly under 2900 which confirms my speculation that the Euro will have a tough time making any more gains. I mean, sure, the Euro got as high as 2938 today but what exactly constitutes a clean break? You often hear about people talking about how they will go long or short when a price can break a certain level but how do you define a break? To me, a break cannot have a clear definition. You cannot put a set number of pips and use that as your definition of a breakout. It's possible to use a set number of pips as filters for your trades, but a breakout is very tough to pinpoint. In today's example we see that 2900 was broken by 38 pips and yet at the end of the day, the price has settled back to just under 2900. It's obvious this level still is creating strong resistence. So how will I define a break? To me, the real story lies at the end of the day. What does the market close at? If by the end of the day, the Euro makes a clear break of the 2900 level, then I might consider the pair to have broken that level.

What's causing this resistance? From what I keep reading, it seems like the biggest underlying factor as to why the Euro can't make any new ground is because of the overwhelming amount of existing long positions. This is also serving as a take profit level for traders who are currently long. Another reason is still because of the speculation as to what the ECB will do. There is not a strong enough sentiment for the Euro yet as the data hasn't really given a clear fundamental trend although today's strong trade balance does provide a start. In order for the Euro to make a strong move I would look for 2 things: A sharp decline in fundamental US data or consistently strong fundamental EU data. Either of those should give traders enough confidence to take a position.

Across the board, I still don't see any good trade set ups. Everything I look at seems to be in consolidation mode, especially the USD/JPY. Open up a daily chart of the USD/JPY and you'll notice some tight consolidation. I would expect some sort of breakout in that pair soon. Other than that, there are no pairs that I'm excited about and unless something drastic happens, I'm not sure if anything will develop this week.

For tomorrow, the ZEW economic sentiment at 5 am EST will be the report I look out for. If for some reason the number is above 15.1 (which was the previous number) I would expect to see a sharp spike in the Euro. I will also see if any of the Fed presidents say anything that might cause the dollar to drop. The Atlanta and Chicago Fed presidents are set to speak at 1 pm EST.

Now- regarding the title of my post. Many of you know that I am a stickler when it comes to my trading rules. Well today I must confess that I broke my rules. But before you gasp in disbelief, I must tell you that I did it with very good reasons. Today there was an Alba breakout on the long side but the breakout occurred above the 2900 level. If you've been reading my posts recently, you've seen me rant about how I don't see the Euro making any strong moves above 2900. With the lack of strong Euro sentiment and the large amount of existing long positions, my gut was telling me that the Euro was going to drift back down below 2900. Although the price got as high as 2938, there was still a strong resistance all the way up to 2950 (see the daily chart below). With all of these factors, I broke my Alba rules and decided not to take the long trade that was presented to me on the chart. Now if the Euro went to 3000 I would kick myself in the face but I still would've stayed out. I just don't feel right going long right now on the Euro unless it's on a dip (like around 2700-2800). This is why I put the safety on and kept my trigger finger from pulling. This market is so dynamic that SOMETIMES you must bend your rules no matter how accurate your system is. A system is only as good as the trader behind it and that is something I've learned with time. No longer do I blindly follow systems just because of their sexy track records. Everything must be done with good timing and today, the Alba system did not match up with the market. Sure, I wish I could get in a trade and make some pips, but at the same time I know I have to attack at the best possible time. Right now is NOT that time.

Results: +0 pips

That's it for me today. Hope you all had a great day!

Related charts:

 

[Big Pippin]

Its a ZEW out there!

You wanted excitement? Well today was full of it Of course, every day is exciting in the Forex for me but today makes things interesting especially for the EUR/USD. The story of the day was the ZEW. The ZEW (an economic research center) report came out with much lower numbers than expected causing the Euro to lose ground against the Dollar today. In fact, the German ZEW came in at -5.6 which is the lowest since June 2001. The EU ZEW came in at 1.3 which was a much lower number than the forecast of 15. So what do these numbers mean? Well the fact that these numbers came in much lower than expected means that a majority of investors are pessimistic about their economy. Germany is the Euro-zone's biggest economy so with a weak number like todays, the possibility of the ECB raising their rates to 3.5% is looking less likely. Remember, interest rates play a big part in the direction of a country's currency. With the Fed most likely pausing their rate hikes, there is a good probability it will weaken the dollar. However, in the case of the EUR/USD, things aren't looking good for either currency right now. I've been talking about how the Euro would have to have a stronger sentiment in order for it to get past the 2900 level but right now it doesn't look like that will happen. So my theme is still the same. I expect to see more range bound movements between the 2900-2700 level, at least until the end of this week.

There were no Alba trades today as most of the movement occurred during the EU session. During my 8am-12pm EST timeframe, the market pretty much just hovered around the EU session low and then eventually nudged a little lower after 12pm. On a slightly longer time frame I am looking to buy the EUR/USD since I feel this is a dip and that the Euro will eventually head back up to 2900. I will probably scale in my entry since I don't know exactly where the bottom of the dip will be.

I was able to make some pips on the USD/JPY today. Remember, yesterday I talked about how there was major consolidation on the pair for the past 2 days and that I was expecting a breakout. I made a play on this and set a straddle order (an entry to buy and an entry to sell) above yesterday's high and low. Which ever one triggered, I would use my other entry order as my stop and reverse level. With these type of consolidation/breakout trades, I like to play both sides since usually it will move nicely in one direction or the other. I'm currently long with about a 40 pip profit right now but my target is at 117.71 so I have a long way to go. My target is basically double whatever my risk was on the trade. As I write this, the yen is currently at 116.58.

As for the other pairs, I still don't see any sexy setups. Everything looks flat right now and I'm not sure if anything will develop this week, but as always, we'll have to wait and see.

Tomorrow, we have Existing Home Sales and I think the market will make a play on this. It's expected that existing home sales has cooled down so unless there is a surprise, I think the Euro will gain a little strength tomorrow, but again, I don't think it will be anything drastic.

Another day, another dollar...or euro..or pound, yen, frank.... you get the idea!

-BP

Related charts:

 

[Big Pippin]

Greenback making a Comeback?

Pretty boring day in the Forex if you ask me, but the dollar did manage to gain a little more ground on the Euro today. The Existing Home Sales report came out at 6.3 million which was slightly less than forecasted but it was pretty much expected that the housing market has cooled off. This is why the dollar wasn't really affected. When expectations are met, the market tends to keep its cool. It's the surprises that really makes the market wiggle. It's being said that dollar expectations are in place and there are no major catalysts to cause it to drop in the next week or so. So what could this mean? The dollar on the rise? For the short term the answer is probably yes. Like I've been saying, I think it could go to 2700 and in an extreme case as low as 2500 before the Euro bounces back up. On the EUR/USD daily chart (see below), notice how the upper and lower Bollinger band levels just so happen to be at around 2900 and 2700. This reinforces my belief that the price will most likely range between these levels until a major news event comes out to shake things up.

As it stands, interest rate futures are showing a 47% chance that the Fed will raise rates again so the speculation is still there. Things are not definite yet. In fact in the testimonies yesterday, Chicago Fed Bank Pres, Michael Moskow said that further interest rate increases may be needed if inflation remains stubbornly high. On the other hand, Atlanta Fed Bank Pres, Jack Guynn said that monetary policy was "properly calibrated". So you can see that there is still some speculation as to what the Fed is going to do. I think until there is a major news report that shows a clear sign that rate hikes are no longer needed, I think we will continue to see range bound movements.

My USD/JPY trade is still going on as my target is still set at 117.71. I know it's still far off but I think the dollar can get that high since I don't really see anything stopping the dollar in the near term (unless of course a major surprise somewhere). I will continue to hold my position until I see something important enough to re-consider my decision.

There were no Alba trades today as the Euro once again stayed within the EU session range. You can see from the chart below that the price pretty much bounced between the high and low and made no clean breaks from the range. I'll have to wait for a better time although I'm not sure if this week will give me any opportunities.

Tomorrow might be an interesting day as far as economic reports are concerned. We have German Ifo as well as US Durable Goods and US New Home Sales. Because of the low German ZEW number, I would expect to see a lower German Ifo number as well. Durable goods and New Home Sales are both expected to have lower numbers so I wouldn't expect much movement if they come in at the expected forecasts. If we see a low German Ifo number with a higher than expected number for Durable goods and/or New Home Sales, I think we'll see the dollar gain more ground on the Euro. I'll just have to wait and see.

Once again trading has been minimal but I'm starting to look real close for a good price to buy the Euro because I think it will eventually bounce back up again. I'll keep you posted.

Happy trading!

-BP

Related charts:

 

[mike46]

Hello everyone,

I will be posting my journal on Trade2win for a system that I have been trading for almost 2 years now called the Alba system. I've posted this on other sites as well and I wanted to branch out into the Trade2win forums. The purpose of this journal is to encourage traders by reminding them that it doesn't take a market genius to make money in the forex. By following my posts you will see how a simple trading such as this one can still be profitable simply by staying disciplined and practicing good money management. With that said, here is my post for today:


It was another humbling day today in the market. This marks the only the 3rd time since the Alba system has lost 2 trades in a row. At 10:10 there was a good looking Alba signal and I entered 3 lots long at 1926 with a stop at 1899 and a target at 1940. Unfortunately the market did not move at all after I entered and I eventually closed my trade out right before Bernanke's testimony at noon at 1912. Hopefully the next 2 days will help us recover. Cheers! ~Big Pippin

Results: -42 -9(spread)= -51 pips

Hi there, I noticed that your stops and profit targets are about the same in pips terms, sometimes stops are even wider. Can you tell me your % winners? Also how do you cope with the happy situation which does happen sometimes !!! when the market runs away and you could have taken 100 - 150 pips profit.
regards
Mike

 

[Big Pippin]

Hi there, I noticed that your stops and profit targets are about the same in pips terms, sometimes stops are even wider. Can you tell me your % winners? Also how do you cope with the happy situation which does happen sometimes !!! when the market runs away and you could have taken 100 - 150 pips profit.
regards
Mike

Hi Mike,

The Alba system has a win percentage of about 74%. The reward/risk ratio is not that great as you can see from the posts which is why the accuracy rate must be that high.

Regarding those rare times when we do get a nice move- I try to keep things in perspective. Big wins happen and I have to make sure I catch them when they happen. At the same time I know that I can't win big all the time so I try not to get overconfident because when I get overconfident I tend to overtrade. Of course I still get excited when I get a big win, but now I just try to keep things in perspective by realizing that catching those big wins is something I'm supposed to do.

In those situations that I miss a big move, I always tell myself there will always be other trades just like it. Just remember, the market is not going anywhere so you will always have another opportunity to grab the next big trade.

Controlling your emotions can be tough and I still struggle with it sometimes. The most important thing is to realize your emotions so that you can make efforts to change the way you think.

Hope that helps. Happy trading!

-BP

 

[Big Pippin]

Euro VS Dollar- Place your bets!

The battle rages on. Who will give the knock out punch that will send the opponent flat on its back? Who really knows? Apparently no one does right now. Todays market was a classic battle between the Euro and Dollar as neither one could be pushed towards a limit. During the EU session, the German Ifo came in at a slightly higher number than forecasted at 105 even though it was still a decline from the previous 105.6 from the last report. Because of such a low ZEW number that came out earlier, this tiny surprise seemed to be enough for some traders to place their bets on the Euro, shown by the jump in the EUR/USD. However, the Dollar fought back and even with the weak Durable goods and Housing data, it still managed to gain back its ground and settling to about the same level that it closed yesterday. The dollar finished around 1.2760 leaving traders right back where they started. So why is there such a struggle between these 2 currencies?

Again, the theme is still the same. It is still a toss up as to whether or not the Fed will raise rates again. It's also a toss up as to whether or not the ECB will raise rates again. No wonder everyone is confused! Right now, the interest rate futures show about a 47% chance that the Fed will raise their rates. We have some Fed governors saying that interest rate hikes might still be needed while others are saying that rates are good right now.

On the Euro side, traders were expecting 2 more rate hikes by the end of the year to 3.5% but with all the weak data coming out, this sentiment might be changing.

So where are you going to place your bets? I still expect to see range bound movement in this pair but I think the dollar will gain a little more ground before shooting up again. I still see 2700-2900 as being the range until we see a major fundamental change. This is confirmed by my Bollinger Bands (See chart below).

Recapping my current trade- I am still long the USD/JPY from 2 days ago and I will still hold onto it as I feel that the dollar still has some kick in it. Interesting enough, I entered this trade because it showed a lot of consolidation. After a brief breakout which put me in the trade we have seen another 2 days of tight consolidation. I am expecting another breakout soon. Hopefully it will be in my direction!

Alba had a nice little win today due to the fact that the dollar gained back all of the ground it loss during the EU session. At 11:00 am EST I saw one of my Alba signals and I entered 3 lots short at 2785 with a stop at 2803 and a target at 2774. My target was hit at 11:40 am and I closed 2 lots and moved my last lot's stop to breakeven. I trailed my stop to the high of the candle shown on the chart where I was eventually stopped out at 2766. It wasn't a big win but I pretty happy with any pips I can pull in this weird market right now.

Result: +22 +19 -9(spread)= +32 pips

Two things I will be watching tomorrow are the German CPI at 2am EST and Bernanke's speech at 10am EST. Traders are watching very closely for ANY sign of fundamental strength or weekness in either currency so be on the lookout for any extremes. Also pay close attention as to what Bernanke says in his speech. Everyone will be digging for clues on whether or not the Fed is going to raise rates so pay close attention.

Well that's it for me today. Hope you all had a great trading day and I'll see you tomorrow.

-BP

Related charts:

 

[Big Pippin]

Yen me!

There's not much to update about the EUR/USD since nothing has really happened today. Expect to see more range bound movement until there is a major fundamental shift in the Euro or Dollar. Bernanke kept his lips sealed as there were not any hints whether or not rates will increase. We'll have to wait and make our own judgments when more economic reports come out.



Today's excitement comes from the Yen. I've been long the USD/JPY for a few days now from when I first noticed tight consolidation. After another couple of days of consolidation, the dollar gained more ground against the Yen today with a nice breakout. My original target was set at 117.71 (see my post a few days ago), and it looks as though my target may get hit. See the chart below. I marked the consolidation points followed by breakouts. When there is tight consolidation like that you can expect to see a breakout of some sorts, these are some of my favorite trades as usually the movements are swift and can earn you a decent amount of pips in a short amount of time. Currently I am up +111 pips per lot so I'm hoping nothing drastic happens over the weekend to hurt my trade.



Because of the lack of movement in the Euro, Alba didn't produce any trades. We did have a slight breakout of the EU session low but it was due to the Bernanke speech candle so I didn't trade it (I treat those like news reports). Following the speech, the Euro bounced up to the EU session high and settled back down leaving us with no trades. Alba for the week only made a slight profit with +32 pips from yesterday. I'm pretty happy with it since this week has been pretty uneventful.



I'm still pretty dry on trade ideas since all my charts still show consolidation but I will keep my eye out for anything that seems interesting. Hope you all have a great weekend!



-BP



Related charts:

 

[Big Pippin]

Silence is Golden...

It was another boring day today with the lack of economic reports to really fuel any movements. Browsing around it looks like the Euro made new highs against the Yen but since I don't trade that pair I really didn't look too much into it. The EUR/USD did absolutely nothing which wasn't a surprise since there was really no reason for it to move. Consequently, the Alba system did not produce any trades (see below).

I am still long on the USD/JPY from last week. The Yen did gain a little ground on the dollar but since it's still above 117.00 I'm still convinced that my target will get hit at 117.71. I am still holding until I see anything fishy. Speaking of Japan, it looks like the US National Basketball team is causing havoc over there as they smothered Australia in the semifinals two nights ago. Finally! A US Basketball team that wins!

And I know you're probably tired of hearing this but I still don't see any convincing setups on my charts. Frankly, it's boring right now. Everything I see is still in the gray zone and until I get a convincing signal, I am not going to force anything.

As far as tomorrow goes, we could see some movement with both the German Consumer Confidence coming out at 2:00 am EST and the US Consumer Confidence coming out at 10:00 am EST. Remember, we're looking for signs that the ECB will tighten rates and/or the Fed will pause their rate hikes. It's all about the rate differentials so we want to see a convincing fundamental sign that will hint at a widening rate between the EUR/USD. Until then I think we will still see the 2700-2900 range movement. Yawn... FOMC minutes also come out tomorrow at 2:00 pm EST so watch out for that. I usually don't trade after 12 noon anyways, so I probably won't even be looking at my charts. Hopefully tomorrow I will have something more exciting to write about.

Happy trading everyone!

-BP

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[Big Pippin]

Running In Place

Lock and load! Finally some action! The dollar had one heck of a roller coaster ride today. Surprisingly enough, even after a much lower than expected Consumer Confidence number, the dollar made a quick surge. Why did this happen? If this was such a bad number for the dollar why did it still continue to rise? From what I've read, it seemed like traders still speculated on high inflation talk in the FOMC minutes which came out later in the day. There could be a bunch of things that caused the dollar to make a quick surge, but what I was most concerned about was hanging on for the ride. I was pretty convinced this dollar surge was just "noise" and that unless the FOMC minutes showed alot of inflation concerns, the dollar would still sink.

However, I could not deny such a strong move and with the help of the Alba system I took a breakout 20 minutes after the Consumer Confidence report. I went short 3 lots at 2779 with a stop at 2810 and a target at 2762. The 2750 mark was my real concern because I know that 50's are a key level in the Euro and I figured that might be the reversal point where the market would correct itself and actually do what the data suggests. Since my target was at 2762 I still felt that the Alba trade was still good. My target was hit on the next candle and I closed 2 lots and moved my last lot's stop to breakeven. I continued to trail my last lot to the high of the candle marked on the chart where I was eventually got stopped out at 2757. (See chart below)

Result: +34 +22 -9(spread)= +47 pips

Interest rate futures contracts are now showing about a 17% chance that the Fed will increase rates in September which means that it's probably not going to happen. However, contracts are still showing about a 43% chance that the Fed may raise rates one more time before the end of 2006. So again, although the dollar gained alot and then lost alot today, it is still right back where it was against the Euro. Don't completely count the dollar out yet. On the Euro side, futures traders are expecting the ECB to raise rates 2 more times by the end of the year.

There is a bunch of US data coming out throughout this week including, GDP, Personal Spending, a Bernanke speech, and Non Farm Payroll. If these reports all show dollar weakness, then I can see the dollar losing alot of ground. Some analysts are even saying that the Euro will get to 1.3200 by the end of the year.

Regarding my USD/JPY trade-- I finally exited my trade seeing how I can sense the dollar getting weaker. I was still able to manage a small profit and ended up getting about 50 pips per lot. My technicals are still showing a possibility that my target may get hit but fundamentally, I think the dollar has finally cooled a bit and will stay that way unless these upcoming news reports show some miracles.

Short term I'm feeling bearish on the dollar. Medium-Long term I am still undecided. I need more data to make a better decision.

For a complete reading of the FOMC minutes you can go to:
http://www.federalreserve.gov/fomc/minutes/20060808.htm

Happy trading everyone!

-BP

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[Big Pippin]

Waiting...

Ok, so there's not much to say about the EUR/USD today. Don't believe me? Open up a chart and you'll notice that the pair had a narrow trading range today. As you can guess, Alba didn't produce any trades because of the lack of movement so I eased my finger off the trigger and will wait for a better time to attack! (See chart below) I believe this range bound movement will continue until the NFP report on Friday unless there is a surprise in one of the other economic reports coming out before then.

The ECB is expected to keep their rates the same in tomorrow's statement and futures traders are betting that they will increase their rates at least 2 more times before the year end with the next increase coming next month.

After reading more about the FOMC minutes yesterday it looks like the Fed is definitely going to pause their rate hikes and may be holding them steady for a while. Some analysts are even saying that not only are the rate hikes done but that the next move will be to decrease rates. I never take analysts too seriously but it is interesting to see other people's opinions. However, looking at the federal funds futures it looks like there is an 80% chance the Fed will keep rates the same in September and about a 78% chance they will keep rates the same in October.

So why keep rates the same? Well, it finally looks like inflation might be contained. Weaker housing data, lower consumer confidence, higher energy prices all have had some part to do with that. Consumer spending has finally slowed with the rising fuel costs and the end of the housing boom. The Personal Spending report comes out tomorrow so that will be interesting to see. Other reports I will be looking out for will be the Chicago PMI and the speech by Bernanke.

As you know I exited my USD/JPY trade yesterday with about 50 pips profit on each lot. I also mentioned that technicals still showed upward movement on the pair but my fundamental thinking was that the USD would show weaker reports which would keep it from hitting my target at 117.71. Right now it looks like the USD is being defiant again as it is once again heading up towards my original target. I know I'm already out of the trade but I still like to see how things pan out.

All the other charts are garbage right now. Actually I take that back. The GBP/USD and AUD/USD both showed good buying momentum and I would've entered. Unfortunately both entries came at around 4am EST which is when I am in dreamland. You can't have them all!

So still no clear setups for me. I'll let you know if I see anything worth mentioning.

On a side note, I recorded the US vs. Germany basketball game but I haven't seen it yet. If I had to bet based on interest rate differentials I'm thinking we beat Germany I'll let you know if my calculations were correct tomorrow! That's it for me. Have a good day everyone.

-BP

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[Big Pippin]

Daytrading Can Come In Handy

For the last week or so I've been griping about how I haven't been able to find any good setups. Today is no exception. Every chart I look at is either showing a range or if a pair does happen to be moving, I can't find a good entry point. That's what comes with the territory when you're trading but it doesn't mean you're completely out of luck. This is where day trading can become useful. For example, in the EUR/USD, the dollar rallied 100 pips but on a longer term chart, it still just looks like it's ranging (which is what it really is doing). However, zoom in to a 10 minute chart and it looks like a pretty nice trend! Having a day trading system as part of your arsenal comes in handy during times like these. I'm not saying you should overtrade, because that is the common problem with day traders. I'm saying that it's good to have a system for every kind of market environment. The Forex is a very dynamic market so it's important to adapt to it's conditions. With the Alba system, I was able to grab a few pips from that movement. Granted, it wasn't my big pay day but at the end of the day, positive pips = positive pips = a happy trader!

At 10:20 there was an Alba breakout and I entered 3 lots short at 2802 with a stop at 2825 and a target at 2791. My target was hit on the next candle and I closed 2 lots and moved my last lot's stop to breakeven. Unfortunately I was stopped out on my last lot at that very same candle. So you can see that although the trade is very small, it's still positive. (See chart below)

Result: +22 +3 -9(spread)= +16 pips

So what caused this dollar surge? Well all 3 US reports today came out better than expected. Personal Spending came out at .8% compared to the .2% forecast. Chicago PMI came at 57.1 compared to the 56.1 forecast and Factory Orders came in at -.6% compared to the forecast of -1%. So while the Fed may be pausing rates, the US economy is not entirely flat. In fact, the median forecast for tomorrows NFP report is 125,000 according to Bloomberg and if this number is correct, it will be the highest number of new jobs in 5 months.

I'm kicking myself for getting out of the USD/JPY trade. It looks like the dollar will hit my original target of 117.71. If you've been following, you know that I got out of the trade because of my fundamental analysis. My technical analysis was still showing buying power and that's what it is currently doing. Arghh! I still profited off of the trade but I hate it when that happens

NFP, Unemployment Rate, and ISM will be key reports tomorrow so I would be on the lookout for those. I don't think any long term trade ideas will pop up by tomorrow but we'll see if Alba can grab me some pips! Have a great day everyone.

-BP

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[bizmanny]

Forex Trading a to z.

Hi Guys,

I am interested in learning how to trade Forex. I would like to know who if there are genuine guys out there who teach this subject. Or articles any sort of materials which will help my education. I will appreciate your contribution.

This week looks to be a quiet one as far as economic reports is concerned but that doesn't mean there won't be any excitement. The Euro has already made some moves today as it made a new 20 day high against the dollar. Today's move was probably caused by 2 things: the first is that traders' expectations for the Fed to increase interest rates is reducing, and the second is the better than expected trade balance for the Euro-zone. But even with the new high, notice how 2900 still seems to be the level to break. As I write this, the Euro is slightly under 2900 which confirms my speculation that the Euro will have a tough time making any more gains. I mean, sure, the Euro got as high as 2938 today but what exactly constitutes a clean break? You often hear about people talking about how they will go long or short when a price can break a certain level but how do you define a break? To me, a break cannot have a clear definition. You cannot put a set number of pips and use that as your definition of a breakout. It's possible to use a set number of pips as filters for your trades, but a breakout is very tough to pinpoint. In today's example we see that 2900 was broken by 38 pips and yet at the end of the day, the price has settled back to just under 2900. It's obvious this level still is creating strong resistence. So how will I define a break? To me, the real story lies at the end of the day. What does the market close at? If by the end of the day, the Euro makes a clear break of the 2900 level, then I might consider the pair to have broken that level.

What's causing this resistance? From what I keep reading, it seems like the biggest underlying factor as to why the Euro can't make any new ground is because of the overwhelming amount of existing long positions. This is also serving as a take profit level for traders who are currently long. Another reason is still because of the speculation as to what the ECB will do. There is not a strong enough sentiment for the Euro yet as the data hasn't really given a clear fundamental trend although today's strong trade balance does provide a start. In order for the Euro to make a strong move I would look for 2 things: A sharp decline in fundamental US data or consistently strong fundamental EU data. Either of those should give traders enough confidence to take a position.

Across the board, I still don't see any good trade set ups. Everything I look at seems to be in consolidation mode, especially the USD/JPY. Open up a daily chart of the USD/JPY and you'll notice some tight consolidation. I would expect some sort of breakout in that pair soon. Other than that, there are no pairs that I'm excited about and unless something drastic happens, I'm not sure if anything will develop this week.

For tomorrow, the ZEW economic sentiment at 5 am EST will be the report I look out for. If for some reason the number is above 15.1 (which was the previous number) I would expect to see a sharp spike in the Euro. I will also see if any of the Fed presidents say anything that might cause the dollar to drop. The Atlanta and Chicago Fed presidents are set to speak at 1 pm EST.

Now- regarding the title of my post. Many of you know that I am a stickler when it comes to my trading rules. Well today I must confess that I broke my rules. But before you gasp in disbelief, I must tell you that I did it with very good reasons. Today there was an Alba breakout on the long side but the breakout occurred above the 2900 level. If you've been reading my posts recently, you've seen me rant about how I don't see the Euro making any strong moves above 2900. With the lack of strong Euro sentiment and the large amount of existing long positions, my gut was telling me that the Euro was going to drift back down below 2900. Although the price got as high as 2938, there was still a strong resistance all the way up to 2950 (see the daily chart below). With all of these factors, I broke my Alba rules and decided not to take the long trade that was presented to me on the chart. Now if the Euro went to 3000 I would kick myself in the face but I still would've stayed out. I just don't feel right going long right now on the Euro unless it's on a dip (like around 2700-2800). This is why I put the safety on and kept my trigger finger from pulling. This market is so dynamic that SOMETIMES you must bend your rules no matter how accurate your system is. A system is only as good as the trader behind it and that is something I've learned with time. No longer do I blindly follow systems just because of their sexy track records. Everything must be done with good timing and today, the Alba system did not match up with the market. Sure, I wish I could get in a trade and make some pips, but at the same time I know I have to attack at the best possible time. Right now is NOT that time.

Results: +0 pips

That's it for me today. Hope you all had a great day!

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