A lot of folks are looking for forex trading advice these days. So, I figured I would pass this on to the whole Winners Edge community. One of the things we look for consistency in the Trading room is USD strength or weakness and Yen strength or weakness. Then we match it up to what looks to be the pair/ pairs to trade on that given day.
One of the best pieces of trading advice that I can give, is making sure you watch the USD- yen like a HAWK… Just as the everyday trader in stocks should be watching the QQQQ or futures (among many other things), we forex traders know that the moves in the USD- yen will be HIGHLY magnified in all our yen crosses. We see patterns emerge all the time and the completion of these patterns will make the Pound yen and Euro-yen ( 2 of our favorites) absolutely ROCK! Here below you will see a one hour chart of the USD yen. We had a couple of ascending triangles for 2 days, that continually failed (trend line breaks) and this lets great shorts on the other pairs. Also, notice what is “close” to a bearish crab harmonic pattern on the hourly indicating moves to the south.
Notice in this 15 min chart (Today, Friday, May 28th) We had a classic Head and Shoulders pattern set up followed by a broken neckline and a subsequent fall. This really put us in a great position to take advantage and be short the pound-yen and euro yen pairs (which did quite well). Space will not permit me to put those charts up but just a 50 pip crash in USD yen results in WAY more on the pound-yen.
So, as for that week we expected more choppiness as the Stock market bounces around between the “flash crash lows” ( as they are now calling it) and the POSSIBILITY of retracing all the way up towards Dow 10,700 (though I Really do not think that it will go that high, at all) and then we should experience the massive 3rd wave down on the stock market, racing us towards 9000 to 9200 or so fairly quickly. This should drive the USD yen WAY, WAY lower and be a MASSIVE wave of USD strength against most pairs. We will be looking for eurodollar towards 115 or so in the coming weeks. Anyway, enough of that. My piece of Forex trading advice is to watch the yen constantly, especially during the Tokyo open for trading all other yen crosses.
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