Daily FX | Dynamic Trader Blog

Dollar breaks down

Good morning forex traders,

Although I am not that interested in fundamentals and even if you are not keen on fundamentals , you cant help but notice the moves yesterday. The Dollar took a pounding across the board and I cant remember the Euro moving up as much it had done yesterday ever before.

Dollar broke down yesterday following the Fed's announcement to ramp up the money printing machine to purchase up to $300b of long term treasury securities and expand purchase of mortgage backed securities by $750b and agency debts by $100b

Yesterday some traders would have made good profits on the back of this but no doubt many more traders would have lost by being stopped out through the initial volatility at 18.30 or through a reversal with trend following. Now is the time to re-assess what the market is doing. Take a step back and allow the market to provide information for a continuation of this breakout or show us signs of a reversal.

Weekly Euro chart (above) shows price had moved to the figure and VI.

The Euro 15 minute chart (above) shows 2.6 x 2 legged extension.

Both charts give us confluence of events for our trailing target but unless you were watching the market at the time of news release and jumped into the trade at the first sign of a breakout or entered with a limit order you would probably have missed the majority of the move. We were out and did miss the trade and from past experience, if I wanted to have traded it and even though it is the biggest jump I can recall in a short period of time, it would have been one that was stressful and would not comply with my style so I am not at all disappointed.

Gold (above) also made the massive move up from the low to the high of the days complete range within four hours.

Even crude oil got in on the act (above).

As the market has reacted the way it did yesterday even with the GBPUSD amidst the gloomy news then you cant help but think is the Dollar beginning to crack and showing initial signs of weakening? We will let price show us if this is truly the case and not second guess here. If this is all a big joke then no doubt normal service will resume shortly. Patience is the key!

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Javid Shaik
Forex Analyst

Nice moves this morning

Good morning forex traders,

Hope you are also looking forward to another trading week. Looking throught he charts last night I opened a long on NZDJPY and this morning a short on the USDCAD. Both are in profit at the moment.

The Cable is looking strong this morning and moved up with some good bullish bars overnight. The Euro is following a similar pattern to the GBPUSD.

The NZDUSD has just broken out to the upside and also looking bullish but beware the head fake possibility.

I would like to congratulate Clayton Farnworth. As of Tuesday he will be a full time trader leaving his joinery job behind. Good luck for your future Clayton.

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Javid Shaik
Forex Analyst

Passion Can Provide The Edge

Good morning forex traders,

We have had a busy week with our driving education. While we were at Silverstone on Monday we bought our helmets, gloves, intercom system and this equated to quite a few thousand Pounds. It's no wonder motorsport is an expensive business. Non the less, we are having so much fun it is keeping us busy and very much entertained. Talking with a friend yesterday, we decided to all try over hand at clay pigeon shooting soon.

Earlier yesterday we had lunch with Saba (who you know from fxcps.com updates) and those that have been following our Dynamic Trader forex blogs will be aware of the progress Saba has achieved and is now becoming a full time forex trader and leaving behind her mortgage business of 20 years. As you can all imagine that is a big step in itself and one many people would not consider but Saba did. The question is why and how did Saba consider this as an option?

Those of you who know Saba will not fail to spot a very noticeable characteristic and that is her pure passion for anything she decides she wants to do. Other than the thought of failure never entering her mind, her ability to focus coupled with overflowing determination forces her to succeed and that alongside her forex education and abundant passion is what is providing her the success in the currency markets today.

Everyone is looking for shortcuts. This could be in the form of attending overhyped trading seminars, or purchasing the latest all singing all dancing trading software or even using free software and worse still, no education. To be a success at anything in life, there is always an expenditure. This cost covers the learning, the equipment and the time.

We are currently paying just short of £1000 per day to learn how to race cars. I know and accept I have an expenditure to learn how to drive with the right techniques. Our first lesson consisted of technique and we were over taken by every single car on the circuit. Our second lesson consisted of speed and technique and we now started to over take other cars on the track. Driving over 100 mph around corners is new to me and I have learnt a technique that gives me the most momentum and the least effort which I would not have realized by myself. It's techniques like this that allowed me to over take a Porsche, Lotus and Jaguar all of which have more power than my Type R.

Those wanting to be forex traders undoubtedly need good education but also need a passion for trading. Forex trading is like a drug and I think it is the best business in the world but no matter how much passion you may hold for your business, you need a past time. Right now, our is racing!

To be an accomplished forex trader you need to immerse yourself into trading and develop a passion for it then, when you begin to find yourself spending all available hours in front of your trading software, find a past time to allow your mind to relax from the trading. This will help you to be alert and refreshed for the next time you get ready to tackle the market.

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Javid Shaik
Forex Analyst