Looking at the moving averages used in daily charts, it can be seen that the market is above all the three moving averages and for entry, traders will look for entry points for dip towards short term moving average, around 1.5800 level and in case the move the extended (which is more expected), the nest entry level will be long term and medium term moving averages crossing each other around 1.5600 level. RSI is 66 in daily charts and will be pushing the GBP/USD down to open up some space before resuming its upwards trend.

1. Shawn Lehman                 $15 475.56            

2. Roy Tapara                       $13 672.10            

3. Howard Wheeler             $13 560.70            

4. Josiah Biddle                     $12 834.29            

5. Robert Mecker                   $12 469.00            

6. Eugene Timpson                $12 171.23            

7. Karen O’Connell                 $11 541.46            

8.Casey Stubbs                        $11 311.29             

9. Henry Francisconi            $11 244.19              

10. Mohd Rosni                       $11 158.97     

PLEASE NOTE:

This gives the list in order of balance; however, the competition will be decided by equity.

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Time for my weekly Forex Report that I release on Saturdays. This week I am going to share what has been my favorite trade for a long time and I am going to keep trading it until it doesn’t work anymore. In review of last week I posted the idea of  putting a short trade on the Eur/Cad and fortunately it worked out pretty well I hope some of you were able to get that trade as well.  I enjoy taking Saturdays to find the best setups for the coming week.

Question?

How many traders are like me putting the time in to find the right trades when the market is closed?

I know that it is supposed to be the weekend, the time to rest, however preparation is important for trading. I think that if you just start in Monday with out a game plan for the week that is where traders get bounced around and can have some big losses.  It is so important for me to find the right setups to read my news and go in Monday morning knowing what I am looking for and when I see it I trade it. My advice to the traders is do your homework and don’t get caught off guard. I am good at what I do because I put time in.  Please do your homework and be prepared this week and I have helped you by sharing my work with you, so I hope it helps.

Fundamental Picture

The last week was a range bound week as the pair is trying to determine which currency is in worse shape the Euro or the Dollar. I think that both of these currencies are in bad shape and honestly I dont see a strong trend for either one until one economy emerges stronger. Due to the range pattern in the Eur/Usd there are not any great swing setups at this time, however it is quite possible to play those ranges for some short target trades.  Any type of swing trade in this condition will get chopped up and not make any money so I would play the range while it is intact.

There are plenty of  great fundamental plays however such as the Eur/Cad which I mentioned last week see link above at the beginning of the post.  One possible trade to look out for is the Eur/Chf, normally I do not bother trading this pair but there is some setups that could be forming because the Swiss Government is taking a firm stand.  This gives traders an edge when we have some good news like this to help us with our trading plan. Take a look at the chart and lets see if we can find any good trades next week on this one.

My Favorite Trade:

Now that I have posted some useful content now I am going to share a  strategy that has worked for me very well.  This is very simple and I love simple because I am a simple guy that is to buy the Nzd/Usd on all pullbacks. The pair is currently way up and I would never buy  at the top because of the strong move up. However since this has been working so well I will be looking at all pull backs looking for possible long setups.

Take a look at the chart

I have two things that I am going to leave you with that is very interesting.  Take a look at the U.S. Government Debt Clock.  Did you know that Facebook is going public, now that is an IPO that will make some good money. Thanks for reading and please share via social media if you have found any value in this article.

The best way to understand exponential moving averages (EMA) is to examine how they are calculated. Mathematically, EMAs are said to be recursive which simply means, that an EMA value depends in part on the previous value. Given EMA Mi, we wish to determine the next value Mi+1. The formula is:
Mi+1 = Mi + α (Xi+1 – Mi)
Xi+1 is the price or other value that serves as the basis for the EMA.
α is a constant less than 1 and is normally a fairly small value. Shortly, we will see how to determine an appropriate value for α.
So, let’s make sure that we see what is happening with the above formula. If the new price Xi+1 is the same as Mi, then no change takes place in our EMA. If price is greater, then a fraction of that price determined by α is added to the EMA. Correspondingly, if the price is less than the EMA, the new EMA value will decrease.
So, how do we determine the right value to use for α? The formula for α is simply:
α = 2 /(N + 1)
The symbol N represents the number period value. For instance, if we want the 9-period value for α, our formula indicates that it has a value of 0.2 = 2/(9 + 1).
We have one final detail to cover and that is how we calculate the first EMA value. The initial value is simply the initial price or X value.
EMAs are popular because the more recent values are weighted more heavily than the current value. With each update, all previous values are in effect multiplied by the quantity (1-α). So, the significance of a particular X value continues to become less and less important. Now you should see why an EMA is also known as a fading filter because the significance of all of the previous updates fades away at each update by a factor of (1-α). Note also that an EMA can only rise when price is above it and can only decline when price is below.

Looking at the moving averages used in daily charts, it can be seen that the market is comfortably above all the three moving averages and for entry, traders will look for entry points for dip towards short term moving average, around 1.5750 level and in case the move the extended (which is more expected), the nest entry level will be long term and medium term moving averages crossing each other around 1.5600 level. RSI is approaching 70 in daily charts and seems to suggest that sooner or later, GBP/USD will look to take an extended dip.

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The Eur/Usd is the most traded pair in the forex market because these are two of the most largest economies on the planet and when you put them together it provides a great deal of liquidity and interest.  Therefore the largest volume occurs in the Euro and that creates some volatile moves and at times powerful trends.

This week has proven to be a powerful trend indeed and many accounts have been hit because people have been caught by surprise. I personally hope that none of you got caught in the Euro bullish onslaught as quoted by @Xiphos_Trading on Twitter that occurred this week and if you would have been reading this blog you would have seen that I pointed a potential turn here. 

The month January can many times be an indicator as to how the entire year ahead as shown by The Disciplined Trader in a very useful video on his blog might help you come up with some trading ideas, I like Normans advice in the video to stay disciplined.

I want to thank everyone for the participation in my blog posts and I encourage you all to leave a comment below as to what your thoughts on the market are and also if these posts have been helpful.

The Euro/Usd Weekly chart is still bullish and we have had a nice run. I am not going to make any predictions this week except to say that we are still in a stron bullish move and I recommend trading with the trend so at this point I am going to be buying all significant pullbacks until I see that pattern fail and then I will think about doing something different.

Trade Idea of the week:

If you have been following the Canadian economy of late you will find that during the global crisis happening in much of the world Canada has been prospering and they have reduced debt and grown the economy.  Read this article about the Canadian economy as reported by the Pittsburgh Tribune this Sunday. On one hand Canada is prospering and on the other hand Europe and the United States are in Global Crisis.  I don’t even have to post any links about the downfall of those economies because of the headlines are everywhere, but just in case you are not on planet earth.

Here are two reports articles that talk about the current condition of Europe and the United States:

• Euro Crisis reported by the Washington Post
• 2012 U.S. Economic Outlook

Summary and Trade Plan:

The Canadian economy is good, Europe and U.S. is bad, so how should we trade? We have an incredible setup forming right now with the Eur/Cad.  The rebound in the Euro has also brought a nice bounce in the Eur/Cad, which in my opinion is a great opportunity for us Forex Traders. This is a good chance to short the bad Euro and take advantage of the strong Cad.

Lets take a look at the charts: Click on the Chart to View Full Size.

This trade could get us another 500 pips and please share it with your friends if you think there is anything good here.

Looking at the moving averages used in the daily charts, it can be seen that GBP/USD has managed to sneak above all the three moving averages and in case of retracement, it will first look to touch short term moving average, which will around 1.5640 level and then it will look to touch long term moving average around 1.5575 level.

Looking at the moving averages used in the daily charts, it can be seen that GBP/USD is above all the moving averages and around 1.5550, the short term moving averages is touching the long term moving average and this level seems to hold the key as break below that level will resume the long term downward trend.