“If the market conditions are not optimal, you
have a choice: Stand aside and wait for conditions to change, or adapt to the
reality of the current conditions… Over the years, I found that I can't always
trade my favorite markets. I have to trade in markets where I'm able to make
money.” - Joe Ross
Irrespective of the
timeframe used in your analysis, one thing remains important in trading, that’s
the methodology that enables you to follow the trend. It’s now vivid that when
Smart Money maintains long positions, pullbacks to support levels would be
expected so that new long orders could be opened at those levels.
Below is
the summary of some of my trading forecasts this month:
AUDUSD
Primary
trend: Bullish
The AUDUSD pair experienced mixed results
last month. It went up by over 350 pips and later fell by more than 200 pips.
On the chart, we have a Convergence Pattern - meaning that the current bearish
threat is weakening (indicated by the trendless ADX which has gone far below
the level 30) as the MACD gives a new ‘buy’ signal. For this month, a long
trade is preferred.
AUDJPY
Primary trend: Bearish
There were also mixed results on the
AUDJPY cross last week: the first half of the month witnessed a rally and the
second half of the same month saw a pullback. There is what looks like a
potential bearish move on the chart. The MACD is already giving a ‘sell’ signal
(as confirmed by the ADX -DI which goes up above its +DI counterpart). This new
trend would be confirmed as strong when the ADX line goes above the level at
30.
EURNZD
Primary
trend: Bullish
In the context of the current bullish trend,
this cross dropped by over 300 pips in the month September. The primary trend
is still northward - giving one possibility of a buying lower in an uptrend.
The ADX is trying to cross the level 30 to the upside, and when this is done,
the condition on the MACD will showcase the next signal. If the signal line and
the histogram are still above the zero line, then it is a ‘buy’ signal.
Otherwise, it is a ‘sell’ signal.
EURCAD
Primary trend: Bullish
The EURCAD is
still in a valid uptrend - only that the steam in the market is not that strong
at the moment. I can say that there is a Convergence Pattern on the chart. The
MACD still displays a clear bullish victory, and a new entry level would be
confirmed if the ADX (which is presently below the level 30) crosses the level
30 upwards. If not so, the MACD histogram would be going towards zero line as
the northward bias is currently violated.
AUDNZD
Primary trend: Bearish
The AUD is vividly weaker than the NZD: the AUDNZD crossed
plummeted by over 360 pips last month. And it looks like this will continue,
The ADX line is above the level 45 as the MACD shows a strong selling pressure
in the markets. What we have now is a Divergence Pattern - a bearish
confirmation pattern for that matter. Trend followers would do well to call a
short trade.
GBPCHF
Primary trend: Bearish
The GBPCHF did not experience much activity last month.
There was no significant movement on either side (whether bearish or bullish).
However, the MACD proves that the underlying trend still looks bearish.
Nonetheless, this is not supported by the -DI that is situated below the +DI.
The ADX is above the level 30, trying to point upwards. If the ADX continues
like this, the market may turn bullish. But it is advisable to remain neutral
right now.
Conclusion: When some instruments go
up, some instruments fall down. All instruments cannot fall at the same time or
go up at the same time. Although, when some instruments nose-dive, they do so
continually and thus generate clean returns. Why is this so? Southward moves
tend to be more rapid and extended than northward moves. As certain instruments fall, it portends
economic problems in some areas. For instance, inflation - which is a common
economic problem, isn’t just a plague of modern-day life. But whatever the
economic situation says, you can become financially free as a trader.
The
article is ended by the quote below. It is a food for thought by Dr. Janice
Dorn:
“The answer is really quite simple, and—just
like so many secrets—is hidden in plain view. The type of thinking that made
you successful in life outside the markets is the mirror image of that in the
markets. In “regular” jobs, in the world of real life—there are rules. These
rules are set down by other people. Other people make rules and you follow
them. If you do not follow the rules, you risk for losing your job or your
license. Think of medicine: a doctor must abide by many rules set forth by
state medical boards. If they do not, they are warned, disciplined and may have
their licenses revoked. The rules are out there and doctors follow them—or don’t
(at their own peril and that of their patients.)… In other words, the same type
of thinking that brought you so much success in the world outside the markets
will not bring you success in the markets.”
Your questions and opinions are highly welcome.
Thank you.
With best regards,
Azeez Mustapha
Forex Signals Strategist, Funds
Manager &Coach
Copyright (C): Fx Empire, LLC
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