Just a quick blog post today to tell you about a new trading video that's just been created by Adam Hewison, the co-creator of the Marketclub trading service. It's all about the EUR/USD pair and the effect it has had on the equity markets recently.
Adam believes the Euro is heading towards More on Is The EUR/USD Influencing The Equity Markets?
The trouble with technical indicators, and oscillating indicators in particular, is that although they can tell you when a currency pair is overbought or oversold, they can never be relied on with any great confidence.
For example the RSI and Stochastic indicators could go under 20 and indicate an oversold position, but that does not necessarily mean that More on When Is A Currency Pair Really Oversold?
This could potentially be my last trading update until September because for the next four or five weeks I shall be glued to the World Cup (with many matches starting as early as 12.30) and will probably concentrate on my stock trading rather than my forex trading. Then after that I will hopefully be going to Thailand for 6 weeks so I won't be trading forex then either. Anyway it's not definite yet. I suspect I will continue placing a few trades but we'll have to wait and see.
It's been a tough week this week with my main 4 hour trading system providing me with two losing trades out of two. However it wasn't all bad as I had a few decent trades trading fibonacci extensions to balance things up.
I've been reading a lot about fibonacci extensions in the last few months as I want to find a few more day trading strategies to use in addition to my main 4 hour strategy, and I've had some decent successes so far.
As I mentioned in my last blog post I More on Weekly Trading Update - 31 May - 04 June 2010
Many forex traders use fibonacci analysis to re-enter a trade in the same direction as the overall trend after there has been some kind of retracement. For instance if the price has been trending upwards but has recently fallen back, then many traders will look to enter a new long position after the price has fallen 23.6%, 38.2%, 50% or 61.8% of the original trend, ie from the low point to the high point.
However today I want to talk about another way you can use fibonacci in your trading, and that's by using fibonacci extensions to determine when a trend is likely to end. This is useful because it helps you exit existing positions and enter new positions to profit from any trend reversal.
More on Fibonacci Extensions And Projections - A Live Trading Example
