The U.S. dollar traded mostly higher today as both Gold and Crude Oil fell. Crude Oil closed down 0.4% at $81.17 a barrel after spiking up to hit a high of $83.12 a barrel, the highest price since early January.

The greenback gained modestly on the euro, franc, pound, yen and kiwi dollar, while losing modestly to the Canadian dollar and Australian dollar.

Looking ahead, economic reports will likely influence the currency markets over the next 48 hours. Tomorrow we will see U.S. Trade Balance and weekly Unemployment Claims while Friday brings us U.S. Retail Sales and Consumer Sentiment.

Stocks:

On Wall Street today stocks closed modesty higher on the back of hopes that renewed business demand will boost corporate profits. Bank and technology shares led the way with the Nasdaq closing up 18.27 points or 0.8 percent, the S&P was up 5.16 or 0.5 percent, and the Dow was only up 2.95 points or less than 0.1 percent.

Volume has been light this week as there has not been much economic data to fuel the market. Reports on weekly unemployment claims, retail sales, and consumer sentiment will come out over the next two trading days and should provide some sense of clarity about the strength of the economy.

Currency pair in focus: NZD/USD

Today we are taking a look at the daily chart of NZDUSD. A well defined bearish pin bar has formed showing clear rejection of the very strong resistance zone between 0.7050-0.7100.

This price action setup is meeting all the characteristics for a well formed pin bar setup. It is also showing clear rejection of a confluent level which gives this setup added significance.

We like to see these types of price action setups here at LTTTM, we hope that you enjoy our simple yet highly effective take on price action trading, for more education, setups, and commentary check out the member’s forum

For a more in-depth analysis of the major FX pairs as well as trading strategies, please check out my price action forex trading course.

The U.S. dollar traded mixed today; closing higher against the euro, pound, and Swiss franc, but losing ground to the Australian dollar, New Zealand dollar, Canadian dollar, and Japanese yen.

Gold closed slightly lower and Crude Oil has been struggling to get past the $80-$82/barrel mark.

Looking ahead, more consolidation seems to be likely this week in the FX markets. Economic reports pick up starting tonight in Europe and continue through the end of the week. These should provide a catalyst for more currency movement than we have seen so far this week and hopefully some great price action setups.

Stocks:

On Wall Street today the major stock indices closed modestly higher. The Dow closed up just 11.86 points or 0.1 percent after being up 60 points earlier in the session, the S&P 500 was up 0.2 percent, and the Nasdaq closed up 0.4 percent.

Market analysts note the Dow Jones Industrial Average is up 61.4% since hitting a 12-year low at 6,547 one year ago today and these types of gains are not sustainable over the long term. The market is likely to consolidate and trade choppy until employment numbers start to show job creation instead of job cuts.

Currency pair in focus: AUD/USD

Today we are looking at the 4 hour chart of AUDUSD to analyze a great pin bar setup that kicked off this most recent up move in the AUDUSD.

Notice how both of the pin bar setups in this chart formed off the same resistance level. You may not have caught the first one, but once the second one formed off the confluent level near 0.8800 there was a high probability it was going to move higher from there.

Price action setups such as this 4 hour AUDUSD pin bar setup are often very reliable and provide a great method to trade the forex market with.

For a more in-depth analysis of the major FX pairs as well as market commentary, please check out my forex trading course.

On Wall Street today stocks traded mixed with the Dow closing down 13.68 or 0.1 percent, the S&P 500 closed down 0.20 point or less than 0.1 percent, and the Nasdaq closed up 5.86 points or 0.3 percent.

Cisco Systems and Blackberry maker Research in Motion led the push higher in the Nasdaq composite index which closed out at 2,332.21, its highest close since September 2008.

Few economic reports for the first half of this trading week mean traders will be looking for other cues to market direction.

Economic news releases will begin to pick up starting on Wednesday and running through the end of the week as the market will see reports on wholesale and business inventories, trade balance, unemployment claims, retail sales and consumer sentiment among others.

Currencies:

The currency markets took a cue from stocks today and remained relatively quiet.

The U.S. dollar rose against the British pound but remained essentially unchanged against the Euro and Swiss Franc.

The Australian dollar, Canadian dollar, New Zealand dollar, and Japanese yen all gained modestly on the greenback. Gold fell.

Currency pair in focus: EUR/JPY

Today’s currency pair in focus is the EURJPY. We don’t usually use trend lines here at LTTTM as we feel they are too subjective overall. However, sometimes you get a rather obvious one that does a good job at pointing out a channeling market, such as the current conditions in EURJPY.

We can see a small pin bar setup has formed off the top of this descending channel. We like this price action setup because it is signaling a resumption of the dominant trend and generally pin bars from key levels like this one are the most profitable.

There were a few more very solid price action setups that occurred in other pairs today, check out our member’s forum for more chart analysis and price action commentary.

For a more in-depth analysis of the major FX pairs as well as market commentary, please check out my forex trading course.

For the record, I am only a fan of trading the 50% retracement off a swing on the daily forex charts, as long as there is a price action signal to confirm its validity I will consider it. My trading is all about confluence and finding evidence to support the price signals on the charts. I may also add that I trade the major currency pairs where this has a higher probability of success, given the major pairs are widely followed and many setups are straight forward and simple.

The process of trading the 50% retracement is simple, below is one example of a recent trade on AUDUSD pair.

1. When you have the price action signal present on the daily chart, you then match up the fib 50% retracement level if there is one present (see chart example below), if the price aciton candlestick signal matches up with the 50% swing retracement level when your good to go and potentially have a valid trade. If you can also find a relevant horizontal level to match up here, its a double whammy of confluence (a reason to get excited).

2. After finding the potential trade signal, decide to enter at market prices, or wait for a pull back to get your stop loss tighter to reduce overall risk. In the chart example below, given the perfection of the setup, as prices started to move up in the correct direciton, a long entry could have been taken, momentum in the correct direction is always a good sign.

3. These setups are rare, but still something to look for in your daily chart timeframes. I personally feel that when a trader looks for the price action signal first, then matches up the supporting factors they tend to make better trades. What I am saying here is this ..  If you see a giant signal on the daily chart, find out what other factors are back it up and showing supportive evidence, we wont always be able to trade a signal, mainly because we prefer not to fight the natureal trend of the market, and many times we see signals forming against the trend.

4. The 50% swing retracement line and price action signal both came together at one common point and showed us a nice setup here, but what you should really take away from this exampleis that it was in line with the general thrust of the market, notice that prior to the pull back, we saw a nice rally up, and the pull back did not exceedthe 50% area , rather it rejected it strongly and has now bounced aggresively higher to tes new recent highs.

Another nice recent example on AUDJPY

I truly hope this article clears some confusion about fib levels, personall I only get a handful of these setups every month on dail charts, but when you see these swing retracements inside general trend movement, its wise to mark them on your charts and then look for some confirmation.

This is just one of Many Price Action Strategies and Techniques I use to Trade Forex, If You are serious about your trading education and learning new material, you should check out my Free price action forex videos here, and then check out my Professional Price Action Forex Course and take a look at the Forex Trade Setups Commentary Blog. Remember to Comment Below Please Guys.

On Wall Street today stocks jumped across the board as investors cheered a better than expected U.S. jobs report. The report showed that fewer jobs were cut in February than analysts had anticipated while the unemployment rate stayed at 9.7% instead of jumping to 9.8% as expected.

The Dow closed up 122.06 points or 1.2%, the S&P 500 closed up 15.73 points or 1.4%, and the Nasdaq was up 34.04 points or 1.5 percent.

Currencies:

The better than expected U.S. jobs report also caused riskier currencies to rally today. The big winners were the British pound, as well as the Australian dollar. The U.S. dollar fell against most of the majors but rallied strong against the Japanese yen as trader’s flocked out of the safe-haven yen in favor of currencies with higher interest yields.

Currency pair in focus: AUD/JPY

In today’s chart we are focusing on the AUDJPY pin bar setup that we discussed in yesterday’s commentary.

As we can see the trade worked out nicely and popped up right into our recommended target zone of 82.00-82.50, hitting a high of 82.29 for the day.

Price action setups like these are the ones you want to look for; we analyze the major FX pairs each day in the member’s commentary and post up our trade recommendations there. Pin bars from confluent levels like this pin bar setup in AUDJPY are one of the most consistently profitable ways to trade forex.

For a more in-depth analysis of the major FX pairs as well as forex market commentary, please check out my price action trading course.

On Wall Street today stocks ended higher as retailers’ better than expected monthly sales figures hinted towards further stabilization of consumer spending.

The Dow pushed into back into positive territory for the year, closing up 47.38 point to end the day at 10,444.14, the S&P closed up 4.18 points or 0.37 percent, and the Nasdaq ended up 11.63 points or 0.51 percent.

The U.S. Labor Department will release its monthly jobs report tomorrow at 8:30am EST, this report is widely considered by market analysts to be the most important indicator of economic health.

Currencies:

The U.S. dollar gained strength today against most of the major currency pairs as Gold and Crude Oil both closed lower on the day.

Most of the major currency pairs consolidated within recent trading ranges today as traders await Friday’s U.S. employment numbers.

Currency pair in focus: AUD/JPY

In today’s chart we are focusing on the AUDJPY pair and a bullish pin bar that has formed off support near 79.20.

While this pair has essentially been consolidating with no real trend direction over the past 7 days, today’s pin bar setup gives us some clue that price may rally up to retest resistance near 82.00-82.50 in the near term.

Price action setups such as pin bars from key levels, like today’s setup, often work out very nicely and provide a great high probability method to trade the forex market with.

For a more in-depth analysis of the major FX pairs as well as forex market commentary, please check out my price action trading course.

On Wall Street today U.S. stocks pared gains late in the trading session as President Obama stepped up efforts to reform health-care and to pass new banking regulations. The Dow closed down 9.22 points, The S&P 500 gained 0.48 point, and the Nasdaq lost 0.11 point.

Stocks rose earlier in the trading session as a better than expected ISM Non-Manufacturing PMI report and ADP Non-Farm Employment Change report pointed to a strengthening economy and a stabilizing labor market.

The big market moving report will be Friday’s U.S. Non-Farm Employment Change and Unemployment Rate, both released at 8:30am EST this Friday.

Currencies:

The currency markets saw the U.S. dollar weaken today as data indicated the global economic recovery is on track and Greece agreed to further budget cuts in hopes of obtaining European aid.

Crude oil rose toward $81 a barrel as positive economic reports offset a U.S. government report showing a large rise in crude inventories.

The euro continued to climb against the greenback as hopes solidified for a plan to save Greece from its sovereign debt troubles.

Currency pair in focus: USD/CHF

Today’s currency pair in focus is the USD/CHF pair. Last Friday we posted this chart up and pointed out the fakey setup that had formed at that time. Since then we saw back to back bearish pin bar setups develop which further tipped off traders to a possible down side correction within the broader uptrend of this market.

We generally like to trade “with” the trend, however when you get well defined price action setups such as a fakey and then consecutive pin bars from key levels, there is a high probability of a correction. Notice how this correction sold down to the next logical horizontal level of support and resistance.

For a more in-depth analysis of the major FX pairs as well as price action commentary, please check out my forex educational course.

Stocks rose on Wall Street today but the advance lost steam into the close, the Dow closed up only .02%, the S&P was up 0.23%, and the Nasdaq closed up 0.32%.

U.S. stocks have risen 8 days out of the past 11 and many market analysts are saying the recent rally is overbought and do for a correction.

Currencies:

The currency markets showed further signs today that recent U.S. dollar strength may be coming to an end, at least temporarily.

The euro and Swiss franc both closed higher against the greenback today as the EURUSD briefly tested 1.3450 support but then got bid higher rather aggressively off this level and USDCHF briefly broke resistance at 1.0875 before getting pushed lower by the bears.

The pound managed to hold ground against the U.S. dollar after it’s hammering by the greenback on Monday and ended the New York session nearly unchanged. Else where, the U.S. dollar lost modest ground to the Australian dollar, gained slightly on the New Zealand dollar, and lost ground to the Canadian dollar and Japanese yen.

Currency pair in focus: EUR/USD

The EURUSD formed another bullish pin bar setup today after what was a rather volatile forex trading session. You can see in the chart below the rectangle is highlighting the lower shadows of 4 pin bar candlestick patterns that have formed off of 1.3450 support in this market over recent trading days.

These types of price action setups off of support areas during downtrends are indicative of possible counter trend momentum building. There is likely to be correction from here at least up to resistance near 1.3800 before the downtrend resumes.

For a more in-depth analysis of the day’s price action setups as well as forex market commentary, please check out my price action trading course.

The month of March kicked off with a rally on Wall Street as the major stock indexes closed higher on the back of a record setting deal by insurance giant AIG to sell a major Asian unit and also on gains in semiconductor shares due to SanDisk corp. raising its revenue forecast.

New found hopes for an agreement to resolve the on-going Greece debt problems also encouraged investors.

Positive economic data reports also worked to offset some of the disappointing economic news from last week as U.S. consumer spending increased slightly faster than expected in January and the U.S. manufacturing sector grew.

Currencies:

The currency markets were volatile today; the euro gained big on the pound as evidence by the huge daily bullish move on the EURGBP pair.

The U.S. dollar gained on the euro, pound, Swiss franc, and Japanese yen but lost to the Australian dollar, Canadian dollar and New Zealand dollar as the commodity currencies rose on stock market strength.

Currency pair in focus: EUR/USD

The EURUSD appears to be building a base around bullish price action setups off of support near 1.3450.

We can see in today’s chart that over the last 8 trading sessions we have seen 2 pin bar setups and a fakey setup. These are indications that a counter trend rally may be in the making for this market.

Resistance comes in around 1.3850 and beyond that near 1.4025. Price action setups like the one seen in today’s chart often occur near market turning points and swing points.

For a more in-depth analysis of the day’s price action setups as well as forex market commentary, please check out my price action trading course.

On Wall Street today stocks closed slightly higher with the Dow up just over 4 points, the S&P up nearly 2 points and the Nasdaq adding 4 points. Overall trading was rather quiet due to another large winter snow storm that hit the Northeastern part of the U.S.

Next week the market receives the all important U.S. Non-Farm Employment Change and Unemployment Rate amongst a truck load of other economic reports. We will keep traders updated as to which reports are the most significant to watch and the times they are released as usual at the end of our daily commentary.

Currencies:

The currency markets relatively quiet today following the lead of equity markets. The U.S. dollar was mostly lower against the majors as commodities rose along with stocks. The exception was the British pound which lost just over 10 pips to the green back.

The upcoming trade week is going to be loaded down with important economic news releases which will likely result in volatile currency trading conditions. This is a bonus for all of us price action traders. Well defined price action setups are more likely to result in big moves under volatile trading conditions.

Currency pair in focus: USD/CHF

Today’s currency pair in focus is the daily chart of the USDCHF. The chart is showing a fakey setup which formed on Thursday and came off to the downside into Friday’s New York close.

The chart shows a previous attempt to break resistance near 1.0850 which was also met with a false break, but not a fakey. The second attempt to break 1.0850 occurred on Thursday of this week and resulted in a fakey setup.

While we don’t generally advise new traders to take counter-trend price action setups such as the one featured in today’s chart, they do often work out if they form near areas of strong support or resistance such as the one we are looking at today.

For a more in-depth analysis of the day’s price action setups as well as forex market commentary, please check out my forex price action trading course.

On Wall Street today stocks closed lower with the Dow closing down 0.5 percent, the S&P down 0.2 percent and the Nasdaq down 0.1 percent. Further problems with the debt situation in Greece and rising unemployment in the U.S. were the main causes for the negative movement in equities.

The number of new unemployment claims in the U.S. rose by 22,000 over last week after analysts were expecting a decrease. Also, a disappointing U.S. Core Durable Goods Orders report added to worries about the strength of the economic recovery.

Dept problems in some European countries took the stage again today as rating agencies said they might downgrade Greece’s sovereign debt rating. A downgrade could increase Greece’s borrowing costs as well exacerbate its debt problems.

Currencies:

The currency markets were quite volatile today. The British pound was the big mover, the markets saw the GBPUSD pair close 144 pips lower as the fakey setup highlighted in our last 2 commentaries came off quite nicely. The euro seemed to gain strength today with the EURGBP shooting up and the EURUSD closing up about 9 pips.

The Japanese yen strengthened against all the major currencies as risk aversion dominated today’s world markets. The U.S. dollar was the other big winner today, rising against most of the majors except for a small loss to the euro and Swiss franc and a loss to the Japanese Yen as well.

Currency pair in focus: GBP/USD

The fakey setup that we have been following this week in GBPUSD has worked out quite nicely for our member’s and made most of them some very decent profits. The entry parameters for this price action setup were posted in our member’s forum before the trade unfolded. We analyze the major pairs each day for price action setups including my proprietary fakey setup.

The fakey setup is not taught anywhere else on the internet. The way that I instruct my member’s to trade it is a completely proprietary method and centers around the fundamental fact that the forex market is designed to be contrarian and thus causes many novice traders much pain and suffering.

My price action trading course will teach you how to harness the power of contrarian trading centered around my time tested and highly profitable price action setups that exploit the volatility and contrarian nature of the forex currency market. The power of my forex educational course combined with daily price action analysis is the best way to learn to successfully trade the forex market with minimal stress and confusion.

For a more in-depth analysis of the day’s price action setups and forex market commentary, check out my price action forex trading course.

Just wanted to point out some nice trades that had formed recently on EURUSD and GBPUSD.
Below are some charts with classic examples of my price action trading setups I use on the 4 hour and daily charts.
You will notice the clean simple chart, with no indicators (Pure Price Action). The Charts who my “fakey setup” and “pin bar reversal setup”. The Current Market conditions have been “perfect”. If you can’t make money in the current market then you won’t ever make money, this current trend is a “Gift”, trade it well. You will also notice that the trade setups resulted in several explosive moves , allowing good profit potential using a sound risk reward ratio. These setups are very simple and logical and have a positive expectancy, re occurring often enough to actively trade the daily and 4 hour charts. I have had good success this past month with the fakey and the pin bar, and Just wanted to share with you the trades I made.  As I said, it’ s been a good few weeks. REMEMBER TO COMMENT PLEASE

Below are some recent examples of  trades made using these 2 price action techniques. Enjoy!

These Chart Below shows Recent  Fakeys and Pin Bars Setups I traded on the 4 hour Timeframe. You Can Read more about the Pin bar strategy here and learn about the Fakey setup here

Chart Below Shows Daily Timeframe Pins and Fakeys - You Can Read more about the Pin bars here and learn about the Fakey forex setup here

Chart Below shows a DOUBLE PIN BAR setup on 4 hour timeframe, I took this one and made 3 times my risk, a really nice trade headed into the NFP. You Can Read more about the pin bar forex strategy here and learn about the Fakey false break setup here

If Your keen to Learn More about Price Action and My Trading Strategies, I suggest you check out My Free Forex Videos and Then Take My Forex Trading Course here.

Thanks for Reading,

Nial Fuller

On Wall Street today the Dow closed up 91.75 points as investors had reason for optimism when U.S. Federal Reserve Bank Chairmen Ben Bernanke testified before congress that the Fed will keep U.S. interest rates at exceptionally low rates for an extended period. This buoyed hopes that continued low interest rates will help spur the economy and ultimately the global economic recovery.

European stocks also made some modest gains on Bernanke’s testimony, the FTEUR Index of top shares closed up 0.2 percent after see sawing in and out of positive territory several times throughout the trading session. Germany’s DAX and France’s CAC both also closed up 0.2 percent.

Currencies:

The currency markets were somewhat subdued today with the euro gaining about 30 pips on the U.S. dollar, the pound lost around 20 pips to the green back. The Australian and New Zealand dollar both eked out small gains against the green back in what look to be corrective moves after yesterday’s big U.S. dollar bullish move.

The Japanese yen gained modestly on the greenback, up only about 5 pips on the U.S. dollar 30 minutes before 5pm Eastern time.

Crude oil closed up over 1$ a barrel, past the 80$ a barrel mark which
helped to calm the U.S. dollar rally today. Gold closed modestly lower.

Currency pair in focus: GBP/USD

Our entry parameters posted in the member’s forum for selling yesterday’s fakey setup worked out almost perfectly today.

We are now short this market via our price action entry parameters posted in the member’s commentary yesterday. We are expecting price to move lower over the near term as there is not much support until the 1.5000 region.

Price action setups in trending markets such as this most recent GBPUSD fakey setup are a very high probability way to trade the forex market.

For a more in-depth analysis of the day’s price action setups and forex market commentary, check out my price action trading course.

On Wall Street today the DOW closed down just over 100 points as investors responded to a much worse than expected Conference Board consumer confidence index reading. The index fell to 46, down from 56.5 last month; analysts were expecting a drop to only 55.

U.S. consumers are vital to a long term economic recovery; today’s consumer confidence reading highlights the fact that the global recovery has a long way to go before significant progress is made. It is likely to be a choppy ride until we see substantial U.S. job growth and consumer spending.

Currencies:

The currency markets were quite volatile today. Most of the major FX pairs rose against the greenback during the Asian trading session but then reversed sharply into the European open and through the New York closing. Dollar strength roared back in with vengeance as U.S. stocks got hit hard by a disappointing reading of consumer confidence.

Some pretty nice 4 hour and daily price action setups have formed over the last 12-24 hours. We are looking for the U.S. dollar to remain strong the rest of this week and will be looking to get in on the dollar bull train that has been plowing forward as of late.

Currency pair in focus: GBP/USD

The confluence zone discussed in yesterday’s GBPUSD chart proved to be a very strong inflection point today. We can see price penetrated the bottom end of our resistance zone, hitting a high of 1.5574 before selling off sharply and forming a fakey setup.

This fakey setup has formed with the daily trend and we are looking for prices to move lower from here. There are a number of possible entry methods that traders can employ for this fakey. We discuss them in-depth in the member’s market commentary and also in my price action trading course.

For a more in-depth analysis of the day’s price action setups and forex market commentary, check out my forex educational price action course.

On Wall Street today stocks were mostly flat, the Dow closed down 18.97 points. The stock market will likely be subdued until Fed Chairmen Bernanke testifies before congress on Wednesday.

Investors are waiting to make any significant decisions until the Fed Chairmen clears up the reasoning behind last week’s surprise discount rate hike of .25%.

Currencies:

The currency markets were pretty tame today. Most of the major FX pairs had very quiet trading sessions, the EURUSD and GBPUSD both had trading ranges under 90 pips today.

U.S. Fed Chairmen Ben Bernanke’s testimony before congress on Wednesday of this week will likely be the next big catalyst for movement in the major forex currency pairs, until that time we are likely to see more sideways consolidation.

Currency pair in focus: GBP/USD

Today we are looking at the daily chart of GBPUSD. An inside bar formed today and there are two possible scenarios we are going to look at for trading off of this inside bar setup.

First, since the overall trend is down this inside bar could break to the downside, resuming the overall down trend. Price action setups taken with the dominant trend usually work the best, inside bar setups are especially great as trend continuation signals.

Alternatively, this inside bar may pop higher and push into the confluence zone as marked on our chart. This confluence zone is a strong area of resistance that was previously support, it also coincides roughly with the Fibonacci 50%-61.8% retracement level, as such, it would be a great area to watch for bearish price action setups to form at.

For a more in-depth analysis of the major forex currency pairs as well as price action education check out my price action trading course.

On Wall Street Friday the Dow squeezed out a small gain, closing up 9.45 points from Thursday.

Renewed optimism about economic growth in major markets as well as a reduced sense of nervousness about debt problems in Europe will likely be contributing factors to any stock advances for the upcoming trading week.

U.S. Fed chairmen Ben Bernanke’s speech on interest rates before congress on Wednesday will be a noteworthy economic event as will any news out of Europe regarding the economic problems in Greece.

Currencies:

The euro rallied on Friday and formed a reversal / pin bar closing out at previous resistance near 1.3590. The GBPUSD did close lower on Friday but managed to close 98 pips off its low after a late day rally during the New York trading session.

The U.S. dollar appears to be on course to weaken over the first part of this trading weak. However, given the recent dollar strength we have seen in the currency markets we are taking a neutral view until we see strong signs of trend resumption.

Currency pair in focus: EUR/USD

Today’s feature currency chart is the daily EURUSD. We are looking at a pin bar setup that developed on Friday afternoon. This pin bar setup is counter trend, so it is not as valid as a pin bar setup taken with the dominant down trend of this market.

We generally advise taking price action setups in the direction of the dominant trend. We are going to follow Friday’s counter trend pin bar to see how it plays out but are not recommending it as a setup. The logical resistance area to watch comes in around 1.3780.

For a more in-depth analysis of the major forex currency pairs as well as price action setups see my forex trading educational course.

The pin bar formation is actually a price reversal pattern consisting of three bars. The term “Pin Bar” is an abbreviation for the term “Pinocchio Bar”.  Once familiarized with pin bar formation it is apparent from looking at any price chart just how profitable this pattern can be. Let’s go over exactly what a pin bar formation is and how you can take advantage of the pin bar setup in the context of the forex market.

What is a Pin Bar?

The actual pin bar itself is the middle bar of a three-bar formation that can be found on any stripped down “naked” bar chart or candlestick chart. We will cover the candlestick pin bar formation after our discussion of the pin bar formation using standard bar charts. Many people prefer the candlestick version over standard bar charts because it is generally regarded as a better visual representation of price action.

Characteristics of the Pin Bar Formation

• The open and close of the pin bar are within the price range of bar 1 and bar 3 of the formation, or very close to being within their range.
• The open and close of the pin bar are very close together, the closer the better.
• The open and close of the pin bar are near one end of the bar, the closer to the end the better.
• The nose or tail of the pin bar sticks out from the surrounding price bars, the longer the nose of the pin bar the better.

Bearish Reversal Pin Bar Formation
In a top or bearish reversal pin bar formation the pin bar sticks out noticeably in between bar 1 and bar 3 and has a long protruding tail.

Bullish Reversal Pin Bar Formation
The bullish or bottom reversal pin bar formation is the opposite of the top reversal pin bar formation. Here again, we see the pin bar has a long protruding tail that has obviously rejected a certain price level.

Examples of the Pin Bar Formation in Action

Here is a daily chart of CAD/JPY, we can see numerous pin bar formations that were very well defined and worked out very nicely.

In the following daily USD/JPY chart we can see an ideal pin bar formation that resulted in a serious move and mid-term trend reversal.

Here is an example of a trending market that formed numerous profitable pin bar setups. The following daily chart of GBP/JPY shows that pin bars taken with the dominant trend can be very accurate.

How to Trade a Pin Bar Formation

To effectively trade the pin bar formation you need to first make sure it is well-defined, (see above characteristics). Not all pin bar formations are created equal; it pays to only take the pin bar formations that meet the above characteristics.

Next, try to only take take pin bars that are displaying confluence with another signal. Generally, pin bars taken with dominant trend confluence are the most accurate. However, there are many profitable pin bars that often occur in range-bound markets or at major market turning points. Try to also combine the pin bar pattern with strong support  and resistance levels, trend lines, Fibonacci retracement levels, or moving averages.

The pin bar formation is a reversal setup, so for a bearish pin bar formation we will sell on a break of the low of the pin bar and place a stop loss 1 pip above the tail of the pin bar. On a bullish pin bar formation we will buy on a break of the high of the pin bar and set our stop loss 1 pip below the low of the tail of the pin bar.

Candlestick Pin Bar Formations

Candlestick pin bar formations are exactly the same as standard bar chart pin bar formations except the terminology is a little different. They should be traded the same way however.
• A bearish reversal or top reversal pin bar formation can be called a long wicked inverted hammer, long wicked doji, long wicked gravestone, or shooting star.
• A bullish reversal or bottom reversal pin bar formation can be called a long wicked hammer, long wicked doji, or long wicked dragonfly.
Candlestick pin bar candle formations should also display the same characteristics that we listed above for standard bar chart pin bar formations.

Examples of Candlestick Pin Bar Formations

In Summary

The pin bar formation can be a very valuable tool in your arsenal of forex trading setups. The best pin bar setups occur with a confluence of signals such as support and resistance levels, dominant trend confirmation, or other confirming signals. Look for well formed pin bar setups that meet all the characteristics listed in this tutorial and don’t take any that you don’t feel particularly confident about. Pin bars work on all time frames but are especially powerful on the 4hour, daily, and weekly charts. It is possible to make consistent profits by only trading the pin bar formation. Add this powerful setup as one of your main forex trading methods and you will wonder how you ever traded without it.

Nial Fuller - Price Action - Learn To Trade

On Wall Street today the Dow gained 84 points on the back of a regional increase in manufacturing which worked to offset concerns about lower sales from Wal-Mart.

However, stock futures turned lower after the bell today as the Federal Reserve announced a surprise hike in the interest rate it charges banks for emergency loans.

Higher interest rates generally strengthen the U.S. dollar while weakening the stock market due to decreasing demand for commodities.

Currencies:

The EURUSD moved lower today and broke through support at 1.3580 today as a late day announcement of a surprise discount rate hike by the U.S. Federal Reserve Bank caused an intense strengthening of the U.S. dollar.

The dollar strengthened across the board on the back of this news.

We see dollar strength remaining into the end of the trading week and likely into next week.

Currency pair in focus: USD/CAD

Today’s feature currency pair analysis is on the USDCAD. Yesterday we reported on an inside bar setup that had formed just above support at 1.0400. Today we saw briefly break 1.0400 but then quickly got bought back higher by the bulls resulting in a false break of a significant support level. This is an example of inside bar price action setup that turned into a fakey setup.

We will continue following this setup into our target of 1.0640. The fakey setup and inside bar setup are explained in depth in my price action trading course.

For a more in-depth analysis of the major forex currency pairs as well as price action setups see my forex trading course.

On Wall Street today positive corporate and economic reports provided another catalyst to push stocks higher.

The continued stream of uplifting economic reports is adding hope that an economic recovery is taking hold, even though unemployment and concerns over sovereign debt in nations like Greece are still widespread.

Industrial production rose 0.9% percent over last month, 0.2% better than analysts expected.

Currencies:

The Euro erased practically all of its gains from yesterday as technical chart levels in the forex market dominated trading today.

The U.S. dollar was higher across the board today and Gold prices fell, Crude Oil was up about .32 cents a barrel.

We see dollar strength regaining its foot hold in the near term. The Japanese Yen looks poised to strengthen over the coming trading sessions as well, except for possibly against the U.S. dollar.

Currency pair in focus: USD/CAD

Today’s feature currency pair is the USDCAD. We are watching the inside bar price action setup that formed today. It has formed just above a very strong support level and we are watching for it to bounce up into the next resistance zone.

Price action setups like the inside bar are best played from confluent levels of support and resistance. My price action trading course goes into extensive detail about how to trade the inside bar and other price action setups.

For a more in-depth analysis of the major forex currency pairs as well as price action setups see my forex educational course.

On Wall Street today markets moved higher with the Dow gaining 169.67 points as global stocks rebounded as investors bought back into riskier assets on improved economic data out of Britain and the U.S.

Barclay’s Bank out of Britain reported a near doubling of profits last year and strong U.S. factory data helped fuel today’s rally in stocks.

Currencies:

The Euro posted its biggest single day gain against the U.S. dollar since June of 2009 as traders bet that the euro-zone currency had fallen too far on recent concerns over Greece’s debt problems.

Else where, all the other major currencies gained big on the green back today except the Japanese Yen.

Commodity prices were up as well as dollar weakness was the theme for the day.

Currency pair in focus: EUR/USD

Yesterday’s inside bar setup on EURUSD popped higher today and provided a nice counter-trend trade.

We can see a pin bar occurred at 1 and there was a “false break” of the 1.3580 level which indicated this was solid support.

Yesterday an inside bar formed at point 2 just above this level that provided the price action setup to enter this trade. Point 3 shows the pop higher that occurred as a result of this setup. Counter trend trading is not recommending for beginning forex traders but after you learn to trade with price action you will be able to decipher quality counter trend trades from inferior counter trend price action setups.

For a more in-depth analysis of the major forex currency pairs as well as price action setups see my price action trading course.

On Wall Street today markets were closed due to the President’s Day bank holiday.

Stocks will likely have trouble making any decent gains the rest of this week if European finance ministers cannot reassure world markets that they can contain Greece’s debt problems.

The fear is that Greece’s problems could spread to other countries as cash-strapped governments around the world continue to try and spend their way out of the recession which is causing a mountain of public debt.

Currencies:

The U.S. dollar saw very little movement today in the major currency pairs as the bank holiday in the U.S. limited FX market movement.

The dollar did manage to push out small gains against the Euro, Pound, and Swiss Franc while losing slightly to the Yen, Aussie dollar, Cad. Dollar, and New Zealand dollar.

Currency pair in focus: GBP/USD

Today’s feature currency pair is the GBPUSD. Specifically we are analyzing the inside bar that formed today and the possible scenarios that may unfold over the coming trading days.

We can see a strong resistance zone between 1.5750-1.5850. It is possible that price may break up from the inside bar setup that formed today and re-test this resistance resulting in a fakey setup. It may just re-test the resistance without resulting in a fakey as well.

Alternatively, price may just break down from the low of today’s inside bar near 1.5610 and resume the downward price movement. Inside bar price action setups usually give rise to a great trend continuation move either through a fakey price action setup or from a break out in the direction of the trend.

For a more in-depth analysis of the major forex currency pairs as well as price action setups take my forex price action educational trading course.

Trading success is a result of discipline, and having a set daily routine is one aspect of being a disciplined forex trader. It is so easy to fall off track and start making emotional mistakes as a trader that you really need to consciously stop this from happening by having a daily routine that you go through every day. A daily routine will add a degree of order and stability to your trading, which is very important to your mindset and thus to your long-term profitability. If you do not currently have a set daily routine for your trading activities than you need to start developing one, trading absolutely cannot be a haphazard endeavor. The more objective you can make every aspect of your interaction with the market, the less likely you will be to commit emotional trading mistakes.

• Limit screen time to a certain period of time and time of day

The first task in the daily routine of a price action trader is to know what times during the day you will be analyzing the market. You will obviously need to work around other responsibilities such as your current job and your family duties. If you find that the only time you have for checking the market is an hour before you go to bed, than you must work with that time period. The most ideal times to analyze the market are around 4-5pm EST, which is the New York closing, and then around 1-2am EST, which is just prior to the European opening. Now if you can’t stay up until 1 or 2am EST, that’s ok, just make sure you analyze the market at the same time each day.

Once you have decided on the time period you have available for market analysis you then will need to decide on how much time you want to devote to scanning for price action trade setups and(or) for monitoring any previous open positions you may have. Limiting your screen time to a specific time allotment is very important to your mindset and hence trading success. Trading off the daily charts is the most stress free and yet profitable time frame to trade off of. Once you become skilled in price action analysis you can scan each currency pair that you trade during your given time period each day. If there is no setup than you move on to the next pair, if you find no setups in any pairs than you are done for the day! Any further analysis beyond this will only hurt your chances at succeeding long term as a forex trader. You will start to over analyze the market and dig up reasons to enter a trade; I promise you this will cause you to lose money over time.

• Follow a Price Action Trading Plan

If you are a price action trader you know what setups you are looking for each day in the market. Since this is the case you should have a written out and clearly defined trading plan of what you are looking for each day during your given time period and allotted time amount. If you do not have a clearly defined and tangible trading plan than you need to get working on this right away. Keeping your trading plan “in your head” doesn’t cut it either, you need to read it, every day. A clearing defined trading plan should include entry parameters, exit parameters, risk management strategy as well as long term goals; these are factors your forex trading plan needs to include at a minimum.

Following an objective trading plan will give you precise setups to look for each day, it will help you focus harder and give you a guide to follow each day while analyzing the market. Market analysis needs to be structured; most traders have no structure to their daily routine which is a result of not having a trading plan. How can you become a structured and thus disciplined trader if you don’t even have a plan for what you are doing? Would a builder build a house without blueprints? No, of course not, it would fall apart, very fast. Yet, almost every person that attempts to become a forex trader approaches the market with no forex trading plan and sense of why one is necessary. Operating in a structured manner in the uncontrollable forex market is simply a necessity to you making money in forex on a regular basis. Luck will only reward you for so long before it punishes you, there is no room for luck in the consistently profitable trader’s vocabulary, simply put; professional traders do not need luck because they have a clearly defined trading plan.

• Keep a trading journal

Keeping a daily trading journal is important for a number of reasons, but not for the reasons you might be expecting. Many trading books and other educational sources will mention trading journals briefly and say that you should write down the parameters of each trade you take so that you can analyze what you did right and what you did wrong. While there is some value in recording this information I feel that it misses the point. Trading success is almost entirely dependent on how well you manage your emotions. The real value that a daily trading journal can provide to you is feedback on how you are feeling each day about your trading activity as well as feedback on your day to day emotional state.

It is very important to right down how you feel before entering a trade and after wards. Write down if you won or lost on the trade and then write down how you are currently feeling. This will do two things; it will give you a task to do right after closing out a trade which will give you time to calm down from a big win or a loss so as to help keep you from jumping back into the market. Also, it will begin to paint a picture of how emotion is tied to trading success. If you are honest in this trading journal about how you are truly feeling before and after a trade you will begin to see solid evidence that the degree to which you are emotional in the market is the degree to which you lose money; there is an inverse relationship between emotion and money in trading forex.

The other helpful feature of keeping a daily trading journal is that you can write down (or type) your daily forex market summary. This will allow you to keep a running tab on market conditions, economic data releases and will generally just make you more aware of what is happening in the market. It is helpful to stay connected to forex price movement each day and to have it take on some context in the broader market picture. If you are going to be away from the market for a few weeks don’t just come back and jump right into a trade. Give yourself a week or so to record daily market summaries so that you can get a feel for the current ebb and flow of price movement, it’s important to stay in tune with the forex market.

• Cleanse your mind and body rather than put extra time into market analysis

As briefly stated earlier, too much time spent analyzing the forex market beyond what you have previously allotted for yourself will usually work against you. A previous article I wrote called “Set and Forget Trading” explains this concept in greater detail. If you find yourself with extra time and you start looking at charts or analyzing economic data outside of your allotted time slot than it’s time for a hobby. Starting working out regularly, any regular exercise will help you focus better on all of your daily life tasks; it will make you feel better both mentally and physically. Time spent exercising is much better than spending extra time analyzing the market; you can control your body and your mind but not the market. If you still have extra time after exercising than read a book that expands your horizons on some topic, it doesn’t have to be trading related, it can be anything, reading exercises your brain and keeps your cognitive wheels greased. Remember that your daily routine is paramount to long term success in the market, don’t underestimate it .  Forex Trading is a business and should be treated as such, any successful business operates under strict routine, you should be no different as a forex trader. Remember To Comment Below

Copyright 2010,  Nial Fuller -  Learn To Trade The Market - Price Action Academy

On Wall Street today the Dow closed down 45 points but was down as much as 160 points earlier in the session.

News that China may take further steps to keep its economic expansion from getting out of hand provided the negative catalyst for today’s selling. Stocks for businesses with extensive overseas activity took the biggest hit today with Alcoa, Boeing and General Electric all falling more than 1%

Currencies:

The U.S. dollar gained modestly on the major currencies today as whip saw trading conditions dominated the forex market.

The U.S. dollar rose significantly during the European session but gave up the majority of it’s gains to the majors during the New York session closing only slightly higher against most currencies.

Crude oil closed down$1.15 a barrel and Gold closed down modestly from Thursday.

Currency pair in focus: EUR/JPY

Today’s feature chart is the EURJPY currency pair. We are looking at the pin bar that formed on Friday as a possible catalyst for a correction to the upside over the next few trading days.

This is a riskier trade because it is counter-trend, we generally advise traders to trade only with the trend when learning to trade forex, as such the safer alternative in today’s currency pair in focus is to wait for a move higher into resistance and sell from a bearish price action setup.

The two resistance zones we are watching come in at 124.40 and then between 126.00-127.00 respectively. Support and resistance levels are important to watch because they add confluence to our price action signals.

For a more in-depth analysis of the major forex currency pairs and price action setups check out my Forex Educational Course.

On Wall Street today the Dow gained 106 points as investors grew optimistic on the back of the Euro-zone’s pledge to help Greece with its debt problems. However, some analysts warned that a band-aid over Greece’s debt troubles won’t be enough to kick start the 10-month rally in stocks that has recently stalled.

Encouraging jobs data out of the U.S. also supported the rally on Wall Street today.

The Labor Department reported that first-time claims for unemployment benefits fell more than expected last week.

Currencies:

The U.S. dollar rose against the euro today despite the broad advance in equities which usually correlates with a decline in the U.S. dollar. The euro is very weak across the board right now, the fact that the dollar lost ground to all major currencies except the euro today is evidence of this fact.

The U.S. dollar lost ground to the British pound, Australian dollar, New Zealand dollar, Canadian dollar, and Japanese Yen.

Currency pair in focus: EUR/USD

Today’s chart of EURUSD highlights an inside bar that formed on Wednesday of this week. The inside bar setup will often provide a very low-risk / high-probability entry in the context of a strongly trending market like the current EURUSD market.

We almost always trade inside bars in the direction of the trend, because this is where they are the most powerful, however sometimes they can be used as turning point entries. The inside bar setup is one of the most simple yet highly profitable price action setups that I teach. You will find specific entry techniques for the inside bar setups as well as other price action setups in my forex trading course.

For a more in-depth analysis of the major forex currency pairs and price action setups check out my Trading Instructional Course.

On Wall Street today the Dow closed down only 20 points after being down nearly 100 points early in the trading day.

Stocks managed to pare most losses after traders absorbed Fed chairmen Ben Bernanke’s speech on how the central bank plans to wean the U.S. economy off economic supports put in place to help keep it afloat.

Currencies:

The U.S. dollar rose against all the major currencies today except the Canadian dollar. This was largely due to the fact that Crude oil rose 77 cents on the NYMEX and Crude oil generally correlates positively with the Canadian dollar due to the country’s vast oil supplies.

Gold futures closed down marginally.

Currency pair in focus: EUR/USD

Today’s chart is a flash back to some previous great price action that occurred in the EURUSD currency pair. We can see on this chart that a very well defined daily pin bar set in motion a cascade of price action events that really highlight just how effective my forex educational course is.

We can see in this chart that horizontal levels acted like magnets to the price and essentially pulled price action towards them and then repelled it once they collided. Trading price action setups such as pin bars and others are a great way to understand the ebb and flow of the forex market.

When you combine price action setups with horizontal support and resistance areas you have all the analytical tools you need to effectively trade the forex market. When you combing this great trading method with a healthy dose of discipline and a “set and forget” mindset there is literally no limit to the amount of money you can make in the forex market.

For a more in-depth analysis of the major forex currency pairs and price action setups check out my Forex Educational Course.

On Wall Street today the Dow closed up 150 points as hopes rose that the European Union will soon intervene in Greece’s escalating debt problem.

The Dow closed back above the psychological 10,000 level one day after closing below it for the first time in 3 months.

Currencies:

The U.S. dollar mostly lost ground against the major currencies today with the exception being the Japanese Yen.

Crude oil and Gold also rose today on the back of a renewed sense of positivity.

Currency pair in focus: GBP/USD

Today’s currency in focus is the daily GBPUSD. We can see a very strong resistance area just over head coming around 1.5850. As price action traders we pay special attention to confluent areas such as this one on GBPUSD. A price action signal that develops at or near a strong horizontal support and resistance area has added significance.

The 1.5850 level below also coincides with the 50%-61.8% retracement zone. When we get multiple factors lining up as on the chart below it is called  confluence of signals. Confluent levels combined with price action setups give very strong clues about impending price direction.

I teach you how to master what I think are the best price action setups to trade and how exactly to trade them from confluent levels in my trading course.

For a more in-depth analysis of the major forex currency pairs and Price Action Education please check out my Price Action Trading Course.

On Wall Street today the Dow closed below 10,000 for the first time since last November as investors continued to worry about sovereign debt problems in the euro-zone which elicited a sell-off in banking shares.

Currencies:

The U.S. dollar gained today on most of the major currencies but did post a marginal loss to the Japanese Yen.

Risk aversion continues as debt problems in the euro-zone continue to cause traders to buy safe haven currencies such as the U.S. dollar and Japanese Yen.

Currency pair in focus: EUR/JPY

Today’s daily chart of EURJPY shows us an inside bar formation. While price did not rally up to our selling zone around 124.75 discussed in yesterday’s commentary yet, today’s inside bar provides another possible price action trading setup.

Inside bars are best used as trend-continuation patterns, as such, in a down trend like the one we are currently seeing on today’s forex chart we would look to sell a break of the low of the inside bar setup with stops just above the high.

Price action setups off the daily charts like today’s inside bar setup allow traders to use what I call a “set and forget” mentality. Traders can set their orders and then walk away until the next day. This is a great way to trade forex using price action setups that will allow you to live the rest of your life without being glued to your PC.

For a more in-depth analysis of the major forex currency pairs and Price Action Education please check out my Price Action Trading Course.

On Wall Street Friday the Dow closed up 10.05 points after being down nearly 200 points early in the trading session. Investors bought up beaten-down technology and material shares which lead to a last minute bounce in stocks.

This trading week brings with it a heightened since of caution on Wall Street as investors analyze the debt problems in Greece, Portugal, and Spain. The euro has lost significant ground to the U.S. dollar in recent weeks as risk aversion has set the theme for currency, stock, and commodity markets alike.

Recent economic reports have casted doubt on Wall Street over whether the rally from 2009 is truly sustainable. Disappointing employment numbers and continuing uncertainty over President Obama’s intentions with regards to legislative reform for the banking and healthcare industry has increased bearishness across the board.

Currencies:

This week will likely see more U.S. dollar strength as well as Japanese Yen strength. There will likely be corrections within these trends as we saw significant directional moves into the end of the trading week last week. As such, our general advice for this upcoming Forex trading week is to watch for price action setups on pullbacks to resistance or support levels within the current FX trends.

This essentially means we are still bullish on the U.S. dollar and Japanese Yen, as such we will look to get long dollars and long yens should a bearish price action opportunity present itself. These are good strong trends to watch out for well formed 4 hour and daily pin bars, 4 hour and daily fakey setups, and even daily inside bars as continuation plays.

Currency pair in focus: EUR/JPY

Below is a daily forex chart for EUR/JPY. We are watching the resistance level of 124.75 for possible bearish price action setups this week. We like to trade with the dominant trend and take only confluent price action setups off of strong horizontal or trend inflection zones.

We will monitor this price action selling zone should any quality pin bar or fakey setups occur. We could even look to sell a continuation break down of an inside bar setup if one forms in this zone.

For a more in-depth analysis of the major forex currency pairs and Price Action Analysis please check out my Forex Educational Course.

On Wall Street today stocks sold off aggressively as investors fled risky assets in favor of safer alternatives. The Dow was down 268.29 points at the New York close, the S&P and Nasdaq also lost substantially.

The main catalyst behind today’s broad sell off was renewed concern over mounting debt problems out of several Euro-Zone countries. There was also a larger than expected rise in weekly jobless claims out of the U.S. adding to concerns about growth ahead of Friday’s key monthly employment report.

Currencies:

Gold saw it’s biggest decline in 16 months, dropping over $50 an ounce as investors flocked to the safe-haven U.S. dollar. Most other metals and commodities were down as well.

The U.S. dollar gained big on all major currencies except the Japanese Yen as renewed risk aversion dominated the currency markets on Thursday. The greenback is very bullish and we see this trend continuing in the near-term. As such, our general view is bullish on the U.S. dollar until we see declarative technical and fundamental evidence that signals other wise.

Currency in focus: Gold

We can see our Gold trade from yesterday worked out quite nicely. This huge move was set off from a pin bar off a confluent level. This is what we teach here at Learn To Trade The Market and it is the only way we advise people to trade. This was a perfect “set and forget” trade as we had our entry , stop, and exit well defined before we took the trade.

There is no better way to trade the currency markets than through price action setups on the daily chart that you “set and forget” about. Trading with confluence and taking quality price action signals will allow you to profit consistently in the forex market.

Before:

After:

For a more in-depth analysis of the major forex currency pairs and Price Action Analysis please check out my Forex Trading Course.

On Wall Street today stocks were lower as the Dow closed down 26 points, the S&P was down 0.6 percent, while the Nasdaq rose slightly with a 0.1 percent gain at the close.

ISM non-manufacturing PMI came in slightly weaker than expected out of the U .S. today, with a reading of 50.5, analysts were expecting a reading of 51.1. A reading above 50 indicates growth within the services businesses sector.

Services businesses make up the biggest chunk of the U.S. economy, as such, today’s reading reminded investors that the economic recovery will likely be slower than most people would like.

Currencies:

The U.S. dollar was higher across the board today. Most of the major currency pairs reversed intra-day after bouncing from trending moving averages or other intra-day support and resistance zones as the U.S. dollar regained its bullish footing.

Gold put in a reversal pin bar today and crude oil closed lower as well.

Currency in focus: Gold

Today we are looking at a daily chart of spot Gold. Spot Gold can be traded through many forex brokers and is slightly different from Gold futures contracts which are traded on the COMEX or Chicago Mercantile Exchange.

Gold basically moves inversely to the U.S. dollar so analyzing the price action on a daily Gold chart every now and again is a very useful tool to the astute forex trader. We can see a pin bar has formed today and it’s tail is rejecting a strong horizontal resistance level and a down trend line. This pin bar formation is considered to have confluence because it has at least two other confirming signals that strengthen it.

Today’s pin bar setup in Gold could be a very big clue into the bullish trend for the U.S. dollar picking up steam again after its recent bearish correction. We will continue to follow this price action setup on the daily commentary as it unfolds over the coming weeks.

For a more in-depth analysis of the major forex currency pairs and Price Action Analysis please check out my Forex Educational Course.

Please Read This Set and Forget Trading Article Here Enjoy !

Watch More Free Forex Videos Here ,  Learn About My Price Action Forex Trading Course

On Wall Street today stocks rallied for the 2nd day in a row as upbeat earnings reports and a bigger than expected increase in U.S. pending home sales gave investors reason to buy.

The good GDP numbers last week combined with rising ISM numbers yesterday and today’s positive pending home sales is providing support that the strength we saw in the fourth quarter could be sustainable throughout the first quarter of this year and beyond.

Currencies:

The U.S. dollar declined against most of the major currencies today accept the Australian dollar. The reserve bank of Australia moved to keep their cash rate at 3.75% last night after the market was expecting a raise up to 4.00%. This caused a substantial intra-day sell of, however the pair closed about 83 pips off its lows.

Pair in focus: USD/JPY

Today we are looking at a daily chart of the USD/JPY currency pair. We can see an inside bar setup has formed at an area of confluence. This market is moving lower, as such we would sell a break of the low of today’s inside bar and look for it to move down to the 89.20 level before pausing.

Sometimes inside bars on the daily chart will result in a fakey setup, which I explain in detail in my forex currency course. However, inside bar setups taken with trend-confluence are usually a very high probability price action setup.

For a more in-depth analysis of the major currency pairs and Price Action Analysis please check out my Forex Trading Course.

On Wall Street today the Dow closed up 118.20 as investors regained optimism after a better than expected ISM report out of the U.S. showed the manufacturing sector is picking up.

Foreign stock markets were also bullish as upbeat economic reports out of the euro-zone and China also contributed to the wide-spread positivity amongst investors.

Currencies:

The U.S. dollar declined today against most of the major currency pairs. The British Pound lost a small amount of ground to the green back however, along with the Japanese Yen.

Gold and Oil which generally have a strong impact on the currency markets were markedly bullish today with Gold rising 1.9% and Crude Oil futures up 2%.

Pair in focus: GBP/USD

We can see that our target of 1.5910 got hit today as GBPUSD sold off into the next relevant support level, hitting a low of 1.5849 today before reversing and forming a bullish pin bar. By looking back at the last 3 daily commentaries it is very apparent that the fakey setup is very effective on the daily time frame.

Traders who are looking for further training in the fakey setup as well as other specific price action setups can check out my forex training videos or my forex trading course which goes into the greatest detail and includes a lifetime subscription to material updates and the member’s trading forum where we discuss price action setups in all the major currency pairs everyday.

For a more in-depth analysis of the major forex curreny pairs and Price Action Analysis please check out my Forex Instructional Course.

Very often aspiring forex traders become lost in a web of confusion with the amount of data that the various financial media outlets plaster all over the internet and television. It is extremely easy to experience “analysis paralysis” while trying to trade forex or any market for that matter. There are so many competing ideas and trading methods along with more fundamental data coming out every day than you could ever hope to digest, it can be very overwhelming to even try and make sense of it all and develop a trading plan based off this amount of information. One of the biggest psychological mistakes that almost every aspiring trader makes on their journey to success is firmly believing that the amount of economic data analyzed and (or) having a technically complicated or expensive trading method has a direct linear relationship with profiting in the market. In reality, as any professional trader will attest to, these factors usually have an inverse relationship with trading profits, at least after certain point. This essentially means that once you do a certain amount of analyzing market data any further time spent analyzing this data is likely to have a negative effect on your trading; it causes you to lose money.

Why it’s Counter – Productive to Analyze too Much Market Data

It may seem confusing or counter intuitive to the aspiring forex trader when they first hear the fact that too much analyzing of market data can actually cause you to lose money faster than you other wise would. This is one of the inherent psychological traps that so often keep aspiring traders from consistently profiting in the forex market and is the reason why many of them blow out their trading accounts and eventually give up all together. The main reason why this occurs is because human beings have an innate need to feel in control of their life and of their surroundings, it is an evolutionary trait that has allowed our species to perpetuate its existence and ultimately arrive at our current modern day level of civilization. Unfortunately for the aspiring forex trader however, this genetic trait of all human beings works against those trying to succeed at forex trading. In fact, most of our normal feelings of wanting to work harder than the next guy or spend extra time studying and researching for our jobs or for school are feelings that are really not beneficial to success in the forex market.

The problem with trying to apply the idea of hard work to forex trading is that beyond a certain level of technical chart reading and awareness of which economic events are the main catalysts for price movement there really is no beneficial aspect to spending more time on tweaking a trading system or analyzing more economic reports. The bottom line here is that there are literally millions of variables involved in trading the forex market; each person trading the market is a variable and every one of their thoughts about the market is a variable because these are all things that can cause price to move. So, unless you are somehow able to keep track of every trader in the market and all of their thoughts, you essentially have no control over price movement and trying to further analyze economic data or trying to come up with an overly complicated method is essentially just a meaningless attempt to control something that simply cannot be controlled.

Thus, the underlying problem of why so many people fail at trading the forex market begins with the idea that they feel a psychological need to control their surroundings and when this emotional state meets the uncontrollable world of forex trading it almost always has negative consequences. This problem works to snow-ball itself as well because once a trader loses a few trades he or she begins to get angry and wants to “get back” at the market. The way they do this is by reading another trading book or buying a different trading system that seems more likely to work or by analyzing the inner workings of every economic report they can find and trying to predict how it will affect market movement. Once this process has begun it is very difficult to stop because it makes logical sense to us that if we put more time in and do more work we will eventually figure out how to make more money faster in the forex market. The difficult truth to all of this is that, as stated earlier, after you reach a certain degree of technical and fundamental understanding, any further research or system “tweaking” beyond that point will actually work against you and the rate at which you study more and do more research is probably about the rate at which you will lose your money in the market.

Less is more in Forex – Set it and Forget it

So how does the aspiring trader achieve consistent profitability in the forex market if we are genetically primed to fail at this endeavor? The very first step in this process is just accepting the fact that you cannot control the uncontrollable forex market and checking your ego at the door. The forex market does not care what you have done in your life before; it has no emotion and is not a living entity. It is an arena where human beings act out their beliefs about the exchange rate of a certain currency pair. These beliefs are a result of emotions, and human emotion is very predictable when it comes to money. The point here is that the people mentioned in the previous section who are doing extensive amounts of research and trying to find the “holy grail” trading system are the ones who are trying to control the market and thus trading based off emotion and providing the predictability for the professionals to take advantage of. The paradox here is that professional traders do very little actual technical and fundamental “homework”; they have their defined edge in the market and they simply check the market once a day or so and see if their edge is there. If it is not than they just wait for tomorrow because they know that the forex market is a continuous stream of self-generating opportunities, thus they do not feel pressured or anxious to trade. If their edge does show up then they set their orders and walk away, accepting the fact that any further action will only work against them because it will be a vain attempt to control the uncontrollable and would not be an objective action.

The logic of “set and forget” forex trading is this; if your trading edge is present than you execute your edge and do not involve yourself further in the process unless you have previously defined the action in your trading plan. Traders that decide to mess with or tweak their trade once they enter it almost always kick start an emotional rollercoaster that leads to overtrading, increasing position size, moving their stop loss further from their entry, or moving their profit target further out. These actions almost always cause the trader to lose money, the reason why is because they were not objectively thought out, but were influenced by an emotional reaction that was caused by trying to control the uncontrollable.

Make Money and Save Time by Doing Less

It is a statistical fact that traders who trade off longer time frames such as 4 hour, daily, and weekly charts and hold their positions for multiple days, make more money in the long run that traders who “day trade” off intra-day charts. The reason many people are attracted to day trading is because they feel more in control of the market by looking at smaller time frames and jumping in and out of positions frequently. Unfortunately for them they have not figured out that they have the same amount of control as the swing trader who holds positions for a week or more and only looks at the market for twenty minutes a day or even less. The ironic fact about forex trading is that spending less time analyzing data and finding the perfect trading system will actually cause you to make more money faster, many people are attracted to speculative trading for this very reason but soon afterwards forget about the fact and start spending countless hours digging themselves into a huge psychological trap that many times they never dig out of. All you need to do to consistently make money in forex is develop a written out trading plan, that includes a risk management scheme, with a definable edge and check the market one time a day for ten to twenty minutes. If your edge (price action signals and setups) is showing up than you set up your entry, stop loss, and target and walk away until the next trading day is over.

Trading in this manner actually elicits a snowball type effect of positive habits that work to further perpetuate your trading success. This entire article can be summarized in the following two sentences; people who spend more time analyzing market data and trying to perfect their trading system inevitably induce a cycle of emotional mistakes that work to perpetuate their trading failures and eventually result in lost money and lost time. People who realize that the market is uncontrollable and build their trading plan around this fact will inevitably arrive at a “set and forget” type mentality that induces an emotional state that is conducive to on-going market success and consistent profitability. The trading method used is one of the least important variables, but generally a simple method that offers a definable and profitable edge such as price action analysis is the best method to use to maintain your “set and forget” mindset.

For More Information on How I Trade Price Action Successfully, Check Out My Advanced Forex Course Here

Copywrite - Learn To Trade The Market Author Nial Fuller

On Wall Street today the Dow closed down 53 points and January closed out a very disappointing month for investors as fear arose over whether or not the economy can sustain its 4th quarter growth rate.
The Dow closed down 3.5% for January and it was the worst month for the stock market since February of 2009.

Currencies:

The U.S. dollar gained across the board today as traders continue to shed riskier assets in favor of the safer greenback. The dollar even gained on the Japanese Yen today indicating it is quickly becoming equal to the Yen as the favorite safe-haven currency.

Pair in focus: GBP/USD

The fakey setup on GPB/USD mentioned in yesterday’s commentary came off nicely today. We are targeting the 1.5910 support area on this trade. Notice the pin bar that kicked off this most recent down move. Pin bars and fakeys are two great price action setups that I go over extensively in my trading course. We monitor all relevant price action signals in the major currency pairs every day in our member’s daily market commentary.

For a more in-depth analysis of the Major FX Pairs and Price Action Education please check out my Forex Educational Course.

On Wall Street today the Dow dropped 115.70 points as new economic reports are casting a negative view on the U.S. economic recovery. Specifically, U.S. unemployment claims increased more than expected last week and there was a disappointing report for core durable goods orders.

Elsewhere, world stock markets dropped after reports out of U.K casts doubts over the strength of the banking system there, and fiscal worries caused the euro to continue its multi-week slump against the U.S. dollar and other currencies.

Currencies:

The U.S. dollar closed higher against all major currencies except the Japanese Yen which it only lost about 8 pips too.

We saw some volatile moves in most of the U.S. dollar currency pairs as moves against the greenback were quickly met with intense selling pressure indicating the safe-haven currency is seeing a resurgence of strength in light of current global economic uncertainty.

Pair in focus: GBP/USD

Today’s chart features a look at a GBP/USD fakey setup that occurred today. We would target 1.5910 support on this setup and will follow it over the next few days to see how it plays out. There have been many profitable fakey signals as of late. For more information on the fakey setup and other great price action setups please check out my member’s section.

For a more in-depth analysis of the Major FX Pairs and Price Action Education please check out my Forex Educational Course.

On Wall Street today the Dow added 42 points after the Federal Reserve assured investors that interest rates will stay low to facilitate economic recovery and that the economy over all is improving.

Stocks recovered from a negative start after the upbeat assessment from the Fed. Today’s Fed statement injected some positivity into the stock market after major stock indices closing lower for 5 of the last 8 trading days.

Currencies:

The U.S. dollar closed higher against all the major currencies except the British Pound. The pound posted a marginal gain on the green back as a result of continued EUR/GBP weakness.

Gold closed lower and Crude Oil dropped after a U.S. government report showed that demand for crude products dropped from the previously already weak levels a year ago when the recession was near it’s peak.

Crude oil to fell to $74.71 per barrel while gold advanced slightly.

Pair in focus: EUR/USD

Today’s pair in focus features a look back at the EUR/USD daily chart to see just how powerful the fakey setup can be. We can see a fakey setup occurred back in early December of 2009 that resulted in a top formation that has since moved down over 1,000 pips.

The second big fakey formation that occurred on this chart was between January 11th and January 15th. The pair has since moved down 400-500 pips from the break down of this setup. We can see that fakey setups often occur at major market swing points and can result in big time gains for the astute price action trader.

For a more in-depth analysis of the Major FX Pairs and Price Action Instruction please check out my Forex Educational Course.

On Wall Street today the Dow closed down 2.57 points after being up 90 points earlier in the session. Investors grew fearful again over President Obama’s plan to regulate banks and dumped stocks shortly before the closing bell. The fact that investors dumped stocks in the final hour of trading is indicative of a troubled market; this was often the pattern during the financial crisis of 2008.

There also concerns that China is moving ahead with a plan to curb bank lending which could slowdown their economy and destabilize the worldwide economic recovery.

Currencies:

The U.S. dollar rose against other major currencies except the Japanese Yen. We remain bullish on the U.S. dollar as current economic events in the U.S. and China appear to be favoring risk-aversion.

Crude oil to fell to $74.71 per barrel while gold advanced slightly.

Pair in focus: GBP/JPY

We can see in today’s chart of GBP/JPY that price rallied up to a horizontal event area at 147.00 and subsequently sold off. I discuss how to trade off horizontal event areas or support and resistance areas with price action in my trading course. What we are looking for is confluence of signals, such as price action setups forming at significant horizontal areas or at Fibonacci retracement levels.

For a more in-depth analysis of the Major FX Pairs and Price Action Instruction please check out my Forex Educational Course.

Stocks turned higher today as the prospects for Ben Bernanke being reinstated as Fed Chairmen for a second term improved. Investors want Bernanke to return because he has maintained a low-interest rate policy which is viewed as positive for stocks due to its effects on lending and economic expansion.

Apple Inc. also helped push stock indices higher today as the iPhone manufacture posted its highest quarterly profits ever for the most recent holiday quarter.

Currencies:

The U.S. dollar traded mostly lower today, losing modest ground to all the major currencies except the Japanese Yen which it gained about 42 pips on due to wide-spread Yen weakness today.

Despite the correction today we expect U.S. dollar strength to pick up again at some point this week as the risk-aversion from last week seemed to be rather significant as evidenced by the charts.

Pair in focus: USD/JPY

We can see in today’s chart of USD/JPY an inside bar has formed indicating some hesitation in the current down-ward momentum. We will watch this pair for a pop back up into our inflection level between 90.70-91.50 for a possible price action setup to get short from. We always try to trade price action from confluent levels in the direction of the dominant market momentum in order to maximize our returns.

For a more in-depth analysis of the Major FX Pairs and Price Action Instruction please check out my Forex Educational Course.

On Wall Street Friday the Dow dropped 216.90 points as investors dumped stocks again on the back of continued fear over President Obama’s proposal for new bank regulations as well as concern that China may move to slow it’s economy due to increasing inflation.

Currencies:

The U.S. dollar traded mixed on Friday; we saw the greenback lose modestly to the Euro, Swiss Franc, and Japanese Yen, while giving up a few pips so the Aussie Dollar and New Zealand Dollar.

The dollar gained decently on the British Pound again on Friday: closing up about 82 pips against the Sterling. We also saw the U.S. dollar beat out the Canadian dollar for the fourth day in a row.

Commodities were down last week, with Crude Oil closing down 4.7% on the back of demand worries and wide spread U.S. dollar strength due to renewed risk aversion.

Pair in focus: GBP/JPY

We can see in our daily chart of GPB/JPY that a nicely formed pin bar reversal pattern occurred on 1-14-10; rejecting 150.00 psychological resistance. This set the stage for last week’s trend line break down and subsequent significant fall into the end of the week. The 50% pin bar entry technique that I teach in my forex trading course would have gotten you a great entry into this amazing trade. Check out my trading videos for more great examples of pin bar setups.

For a more in-depth analysis of the Major FX Pairs and Price Action analysis please check out my price action trading course.