Here’s 7 setups for active Forex traders
Dave Floyd is a professional FX and stock trader based in Bend, OR and the
President of Aspen Trading Group. Dave’s approach to FX combines technical
and fundamental analysis that results in trades that fall into the swing
trading time frame of several hours to several days. For a free trial to
Dave Floyd’s Daily Forex Alerts
FX Forecast
Today will mark a new approach to the FX articles that will appear here on
Monday and Wednesday’s. First, these articles will now be posted by 6 AM
PDT. Secondly, the articles will focus almost exclusively on providing you
actionable trade ideas that will last for 24-hours at the most. I will
also provide a performance report each week to see how the trades performed.
I will, when applicable, provide some observations and analysis on some other
trade ideas and or developments worth noting in the FX markets.
Today’s traders are now demanding a more systematic approach, and this new
feature will nail those desires right on the head. With our 24-hour
forecasts you have specific entry prices, stop-loss and price targets. We
use a simple trailing stop-loss approach as well for trades the begin to achieve
their price objectives.
Let’s look at a few examples from last week as a way to illustrate how this
will work. Below is a screenshot from last Thursday, it is exactly what
will be posted here each Monday and Wednesday.
The far right column, 24-Hour Targets, is simply our estimate of where the
pair will trade towards during the next 24-hours. A ‘N.A’. simply
indicates we do not have a price target.
The ‘Current Bias’ column will only show a bias for the pairs that are
highlighted ‘blue’ as these are pairs that we also recommend on a discretionary
basis.
At 5 AM on 10/20/05 GBP/USD opened at 1.7665. The price target,
as noted above, is 1.7735 – a 70 pip gain if achieved. The initial
stop-loss would be 35 pips, or 1.7630. (suggest a stop loss equal
to 1/2 the projected gains)
GBP/USD went on to achieve both targets.
Naturally, not all of the forecasts will play out, and like most systematic
approaches, the number of iterations will increase your success. Pairs
like USD/JPY and EUR/USD did not achieve their targets and were
stopped out, resulting in a loss of 65 pips, while AUD/USD, USD/CAD
and USD/NOK easily offset the 65 pip loss with solid gains.
Traders may also look to employ a trailing stop strategy to protect gains.
We suggest using a trailing stop equivalent to 1/4 the value of the targeted
gains. So, in the example of the GBP/USD above, the target is for a gain
of 70 pips, therefore a trailing stop of 17 pips might be a prudent approach.
Ultimately the decision is yours. Other traders/clients simply use our forecast(s) as a guide and then identify their own entry points based on their
trading methodology.
FX Targets for Tuesday October 25th
As always, feel free to send me your comments and questions.
P.S. Would you like to learn the strategies that I use to trade the Forex for
a living? If so,
click here to register for my free online workshop on Thursday, October 27
at 12:15 ET. We’ll look at the current market together and I’ll show you what
strategies are working me. Please note: Space is limited to only 45 traders, so
click here now and register.
Dave Floyd is a professional FX and stock trader based in
Bend, OR and the President of Aspen Trading Group. Dave’s approach to FX
combines technical and fundamental analysis that results in trades that fall
into the swing trading time frame of several hours to several days.