Daily FX | Dynamic Trader Blog

Euro Supported

The Euro Dollar has a support level which has produced a minor bounce. As mentioned previously on Javid's blog the Euro may find support and bounce or travel sideways which is quite normal after a major move. Every big move tends to have consolidation before a continuation or reversal. If the Euro Dollar continues then we will see a breakdown of the support level.

There are at least two methods of making money on a move like the Euro has done from the all time high. One is two take out a long term trade and manage the positions while riding out minor reversals. The other is to use shorter term tehnical analysis on shorter time frames and get the minor reversals including the longer term trends.

Right now on the Euro, our model highlighted a long position and a breakdown of the support zone could provide the short continuation. However, if we get a 123 786 with evidence from our supporting indicators then we could see a reversal in place. That said, it is always easier to trade with the trend and right now the trend is down. Trend trading will provide less stress and usually bigger rewards.

My next update will be a the strategy I mentioned last week.

Until then, good dynamic trading.

Forex Analyst
Anne Chapman

In Charts We Trust

Chart patterns are quite often the first introudction new traders have to the financial markets. This brings a degree of familiarity and a comfort level to the trader. Triangles, rectangles, wedges, channels, double bottoms and tops, head and shoulders and many more are the first glimpse of what trading charts contain. Chart patterns are an excellent way to learn the markets and trust the movements in the markets and identifying perhaps the direction of the market and areas of reversal.

Fundamental traders may disagree with what I am about to say below but I strongly believe that many times news is already factored into the price. Price contains a lot of information and in most cases more than most traders actually realize.

As a dynamic trader I am always willing to go with the flow of the market. That means I will follow the trend of a market unless I have very good reason not to. Trend following holds the most advantages and price within a trend gives excellent indications. Many traders will fail to follow a trend and decide to fight the trend to make small amounts of profits for massive amounts of stress.

If you follow the trend, chart patterns, support / resistance then your trading is on it's way to being profitable.

Over the years I have seen Javid develop some excellent strategies for identifying trends and I use to aid me in my trades but trend direction is probably the hardest to identify. Next week I will share a basic strategy to identify trends.

Click here for today's forex analysis.

Daily Pivot Points can be found here.

Good trading

FX Analyst
Anne Chapman

The Best Forex Strategies Part 2

Previously we discussed the internet selling trading strategies in profusion. As long as their is a need and belief for becoming rich overnight on the markets the selling of strategies will continue. Now I am going to show you the best strategy you will ever need to make money from the markets.

I have been investing in the stock market for nearly 20 years. I had bought shares and held on to them for years. I have even had shares handed down to me and continued to hold them. Like many investors, I used the buy and hold strategy. This works well in a bull market but does not work in a bear market. So, after the markets changed to a bear market in 2000 I felt my perfect strategy was losing me money at which point I needed to learn why.

Me and Javid attended a stock market weekend training course soon after the bear market began and I quickly realized I did not know anything at all as far as trading was concerned. I fooled myself in believing that because I made good money from my buy and hold strategy that I knew all I needed to know from a trading perspective.

After doing the course I looked at the markets in a different light. I knew more but I also knew I didnt know enough. Javid decided to attend further courses both in the UK and USA and had 4 seperate mentors. After almost 18 months and courses and mentoring, creating and testing strategies, learning trading software packages and trading platforms Javid started making money from the markets. Javid mentored me and showed me how to make money from the markets too. I began to think this is quite simple but was nervous at the thought of this actually working consistently. In fact I was making more money from trading then being employed but refused to leave my job in case these strategies stopped working. One day Javid convinced me to hand in my resignation which I did and I am very happy to say it was the best decision regarding employment I have ever made.

So, now that I was no longer employed I had to build upon my experience on the markets and became a full time trader. I called upon Javid for further education and strategies and the mental approach I should take towards trading. This took a while for me to grasp and the cool mental approach was not easy for me but I learned the process Javid showed me and removed much of the emotion I had from my trading. Now that my mental approach had been worked on, my trading style had to be identified.

So, why don't I buy a pdf for $97 or a pre built black box strategy for $15,000 off the internet and just use it to make money? The reason is many trading pdf's for sale on the internet are produced by clever thinking marketeers. They can entice you to buy almost anything because that is their job. They market products but many of them are not traders, they are full time marketeers! A black box strategy throwing up buy and sell signals without a valid reason is similar to driving a car without brakes. Our left brain needs answers and not understanding buy and sell signals is disastrous long term for trading.

With all that said what strategy do I use? From the mentoring Javid may have given some of you reading this forex post and webinars you may have attended, one of Javid's favourite trading method is breakout and breakdowns. This is exactly what I look for and so do the majority of professional technical traders around the world. At the end of the day the markets come down to support and resistance levels. A support level breached signals further weakness where as a resistance level broken signals further strength. It really is as simple as that. This is the best strategy you will ever need as far as technicals are concerned. It has been tried and tested for many many years and it is what works. Looking for breaks of support and resistance levels gives you directions. What needs to be added to these breaks is confirmations and filters. Adding these confirmations and filters will remove some fake breakouts.

So, when you next look at a chart, identify the support / resistance levels. If price moves beyond these levels then include a filter to add credibility of this move. Finally confirm the breakout / breakdown with some confluence of events. Now you have a full working strategy. This is what I use in addition to others but this alone when perfected can make a good income for any educated trader. To a non educated trader this may seem like rocket science but to those Javid has mentored and trained this shoud be much easier to create.

Good trading.

FX Analyst
Anne Chapman

The Best Forex Strategies Part 1

Selling forex strategies on the internet is a big market. Many new strategies are created daily and sold on the internet to traders looking for the holy grail. As long as their is always uneducated traders their is always a market to produce strategies to sell. So is this a good or a bad thing?

As most of us are aware, 95% of traders will consistently lose money. Only 5% make profits and these are generally the eduacted traders. Every day we have numerous emails asking about what indicator / strategy / software we use. Let me be very clear about this, without the compulsive forex education, any indicator, strategy or software you use will not help you make money on the forex markets. Further more, without the forex education no strategy sold on the internet will make you consistent profits. A big win here and there is not trading, it is gambling and is destined for major losses.

So, if forex education is so important why does Google have 366,000 forex strategies listed? Surely knowing even the best strategy out there is useless without the education and having experienced the markets and emotions that go with it? The answer is simple. The uneducated will always look for the quick fix and have no idea what it takes to be a trader. It's exactly because of this reason that  there is an abundance of strategies for sale on the internet. Don't be fooled, no matter how good you are told a strategy for sale is (and most are not as good as they may seem), the best strategies are the simplest and I am going to share with you the simplest and probably one of the best type of technical strategies for the forex market tomorrow.

Good trading.

FX Analyst
Anne Chapman

What is an Inverse Strategy?

In the last post we discussed what a parallel strategy was. Today I would like to discuss the inverse strategy.

The inverse strategy is a little more complex to the parallel strategy as it requires trades moving in opposite directions. So, what is required for this to work is the base and counter currencies on the first pair to be directly opposite to the second pair. Let's take a look at some examples of that.

• EURUSD and USDCHF
• GBPUSD and USDJPY
• AUDUSD and USDCAD

In all three of the above examples, the first pair has the Dollar as the counter currency and the second pair has the Dollar as the base currency. So if the Euro strengthens against the Dollar then we will generally see the Dollar weaken against the Swissy.

The parallel and inverse strategies can be easily identifed almost every morning on the Dynamic Trader Forex Toolkit under the Daily Pivot Points.

Read more daily forex analysis here.

Good trading.

FX Analyst
Anne Chapman

What is a Parallel Strategy?

Many of us use parallel strategies without knbowing we are and others use it as part of a trading plan. So what is a parallel strategy?

This is by far one of the easiest trading strategies to implement and follow. It requires a technical or fundamental set up and at Dynamic Trader we favour technical set ups. The set up has to be on two pairs that tend to move in the same direction. An exaqmple of that is the Euro v Dollar and Pound v Dollar. Both the Euro and Pound are the base currencies against the Dollar and both the Euro and Pound behave in similar fashions.

As Javid teaches this method on his forex mentoring courses, taking a position on the Euro Dollar based on a set up and taking the same position on the Pound Dollar with similar set up is referreed to as a parallel position and so the name Parallel Strategy.

The Parallel Strategy is  a basic strategy but we will require good points for entry and stop as per usual and as always must have good money management.

Some suggestions for you to use the Parallel Strategy on are listed below:

• EURUSD and GBPUSD
• AUDNZD and NZDUSD
• USDJPY and USDCHF
• EURJPY and GBPJPY
• AUDJPY and NZDJPY

The above listed pairs and crosses are suggestions for the Parallel Strategy but any two currencies pairs or crosses you find are similar in their behaviour can be used.

You can read daily forex analysis at www.fxcps.com

Enjoy the weekend and also the start of the Premier League football season.

Below are today's forex daily pivots created by Dynamic Trader Toolkit.

FX Analyst
Anne Chapman

Forex Trading Rules

Traders should never assume they know all they need to know to trade the markets. A successful trader is always learning and evolving and never stops trying. Some traders think once they have a strategy they like they just need to use that all the time. The markets are dynamic and a static trader is unlikely to make a succesful trader.

Below I have listed some simple rules every dynamic trader should have implemented in their trading plan.

• Never chase trades
• Don't overtrade
• Always use a stop loss
• Never average down
• Know what news is due out and when
• Let price decide your actions
• Keep a record of your trades

This is not a complete list of trading rules but certainly is a starting point. Add to the above list and create your own trading plan which you should follow without deviation.

Here are 5 Things dynamic traders should not use:

• Emotion
• Revenge
• Anger
• Greed
• Fear

It is easy to get caught up in the emotions of a trade or after having a bad loss and wanting to take revenge on the market. Feeling angry after a loss, letting greed take over in a trade or fear of losing money is all part of trading and something each and everyone of us hasnexperienced. Learning to deal with these is what is known as dynamic trading.

Every good trader will keep good records. Make sure you have organized an up to date records of your trades. This is a big part of evolving and your best form of learning.

FX Analyst
Anne Chapman

Choosing a Forex Broker

Dynamic traders will tend to have and use more than one forex trading account. New traders starting off in forex looking to open their first account will no doubt be confused as choosing a forex broker is not easy. Your broker, platform and service will be crucial to your trading so deicde carefully.

Forex brokers are in abundance and that makes it all the more difficult for someone new to forex trading to decide which is the right company to go with.

First off, We are not an Introducing Broker or affiliated with any forex broker. An Introducing Broker otherwise know as IB or an affiliate is a person or organization promoting the broker in return for some form of commission either once off or ongoing. Javid was on a seminar where the seminar company was heavily promoting a broker and offering all sorts of freebies if he signed up that weekend. It was clear they were some how associated with the broker and they were serving their own needs and not the seminar attendees requirements.

Never rush into signing up with a broker. You wouldnt buy a car without knowing something about it so don't rush into opening a broker account without knowing more about them.

Choosing a forex broker can be confusing but here are some tips to help you identify the qualities your broker should have.

Low Spreads:
The spreads is the difference between the buy price and sell price and is measured in pips. Compare spreads across a few brokers and look for the brokers with smaller spreads.

Accounts:
New forex traders should look to start trading with either a Micro or Mini account. Once experienced then a trader can move onto a Standard account. Your broker should offer a micro or mini account.

Regulation:
The forex broker should be registered as a Futures Commission Merchant with the Commodity Futures Trading Commission (CTFC).

Customer Service and Speed:
Trading in forex is available 24 hours a day from Sunday evening until Friday evening. Customer service should be open during these exact times. Try calling the trading desk or helpdesk to see if they are open and check the speed at which they answer the phone. When in a trade the last thing a forex trader wants is to be kept waiting for the phone to be answered.

Trading Platform:
If you use many different computers you may prefer the trading platform that is web based. If you will be trading from just one computer all the time then downloading and installing the software to your computer will be fine. Check to see if your broker is software based or web based. Some brokers offer both options which would be the better option.

How Many Currencies:
Check to see what currencies they offer trading on. As a guidance confirm they trade most of the major pairs and all the ones that you may like to trade in addition.

Leverage:
How much leverage does the broker offer? For inexperienced traders using mini accounts should not use too much leverage and 100:1 would be adequate in most cases.

Money:
Check what the procedure is to fund your account and also to withdraw your profits including the time it takes to do both.

Tools:
What tools are offered with the account? Some brokers offer an array of charting tools and although useful and well worth having I do not recommend relying on these solely for your trading. You get what you pay for and even though any free tools offered with the trading account is always great, a trader needs to invest in good tools to become a good trader. Advanced Get is one of our favourite trading tools. Read more about this excellent trading software.

The above is just a guideline to help choosing the right broker.

Can Dollar Strength Continue?

A week of heavy news events are almost complete and the Dollar seems to have come out of it smelling of roses. Interest rate decisions by four central banks have come and gone without any surprise. A rate increase seems less likely for the coming months based on fundamentals and the Fed's current tone.

The credit market is far from normal levels but the Fed's actions seems to have improved public confidence and perception.

The recent Dollar strength is showing the confidence but the Dollar Index doesn't quite confirm that just yet on the weekly outlook. The weekly Dollar Index chart is below.

Javid's forex analysis can be found here.

Have a great weekend.

FX Analyst
Anne Chapman

Chart courtesy of Advanced Get. Data provided by eSignal.

Euro still rangeing

Hello Dynamic Traders.

The Euro Dollar is still in a range and I have added a chart to show you. A BOB below 1.53 zone and then we should be concerned for further possible downside moves. A pullback is likely at some point and measuring the pullback could determine what is next on the Anti Dollar agenda.

Daily Euro Dollar Advanced Get chart below.

Further fx analysis here.

Good trading

FX Analyst
Anne Chapman