The Eur/Usd had a huge drop this week!!!! Yes it dropped 41 pips, after all the talk, after all the downgrades, after all the drama, the Eur/Usd currency pair fell a whopping 41 pips. It closed last week at 1.2721 and closed this week at 1.2682. The pair actually opened at 1.2687 and closed at 1.2682 so actually it only was down 5 pips. Now I believe that market sentiment is what moves the market and that is why the Euro is down so far right now. One thing to remember is that the media and the market participants are very fickle, which means they can love you one minute and hate you the next.

So lets try to look at what events could cause a shift in current market sentiment:

• They will get tired of reporting only about the Euro, and eventually people will see that the Dollar is not in any better shape than the Euro as a matter of fact the U.S. is just a bad off or perhaps worse than the Euro.
• The U.S. Government is in 14 trillion in debt which is greater than any other country in the world.
• On top of our tremendous debt that we cannot control is the fact that the fed wants to print more money QE3
• U.S. Unemployment is causing less taxes to be collected add that the fact that the debt is growing means that the debt will keep spiraling out of control.

Yes the Euro Stinks, but have people really forgotten about the dire condition of the Dollar? You know the saying the bigger they are the harder they fall. I think we will see a fall soon. Watch this video that truly describes the ignorance of most Americans and mainly the ignorance of the government. Last week I called a Euro bounce and I am sticking with me analysis until It goes against me

Weekly Chart:

Read another weekly analsyis at Forex Abode

Please Share This article And add to it by adding comments below, All comments are welcome.

We have started the year of with nothing but consistent drops for the Euro verses all major currencies. The current market sentiment is nothing but negative news.  The constant stream of bad news is going to continue to drive prices lower on the Euro.  Equally important is the string of positive news coming out recently on the Dollar.

There was recent negative biased opinion on the Euro put out by Chief economist Olivier Blanchard.  He believes the Euro will be continue to be in a recession.  So based on that opinion we can expect to see more downside in the Euro in the near term.

Get a detailed report on the Eur/Usd from Forex Abode.

Caution!!!

However I personally see a strong potential reversal based on the following things:

• The Federal Reserve still wants to devalue the Dollar and is looking to proceed with QE3 the consequences of that will be a large devaluation of the Dollar.
• With all the shorts in play right now it is only a matter of time for a massive short squeeze to come into play.
• Goldmans’ talking Head makes a bearish Euro statement which usually leads to a reversal as reported by Zero Hedge.
• Commitment of Traders Report for the Eur/Usd hits a record for the most shorts held at one time. If everyone is short than there will be less additional selling pressure.

So in the time being I would play this market by shorting all large pull backs in high resistance areas. But do so with caution and great risk management because as I mentioned a short squeeze could come into play.

Lets take a look at the Chart:

Eur/Usd Daily

Click on Chart to Enlarge

Thanks for reading and please share your comments and spread this article around to your friends.

Additional Article on the Dollar Index.

By Casey Stubbs of Winners Edge Trading

When I look back on 2011 there was so many things that moved the market this year.

• EarthQuake in Japan
• USD financial Crisis and Qe3
• Euro Collapse

2012 in my opinion is going to be more of the same and we are going to see things get worse before they get better.  I am not trying to bring fear to my readers but rather to get you to think.  The markets are going to be crazy this year. It will be very difficult to master them. However with a plan and a strategy you can make great wealth for yourself in 2012.

I think a good strategy this year will be to short the Euro on every bounce that occurs and keep doing that until you see something change.  Trading this one strategy alone could give you a nice return at the end of the year.

I wish to thank everyone and wish them the best for 2012.

Casey

This article is going to discuss how to do a back test to determine if a strategy is profitable before you start to trade it. The key word is BEFORE you trade it. The problem with most traders I know is that they usually start trading with no, testing at all heck they don’t even have a plan or a strategy. I am not trying to be cruel here but I deal with traders every day and I am asking them these key questions to try to find out where they are going wrong.

So this post is much needed and I hope that you heed the words that have been written so that you may learn and be profitable.

There are some benefits to back testing a strategy before trading. The first benefit is that you will know ahead of time if a strategy actually works and if you are wasting your time or not even before you start trading live. Another great reason to back test is that you learn the strategy very well before you actually start to trade, believe me after a couple hours of straight back testing you will know you strategy inside and out. Back testing a trading strategy also allows you to test different variables with your strategy to see if changing something will increase your profits. The two small drawbacks to back testing are that the results cannot be guaranteed in the future so if you find a good one your results might not be what you actually expect when you start to trade. The other drawback is that to do it right it takes a lot of time and hard work but that can be a benefit as well.

Steps To Start Back Testing

The first thing you need even before you start back testing is a forex trading strategy. I have include a link to for your convenience to a Forex trading strategy website in case you need a strategy to test. Once you have your strategy you have to make sure that you understand all of the entry requirements, money management, exit requirements, and all of the indicators you will need for this strategy.

Once you fully understand the strategy you need to choose a pair that you are going to test on for my example I am going test on the Aud/Usd. You also have to determine how far back you are going to test. I recommend testing it a minimum of 2 months but you should probably do more.

For the example I am going to test I am going to test for one month.

Here is the my strategy for this example:

Indicators Used:

1 Hr Chart

7 and 27 Simple Moving Average

Macd 8 17 9

Rsi 14

Entry Requirements:

Enter on a Cross of the 7 and 27 Go in the direction of the cross.

Filters to keep us out of bad Trades.

Also RSI Must be above 50 pointing up for a long and below 50 pointing down for a short.

If RSI is  above 65 no trade on a long

If RSI is  below 35 no trade on a short

Macd above 0 for a long and below 0 for a short.

Wait for the candle to close before entry.

If the Entry candle is larger than +50 no trade

Stops Loss And Take Profit Information

Stop loss 3 pips above previous candle to the entry

Move Stop to +30 when the price gets to +50

Trail Stop by 27 MA candle after the price gets past +30

Money Management

Risk 2% of account on each trade

I know I am going into a lot of detail here I didnt have to include the strategy but I want to go above and beyond the call of duty and give you some great information that will change your trading forever.

Chart One the area between the green lines indicate exactly 30 days of time. From May 17 to June 17^th.

Chart Two Next I am going to look at all the times I think the price is going to trigger a trade and mark them on the chart.

Now we are almost ready to start the back test but before we do that we need to create a spreadsheet that will have all of the data we record from the backtest.

Here is an example of the first trade I recorded.

Now I go through and do the same thing with each trade. After I have completed the entire back test and log the results I look at the numbers in the speadsheet and make my observations of the strategy.

Here is a graph of the performance.

So now that we see the strategy is a winner, now it is time to fine tune it to make it better. The strategy was profitable but if I made some small adjustments it could be much better. If I add one or two more winning trades to the mix or get some more pips per trade, that would be a large increase in profit over time.

So now back to the drawing board I am going to follow the same rules and make a few changes to see if I can improve the strategy. If you have any comments please share them below.

Eur/Usd

Fundamental Data and upcoming News:

Republican whips delayed a House of Representatives vote on the plan on Thursday night after failing to quell a rank-and-file conservative revolt.

House Republicans were meeting for closed-door crisis talks on Friday.

The fiscal fiasco leaves the US inching closer to a potentially catastrophic default on federal debt next Tuesday.

The White House has warned the government will run out of money to pay all its bills unless a $14.3tn (£8.7tn) borrowing limit is increased by 2 August.

The US treasury department is expected to unveil emergency plans explaining how the government would function if Congress does not agree to raise its borrowing limit.

http://forexblog.oanda.com/20110729/republicans-try-to-save-debt-bill/

Euro-sovereign debt fear is again dominating this mornings market. Moody’s has placed Spain’s Aa2 rating on review for a possible downgrade and has threatened to lower the ratings on four Spanish banks. Arguably not in the Greek boat just yet, Spanish 10-year yields have backed up +60bp so far this month. Once the market begins to lose confidence, yields creep much quicker, just look at Italy this week, surging Italian yields on speculation that Tremonti may quit.

Euro-zone inflation rate fell to +2.5% in July, after having climbed +2.7% in June, y/y. It’s still above the ECB’s target of just below +2%. Perhaps this may persuade Trichet and company that further tightening is not warranted over the coming months.

The EUR bulls should be more concerned now that the currency has failed to rally significantly on the back of inept Washington politicking doing everything it can to destroy trust in the dollar. What if the lawmakers finally get their act together and increase the debt ceiling?

http://forexblog.oanda.com/20110729/three-more-strikes-against-the-euro/

Daily Chart Clues:

The Daily Eur/Usd chart shows that we are currently trading sidways which makes for some great opportunities for range trading.

Eur/Usd

Next we will look at the hourly chart pivot points these can be played for some great trades if you are patient and know what you are doing.

eur july 30

This Forex webinar has been posted by popular demand. Many people have been emailing me asking to post this webinar from two weeks ago. So since everyone wants to get it, I must listen to my readers. This webinar is step by step instructions on how to trade one of my favorite strategies. There is also more information on this strategy in this forex strategy training post I did about a month ago.

Purchase the EA here.

This trade will also allow you to close all of the forex trades that you currently have open with the click of a button as well. The tool is based on an EA and is easy to install.

One Click Mt4 Trading

I just installed this tool and I am impressed with how easy it is to set up and use. This tool is available at no cost and you can download it below.

Click Here to Download

I have installed this clicker and use it to trade, I like this tool that is why I am sharing it with you but I am not responsible for helping you install this tool. If you need help
go to the help pages to get instructions here.

Here are the rules:

Risk 1% of total account value on all trades

Identify the trend on 4 hr Chart and trade within the trend.

1 to 3 Risk Reward Ratio. Let my winners run and cut losers short.

Use a 3 EMA and a 30 EMA 25 EMA. When the 3 EMA
crosses above or below the 30 that is when you enter. Wait until the candle closes.

Open 3 lots with a stop just above the high on the the candle you enter on. Adjust stops as
the trade moves in your favor.

Use MACD with 12,26,9 settings the purpose of the MACD is to exit trades.
When the lines on the MACD Cross after you enter that is when you exit 2 lots two take profit.
Keep the 3rd lot open to let the profits go on more.

Here is a chart that shows an example:












Here is a video that I share the forex strategy.