Look for entries in these 7 setups
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
Here Are Some FX Set-Ups I am Watching
Looks like the daily chart on DXC is growing a bit tired after this leg
higher from Friday as we are now seeing the 2nd ‘spinning top’ forming. This
pattern is indicative of a move that is tired not necessarily not signaling a
top – at least at this point.
You will also note that late in the day on Tuesday both the EUR and GBP had
formed a bullish hammer on their daily charts. While this dovetails in with the
spinning tops on the DXC chart it simply merits watching at present since the
upward trend in DXC is still quite strong.
The weekly chart of the EUR/USD is also worth noting.
The 24-Hour Targets noted below are an excellent and simple way to position
yourself for the next 24-hours.
Wednesday’s 24-Hour FX Targets
Notes/How To for The 24-Hour FX Targets
Today’s FX 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.
Entries: entry prices are meant to be taken at the time of posting by
simply placing an order to buy or sell at the market. Targets will typically be
posted by 5 AM PDT.
Stop-Loss: we suggest that all traders place a stop-loss equivalent
to ½ of the value of the projected gain in pips. For instance, if the price
target for the EUR/USD is 1.2200, and it is trading at 1.2100 at the time (100
pip gain) of the forecast, we would suggest setting a 50 pip stop loss
(1.2050).
We also discuss a basic trailing stop strategy at the end of this article.
Exits: traders should take profits when the ‘Target Price’ is
achieved. If, by 5 AM PDT the following day, the stop-loss or target price has
not been achieved, simply close the trade at market.
Let’s look at an few example as a way to illustrate how this
will work. Below is a screenshot from Thursday October 20th, it is exactly
the same format that
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.
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.
Trailing Stops:
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.
As always, feel free to send me your comments and questions.
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.