Weekly Forex Outlook 20 November 2016

It's been almost 2 weeks since the US election and the aftershock is beginning to settle. My analysis shows that both volatility and price action are no longer hostile to my trading methodology. Here are the currency pairs that I'm watching next week for possible trading opportunities:

AUDJPY - Resistance at 81.50 has been broken during the week but price action is still showing a lot of selling pressure. Thursday's and Friday's candles show that buyers and sellers are still struggling it out for control. At the moment, my analysis favours a long trade more than a short trade. This is because price action in the last 5 weeks show that buyers have been stronger than sellers. I am waiting to see how Monday's candle turn out before deciding on my next move.

AUDUSD - Support at 0.7440 was broken this week and sellers are in total control for the last 3 days. If price pulls back to 0.7740 then it could be an opportunity for me to enter short if this support levels turn into resistance.

EURAUD - This pair finished the week just under 1.4430 level. This has been a very strong support level for much of the year therefore it could now be acting as resistance. Despite the recent messy price action, there are still signs that it is a significant level for me to trade from. Going into next week, I am monitoring this pair on multiple time frames looking for signs of strong selling pressure below resistance to go short.

EURUSD - I'm looking at the weekly chart here and price is getting close to 1.0520 long term support level. Seller have been strong in the last 2 weeks therefore I only would consider a reversal long trade on daily or weekly time frames. Smaller time frames carry more risk than I can handle in this particular case. Let's see how it turns out.

GBPAUD - Resistance at 1.6720 has been tested and broken through. This setup has almost meet all of my entry criteria for a long trade. I need to see how the weekend gap (if any) would affect the numbers for entry and target that I have planned. My stop would be below 1.6400 which is the last swing low.

GBPJPY - Buyers continue to push price up after the US election and now it is close to 138.60 resistance. I want to see evidence that resistance holds up as well as selling pressure below resistance to enter short.

USDJPY - Similar to GBPJPY above, this pair has been on a strong uptrend since the US election. Price is now very close to 111.20 resistance level. This is a strong support resistance level in my analysis with a lot of strong movement away from it earlier on in the year. My approach here is the same as my plan for EURUSD (see above):  I only would consider a reversal long trade on daily or weekly time frames because Smaller time frames carry more risk than what my trading plan is designed for.

October 2016 performance summary

Here are my performances across the 2 accounts for October 2016. Account statements and performance summary pages have been updated.

+1.84% on Trend Following account
 0.00 on PAMM Growth account

This year so far have been full of surprises and it still has more to go with only 2 months remaining. My discipline have been tested many times when market does not produce trading opportunities.

There was no opportunity to trade on the Growth account this month. I am more than happy to stay on the sideline watching the market rather than forcing the market to produce trades. With the US election coming up next Tuesday, I will not be trading USD until Monday 14th.

The trend following account had a positive month with big winners on GBP shorts. GBPAUD short was opened for 5 weeks and finished with +5R. GBPUSD was opened for 7 weeks and also finished with +5R. This account will continue to trade as normal over the US election unless volatility goes above my risk tolerance (which happened prior to Brexit).

Weekly Forex outlook 16 October 2016

The Australian Dollar has been strong in the last week, breaking through key support resistance levels on many pairs that I trade. These are the possible trading opportunities that I am watching for next week:

AUDJPY - Resistance at 78.90 has been tested many times last week and was broken on Friday. Price has made a significant higher close. If resistance turns into support, there could be an opportunity for me to go long if price retraces back to test this level again.

AUDNZD - The opportunity on this pair is very similar to AUDJPY. A break of resistance offers a possible long entry if a retracement occurs. I will be looking for evidence of 1.0730 acting as support together with strong buying power before I plan my trade.

EURAUD - This pair created a new yearly low on Friday which is also a sign of 1.4430 support breaking in my analysis. I will wait until the Monday's daily candle to close before reviewing this pair again. Depending on how price moves on Monday, I could be entering short or long. I need more confirmation to better assess the risks. Next Thursday will have interest rate decision for EUR and I will not trade EUR on that day.

GBPJPY - Since the big drop from 2 weeks ago, this pair has been slowly crawling up. Resistance at 128.70 could be in play next week if buyers continue to push up. I will be monitoring this pair on multiple time frames for opportunities to short if I can see signs of strong seller pressure below resistance.

Weekly Forex outlook 10 October 2016

Last week produced some big movement for GBP. Stories of traders and investors losing everything have been coming in from the online communities. Trading requires absolute discipline because just one moment of carelessness can undo months of profits or even wipe out all trading capital. I choose to be a survivor because I value the experience that the market gives me. I choose to stay alive so that I can take profits another day.

It has been more difficult for me to trade since Brexit because of uncertainty in support resistance levels. I am 3 months into my second year of prop trading and I have done 8 trades with only 1 winner. The Growth account is going through a new largest draw down, partly due to the losses and partly due to the increase in position size (as required by the firm I trade for). However, my performance statistic is still within the acceptable zone. Losses are kept small relative to winners. Both short term and long term expectancy are still positive.

Thursday last week provided 2 trading opportunities: EURYUSD H6 long at 1.1120 support and USDJPY H6 short at 104 resistance but I did not trade because it was too close to non farm payroll the following day. It hurts a little to find myself missing out on profits because I follow my trading rules. But then I also remember that my rules were created based on statistics and not emotions.

My focus for this week would be to identify new support resistance levels for GBP pairs. The only trading opportunity that I can see right now would be USDCAD on daily chart:

USDCAD - Buyers managed to break above 1.3250 long term resistance and closed above that. Today's open had a gap down so I will wait until Monday's daily candle to close before reviewing this pair again. I am looking for opportunities to go long above 1.3250 which could now be acting as support.

September 2016 performance summary

Here are my performances for September 2016. Account statements and performance summary pages have been updated.

-3.79% on Trend Following account
-0.43% on PAMM Growth account

There were 6 trades taken on the Growth account, 5 losses and 1 win. These are the trades summary expressed in unit of risk (R): -0.63R, -1R, -1R, -0.77R, +2R, -0.56R

My trading plan always set TP at +2R. Theoretically, I should be have lost -3R but in reality I am only down -1.96R . Despite making a loss this month, I have achieved my goal of losing less than what I should have. My actual performance have been better than what my trading plan allows. I cannot control the outcomes of my trades but I have complete control over how much I lose.

The Trend Following account posted a big loss for September. Reversals on the trends this month had put a string of losses on the account. There are 10 months to go before the 2 years forward test is completed. I will not be making any changes until I have 2 years of real statistics to analyse. Unlike other traders, back testing result does not mean anything to me. I only make trading decision based on live trading with real money.

Weekly Forex outlook 18 September 2016

My blog entry last Sunday produced 3 trades on the Growth account during the week: 2 losses and 1 win. In typical fashion, I started the week with 2 losses in a row before getting a winner with GBPAUD on Friday. However, that 1 winner is twice as large as the 2 losers combined. This is my reward for grinding it out trade after trade, doing the exact same thing, taking losses without losing trust in my ability. It's not easy to take a trade when you just had 6 losses in a row. Discipline and a high tolerance for pain are essential for trading success.

These are potential trading opportunities that I am monitoring for next week:

AUDJPY - Support at 76.30 has been tested a few times last week and it appears to be holding. However, according to my analysis, price action is not showing any sign of strong buying power.Therefore I will be watching for an opportunity to short if resistance breaks.

AUDNZD - I shorted this pair last week when resistance wast tested. The trade was closed out for -0.56R loss when my exit signal came up. Price finished the week just below resistance therefore once again I will be looking for signs of strong selling pressure to enter short.

EURAUD - After breaking above 1.4890 resistance earlier in the week, price has pulled back to this level again. This can potentially setup a continuation trade for me. I will be watching price at support to find low risk high reward opportunities to enter long.

EURJPY - This pair mostly been ranging in the last 2 weeks. Support at 114.00 has been holding up well so far. For next week, I am looking for opportunities to go long if support holds and buyers are strong. Alternatively, if support breaks then I will be looking for shorts. I trade whichever direction is price action is showing a higher probability according to my strategy.

USDCAD - Resistance at 1.3250 is finally coming into play. This is a significant resistance level in my analysis. Just like the GBPAUD from last week, I prefer to trade only from these support resistance levels because they offer many advantages to suit my risk management techniques. If resistance holds then I will be looking at multiple time frames for signs of strong selling power to enter short.

Weekly Forex outlook 10 September 2016

This week has been yet another week of patiently waiting for the right setup to trade. I was so close to being in a trade but the market did not agree with my analysis. I had a buy limit  to go long USDCAD on daily chart after 1.2830 support was tested on Tuesday and price action showed signs of strong buying power on Wednesday. My entry price was at 1.2846 but unfortunately price got to within 5 pips and then buyers stepped in.

This is a screenshot of the setup when my order was placed:

This is what it is now. Price has already hit the TP that I planned for. This is the reality of trading.Trading is about following a plan while realising that the plan sometimes will not get you in on profitable trades. The plan is not going to work each and every time.

For next week, I am looking at the following currency pair for potential trading opportunities (all charts are on daily time frame):

AUDUSD - Buyers were very strong at 0.7500 support level just 2 weeks ago. If price continues to drop to this level then I will be looking for opportunities to go long.

EURAUD - Friday's candle closed just above 1.4890 resistance. This level was tested recent and proved to be the point where sellers eventually took control after a long period of indecision. Since there is a daily close above resistance (even by just 6 pips), I am only looking on the daily chart for signs of indecision and possible reversal. As a systematic trader, my trading plan is black and white.

GBPAUD - Last week I talked about this pair getting close to 1.7760 resistance and this week it is still the same. This is a significant level according to my analysis. I will look to short if resistance holds and there are signs of strong seller pressure. Alternatively, if buyers were able to break through then I am going to look for a pullback to enter long (if it happens).

NZDUSD - Resistance level 0.7320 was broken on Tuesday and now there is a pullback to the same level. This time it could be acting as support. This is a typical continuation pattern that I trade. First I want to see confirmation of 0.7320 acting as support. Then I will be looking at price action on multiple time frames to find the pattern that I know how to trade.

Weekly Forex outlook 5 September 2016

There are 3 currency pairs that I am watching from today for trading opportunities:

AUDNZD - Price is close to 1.0310 support level which is also the low of this year so far. If there is sign of transition from sellers to buyers above support then I will be looking for opportunities to enter long.

GBPAUD - This pair has been on a steady uptrend for the last 3 weeks and now it is approaching 1.7760 resistance. If I can see signs of strong selling power when price hits this level then I will be looking to go short.

GBPUSD - Resistance at 1.3410 is a key level that I am interested in. On daily chart, price has not been able to close above this level since Brexit. Similar to GBPAUD above, I am looking for opportunities to short below resistance if I can see price action evidence that meets my trading criteria.

August 2016 performance summary

Here are my performances for August 2016. Account statements and performance summary pages have been updated.

-0.81% on Trend Following account
-0.68% on PAMM Growth account

This month has been a personal challenge because I moved back from England to Australia. Nevertheless, I did not miss out on any trade setups. The capital risk per trade on the PAMM account has been increased therefore I am expecting a larger draw down period ahead if I run into a losing streak. There were only 2 trades taken for the month of August.

The Trend Following account posted a small loss for August. It is currently holding onto a lot of winners (11 out of 12 trades are currently in profits). If the trend continues then it is going to have good results for September.

The new day trading system has been trading live for 2 weeks. We (myself and other members of my team) had a vote on the idea of showing the account but at this stage the decision is a no. As a member, I must respect the decision of the majority. This system will be trading live against Charlie Burton at the London Forex Show on 24 February 2017. If you are attending then you will get to see it live in action!

Weekly forex outlook 21 August 2016

After living in England for the past 3 years, I have moved back to Perth Australia. My office at home is too noisy for audio recording so I will be renting a small office for this purpose. I still write about the trading opportunities on my blog whenever I can but Sunday videos will have to wait until my new office is setup.

On the trading side, I will begin an intraday trading system next week. This system will be trading only the London session. You can watch my latest TV interviews for July to know more about them. This new account will have money from other members of my trading group so I would need to ask their permission first before I can link it to myfxbook and share the account statements.

The market is beginning to settle down after Brexit. Support and resistance levels are beginning to form clearly which is a positive sign for my trading style. For next week, I can see one possible trade setup on EURAUD:

EURAUD - After testing 1.4430 support, buyers have been in control of price for much of the last 2 weeks. This pair finished the week close to 1.4890 resistance. Going into next week, I will be watching this pair on multiple time frames looking for signs of a reversal. Alternatively, if resistance breaks then I will be looking for a retest where resistance could turn into support. I don't know what will happen but I will only take action if price is showing the exact price action pattern that I know how to trade.

July 2016 Performance Summary

Here are my performances for July 2016. Account statements and performance summary pages have been updated.

-1.17% on Trend Following account
0.00 on PAMM Growth account
0.00 on High Risk account

This has been a month of tested patience with no trading signal generated for the Growth and High Risk accounts. I have learnt to sit on my hands for as long as I need to until a valid trading signal comes up. The Trend Following account has resume trading in the last 2 weeks.

The High Risk account has officially ended. Final gain for the account is +115% over 2 years. My client has withdrawn their funds and I was paid a percentage share of the profits. Since this account does not belong to me, I cannot have it audited like the Growth account. This account was my first managed account and I am very happy that I was able to produce the results that my client wanted.

Weekly Forex outlook 31 July 2016

My July interviews on Tip TV is now available for viewing. Here are the links to Part 1 and Part 2.

These are the currency pairs that I am watching next week for trading opportunities:

AUDJPY – Price came down to test 77.60 support on Friday and it finished right on top of it. If I can see a transition of control from sellers to buyers, together with strong sign of buying above support then I will be going long. I will be extra cautious because of interest rate decision for Australia on Tuesday.

AUDNZD – Friday saw a break below resistance at 1.0560 and price closed below it as well. My trading plan is telling me that support has been broken and I should be looking for opportunities to sell. If there is a retrace back to 1.0560 area then I will be looking for opportunities to short on multiple time frames. Just like AUDJPY above, the risk is high due to interest rate decision for AUD.

USDCAD – Last Sunday I mentioned possible short opportunity if this pair continues up to test 1.3280 resistance. The turnaround did happen but not in any suitable trading setup according to my plan so no trade was taken. On the positive side, price action during the week confirmed that 1.3190 (dotted line from last week’s chart) is not a valid resistance that I can trade from. I will remove this level from my chart on Monday.

NZDJPY – This pair got very close to 73.00 support level on Friday. This is a strong support level in my analysis. If price continues to drop to hit this level then I will be looking for low risk high reward opportunities to go long above support if I can see evidence of strong buying power above it.

Weekly Forex outlook 24 July 2016

It has been another week of patiently sitting on my hands. Market conditions are still hostile towards my trading style so I am happy to wait. On Thursday there was almost a trade for me on AUDNZD H8 when price tested 1.0730 for the second time. My intended target of 2R is just out of reach by a few pips but rules are rules so no trade was taken.

These are the currency pairs that I am watching next week for trading opportunities:

USDCAD – This pair is approaching 1.3280 resistance. On my chart I have also marked in 1.3190 as a possible new resistance level. I will see how price reacts to this level in the next few days. As it stands, I am only interested in 1.3280 as the level to trade from. If price reaches that level then I would be looking for signs of sellers in control below resistance to enter short.

USDJPY – Price broke above 105.50 resistance last week, came back down to test it and for now it appears to be acting as support. I was monitoring this pair on multiple intraday time frames as it came back down to test 105.50 but did not see anything that meets my trading criteria. Going into next week, I will be watching this pair on the daily chart only for sign of strong buying power above support in order to go long.

My second year as a proprietary trader

Today I have signed my second year contract to continue prop trading for Axis Partners Ltd. I have received more trading capital and I am allowed to trade bigger position size. Therefore, in order to accurately track my performance, I have deposited more money into the PAMM Growth account (cTrader 1009561).

Effective today, trading capital on the account has been increased by 66%. Standard risk per trade is now 0.50% with an upper limit of 0.75%. There is no change to my methodology, risk management or trading plan.

As the result of this increase, myfxbook will report different figures for Gain and Absolute Gain. It is the Gain that will truly reflect performance because it compensates for external flow such as deposits and withdrawals. Myfxbook uses Time Weighted Rate of Return (TWRR) to accurately reflect the change. I will also do the calculations on my own to make sure that myfxbook is correct.

Weekly Forex outlook 16 July 2016

Although it has been 3 weeks since Brexit, I am still adopting extra caution because price action is currently not favourable to how I trade. Some currency pairs are at levels not seen for over 10 years. This means that the support and resistance levels that I identify using my methodology are less reliable. I would need to confirm their validity with recent price action.

My trend following system was put on standby before Brexit when volatility pushed the overall account exposure over the limit that I set for it. Now I am simply waiting for volatility to stabilise and will resume trading as soon as exposure drops below the limit. Risk management is the name of my game and I take no chances when it comes to overall system risk and exposure.

Going into next week, I will be watching NZDJPY because this pair finished the week right above 74.50 support. I am going to look for signs of strong buying power above support to enter long. This could be a high risk trade since Monday is bank holiday for JPY and Tuesday has GDT Price Index for NZD.

June 2016 performance summary

Here are my performances across the 3 accounts for June 2016. Account statements and performance summary pages have been updated.

+1.59% on Trend Following account
+0.77% on PAMM Growth account
-1.35% on High Risk account

My Trend Following account has enjoyed a strong 1st half of this year as increases in volatility drive trends. It registered positive gains for 5 out of 6 months so far this year. July 21st will be its 1st year anniversary. I will do a more in-depth review of this account after this date.

The Growth account had only 1 winning trade in June yet it has gained back all losses in the last 6 trades with extra profits on top. I know that my methodology has positive expectancy so I just keep at it no matter what. I'm happy to take losses and I work hard to keep them small. When the time is right, profits from one winner will more than make up for several losses.

The High Risk account is into its last month under my management. I will finish with it on August 1st. At the moment, it is at +115% and will very likely to finish around there. I will be paid a percentage of total profits. If my client would like to continue with my services then I would provide an update on this.

Performance Review 1st year prop trading

Here are the audited performance metrics for my 1st year of prop trading:

Weekly Forex outlook 12 June 2016

I will be adopting additional risk management leading up to the UK referendum on Thursday 23 June. Capital risk (position size) for GBP pairs will be reduced by 50% for all trades taken in the next 2 weeks. This will apply to my Growth and High Risk account. These are the currency pairs that I watching for next week:

EURAUD – Support at 1.5200 has been holding up last week but price action is still showing a lot of selling pressure. A daily close below 1.52 could be a sign of support breaking. If support is broken then I will be looking for opportunities to sell. Alternatively if there is a daily close above 1.5300 then I will be looking for opportunities to buy.

GBPJPY – Support at 151.50 was tested on Friday and price finished the week above it. This is a key level to watch because a break below this would mean a new yearly low for this pair. If there is sign of strong buying pressure above this level then I will be looking for opportunities to go long.

USDCAD – 1.2830 support has been taken out and now it could be acting as resistance. If there is a pullback to this level again then I will be looking for signs of strong selling power below resistance to enter short.

NZDUSD – On the 4 hour chart, there is a possible continuation long trade at 0.7050 support for Monday. This is a previous resistance level which was recently broken last Thursday. Depending on the size of the opening gap when market opens, I will looking at scenarios to enter long on Monday or wait until end of Monday to have a lower risk entry.

Weekly Forex outlook 5 June 2016

I am watching the following currency pairs next week for potential trading opportunities:

AUDUSD – If resistance at 0.7390 is tested and it holds then I will be looking for signs of strong selling power below resistance to enter short. I am aware of AUD interest rate decision on Tuesday so timing is important if a setup occurs.

EURJPY – support 121.70 was broken on Thursday and price stayed below it on Friday. This was a strong weekly support level so if price comes back up to retest it.

EURUSD -  Friday saw buyers taking control of price and made a significant push up. If this rally continues to 1.1480 resistance then I will be watching multiple time frames for signs of sellers taking over to short below resistance. This level has been in play many times in the last 12 months and it is also a significant resistance level on weekly and monthly time frames.

GBPJPY -  Sellers were in control last week and this pair finished the week just above 154.60 support level. I will wait for Monday’s daily candle to close before deciding if price action favours a short or long bias. Then I will look for the setups that I know how to trade.

USDJPY – This pair is approaching 105.50 support level. Last time price tested this support level, buyers took control and push up over 500 pips. I will be monitoring this pair on multiple time frames to see if price action suggest that buyers will step in again this time.

NZDUSD – resistance at 0.6880 was broken on Friday and buyers made a significant push through to finish the week above this level. Going into next week, I will be looking for opportunities to enter long above this level if price comes back to test it and I can see signs that it is acting as support with strong buying power.

May 2016 performance summary

Here are my performances across the 3 accounts for May 2016. Account statements and performance summary pages have been updated.

+3.34% on Trend Following account
-0.28% on PAMM Growth account
+0.09% on High Risk account

This month, I should have finished positive on the PAMM Growth account but I struggled to stay disciplined. On a few occasions I did not get up on time to check my charts and missed out on trades that turned out to be winners. Trading demands the highest level of discipline and it will punish traders even for moments of weakness.

There are thousands of people blogging about trading but I can guarantee with you that only my blog shows the true reality of trading.

There are winning months and losing months. The market will not allow you to make money on every single trade. My account balance goes up and down as it should do. Most of the trades that I missed turned out to be winners (bad luck). I make mistakes, forget about potential setups and struggle at times to stay discipline. This is how trading really is on a day to day basis. It is not all rainbows and sunshine.

Weekly Forex outlook 22 May 2015

As mentioned in my video on 15th May, I will be taking a few weeks off from making videos to finish off my other projects. Going into next week, I am watching 3 currency pairs for possible trading opportunities:

GBPAUD - Price broke through overhead resistance at 2.0000 on Wednesday and now this level could be acting as support. Thursday and Friday saw declining buying pressure. If I can see evidence of 2.00 acting as support and sign of strong buying power then I will be looking to enter long above support.

GBPJPY - the picture here is very similar to GBPAUD above. Price broke through 159.70 resistance and had pulled back to this level again. I will take extra caution here because there is recent evidence on daily chart to suggest that support level can be as low as 159.00 . Again, the plan is to see confirmation that support is holding and then go long at the first sign of buyers in control above support.

USDJPY - Buyers have been in control for 2 weeks, pushed price up from 105.50 and now it is close to 111.00 resistance. If price gets there then I will be looking for signs of reversals and enter short below resistance when all of my entry criteria are met.