Live to trade, trade to live
Ah, the age old question for people who want to trade for a living: do I live to trade, or trade to live? Like me, many traders in the forex market love what they do. We love to trade forex. We love to think about forex. We love to think about trading forex, and we dream about forex when we sleep. It is a sickness. It is a passion. And, truly I think one needs to have that passion in order to make any dream come true, no matter what it is. But sometimes traders can become so enthralled or even obsessed with trading that they lose the point of it: the point really is to trade in order to LIVE, not to live to trade all day. Of course, some traders are fine with sitting in front of their computer all day with red eyes and coffee stains on their shirts. But for me, I trade to live. I have learned to be incredibly disciplined with my trading so that I must stop trading by 12pm noon New York time. This discipline has become one of my most important tools in my trader toolbox. Discipline keeps me out of bad trading times of the day, like New York afternoon, and helps me remember to ENJOY LIFE. A little less time in front of my computer actually makes my next trading session even better because I am rested, I eat properly (enjoying fantastic New York restaurants), and I am a happier trader and a happier human. Plus my friends and family are happier when I can spend more time with them too. If you absolutely feel the need to be trading all the time, here is a suggestion: try out zulutrade.com. You can have others autotrade your account for you free of charge while you sleep or do whatever you want without having to sit there and stare at your charts! Remember the goal: trade to live.
Significant wick on the weekly candle
Hello traders, so happy to see this rally ending the day and the week in the US equity market and also in the yens. Why am I happy? This week was quite spectacular in pip making, I was buying and selling and then selling and then buying the yens all week. Intensive trading but it paid off. My usual plan all week was trading the yens as they followed the dow futures. Now with this nice rally ending the week, I see that USDJPY is ending this volatile week ABOVE the significant level of 95.72, that pesky support that has been playing with us the past couple of weeks. This week and last week candlestick both closed with wicks above this level, pretty interesting. Is the market trying to build the base that traders have all been looking for? Significant levels were breached this week on the Dow and S&P 500 levels that have not been seen since the 1990s. But alas too the Dow has managed to close the week above 8000, significant. The market is trying! Next week is Thanksgiving in the US on Thursday. But any forex trader who has been around this market in recent years knows that this market does not sleep for no turkey eating and football watching. I look for big moves next week. In fact, isn’t that a bullish engulfing candle on the USDJPY daily chart?
Double Bottom in Dow and GBPJPY ?
Last week we saw the Dow get close to making a double bottom at 7773, the low that was reached in early October. And, during the same time period, GBPJPY did make a double bottom at 139.00. This is pretty significant. Just as this stock index and this currency hit those levels, the market sentiment quickly changed and reversed for several hundred points up. Now, all traders and all the “experts” out there are looking and waiting and hoping for some sort of bottom to be forming on the Dow to shed some light as to when real money will start moving back into the US start market. As I have mentioned before, I have been selling the yens, but I too am very cautious: my brain keeps screaming, “this thing must retrace at some point!!?” I love double bottoms in the forex market, they are very important and helpful for setting up trades on all time frames. So this double bottom on GBPJPY is the area to break for further downside to continue. Today I actually bought this pair for about 80 pips profit. Another part of the story to this currency pair is watching GBPUSD. GBP has been extremely weak. I did notice that the monthly S2 pivot is sitting exactly on the 2000 low at 1.3800, just something to note for possible targets this month. If that actually happens then GBPJPY will most definitely break this double bottom, so it will be important and interesting to see if these levels can hold support or slice through again. My brain says GBPJPY may need to retrace up to the daily 50ema, but that is way up at 168.00, that is 2300 pips away… Sometimes I must put my brain on a shelf and just keep following the trend. Let’s see where this week ends.
Market shrinkage
Smaller, smaller, the markets shrink. There just is no end in sight for the continued world financial turmoil. Gold and oil prices too are falling fast. As usual, as equities fall, I sell the yen pairs. USDJPY was pretty nice today. As I stated before I have been starting my trading day at about 7am New York time. I noticed that from 6-7am the USDJPY price headed up and ended the 7am hour candle close at the daily pivot, 97.73. For about 30 minutes price hovered around the pivot but could not continue above it. To me that was the signal to start selling. Today was especially nice because there was no US economic news scheduled to come out, so I did not have to worry much about erradic price moves. And, if at all possible I really like to get my pips before the New York session starts at 9:30am. Sure enough, USDJPY began moving down, following the Dow futures lower. A nice 100 pips and I was out by 9:15. Looks like I missed some more downside price movement in the yen pairs in the afternoon, but I had stuff to do away from my computer. This market has been so nice lately. But all this market shrinkage also includes job market shrinkage, plenty of people are losing their jobs in the US and around the world. I wonder how many are pouring into the forex market with their savings that they have left, hoping to make it big in forex.. Plenty are. I hope all are exercising due diligence and care in learning and trading demo before putting hard earned cash at risk. Gambling is for the casino, comrades. Cheers!
PS, EURUSD has in fact broken its trendline I mentioned last post and fell nicely to 1.2500. As I write this, this pair has broken below 1.2500. I suspect the low at 1.2350 is soon to come, and if the triangle on the daily chart plays out, the target for short goes to 1.1900. Let’s see how it goes.
Consolidating week in currencies
This week started with some bold retracement moves but ended in mostly consolidating mode for many currency pairs. We saw the Bank of England slash interest rates by 1.5%, the European bank cut by 0.5%, and Non Farm Payrolls in the US ended the week with worse than expected 6.5% unemployment. Nothing new, my friends. Seems like the beginning of the week many currencies needed to retrace to get out of extremely oversold conditions, and since everyone expected all the bad economic news later in the week, by Wednesday most currency pairs were ready to continue on their trending patterns. EURUSD was able to reach its new monthly pivot at 1.3080 area, but has since slid back down. Now I can see a nice triangle pattern on the 4h EURUSD, support line connecting the lows at 1.2325 and at 1.2525 and again at 1.2650. If this trend line is broken to the downside, then the downtrend will continue, first to test the low at 1.23, then possibly on down to 1.2000. Back above the monthly pivot I may consider some more up retracement, but as long as price remains below it, I will continue to sell it. The USDJPY has been consolidating this week, I found myself buying yen pairs early this week, and then selling them again the latter part. The weekly candle on the USDJPY is a 400 pip spinning top or doji candlestick. What does this mean? It means indecision. My guess is that this pair will continue to range in this area, as long as the important 95.70 is not broken to the downside. Below there and watch out, a test of the low and then further lows can be expected. But remember, if the yens fall, then the world stock markets are also falling, so I will continue to pay close attention. Can the Dow remain above 8500?
I voted, for Forex
Election day USA! The electricity is in the air. What candidate will be good for the forex trader? Interesting that the US stock market has been liking the fact that the polls have been leaning toward Mr. Obama. Actually not surprising, in past elections the Dow perks up for the prospect of a change in the White House. For me, yesterday and today have been good trading, mostly the yen pairs. Whatever the outcome of the US presidential election, the remainder of the year will be interesting for us. The US dollar has shown some weakness in the past week, partly due to interest rate cuts in Australia and expected in Europe this week. Then Non Farm Payrolls on Friday, cannot be good as jobs continue to fall. As a US forex trader, Mr. McCain would be the best pick for his tax policies. But there are so many factors in this time and this election. In all, either way, I have decided one thing: Forex trading will continue to pay my bills and then some. Even in these tough economic times, when people in the US and around the world are losing their jobs and their homes in some cases, so far, the foreign exchange market continues to provide fantastic profits to those who respect it and play it for what it is. I am not too afraid or excited for change in the White House, as long as I can continue to trade forex for a living.
Jennifer Shotts
Casey Stubbs has been trading for 14 years. He started trading in the stock market and moved to Forex. 
Richard draws from his extensive experience trading to write insightful trading articles for both fundamental and technical analysis.
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