Forex Trading Signals – How We Traded in May and June 2017June 30, 2017
It all started with the chart above. You see, we were heavily short the EURUSD pair. As Forex trading signals providers, we use technical analysis for our trades. It works like a charm. That is, most of the times.
The thing is that prior to the trade recommendation above, we were only selling the EURUSD. Or, buying the dollar. No matter how you put it, on our website, we were dollar bulls.
But, Forex trading is not a straight line. Trading is a game of probabilities. And, our Forex trading signals are the result of a pattern recognition approach. As such, we couldn't simply ignore this triangle.
The thing with the triangle above is fairly simple. It was too beautiful. Elliott Waves traders know that such a triangle forms extremely rare. In such a perfect formation and on such a time frame, they are very rare.
Yet, we couldn't ignore the pure truth. Remember? We trade on a pattern recognition approach.
As such, in the middle of this May, we switched sides. I mean, in how many Forex trading courses did you hear the expression "cut your losses short"? That's right. Too many times. How to do that?
Simply pull the plug. There's no other way. So, we took a loss middle of May and bought three full positions on the EURUSD having 1.1292 as a target and 1.10 stop loss. Pretty nice risk-reward ratio.
However, any Forex Elliott Waves traders know/should know what a limiting triangle brings. It brings a path moving forward. No one can take this triangle and its future implications from the EURUSD chart anymore.
Not only that we went long, but we reversed our mindset too. It seemed like the perfect trade. Judging by the outcome, it was. But, the journey was an incredible one...
How to Find the Right Forex Analysis
As mentioned earlier, trading is a game of probabilities. But, above all, it's not a game. These are real people with real money. No one will have mercy on you, as you won't have either.
When buying or selling a currency pair, what matters is to calibrate your expectations. You can do this by using a realistic risk-reward ratio, or bring something else to the trading table.
In our case, we use time. The best Forex analysis is always the one that uses both price and time. I mean, if you know where the price should go and have an idea about when that will happen, that's a winner.
As such, as a Forex trading signals provider, we strive to incorporate the time element in our trades. As a matter of fact, most of the times we exit a trade because the price didn't reach a specific target in a specific amount of time.
Coming back to the EURUSD trade, to reverse the course it was a difficult decision. I mean, Fed was supposed to come and hike the rates, right? How on earth would EURUSD move higher with the interest rate differential widening? Yet, technical analysis is technical analysis. We had to do it.
Moreover, above 1.13, the Euro weighted basket the ECB (European Central Bank) considers, suggested even lower inflation. We know this is a problem in the Eurozone. As such, the ECB will do whatever it takes to keep Euro down. Right?
Yet, we bought the pair. Not only that we bought it, but insisted staying on the target. To put this into perspective, this was back in the middle of May. But, the Forex market plays tricks on you.
Or, at least you think it is.
Early March Forex Trading Signals
The biggest problem in a trade is to let your profits run. This is the basis of any fx training program. Yet, humans fail at it.
It's not like we were bears on the EURUSD pair the whole year. No. In fact, early March, our Elliott Wave Forex subscribers received the following recommendation.
The idea behind this setup was that the market formed a contracting triangle. Moreover, the triangle appeared on three different degrees. We expected three b-d trend lines to break.
Looking in retrospective, it was a great setup. Even if only for three half positions, the idea was brilliant. The take profit level was almost the same. However, from a technical point of view, the setup proved to be incorrect.
Coming back to the EURUSD limiting triangle setup, here's how we described the decision to switch to the long side:
Watching the above video will give you an idea about what our Premium and Platinum members receive every day. We made such video analysis explaining the Forex trade recommendations. We don't simply buy or sell something.
Moreover, logic and reasoning prevail. Sometimes, like it was the case with this EURUSD reversal, fundamental factors have no logic. However, our Forex trading signals use technical analysis and then consider fundamental factors.
But, the story of buying EURUSD middle of this May is far from over. As it turned out, the psychological factor in trading matters most than any charting strategies in Forex.
Price and Time - Forex Trading Signals Today
Our swing trading signals service provides trading recommendations for the Forex market. However, we do not trade all the currency pairs. In fact, we analyze about ten of them. The most important majors and some crosses.
Since we launched three and a half years ago, we've been through all kinds of situations. However, it is rare when we corner a market.
Cornering a market means to leave no room for error. As a Forex signal provider, ideally, the price of a currency pair can move only in your direction. If you corner the market, that's it.
In our case, we did corner the EURUSD market. We use the Elliott Waves theory as a logical reasoning behind our trades. When doing top/down analysis, it is like solving a math problem.
When all the pieces of a puzzle come together, there's where you want to put your money in.
As such, we ended up trading the EURUSD, in full positions, with a full exposure. Our money management system as explained on our FAQ page was tested to the max. Yet, when you corner a market, you better go for the jugular. Such situations do not happen very often.
In fact, there was a similar situation we traded with our members. Back in February 2015, the USDJPY broke higher from a limiting triangle on a daily chart. We simply didn't trade anything else anymore until all our trades reached the take profit.
Trading Signals From a Contracting Triangle
This May, the market played tricks on us. But only because the end of the month came. The price target was alright, plenty of time left...but 1.13 simply didn't come.
We took more trades. More longs. Fully exposed on the long side. Yet, we closed all the longs at the end of May for a nice profit. We exited at 1.1230 area. However, the 1.1292 didn't come.
To tell the truth, the 1.1292 was simply symbolic In fact, the price needed to retrace 1.13. Moreover, to do that in a specific amount of time.
We knew from the start that, if we had a new chance, in June we'll start uploading longs again.
May ended with our performance looking like this: 4.70% on the month, 12.77% on the year so far.
However, we had some unfinished business with the EURUSD longs. That triangle ended the 5th wave in a strange manner. It formed a terminal impulsive move.
These are terrible creatures in technical analysis. They allow a Forex signal provider to incorporate the time in an analysis.
Check the first chart on this article. See that vertical line in the middle of the gray square? The price needed to move above 1.13 until that time. Price and time, the holy grail in trading.
As May ended and we booked the profits, we started to buy again in June. The time element was on our side. At the start we bought slowly, trying to build various scenarios for the upside move.
In this case, the market looked like it formed a double three running pattern. It doesn't matter if the pattern is the 2nd wave or the b-wave. From a currency trading signals point of view, things were similar.
Similar Pattern on the EURGBP Forexcharts
What mattered was 1.13 to come. Yet, the market still consolidated for a while.
In the meantime, the EURGBP cross formed something similar on the daily time frame. This cross is a difficult one to trade lately. Since the Brexit vote, no one knows for sure how the GBP will move.
Not to mention the Bank of England's uncertainty. Lately, the MPC (Monetary Policy Committee) members have different views. Some are split over inflation, some want to hike rates.
Governor Carney says in one speech that hiking rates is inappropriate, and in another one he's hawkish. As such, the GBP is all over the place.
Yet, one of the very first beginner trading strategies calls for having a stop loss every time. Nothing can go wrong if your stop is in place. Therefore, the Forex trading signals we generally have limited risk. We cannot lose more than planned.
This turned out to be a risky trade. We love such trades.
The idea was to buy for the break of the b-d trend line and then wait for more continuation. It turned out we were right and we closed the trade with nice profits.
Forex Market Signals - Great Expectations
We started to buy EURUSD again in June. While 1.1292 came, the market strongly sold from 1.1295. In doing that, it left a valuable trace behind: the 1.13 level was still intact.
Now, that's not possible. After a terminal impulsive move, the market MUST move beyond it. As such, the arguments for being long were still valid.
We ended up building a full exposure again. No regrets, no strings attached. After all, we cornered the EURUSD market, right?
Basically, we reassured everything is ok and that we want to buy some more. We still had plenty of room for that.
As John Maynard Keynes put it back in 1919: "You'd really be amused by the amazing complications of psychology and personality and intrigue which make such magnificent sport of the impending catastrophe of Europe".
Part of our Forex trading signals approaches, patience is key. Patience and discipline in trading are as important as the trading setup is. And then came Draghi...
Mario Draghi Saved the Day
This is what every trader that don't use technical analysis will say. Or, a trader that doesn't believe in it.
At the start of this week, Mario Draghi held a speech in Sintra, Portugal. The speech was fairly balanced. Yet, the Euro shoot higher across the board.
All the Euro pairs exploded. EURUSD took 1.13 like it was nothing, and never looked back. EURJPY jumped over two hundred pips. Finally, EURGBP moved to the upside as well. Even the EURAUD, the other important cross, moved higher.
But this wasn't fundamental. We expected it. It was purely technical. The EURUSD, for example, as our Forex trading signals subscribers know, simply consolidated all this time.
Since the middle of May until the last week of June, the pair moved in ranges. Failing to take 1.13, and holding 1.11. In fact, it just built energy to break higher.
Obviously, 1.13 came, we booked the profits on the big position we had. It turns out June 2017 will add some more on this performance chart.
Now that the 1.13 is behind us, things look great. We have a triangle in place. More importantly, one that the market confirmed.
When trading with Elliott Waves Theory, the logical process doesn't allow you to count on current prices. Instead, what you should do is to trade current levels based on previous patterns.
If the pattern is confirmed by future price action, it will stay there. Forever. As such, the triangle is here to stay. It is up to us, as Forex trading signals providers, to make the best out of it.
And, there are plenty of traces this triangle left behind. For instance, we know where the EURUSD goes next. Both on the medium and long term. Moreover, we can trade accordingly on the short-term.
End of June is here and nothing can change our performance. We're up another four percent on the year, not mentioning the open positions. But this is a trip to remember.
What we did with the EURUSD pair these two months is not random. Make sure you understand that.
It is the result of hard work and discipline. Moreover, the courage to stand with your beliefs. But, above all, the result of proper FX training. There are plenty of Forex mentorship programs out there. Just Google.
However, none will teach you how to corner a market. Not to mention, how to trade with time on your side.
The analyses we post for our subscribers represent some sort of an Elliott waves blog. Moreover, the video analyses show the day-to-day struggles. You know, when you know you're right and yet the market doesn't move.
This emotional rollercoaster is more difficult to handle than a losing streak. For a Forex trading signals provider, this is the toughest challenge.
Capital Properties FX moves forward, as the market moves forward. Never feel sorry you missed a trade. The market will always open the next Monday.
How many times did you buy something only to see the market dipping instantly? Or the other way around? Too many times.
Think of all the forces that drive the Forex market. Retail traders represent the smallest part. Only about six percent of the daily Forex turnover belongs to Forex traders.
Ther rest comes from central and commercial banks, Forex brokers, liquidity providers, high-frequency trading algorithms, and the list can go on. Our job as Forex trading signals providers is to make sure we align our trades in the right direction. For a fair representation in the financial markets, click here.
Make no mistake, these days, humans follow robots, not the other way around. Expect this trend to continue and be even more aggressive by the day.
With this June 2017 performance given by the EURUSD story mentioned here, we exceeded 14500 pips profit. This is not a joke. Over 14k pips.
Now, before saying something, consider this as the result of a three and a half years of Elliott Waves analysis. There's no other trading method out there so accurate like this one.
Moving forward, we already started to prepare for NFP (Non-Farm Payrolls) next Friday. The beauty of FX trading is that the process is a never ending one and each week brings something new to the trading table.
Come and join us. Technical analysis at its best.
Capital Properties FX
July 1, 2017
"The Most Important Thing Now": Bank of England, Quarterly Inflation Report Q&A, May 12, 2010
"Better Chopra Than Our Hopeless Lot", Walter Naughton, Irish Independent, November 22, 2010