A few weeks ago I asked you about the type of content that you’d like to see on my blog… and most of you suggested me to write more about entries and the reason behind them… so here I am writing this post…

Setup

Yesterday I told you why I thought it was a good idea to go long in the USDJPY. On the long term charts, the market just broke through an important resistance and it is likely to continue its way up…

So we are clear on the long term charts right? If not, please refer to yesterdays post.

My Trading Plan

So created my plan… I showed you this chart:

Hey traders, how is your trading going?

What do you think about the USDJPY?

Yesterday I was talking to a trader friend and asked him the same question… He said we wouldnt trade it… its been going up and up and up, and he thought the USDJPY was going to retrace pretty soon…

What do think about that?

Look, I agree with him (in some way), eventually the USDJPY will retrace back… but what if it is in a week from now? If we watch on the sidelines, we’ll lose plenty of opportunities just because we think the market is going to retrace back…

My final argument was that we need to trade what we see not what we think… If the USDJPY is going up, then look for long opportunities.

What are your thoughts?

USDJPY Long Term Analysis

Hey how is your trading going? Actually… let met take a guess!

If you have been trading the EURUSD… you are not doing “that” well…

How do I know this… well, take a look at the following EURUSD chart:

It’s been almost impossible to trade in the last 45 days… notice how the big moves happened during important announcements, and as you already know, its very difficult to trade them.

If you’ve been successfully trading the EURUSD I’d like to hear about it… let me know in the comment section.

Now, if you have been looking for trades on other pairs or crosses, such as the AUDUSD… you might be doing a better job…

So… did I miss?

Anyway…

First of all, I want to thank everyone who took the time to send me your suggestions about the content, type of analyses, etc that you would like me to write about…

If you still want to send me your feedback, please do it: info@straightforex.com

I’ll really appreciate it!

One of the suggestions that kept coming was that I should do a more in depth analysis of the short term charts…

And you know what, I will definitely focus more on the short term charts, on both: short and long term charts, both of them are important…

Anyway…

Now to the topic!

This is why the AUDUSD has been my favorite currency pair in the last year

Hey, how is your trading going?

It’s been kind of difficult to trade the majors in the last few weeks hasn’t it?

Luckily for us, we have plenty of instruments (crosses) to choose from, and some of them have been trading in a ver clear market condition.

And believe me, the most important aspect of trading, even before the entry system, is whether or not you are trading the “right” currency pair.

What do I mean by the “right” currency pair.

Look, you could have perfect timing, but if you chose the wrong currency pair, the market will move against you.

Enough about the EURUSD?

As I said on my previous posts, there are other pairs with a clearer market condition.

To help you select the best currency pair to trade each day, ask yourself the following questions:

• So why should I trade the EURUSD rather than others with clearer market condition.
• Which currency pair has the clearest market condition?
• Does the long term charts support your trade on the short term charts (or vice versa)?

These are the type of questions that you should ask yourself every morning, before opening your first trade.

In the last few weeks I’ve been posting my analysis on the EURUSD, and even when there are other currency pairs (I think) that have a clearer market condition, traders seems to be more interested in the EURUSD.

Do you have any idea why there are plenty of traders that just focus in the EURUSD?

I’d like to know that…

Anyway…

First things first…

Last Tuesday I told you I wasn’t going to trade any breakout in the EURUSD… Here Tuesday’s chart:

I said that I was going to wait for my signal AFTER the breakout because it was trading at The SF Box.

Anyway, the EURUSD broke both sides of the range.

Here is the chart:

It’s always very important to perform an analysis BEFORE you start looking for trade opportunities.

Trading without an anlaysis would be like trying to get from place A to place B in an unknown city, without a roadmap… just following our gut feeling.

It doesn’t make sense does it?

Well, the same goes for currency pairs, if you do your analysis, then you can have your trading plan, you know what the market needs to do in order to start looking for trade opportunities…

Anyway… here is my trading plan for the EURUSD

Unless you’ve been hiding in a cave, you havent seen how the JPY crosses have been moving in the last few weeks.

Yesterday a fellow trader asked me what my thoughts were about those moves, and if I thought there was still a chance to go long, you know, the market might retrace, etc.

That reminded me something I read somewhere (cant remember where):

The market is never too high to stop looking for a buy, or too low to stop looking for a short.

Ever since I read it, it made total sense to me, and I adopted it almost as my motto…

So don’t be afraid to get caught in a retracement, because you are going to miss the whole move. I rather get caught in a retracement than watching those kinds of moves on the sidelines…

What are your thoughts about this?

Hey we have plenty of fundamental announcements coming up this week. Just to name a few:

Monday (yesterday): AUD interest rate

Wednesday: JPY interest rate

Thursday: GBP and EUR interest rate

Friday: USD Non-farm payrolls, CAD unemployment report

Pretty busy isn’t it?

You know how I handle them, I’ve wrote about it a few weeks ago, what I can say is that I’m just going to trade what I see on the charts, I’m not going to get biased on what I think the market will do based on fundamental announcements, etc.

Do you agree with me?

Look, there is a time for everything in life…

• A time to go to college
• A time to get married
• A time to have children

And a time to trade the EURUSD hehe

And I guarantee, that right now, it’s not the time to trade the EURUSD

Seriously…

I made the mistake a couple of weeks ago when I thought it was out of the range… but no, it wasn’t.

Right now with all the news about Cyprus and stuff, it makes it even more difficult to trade it.

Just take a look at the EURUSD hourly chart:

You’ve seen how the USDJPY has been trading in the last few months, it’s been going up and up and up without looking back.

Since February though, it reached an important resistance level (read it “zone”), and its been ranging since then.

Let me show you the 4H chart:

Since the first days of February, when the USDJPY reached this resistance level at 93.80, it started to trade in that range (green levels), has been difficult to break either extreme of the range.

Last week I made a multiple time frame analysis on the USDCAD. All charts were pointing up and I thought it was a good idea to look for long opportunities.

Guess what? Since then, the USDCAD has been going up

Last week I got a few emails asking me if I’d close my trade over the weekend and last Fridays CAD news announcements (I think it was the CPI)…

My answer was no. I’ve talked about it in the last few weeks, how I’m going to handle news announcements this year. In essence its like this:

I’ve noticed that when there is an important fundamental announcement, most of the time the market will move in the direction of the market condition. I always trade in the direction of the market condition, so if I have enough pips to set my SL to the break even level, I’ll always let my trades run, even during the most important ones.

Lets say you have two possible trades coming up on two different currency pairs.

On the first one, both, the long term chart and the short term chart are connected, pointing up.

On the second one however, there is a little bit of discrepancy between the different timeframes, long term charts are pointing up, while the short term chart are pointing down.

Which trade would you feel more comfortable taking?

That’s right… the first one.

It’s all about being in the right side

Why is that?

Because when everything is connected, the market is more likely to continue in the intended direction.

In the other hand, when something is not clear, or there is discrepancy between different timeframes, well… its not that likely to continue in the intended direction.