The Eur/Usd is in a period where the 1.5000 resistance level has been broken today. The entire world is betting against the Dollar right now. I have not read one positive thing on the Dollar. If there is any good news for the Dollar post the link here I would like to read about it. So with the fundamentals and technical data all pointing to a Dollar fall what do you think would be the way to trade? It appears that the Eur/Usd will be moving upwards but lets not trade until we get signals.
The G20 meetings brought more pressure on the Dollar. The United States government is broke and they are pushing more debt and taxes on the people which will put even more pressure on the Dollar. To learn about more news read Forex Crunch and Yohay never leaves anything out when it comes to covering the news.
4hr Chart
We are currently in a channel between 1.5063 and 1.4819 the a little over 100 pips. The support and resistance levels are very clear. 1.5063 is the resistance and 1.4918 is the support. There is also a trend line that is rising since 1.4620 and this line has been tested twice is being tested right now as I right this.
If this current trend line gets broken to the downside than look for support to hold at 1.4019. The current run is towards 1.5000 and if the price breaks that again look to challenge the 1.5063 resistance level and if that price is broken look for more gains in the future.
Read more about the Eur/Usd and a possible Gold Bubble on The Geek Knows.
I want all the readers to be looking for a series of articles by a professional scalper and he is going to reveal his strategy. I am excited about this article and I had let you all know that it was coming. So be ready scalping system coming soon.
Some thoughts on using technical market analysis to determine risk management in forex trading. Perhaps the greatest strength of technical analysis is that it allows traders to quantify precisely, and thereby help control, the risk factors inherent in trading. The most obvious risk control application of technical analysis is stop loss placement. Technical analysis employs a simple and elegant rationale for determining the location of stop losses. When the reasons for getting into a trading position are no longer valid, that position should be abandoned, usually at a loss. The purpose of a stop loss, after all, is to cut losses while those losses are still manageable.
For example, in a breakout situation where a trade is entered on a price breakout above a certain resistance line, if price falls back significantly below the line, the reasons for entering that trade would no longer be valid. Therefore, the stop loss should be placed at some pre-determined point directly underneath the line, where the break will have proven itself to be either false or premature. A failed breakout, as described above, is certainly a good reason to get out of a trade with a manageable loss.
Another example of risk management from a technical analysis perspective is as follows. For a trader who has entered a long position on a pullback to an uptrend support line, if on one of the subsequent pullbacks price breaks below that uptrend line by a significant amount, a good location for a stop loss would be at some pre-determined point directly below the trendline. A breakdown below the ascending trendline would mean that price is no longer pulling back and continuing the uptrend, but might perhaps be reversing its trend. If this is the case, the original reasons for getting into that trade (uptrend continuation) will have begun to be invalidated, and a properly placed stop-loss below the line can potentially prevent a great deal of pain.
Risk management with the use of technical analysis is both logical and straightforward. By using technical analysis to help dictate stop losses, a forex trader is allowing the market to determine when to cut losses. This is much more reasonable than setting stop losses merely according to an arbitrary number of pips or some random point of pain.
- James Chen, CTA, CMT
* I will be key speaker at FXstreet.com’s International Traders Conference in Barcelona, Spain in October 2009 - for more information, please go to: www.traders-conference.com .
* For information on my book, Essentials of Foreign Exchange Trading (Wiley), please click here.
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