Howdy Folks!

I’ve dusted off my microphone and decided it was time to start the weekly video update again! Today’s video discusses the one, lonely trade I took this week along with some more thoughts on identifying supply and demand level trading opportunities. Post your comments on what you think, I’m looking to make this video stuff as useful as possible for you!

I hope you have a great weekend!

Ryan

Howdy Folks,

First, thank you for being so patient with me and my stale blog while I wrote my book. I’m finishing it up now and getting back into the swing of things.  I appreciate everyone’s comments and suggestions as well. I’m really looking forward to having this work published. I will keep you updated on it’s progress.

Also, before I get started I want to mention I posted my thoughts on USD/CAD over on my FX Street blog. I invite you to read them by clicking here:

Tonight the USD/JPY is on my watch list for the next 48 hours. This pair staged a fantastic rally last week and given what happened in today’s equity market I think the risk averse crowd is itching for a reason to rally this again. Tonight we see USD/JPY floating just above what should become support from last week’s rally if the old axiom of resistance forming support proves true again with some trend indicators pointing to a move higher.

Fundamentally, the sentiment may shift to Dollar over the next 48 hours. Japan’s core machinery orders posted a horrible number tonight down 5.4% versus an expected 0.1% gain, ouch. Japan will also see GDP data tomorrow night (Wednesday in the U.S.) but that is the last of Japan’s fundamental punch for the week. Dollar on the other hand will see trade balance, retail sales and unemployment data over the next 48 hours with consumer sentiment on Friday.

Should the data continue a positive streak I expect to see another rally in the equity markets. Today’s market staged a vicious fourth quarter rally on mere commentary from Paul Krugman. Kathy Lien wrote in today’s FX360 column:

It seems that markets only needed one small catalyst to overturn bearish control. Today it came in the form of economist Paul Krugman’s comments that the economy is on pace to recovery, and should breach recessionary bounds by September. His comments reaffirm what everyone desperately wants to believe. However, today’s ending rise does mask some of the dour events that took place today. Today’s trading may present the new norm, as the masses of conflicting indicators manage to spike anxiety and volatility.

-Kathy Lien

http://www.fx360.com/commentary/kathy/1362/us-dollar-market-swings.aspx#headline04

I agree with Kathy. Assuming the news is consistently positive we may end the week higher on the equity side and Dollar may win out over the next 72 hours. From a technical perspective, the pair is testing a serious demand level built in from last week’s rally. Supply and demand traders will be watching the demand level between $97 and $97.50 for signs it will hold. Trending indicators including the Remora (modified HMA) that I watch and the bollinger bands suggest this pair may be starting a new up trend as well.

Here are today’s charts…

USD/JPY Daily

USD/JPY Daily (Remora)

USD/JPY 240

Best of luck, and more tomorrow! It’s good to be back!

Ryan

MPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle. Forex trading involves substantial risk of loss and is not suitable for all investors. It is quite possible you will lose all your risk capital on one or many really dumb trades if you don’t protect it with the appropriate risk measures. You could end up living in a van down by the river, and if you do it is not my fault you dig?

Howdy folks,

I’m closer to finishing the book and trying to get back into the swing of blogging again. Tonight I have only one interesting trade idea which I posted over on my FX Street blog. Since I only have one long term trade idea today I’m going to take the lazy way out and suggest you visit my FX street blog if your interested:

http://blogs.fxstreet.com/dayjobtrader/

Hope your having a great trading week thus far!

Ryan

Something lighter to banter about today. For all the talk about efficient markets and the “randomness of price” take a giant gander at where the EUR/USD closed today, $1.40 on the nose!

GBP/USD closed at $1.5905

USD/CAD closed at $1.1200

You’re not going to convince me this is random price action. I can see the interbank traders closing their books on the “double zeros” with cold beer, golf and the Memorial Day weekend on their mind.

Randomness of price…sure.

Have a great Memorial Day weekend!

-R

Following the giant sell off last Friday I went searching for some gap trade opportunities on Sunday night. I’m still hacked off I didn’t sell USD/JPY when it opened with an up gap in favor of the down trend. I can hear myself saying $98.74 is the supply level to sell, good grief. If I could trade a day late I’d be flying a Gulfstream G-550 by now.

I did manage to harvest a few pips off the USD/CHF as it gaped lower. Anytime I get gap lower after a long period of selling it sets up a long trade. I liked the hammer it formed and I wanted to trade it long for a few hours to see what I could get. I ended up holding it overnight and after a brief scare managed to get some pips out of it. This was not the cleanest trade I’ve ever made but profit is profit.

Historically I haven’t seen gaps as frequently as I have now with the recent volatility however when they appear a gap can offer a great trade on Sunday for those of you who work day jobs.

Overall a decent start to the week and I hope you’re off to a good start as well!

We have some good fundamental data on tap this week including Trade and Retail Sales data. I’m particularly interested in the Retail numbers since everything else in the U.S. seems to be on the stabilization path. The expectation is a big fat 0% but if it shocks significantly in either direction we could see some fun price action in the risk pairs such as AUD/USD or USD/JPY.

Best of luck,

Ryan

I haven’t posted in a while simply because I’ve been far too busy trading, writing my book and maintaining a few posts over at FX Street. Fortunately the book is close to being done and I’ll be able to finally bring this blog up to date!

This week something happened that I had to share because I think it is an important lesson you can learn from. I go out of my way to blog my trading blunders with the goal of making you a better trader so I hope it is working!

I’m a discretionary trader which means I do not trade a set of rules governing my entry or exit from the market but it doesn’t mean I trade without a plan. I trade a trend based methodology many of you know as “The Remora” which is a core topic in my upcoming book. The problem with discretionary trading is without black and white entry rules sometimes you can seriously over think a trade and in my experience cleverness is often not rewarded to your liking.

The Trade Setup

AUD/USD has been on a strong trend since the 28th of April and had just closed down forming a “pull back” day within an uptrend. These “pull back” days are what I look for when considering whether or not to join an existing trend so it put me on alert for a potential long trade.

The Trade Entry

With the bias to go long based on trend I started looking for fundamental reasons to back the trade. The evening of the 5th I got my wish when the Australian retail sales report posted a 2.2% gain over an expected .5% gain. The initial reaction was a sell off smack into a support area which offered an excellent opportunity to buy the pair and join the trend on the back of positive fundamental news.

The Clever Mistake

Even with everything going my way I convinced myself when London opened they would test the support level again and I dropped an order at $0.7337 instead of buying at market. I wanted to keep risk low and figured that support level would be probed again but I was dead wrong. The market never dropped and my long order was never picked up. For the sake of risking another twenty pips I missed out on 300 pips as the AUD/USD rallied for three straight days closing today at $0.7679.

I could have easily reduced my position size, increased my stop loss and bought at market but I tried to be clever and I missed out. I knew the trend was strong, I knew the fundamentals were strong, I knew the support layer had been tested but I was convinced of something that hadn’t even happened yet. Talk about a rookie mistake!

The moral of this story is that you can only trade on what you know and not make assumptions about what you think you know. It doesn’t get any better than this trade setup and when it happens again make sure you just pull the trigger!

I hope you’re making a killing in these crazy markets! Have a great weekend!

Best of luck,

Ryan

Quite a mixed bag on the Dow Jones Industrial Average today. We saw a late day rally fueled by some positive data out of the Fed and American Express among others ultimately ending up 109 points. It appears the positive outlook continues into the Asian markets as the Nikkei is up 253 points at the time of writing this post.  A positive outlook may help fuel the carry trade through the rest of the week. Combined with a juicy daily chart hammer along support I’m considering a small long in USD/JPY over the next few days. The U.S. economic risk event calendar is rather sparse tomorrow (Thursday) however we are still awaiting the results of the U.S. bank stress tests which could be a game changer, who knows how the market will react to that news.

Technically speaking, the hammer corresponds with a resistance layer that USD/JPY broke through a couple of weeks ago but had not tested as support until today. Looking at the hourly chart, the demand level appears to be between $98.60 and $98.10. I’ll be watching for an opportunity to go long as price moves in and out, around that level while tomorrow plays out. If I do get long, I’m going to shoot for a profit target around $100.71.

How Much Does a Sam Adams Cost in Washington?

I was reading comments tonight and saw Radek had asked:

So how much is a Sam Adams there in your place?

Very good question, unfortunately I don’t know the answer. I buy Sam Adams when the seasonal cases come out at Costco. I don’t recall the price of a case but their Winter brews are my favorite. Perhaps I should change my donation link to say “Buy Ryan a Case of Sam Adams”!

There are only two beers my Wife and I are fond of. One is Sam Adams and the other is a local brew named Mac & Jack’s which unfortunately can’t be bought retail unless you want a keg so we are stuck with ordering it at local restaurants.

Best of luck,

Ryan

When a poker player with a superior hand is beaten by an opponent who is praying for a miracle on the river card it is known as a bad beat. Poker players understand that once in a while the odds are going to align against them and take them out even when they start with a superior hand.

Traders have their own version of the bad beat known as the stop gun, tick out or whatever they want to call it. Usually the story talks about how their stop was taken out moments before the market moved a gazillion points in their favor. Cry me a river.

Professional traders understand that occasionally stops suck and you’re taken out moments before the big move but do we care? No!

The reason we have risk control to begin with is to stop the blood letting before we run out of blood. The moment your stop is triggered there is no way you could have known the very next tick would start a turn in your favor.

The trader who tortures them self with what could have, should have or might have been is committing a horrible emotional blunder. You must avoid succumbing to bad beat syndrome because afflicted traders begin to move their stops when the next trade moves against them. They are convinced the trade will turn around just like the last one only this time they end up bleeding out their account.

This hasn’t happened to me in a while which I’m grateful for but today I was tagged out by about 20 points literally minutes before a 225 point rally in my favor. Every poker player or trader has a bad beat story and frankly nobody wants to hear them.

Today I took GBP/USD long for +118 points and was stopped (not cheated) out of a long GBP/CHF for -76 points but if you ask me, both were winners.

I don’t plan to trade tomorrow, I’ll wait for Non Farm Payroll Friday and trade post report if the right opportunity comes up.

If your interested in a channel I’m watching on EUR/USD check out my FX Street blog for all the details by visiting me at: http://blogs.fxstreet.com/dayjobtrader/

Best of luck!

Ryan

Thought I’d follow up on my USD/SGD trade from the weekend. The pair gaped up on Sunday afternoon offering some longs around the channel breakout but is having a lot of trouble breaking through resistance at $1.5240.

I actually missed the long entry because I put my entry order near the bottom of the gap. I figured it would fill the gap before moving further but it didn’t, oh well. If I were long, I’d at least consider a break even stop as there is no sense in letting a winner turn into a looser ahead of the upcoming event risk.

Tomorrow’s fundamental docket for the U.S. Dollar includes ADP Payroll, ISM Manufacturing and Pending Home Sales which may help drive this pair out of its range but it may not be favorable to the position.

Best of luck,

Ryan

Today was a cliche day in Seattle, cold and rainy. I saw it as an opportunity to partake in a O’Keefe family tradition, Ivar’s Fish Bar on Pier 54. If Seattle is known for anything it would be rain, coffee and Ivar’s Fish Bar on the waterfront. When I brought my Wife to visit Seattle for the first time we drove straight from the airport to Ivar’s, it’s that good.

Since opening in 1938 Ivar Haglund’s fish bar has become a Seattle institution.  My entire life I’ve measured other fish-n-chips against the Ivar’s standard and nothing comes close to their Halibut-n-Chips.

I ate out on the pier. It was raining, windy, 39 degrees and I loved every minute of it. If you come to Seattle, do not miss Ivar’s or you’ll miss out on something special.

If you let me know your coming, I’ll meet you there!

Is the USD/SGD Preparing a Breakout?

Here is a currency pair I’ll wager many of you don’t look at regularly but a nice channel is shaping up on the USD/SGD which may breakout soon. On the daily chart we see a head & shoulders pattern which broke down about two weeks ago followed by a consolidation range. The range can break in either direction but the overall trend on the daily chart appears to be up and Friday closed with a bullish engulfing candle giving me a bias to the uptrend continuing. The pair is currently consolidating on the 38.2% Fibonacci level within the uptrend between $1.4149 and $1.5575.

(Click the charts for a larger view)

As of Friday’s close, the 60 minute chart was bunching up near the top of this channel. Should the pair break out to the upside, I think a decent technical price target could be $1.5300. We will have to wait and see what happens.

What do you think? Share your opinion on this trade with us by clicking here, I’d love to hear from you.

About the Book

I appreciate the interest in my book through all the comments and email, I’m very excited about it. Peter asked if I had any idea when it would be out and I’d like to address that question. Currently we are still in the writing and editing phase. I don’t believe the book will make it to print until late this year or early next year.  I will keep you updated via this blog as progress is made so stay tuned.

I’m writing this book for the struggling trader or those who work a day job. This is not an academic book. I don’t explain what a pip is, how the FX market got started or what the economic drivers of XZY currency are.  My goal is to give you actionable trading advice from my own experience with some methodologies you can make your own and hopefully get you on track to profitable trading.

-Ryan

Photo Credit: anneh632

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle.   Forex trading involves substantial risk of loss and is not suitable for all investors. You could loose some or all of your investment capital, your shirt, shoes and possibly end up sleeping in a rusty old van down by the river. If you do, it’s not my fault you dig?