With daily ATR's falling on average 15% across most of the majors and the crosses, along with several inside days, the price action chop fest has begun as the markets digest the Himalayan sell-offs, we have witnessed over the last few months.

This was intimated by how the intraday Ichimoku Clouds have gotten very finicky, like college students on triple espressos waiting to take their final exams.

Taking a look at the chart below, we can see how the Clouds or 'Kumo' have started the flipping contrast. Notice how the white portion of the cloud goes from top to bottom to top Mexican jumping bean style all over the charts for the last several days.



Remember according to Ichimoku theory, the cloud represents support and resistance levels. The thicker the cloud, the thicker the support/resistance it should offer. If its constantly flipping from thick to thin, then that basically is communicating an opportunity is right around the corner for the pair to reverse instead of continuing on in any particular direction.

Thus, if you are looking to catch any substantial move, the floor might drop right out from under you at any moment. This requires a more nimble trading approach as the flipping of the cloud results from the price action being direction less or zombie like bouncing from pillar to post looking for fresh meat. When I see this kind of chart formation, I generally result to the following tactical methods:

1) Drill down to smaller time frames (i.e. 1 or 5 minute charts) *we only suggest doing this if you've had practice/success at these levels and are choosing pairs with smaller spreads.

2) Super-size the time frames up to the larger parameters, aka the 4-hour or daily charts. This will create a pseudo-smoothing method and help one to see the larger ranges in play and play for rejections off the Bollinger Bands or 20EMA's with correlating flat Momentum readings (12 period.)

3) The last option is to stay out which has been my more enjoyable method besides the 1min time frames. Sometimes, there just are not too many ladies for me to dance with on the dance floor. When that happens, I usually re-evaluate whether I am in the right environment or or whether I want to dance at all. I do Tango dancing so if there are no ladies around, then I'm generally not dancing. There will always be another Tango Milonga to go to and there will always be another trade in the markets.

Remember the markets have a close relative called Las Vegas, and you want to make sure you are not always playing hands just because you have time and money to play. In the same fashion, you want to pick your games, tables and times to play where you are most likely to succeed. Based upon the current price action, this trader suggests smaller targets, trading pairs with tighter spreads, perhaps using Bollinger Bands and pivots if you are looking for a rejection play, and being more selective.

The chart below gives an example of such plays using the Bollinger Bands on the 1hr charts.



Chris Capre is the Founder of Second Skies LLC which specializes in Trading Systems, Private Mentoring and Advisory services. He has worked for one of the largest retail brokers in the FX market (FXCM) and is now the Fund Manager for White Knight Investments (www.whiteknightfxi.com/index.html). For more information about his services or his company, visit www.2ndskies.com.

Tuesday, September 8, 2009

What is FOREX Trading and Can I really Make Money While I Sleep? by Adam Davies

Can you make money from FOREX trading?
The simple answer is Yes!

FOREX trading is in its simplified form a cash market where the currencies of nations are traded. Currencies are constantly being bought and sold by traders and brokers accross the globe. The conditions within the FOREX market are constantly changing every second in response to what is happening in the world.

The FOREX market is fluid and volatile, currencies are traded 24 hours a day 5 days a week and there are enormous oppertunities within the market for large, low-risk profits.

Currencies are traded in pairs, for example, an investor may decide to make a speculative trade on the exchange rate of the US Dollar and the UK Pound.

Lets say the investor purchases $400 US of UK pounds and leaves that investment in place for a period of time within the market between those two currencies. After this period, the investor purchases US Dolars back with his original purchase of UK Pounds and he gets $497. The trade has profited by $97 US.

Investors need to be aware of the ROI (Rate of Return) for a trade against all of the other possible currency pairs or possible risk free investment ROI such as US Govenment Bonds. It is a complicated business but volatility and fast changes to global events make it possible to make fast and large profits.

Without a doubt the best way to proceed if you are keen to have a go at FOREX trading is to get access to a FOREX TRADING ROBOT.

Without using a robot, unless you are an expert, you have no hope of checking, testing and cross-checking the ROI of thousands of currencies and bonds worldwide all day every day.

With a FOREX TRADING ROBOT you can leave your investment to work for you knowing that a tried and tested robot is covering all of the angles for you and cross checking every conceivable currency pair to make sure the profit from your investment is maximised.

The newest, most advanced and successful FOREX trading robot is FAP Turbo . In its extensive pre-release back testing FAP Turbo showed the follwing results:

9,645 Total Trades 95.9% Winners

5,000% NET Profit

To put that into real terms, a $400 investment could return over $8000 in just 2 months automatically!
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