YouPip.com - Your Forex Resource Center

Understand the Olsen Scale of Market Quakes – SMQ Charts

2010-05-19T18:45:00.004+01:00

The Scale of Market Quakes (SMQ), created by Richard Olsen, co-founder of Oanda, is a measure that quantifies the impact of price events in the Currency Forex Markets. By measuring how big and how fast the prices of a market instrument moved by the time of a political and economic event, news release or natural disaster, the SMQ provides analysts with ways to compare how much such events have influenced trading decisions and the flow of market order executions.

As the Olsen SMQ calculation is based on the price evolution of a currency through time, any event causing a raise in the markets volatility can be indentified and set apart for further analysis. This makes it a valuable Fundamental and Technical Analysis tool capable of quantifying the impacts caused by news events, the placement of large orders, cascades of liquidations, and ubiquitous unbalances between buyers and sellers, for example.

Reading the Olsen Scale of Market Quakes Charts – SMQ

Let’s take as an example a SMQ chart of 2008 Jul 03 at 12:30 GMT, exactly at the release time of a basket of main economic events composed by:

ECB - Jean-Claude Trichet speech
USA – Initial and Continuing Job Claims reports
USA - NFP report (Non Farm Payrolls)
USA – Average Hourly Earnings reports
USA – Average Weekly Hours
USA – Unemployment Rate
USA – ISM Non Manufacturing

Figure 1: FxStreet.com Economic Calendar at 2008 Jul 03 (only events between 11:45 and 14:00 GMT)

The chart bellow shows the hourly EURUSD Forex spot prices at 2008 Jul 03 and on the two previous days. Note how the releases strongly pushed the EURO down by a relatively large amount.

Figure 2: EURUSD – Hourly Euro vs Dollar Forex spot prices at 2008 Jul 03

Looking at the Scale of Market Quakes chart, we can see that the release of those basket of news produced an average impact on the EURO equivalent to a SMQ value of 1.9, which is amongst the largest impacts the Euro have had during other NFP releases.

Figure 3: Average EURO SMQ Chart against main currencies at 2008 Jul 03 – 12:30 GMT

The currencies dissection on the left side SMQ radar shows that for the Euro, the largest impact caused by currency events at 12:30 GMT was against the Dollar (EUR/USD) and the Pound (EUR/GBP) while less pronounced movements where found on EUR/CHF and EUR/AUD.

Also note that the Olsen SMQ is produced with a 2 hour lag, and that SMQ peaks will be shown before the peaks on the currency charts. This way, although SMQ is calculated after the price movement, its measures are displayed before the end of the movement and approximately at the time of the event that caused the move in the markets.

To alleviate this 2h lag, a 1h estimate is also calculated and displayed in the chart. According to the article “The Scale of Market Quakes”, this estimation overshoots the final value by roughly 20% on average.

Olsen’s Intrinsic Time and the calculation of the Scale of Market Quakes

The Olsen Scale of Market Quakes is calculated based on the notion of Olsen’s Intrinsic Time. The Intrinsic Time is an alternative way of viewing the price evolution on trading markets were the time is measured from one price move overshoot (OS) to the next. Price overshoots are market with diamonds on the chart bellow:

Figure 4: Intrinsic Time: Directional Changes (DC) and Price Overshoots (OS)

For a intrinsic time point to occur, there must be enough movement against the previous prevailing trend to trigger a Directional Change Threshold (DC), where the DC is defined by a fixed percentage of the previous move. From this point onwards, the Price Overshoot (OS) starts to be counted until another Directional Change is triggered.

In the same way as we have different Timeframes and Tick Charts on conventional charting, we can have different Intrinsic Time charts by using different percentages as the Directional Change Threshold.

The Olsen Scale of Market Quakes takes the calculation of the Intrinsic Time one step further and, for each price movement in the market, the SMQ will measure how many DC thresholds, from 0.05% to 500%, would be be triggered, normalizing then the values into a scale from 0 to 6.

Because of that, big SMQ magnitudes will always correspond to big price price moves but, big price price moves may not always receive a big SMQ magnitude. If a big movement has developed in time as small and lengthy price swings, it may not trigger high enough DC thresholds thus not receiving a high SMQ magnitude value.

Comparing Market Impact with the Olsen Scale of Market Quakes
SMQ Charts

The charts bellow show the behaviour if EUR/USD during a series of NFP – Non Farm Payrolls releases from 2007 Aug 03 to 2009 Mar 03. By looking at the charts we can measure the impact that each NPF release had on the Euro and also compare how the SMQ magnitudes behave given different spot price responses to those events.

Figure 5: Little reaction from the market vs Drop-and-Recovery

Figure 6: Same change on Forex EURUSD spot prices, but with different steepness

Figure 7: Volatile Markets with different price activity and range sizes

Figure 8: Drop-and-Recovery with different price activity

More about the Olsen SMQ - Scale of Market Quakes

To learn more about the Olsen Scale of Market Quakes and SMQ Charts check out the following links:

Online Olsen SMQ Charts

Full Description of Olsen Scale of Market Quake Charts

The Scale of Market Quakes by T. Bisig, A. Dupuis, V. Impagliazzo and R.B. Olsen

An extensive set of scaling laws and the FX coastline by J.B. Glattfelder, A. Dupuis and R.B. Olsen

Ride Bigger Forex Moves with Currency Derivatives

2010-05-11T10:01:00.001+01:00

You don’t need to have a perfect timing to profit from the big, longer term moves of the Forex Markets. With the right strategy, you can even survive initial pullbacks against your position without fear of stop-loss hits or margin calls.

That’s one of the reasons why currency trading is not only governed by the spot Forex markets. Currency Derivatives such Futures and Options add powerful dimensions for the retail Forex trader that are traditionally only exploited by the big players such as banks and hedging funds.

In the article “Combining Forex Spot And Futures Transactions”, Noble DraKoln, president of the Liverpool Trading Company and Speculator Academy, explains how to use Currency Futures Contracts and Options as ways ride bigger Forex moves by managing the risks taken on the spot prices.

For more advanced trading techniques using Options, check the article “Practical And Affordable Hedging Strategies” by Tristan Yeates.

Make money on NFP – Non Farm Payrolls

2010-05-06T23:15:00.001+01:00

NFP LIVE COACHING: How to conservatively make money during Non Farm Payrolls

With the right trading techniques, Nom Farm Payrolls can offer excellent opportunities to make a huge amount of money in no time. In this article, we will discuss news trading strategies and show you how to get free live coaching during NFP news release.

Live Trade Coaching on NFP Non Farm Payrolls

Wayne McDonell, Chief Currency Coach at FX Bootcamp consistently guide traders who are willing to learn the ropes on Forex and news trading. Being already on its 48 edition, he presents Live Non Farm Payrolls coaching sessions at every NFP release since 2006 at FXStreet.com.

During each his webminars, Wayne walks the audience through his detailed news trading strategy as well as the same other strategies he coaches at FX Bootcamp on a daily basis. People attending the presentation are free to ask questions at anytime while the market is moving via a simultaneous chat room.

To attend to Wayne McDonell free NFP live coaching sessions you can just register yourself at FXStreet by using any of the following links:

http://www.fxstreet.com/live/sessions

http://www.fxstreet.com/live/sessions/session.aspx?id=9ee201c2-e6de-4bbd-a514-cb065fd02b42

Get ready for the live NFP news action!

Watch these video training courses with Wayne McDonell beforehand to prepare yourself for the live NFP webminar:

Strategic & Tactical FOREX Trading (Part 1)

Strategic & Tactical FOREX Trading (Part 2)

The 6 Best Moving Averages for Forex Trading – Part 1

2010-05-03T20:52:00.002+01:00

Moving Averages are the best lagging indicators in a trader’s arsenal, specially when combined with a good set of leading indicators.
But what are the best moving averages among the best trading settings?

In this first of two articles, we will discuss how the many types of MA’s can be optimized to solve different trading problems. We will start with the 5-T3 Adaptive Moving Average, the 14-ILRS MA and the 5-Hull Moving Average.

In the second article we will talk about the 21-EMA, the 55-EMA and the 200-EMA, going through their applications in the trading pit.

Download the Indicator AllAverages.mq4 containing the Best Moving Averages described here.

Download the template Youpip.com - The 6 Best Moving Averages.tpl with the suggested setup from this article.

Click here for more information on YouPip Forex Analysis, Templates and Indicators.

5 - T3 Moving Average – The Golden Dynamic Support / Resistance

The 5 Period T3 Moving Average is by itself one of the best swing following indicators that can be used in any market and timeframe. It works by providing short term dynamic support and resistance where the price will bounce many times during the development of a trend swing.

Tim Tillson’s T3 MA is an Adaptive Moving Average that uses the difference between the current price action and the value of a same period EMA to correct its accuracy.

After the market has formed a trend, the price action will stay above or bellow the T3(5) for virtually the entire duration of each of its swings. If a candle crosses the T3(5) and then close without crossing it back, this will usually mean that the swing is over. Another full candle closing in a crossover position will confirm the swing termination.

In a Trending Market, good entries can be made based on a T3 (5) bounce happening on higher timeframes.

The 5 - T3 Moving Average Entry Strategy

Place an order in the same direction of the trend just at the time the price hits the T3(5) MA. Trail a stop loss in a lower timeframe as price bounces back in the direction of the trend. If price crosses the T3(5) and doesn’t return in the same candle, exit the trade.

This strategy works great for bounces on the H1, H4 and D1 timeframes.
After placing the order, manage the trade using the a lower timeframe (such as the M15 for an H4 entry).
Do not use this strategy in ranging markets.

14 - ILRS Moving Average – The Wicks Tracker

The smooth 14 period ILRS Moving Average likes to be away from price action just at the right distance to let wicks develop without crossing it. Because of its behaviour, this MA is great for trailing stops and even aggressive swing re-entries after a trend has developed itself.

During a trend swing, it’s not unusual to see one or two naughty candles closing with wicks exactly at the ILRS(14) MA, by the pip.

ILRS stands for Integral of Linear Regression Slope. It is one of the smoothest MA’s and carry very little market noise.

The 14 - ILRS Trailing Stop Strategy

The ILRS(14) is the best moving average to trail a stop-loss tight on a trending swing.

After the trend has formed, trail your stop-loss 1 or 2 pips away from the IRLS(14) MA candle by candle.
Leave some more space if you are trailing stops on the H1 or higher timeframes.

5 - HMA Moving Average – The Trend Watchdog

The 5 HMA, or 5 Period Hull Moving Average tracks the price very closely with some overshoot. This makes it a good MA for alerts and trend following indication.

During the formation of a trend:

The 5 HMA cross off the 5 T3 is the first alert that a swing is forming.
The 5 HMA cross off the 14 IRLS usually confirms that the new swing has been formed.
The trend swing then proceeds with the 5 HMA parallel to the 5 T3.
A 5 HMA cross back on the 5 T3 signals that the trend has lost momentum: The price may run sideways before continuing or the trend will terminate soon.
A 5 HMA cross back on the 14 IRLS usually confirms the end of the swing to a more sloppy price action.

Note: More experienced traders will want to discard discard the 5 HMA information and trade directly on price action or other leading Forex tools. Too much confirmation on lagging indicators can make you late for the best entries and exits.

Forex Psychological Levels

2010-05-03T17:48:00.003+01:00

Major forex players such as central banks, hedge funds and big carry traders like to pay particular attention to key price levels that have bigger repercussion on a country’s economy than the mere and nosy ups and downs of its currency fluctuations. The so called Psychological Levels are prices that can cause anxiety and expectation on the people following a financial instrument. They are self-fulfilling, meaning that people will take some course of action based solely on the price reaching those levels.

Most Important Forex Psychological Levels:

Dollar Parity
USD/CHF = 1.000 will normally trigger actions by the Swiss National Bank to return the Swiss Franc to more “normal” levels trading above parity. Market moves can be quite aggressive at this level and spill to EUR/USD, given the Euro/Swissy correlation. Other currency pairs that are near parity in recent times are the Aussy (AUD/USD) and the Loonie (USD/CAD).

Rounded Numbers
Rounded Numbers with double zeros (such as EUR/USD 1.3200), or even better with a triple of zeros (1.3000), are levels that a lot of people are waiting to jump into a trade. Many Pending Entry Orders and Target Take Profits are triggered right at those prices while protecting Stop Losses should stay in a safe distance allowing space for a bears-and-bulls battle and wicks caused by the triggering of more aggressive stops standing more closely.

Historical and Daily Levels
Historical highs and historical lows are always watched with anxiety while intraday traders normally respect the previous daily candle with more importance given to the previous day high and low. Also look for these levels on higher periods such as the weekly and monthly charts.

Prices that appear on the Media
Hyped numbers or price levels that are on evidence are always a reason for traders to rethink their positions and create trade plans. Be cautious when the candles in your chart approach them.

Forex Best Leading Indicators

2010-04-28T10:25:00.002+01:00

Trendlines
Trendlines are the trader’s best friend and one of the best leading indicator a trader can use in his charts.

While trades are entered on a bounce of long term trendlines (at H4, D1, W1 and MN timeframes) with relatively loose stop-loss triggers, medium and short term trendlines can be very accurate and it is not unusual to find them working on a “by the pip” basis.

Breakouts are another example of trendline entries, specially when they are confirmed by a “support/resistance role reversal” when, after a breakout, the prices retrace to the trendline and then bounce back away.

Horizontal support and resistance lines are special cases of trendlines. When combined to Pivot Points and/or Fibonacci levels, they usually reveal very probable bounce or role reversal areas.

Types of Trendlines

Support and Resistance Horizontal Lines
Support and Resistance Trend Lines
Median Lines
Logarithmic Trend Lines
(Check out this article to see why Logarithmic Trendlines work)
Andrews Pitchfork (see bellow…)

YouPip.com publishes free chart analysis with high probability trendlines and pivot points updated many times a day. Check it out!

Pivot Points

Pivot Points are great at predicting turning points in the currency markets. Because so many traders have believed on them, they become a self-fulfilled prophecy predicting monthly, weekly and daily prices around pending orders are placed and automatic trading software make their bets.

While the classic pivot points are the best prices to watch on a daily basis, all the other pivots start to become important when looked from a weekly and monthly perspective.

Always pay attention to daily R2 and S2 classic pivot points. Specially near London Session closing time, they represent important turning points caused by cash outs of traders who follow the Londoners and head home, finishing their trading day.

Another powerful use of pivot points rely on the overlap and clustering of different types of monthly, weekly and daily pivots over a price area. Fibonacci, Psychological levels, Trendlines and other lagging indicators such as Stochastic turns will add more confirmation and precision to probable reversals at a pivot point area.

Types of Pivot Points

Classic Pivot Points
Fibonacci Pivot Points
Camarilla Pivot Points
Woodie’s Pivot Points
DeMark Pivot Points

Fibonacci Retracements and Extensions

The famous Fibonacci sequence is considered the best measure for proportion and equilibrium on all forms present on Nature.

Fibonacci ratios also seem to be intrinsically bound to the human senses, be it when we stare at the perfect proportions of a beautiful woman, or when we are catch by the greed and fear of dealing with the price swings on the currency trading markets.

Whichever way they may work, the Fibonacci retracements and extensions will be seen and respected on most trend swings at the Forex currency pairs.

Their best use is on trending markets, where they work in fractal manner by showing turning points on price extensions and retracements, either during each individual swings or full trends and price moves.

Again, look for agreement between long and short term Fibonacci ratios and their overlap with other leading indicators for the best trading opportunities.

Forex Psychological Levels

The so called Psychological Levels are prices that can cause anxiety and expectation on the people following a financial instrument. News hype, dollar parity, rounded prices, daily high and lows and historical levels are normally respected by many traders and may cause a trend to stall or even reverse.

Click here learn more about Forex Psychological Levels

Andrews Pitchfork

Many traders consider Andrews Pitchfork the best trendline methodology although its use is widely misunderstood and underused in most Forex articles.

Andrews Pitchfork defines three lines of extremely high bounce rates that consist of a median line plus other two parallel lines that are drawn on each trend swing using its swing high, swing low and the previous swing point.

While trying to fit a pitchfork on a trend by forming a channel will work great at most of the time, this is not the main use of Alan Andrews work.

We will soon write an article about the best uses of Andrews Pitchfork. Keep checking at www.youpip.com from time to time.

At the meantime check these great books. They are a must read for any trader wanting to take full advantage of the pitchfork methodology:

Moving Averages??

Yes, Moving Averages. You read it right. Although MA’s are lagging indicators by definition, some of them can predict price bounce areas ahead of time, acting in a leading way.

The best moving averages for use as leading indicators have higher periods and don’t move much with the development of price action in the last unfinished bar. The 200 EMA and 50 SMA are among the best examples but the same kind of strategy can also be used on some MA’s of smaller periods such as the 21 EMA, the 14 IRLS MA and the 5 T3 EMA.

To learn more about the use of Moving Averages check out:

The 6 Best Moving Averages for Forex Trading

Market Correlations

Market Correlations offers one of the best ways to know in advance how a currency pair will behave in the near future. Very often one of the correlated markets take the lead on a S/R hold or breakout that are then followed by its peers. Also, Support and Resistance areas, Pivot Points and Fibonacci levels are often interrelated between the different correlated markets.

You can find weekly updated correlations for the most important currencies and futures contracts at the FX-Bootcamp’s blog.

Most Important Dollar Correlated Instruments

Futures Market (Exchange)	Symbol
Gold (Comex)	GCM0
Mini Crude Oil (Nimex)	QMN0
10 Year U.S. Notes (Ecbot)	ZNM0
Mini SP-500 (Globex)	EXM0
Mini Nasdaq 100 (Globex)	NQM0
Mini DJIA (Ecbot)	YMM0

Other Important Correlations in Forex

Futures Market (Exchange)	Symbol
DAX (Eurex)	FDAXM0
FTSE 100 (Euronext)	FTSEM0
NIKKEY 225 (Globex)	NKDM0

Currency Relative Strength Indexes

Index (Exchange)	Symbol
Dollar Index (Ice)	GCM0
British Pount (Globex)	6BM0
Euro (Globex)	6EM0
Japanese Yen (Globex)	6JM0

Trade the News: Take Advantage of Delayed EURO NEWS

2010-04-27T13:48:00.002+01:00

News Trading Tutorial: Take advantage of delayed news between UK and Europe

There are times in Forex when news releases of similar economic information happen on slightly different times on UK and Europe. These events can offer good trading opportunities for quick profits.

One example of such news events happened recently on April 20 with the release of UK – Consumer and Retail Price Indexes at 8:30 GMT and German / European Union ZEW Survey at 9:00 GMT.

Bellow are the FxStreet.com definitions of the Economic Indicators:

Consumer Price Index: The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or Bearish).

Retail Price Index: is a statistical measure of a weighted average of prices of a specified set of goods and services purchased by consumers. It is widely considered as a key measure of inflation that indicates an accurate reflection of the cost of living. Normally, a high reading is seen as positive (or bullish) for the GBP, whereas a low reading is seen as negative (or bearish).

ZEW Survey: Economic Sentiment published by the Zentrum für Europäische Wirtschaftsforschung measures the institutional investor sentiment, reflecting the difference between the share of investors that are optimistic and the share of analysts that are pessimistic. Generally speaking, an optimistic view is considered as positive (or bullish) for the EUR, whereas a pessimistic view is considered as negative (or bearish).

By reading the definitions and knowing that there will be a 30 min delay between the news releases, one could make the following assumptions:

A better than expected UK CPI and RTI would indicate that UK Economy did relatively good for the period.

This tells me that, if the fundamentals of UK, German and Europe are at a similar level at the moment, and the same sort of data and calculations influenced both UK and German preview of the reports, Germany and Europe would also probably be more optimistic about their economies.

Thus, we could probably expect a similar better then expected response on the German / EU ZEW Survey.

With the above assumptions, we could prepare a trading plan by looking at places to take a trade on EURUSD based on whatever reactions UK CPI and RPI news had on GPBUSD.

As we can see in the pictures, UK news release were better than expected causing GBPUSD to rally almost instantly at 8:30 GMT (10:30 Broker Time) while the EURO remained stationary in its momentum waiting for its own news.

By following the assumptions previously maiden, EURUSD is expected to raise as well, so we would better look at good places to long it. There are two places worth noting:

Aggresive Long Entry during News Anticipation

As more traders in the world had probably similar assumptions, after the Cable volatility suppressed, they started to long EURUSD anticipating a rise caused by the ZEW Survey release.

An aggressive long setup was then formed before an anticipation confirmation, with a stop loss just bellow the 1 min 200 EMA. This stop would be tightened just before the EURO news release to a place above break even or to about 4 pips below whatever value EURUSD would have just before the news.

More Conservative Long Entry on Anticipation Retracement

A more conservative entry would be after the confirmation of a bullish anticipation with its higher high and its subsequent retracement before the news.

The conservative long setup would be to enter before the news on the retracement hesitation with a tight stop loss of about 4 pips. Attention is needed to move the stop to Break Even preferably before the news or as soon as the price moves in the direction of the trade during the news.

News Trading Considerations

BEWARE THAT ANY TRADING DURING A NEWS RELEASE IS EXTREMELY RISKY

Always protect your capital by entering a trade with a pre-set stop loss in the same order. Even if you plan to set the stop loss at a later moment, make the pre-set SL wider so you can tighten it afterwards.
It may be hard to place trading orders during news and other volatile moments. Broker trading servers can get too busy and may not execute stop-loss change requests or any orders at all. Be provisioned for these situations by always defining a pre-set stop-loss together with your entry order.
Depending on your broker, the spread can grow bigger and hit your SL levels during news or other volatile moments. Avoid placing trades with brokers that change the spread dramatically during news releases.
Depending on your broker, price gaps and spread growing can make the price simply “jump” your stop loss rendering it useless. Beware of such brokers and always be present for a manual order close in a worst case scenario.
Training on a DEMO account is always the most conservative way of trading.

Troubleshooting YouPip - Live Analysis Downloader

2010-04-26T18:21:00.001+01:00

Automatic Live Analysis Downloader

YouPip.com market analysis are updated many times during lateAsia, London and New York trading sessions.

The Live Analysis Downloader delivers Free Updated Forex Analysis and Indicators directly into your Metatrader templates folder making it much easier to keep pace to what is happening to Forex, pip to pip.

Learn more and Install YouPip.com Live Analysis Downloader

Troubleshooting Automatic Live Analysis Downloader

These are the typical problems that may arrise when using YouPip.com Live Analysis Downloader. They can be easily solved by re-installing SlickSVN or excecuting the automatic downloader with administrative rights:

No files were downloaded
A command prompt window opens and closes rapidly
'svn' is not recognized as an internal or external command, operable program or batch file.

If no files are downloaded to your Metatrader templates folder you may be having a problem executing the .bat file. To check what may be the problem follow the instructions bellow:

Make sure your internet connection is active and you are running "YouPip.com - Live Analysis Downloader.bat" as Administrator.
(It may not work in some versions of Windows if run as a regular user)
Open a Command Prompt window as Administrator
Type "svn" and then hit ENTER.
You should see a message asking you to type "svn help" for usage.

In the case you receive a message like:
'svn' is not recognized as an internal or external command, operable program or batch file, SlickSVN was not installed correctly or you may not be in administrative mode.
Go to your Metatrader folder, type "YouPip.com - Live Analysis Downloader.bat" and hit ENTER
The automatic downloader will start and will show you a message with any error it may be getting.
If you get an Access Denied message, this is because of Windows 7 / Vista permission structure for the Program Files folder. In this case you can:
- Change the permissions for your Metatrader folder
- Install Metatrader into another folder outside Program Files
- Execute YouPip.com - Live Analysis Downloader.bat in another folder outside Program Files

How to get Free Live Forex Analysis

2010-04-25T00:40:00.001+01:00

Tutorial: How to Get Free Forex Analysis straight to your Metatrader Platform

YouPip.com is providing a free service for Metatrader that delivers Live Forex Chart Analysis straight into MT4. The analysis are made directly on top of the currency pairs and are offered in the form of Metatrader templates.

Manual Download of Free Forex Chart Analysis

Up-to-date Forex Live Analysis of the major currency pairs and the main crosses are offered for manual download for the following symbols:

EURUSD, USDJPY, GBPUSD, AUDUSD, USDCHF, USDCAD, NZDUSD, GBPJPY, EURGBP, AUDJPY

Click here to manually download the latest versions of the Forex Market Analysis and Free Indicators

In the link above you will also find a couple of selected Free Forex Indicators that deliver real value for your trading.

Automatic Live Analysis Downloader

As the Market Analysis are updated many times a day during late Asia, London and New York sessions, you may prefer to use our automatic analysis downloader.

YouPip.com Live Analysis Downloader delivers updated Chart Analysis and Forex Indicators directly into your Metatrader templates folder. This makes it much easier to keep pace to what is happening to Forex, pip by pip.

Installing YouPip.com Live Analysis Downloader

Follow the instructions bellow to install YouPip - Live Analysis Downloader:

Make sure you have the Metatrader 4 Trading Platform installed in your system.
If your broker doesn't support Metatrader, you can get a free copy at http://www.metatrader4.com
Download and install SlikSVN - Subversion Version Control
at http://www.sliksvn.com/en/download
Select the Typical Install
Download YouPip Live Analysis Downloader here.
Copy the file "YouPip.com - Live Analysis Downloader.bat" to your Metatrader folder.
(Usually "C:/Program Files/Metatrader")
Execute the file "YouPip.com - Live Analysis Downloader.bat" by clicking on it twice.

Note:If you have Windows 7 or Windows Vista you may need to run the file in administrator mode.
To do this Right-Click the file "YouPip.com - Live Analysis Downloader.bat" and then hit "Run as Administrator"
The Live Analysis Downloader will automatically download the chart templates and indicators from YouPip.com:

- Examples of currency technical chart analysis downloaded to "Metatrader/templates" folder:
YouPip.com - EURUSD.tpl
YouPip.com - USDJPY.tpl
YouPip.com - GBPUSD.tpl
... and other templates

- Examples of free Forex indicators downloaded to the "Metatrader/experts/indicators" folder:
YouPip-Aimer.ex4
YouPip-Aimer.mq4
YouPip-DZS.ex4
YouPip-DZS.mq4
... and other indicators
After the template files are downloaded, open Metrader apply them to your charts.
- Click on the Charts menu, then hit Template - Load Template.
- Select the template according to your chart currencies.

Troubleshooting

Typical problems that may arrise when using YouPip.com Live Analysis Downloader are easily solved by re-installing SlickSVN or excecuting the automatic downloader with administrative rights.

Check our Troubleshooting section if you are having problems with YouPip.com - Live Analysis Downloader

Risk Disclosure

Trading FOREX or any other Margin Tradable Market carries a High Level of Risk.

Using any information or material provided by YouPip.com implies that you are fully aware of YouPip.com - Terms of Use and YouPip.com - Full Risk Disclosure.

Forex GBPUSD Analysis - W3 Apr 10

2010-04-19T22:57:00.002+01:00

Forex GBPUSD Daily Analysis - Apr 2010

GBPUSD - Cable forex chart analysis from 19/04/2010 to 24/04/2010. Keep an eye on this post during the week since it will be updated with new information showing how the market has developed.

We will also keep the old pictures so you can follow how the analysis is updated in the process.

Montly GBPUSD Outlook

The Cable finds itself at a major S/R level marked by (1) and trapped by the golden monthly trendlines at (2) and (3).

Weekly GBPUSD Outlook

These are possible outcomes for the pound given the current support and resistance levels.

Daily GBPUSD Analysis

A D1 trend continuation is expected from the montly S/R level although a head-and-shoulders pattern may be forming heading the cable down.

H4 GBPUSD Analysis

These are possible H4 outcomes based on the daily analysis and current S/R levels.

H1 GBPUSD Analysis

Bellow are the support and resistance levels at H1.

I can see a bullish raly to the (1) target area but pay attention at the (2) trendline and a range between the levels at (2).

21/04/2010 UPDATE...

It looks like the pound wants to go a bit down from there at the momment but beware of rally to the 1.5440 psycological level.

Forex EURUSD Analysis - W3 Apr 10

2010-04-17T23:37:00.005+01:00

Forex EURUSD Daily Analysis - Apr 2010

This is the first forex chart analysis starting on EURUSD. Keep an eye on this post during the week since it will be updated with new information showing how the market has developed.

We will also keep the old pictures so you can follow how the analysis is updated in the process.

Montly EURUSD Outlook

After a montly lower-high, EURUSD is at major support represented by the two golden lines in the chart.

Weekly EURUSD Outlook

Pay attention at the golden lines for:

a break of support for a montly lower-low
a hold and rally to the orange horizontal line, upper trend line or a montly higher-high
a range between the golden lines and the orange horizontal line

Daily EURUSD Outlook

D1 support and resistance levels for EURUSD

4 Hour EURUSD Analysis

After a fill of the gap (1) on the last week, a new trendline (2) seems to have been formed today and the market looking to reach (4) retracing at a strong level at (5).

Please note that stronger trendline at (3) has not been touched. This may be due to the gap (1) and the market may not come back to it soon but a continuation downwards trhough (6) is very feasible with a target marked by the arrow at (3).

1 Hour EURUSD Analysis

Keep an eye on the strong montly resistance at (1) and the H4 61,8% fibonacci retracement support at (2) as targets for the next days.

21/04/2010 UPDATE...
It looks like the Euro wants to head down for the next comming hours...

Forex Levels for the Next Week

2010-04-17T17:03:00.001+01:00

EURUSD

GBPUSD

USDJPY

Improve Focus and Concentration on Forex Markets

2010-04-07T09:47:00.001+01:00

This are videos that help me concentrate myself before and during my trading sessions.

I like to put this video on top of my trading charts during quiet times and fell the ticks flowing. The picutures ellude the up-and-down fractal nature exposed in the different timeframes of high efficient markets such as Forex.

Binaural Brain Synching

If external stimulus is applied to the brain, it becomes possible to entrain the brain frequency from one brain state to another. The easiest way of applying stimulus to the brain is via ears and eyes.

Since humans cannot hear sounds low enough to be used for brain stimulation, special techiniques must be used. One such special technique is binaural beats.

If slightly different audible tones are played to each ear through stereo headphones then, as the brain puts these two sounds together, it generates brain waves of a frequency equal to the difference of the two tones.

Just passively listening to binaural beats does not necessarily alter your state of consciousness. Winllingness and ability to relax and focus attention affects how effective the stimulus is for inducing those state changes.

Delta Wave Entrainment

I found this Delta Wave Induction good for energizing up before the session and when I wake up. I can fell my brain neural networks turning on with the images. Certain frequencies in the Delta range are also known to trigger the release of Human Growth Hormone – GH, beneficial for healing and regeneration.

Theta Wave Entrainment

The Theta State (4 Hz – 7 Hz) has been found to increase learning cababilities. I like to use it after Forex trade sessions before reviewing each of my trades so I can fix what I’ve learned from the day.

Alpha Wave Entrainment

This Alpha Wave video is also good for energizing just before the trading starts.

Alpha waves range between 7-12 Hz. This is a place for deep relaxation but not quite meditation. In alpha we begin to access the welth of creativity that lies just bellow our councious awareness. It is recommend to practice your creative visualization and auto-suggestion technique in alpha state.

More about Brain Wave types and their uses…

Brain Wave Entrainment

Build a Successful Plan to Profitable and Consistent Trades

2010-04-06T14:40:00.014+01:00

Successful traders set realistic, measurable and time-oriented long-term and short-term goals.

They are aware of their actual performance and are able to develop specific detailed plans towards success.

They are highly committed to their goals and the daily demands needed for their achievement.

They are focused on the trade and in their net performance, not the amount of money being won or lost during the process.

Bellow is an example of how to determine your objectives in trading and how to build an strategy to take you from where you currently are to the final achievement of your satisfaction as a Forex, Futures or Equities trader:

Lifetime Goals:

Be a successful and consistent trader in a variety of markets and instruments
Use my capital and trading expertise as a way to improve local communities

Three-Year Goals:

Accumulate a solid capital originated from trading results
Own a company that manages funds for third party investors and companies
Teach others how to become profitable and consistent on trading

One-Year Goals:

Live exclusively of Forex and Futures trading results
Provide solid analysis for hedging operations on Live Cattle and Dollar futures

Goals for the Coming Month:

Achieve MAP – (Minimum Acceptable Performance) of 15 pips per day
Earn a minimum of 75 x 4 = 300 pips for the entire month
Earn a minimum of 15 x 5 = 75 pips for each week
Not take stupid trades outside trading plan
Video Record and review all trades taken
Keep my trading journal up-to-date

Obstacles I will have to overcome:

Trading outside the plan
Not acting when the market shows itself
(Especially on entries and cutting non-working trades for break-even / small losses)
(Video reviews to help me timing myself with the market)
Doubling-up

Resources I already have:

Real Time Forex Coaching with market experts and consistent traders
Inner understanding that :

No indicator or set of indicators will be perfect
Even the best analyst doesn’t know if that S/R line will brake or hold
Good traders act purely on probabilities about an area to hold or break
There’s no holy grail and it is a waste of time to search for it
Market knowledge helps but you don’t need to be a good analyst to be a profitable and consistent trader

Trading Psychology (see Trading in the Zone)
Good enough understanding of technicals and fundamentals
Selected set of trading tools and timeframes
Source for Forex News (FxStreet, DailyFx, FxFactory)
Good understanding and experience on using:

Trend Definition and Break of Trend
Support and Resistance + Trendlines
Fibonacci Retracements and Extensions
Multi-Timeframe Analysis
Pivot Point theory
Forex Indicators (MACD, Stochastics, RSI, CCI, etc.)
Reversal Candlestick patterns
Market Patterns (Head and Shoulders, Trend Continuation, Flags, Triangles, Gartner, Butterfly, etc)

Basic knowledge of Elliot Wave Theory.

Resources I will need:

Build-up greater confidence
Greater focus during the trade and on market opportunities
Relax on quiet market times
Develop a trade journaling practice

Actions I will take this week towards attaining my goals for this month:

Analyze higher timeframes and create trade plans before the trading session
Build-up focus and energy levels by using meditation and positive imagery
Use self-talk to keep me in a winning behavior
Record my trades
Put daily notes in my trading journal and goggle calendar with:

Performance, Mental and Experience Goals
Trade Videos
What went well
What didn’t go well
What did I learn
What I will now do differently

When creating your Plan towards your Trading Goals:

Set where you are (A)
Set where you want to be (B)
Create a plan to take you from A to B
Always think in terms of pips (points) and the trade in itself, not in the money involved
Believe in the plan
Believe in your ability to follow the plan
Be determined and committed to your goals

Trading Psychology: SELF TALK your Trade Success

2010-04-05T19:46:00.006+01:00

When trading, as well as doing many other activities, there is a continuous self talk between us to ourselves that occurs automatically, without our even being aware that it is occurring.
Try recording your self-talk by spelling out loud your toughts during your trade session. You will proably be amused when playing them back.
What does it sound when you talk to yourself? Is the talk friendly and supportive? Is it angry and perfectionistic? Does it support you reaching your goals?

Successful traders maintain their self-confidence during difficult times with realistic and positive self-talk.

At other times they use self-talk to produce confident thoughts, positive feelings and winning behaviours during the trade session.

Self-talking positive affirmations in the form of simple statements will help ward off anxieties and build-up confidence.
They should be simple, positive and preferably worded in the present tense. Spelling them out loud many times each day makes them powerful and effective in psyching up before trading.
Bellow is a list of positive affirmations that will be helpful for your trading consistency:

Positive Trading Affirmations
· I AM FOCUSED ON THE TRADE and on what the MARKET IS TELLING ME NOW
· I WIN ON A SERIES OF TRADES
· I AM CONFIDENT ON MY SKILLS AND MY CONSISTENCY
· I AM IN SYNC WITH THE MARKET
· THE MARKET TELLS ME when TO EXIT THE TRADE
· THE MARKET TELLS ME when TO ENTER THE TRADE
· I FOLLOW MY TRADING PLAN
· I LET THE TRADE MOVE WITH MY PLAN
· I EXIT WHEN MY PLAN IS NOT WORKING

A good way to manage your self talk is to write down a plan with staments you would like to tell yourserlf on the different moments of your trade session. An example of such a plan can be found bellow.

Self Talk Management Plan

Before the Trading Session

I AM FOCUSED
I AM IN SYNC WITH THE MARKET
I HAVE A WINNING ATTITUDE
I TRUST MY EDGE
I BELIEVE IN MY PLAN
I WILL ACT WITH THE MARKET

Before Each Trade

I AM FOCUSED
I TRUST MY EDGE
I BELIEVE IN MY PLAN
I WILL ACT WITH THE MARKET
THE MARKET TELLS ME WHEN TO ENTER
I CAN SEE THE EDGE
I AM IN THE “HERE-AND-NOW”
IS IT TIME TO ENTER? –> ACT

During Each Trade

I AM FOCUSED
I HAVE AN EDGE BUT ANYTHING CAN HAPPEN
THE MARKET TELLS ME WHEN TO EXIT
I AM FOLLOWING MY PLAN
IS MY PLAN NOT WORKING? –> ACT
IS IT TIME TO EXIT? –> ACT
IS IT TIME TO MOVE THE STOPS? –> ACT
IS EVERYTHING WITHIN THE PLAN? –> LET IT GO

After Each Trade

I AM HAPPY BECOUSE I FOLLOWED MY TRADING PLAN
MY PLAN GIVES ME THE EDGE
MY CONSISTENCY MAKES ME WIN
MOVE TO THE NEXT TRADE

After Each Trading Session

I AM HAPPY BECOUSE I FOLLOWED MY PLAN
NOW IS TIME TO RELAX
THEN IS TIME TO REVIEW AND JOURNAL

More about Self-Talking...

Self-talk and your personal belief system

Recommended Forex Book: Trading in the Zone

2010-04-01T11:56:00.031+01:00

Trading in the Zone by Mark Douglas

In this book, Mark Douglas walks his readers through the psycological states of a trader's mind and how the best traders thought process determining for their success.

Following are some excerpts that I personally found most interesting:

Maximizing the trader’s state of mind is the key to successful results.

Winning and consistency are states of mind in the same way that happiness, having fun, and satisfaction are states of mind. Your state of mind is a by-product of your beliefs and attitudes.

Traders who are consistently successful are consistent as a natural expression of who they are. They don't have to try to be consistent; they are consistent.

The best traders aren't afraid.
At the same time, they have developed attitudes that prevent them from getting reckless.

This lack of fear translates into a carefree state of mind, similar to the state of mind many great athletes describe as a "zone", a special state of mind in which there is absolutely no fear and you act and react instinctively. You "Just Do It'.

When you're feeling confident and unencumbered by fears and worries, it isn't difficult to put on a string of winning trades because it's easy to get into a flow, a kind of natural rhythm, where what you need to do seems obvious or self-evident.

The best traders stay in the flow because they don't try to get anything from the market; they simply make themselves available so they can take advantage of whatever the market is offering at any given moment.

If there is such a thing as a secret to the nature of trading, this is it: At the very core of one's ability
1) to trade without fear or overconfidence,
2) perceive what the market is offering from its perspective,
3) stay completely focused in the "now moment opportunity flow," and
4) spontaneously enter the "zone," the strong virtually unshakeable belief in an uncertain outcome with an edge in your favor.

Ninety-five percent of the trading errors you are likely to make will stem from your attitudes about being wrong, losing money, missing out, and leaving money on the table.

What trader hasn't convinced himself not to take a loss and, as a result, had it turn into a bigger one; or got out of winning trades too soon; or found himself in winning trades but didn't take any profits at all, and then let the trades turn into losers; or moved stoplosses closer to his entry point, only to get stopped out and have the market go back in his direction?

These are but a few of the many errors traders perpetuate upon themselves time and time again. In the process of trying to maintain a pain-free state of mind, you also take yourself out of the opportunity flow and enter the realm of the "could have," the "should have," the "would have."

These are not market-generated errors. That is, these errors do not come from the market. The market is neutral, in the sense that it moves and generates information about itself.

To be consistent, you have to learn to think about trading in such a way that you're no longer susceptible to conscious or subconscious mental processes that cause you to obscure, block, or pick and choose information on the basis of what will make you happy, give you what you want, or avoid pain.

Traders who have learned to think in probabilities are confident of their overall success, because they commit themselves to taking every trade that conforms to their definition of an edge.

They don't attempt to pick and choose the edges they think, assume, or believe are going to work and act on those; nor do they avoid the edges that for whatever reason they think, assume, or believe aren't going to work. If they did either of those things, they would be contradicting their belief that the "now" moment situation is always unique, creating a random distribution between wins and losses on any given string of edges.

They have learned, usually quite painfully, that they don't know in advance which edges are going to work and which ones aren't. They have stopped trying to predict outcomes.

They have found that by taking every edge, they correspondingly increase their sample size of trades, which in turn gives whatever edge they use ample opportunity to play itself out in their favor

To think in probabilities, you have to create a mental framework or mind-set that is consistent with the underlying principles of a probabilistic environment. A probabilistic mind-set pertaining to trading consists of five fundamental truths.
1. Anything can happen.
2. You don't need to know what is going to happen next in order to make money.
3. There is a random distribution between wins and losses for any given set of variables that define an edge.
4. An edge is nothing more than an indication of a higher probability of one thing happening over another.
5. Every moment in the market is unique.

Unsuccessful traders are obsessed with market analysis. Good market analysis can certainly contribute to and play a supporting role in one's success, but it doesn't deserve the attention and importance most traders mistakenly attach to it.

The Typical Trader

Lets assume an hypothetical trader. When he first started trading, he was having fun; he was in a carefree state of mind; he had no personal agendas and nothing to prove.

As long as he was winning, he put his trades on from a "let's see what will happen" perspective. The more he won, the less he considered the possibility of ever losing.

When he finally did lose, he was probably in a state of mind where he least expected it. Instead of assuming that the cause of his pain was his erroneous expectation about what the market was supposed to do or not do, he blamed the market, and resolved that by gaining market knowledge, he could prevent such experiences from recurring. In other words, he made a dramatic shift in his perspective from carefree to preventing pain by avoiding losses.

Curiously, even though his knowledge has increased, he now finds that he's developed problems executing his trades. He hesitates, second guesses himself, or doesn't put on a trade at all, in spite of any number of clear signals to do so.

The typical trader doesn't predefine his risk, cut his losses, or systematically take profits because the typical trader doesn't believe it's necessary. The only reason why he would believe it isn't necessary is that he believes he already knows what's going to happen next, based on what he perceives is happening in any given "now moment."

What the typical trader doesn't realize is that he needs an inner mechanism, in the form of some powerful beliefs, that virtually compels him to perceive the market from a perspective that is always expanding with greater and greater degrees of clarity, and also compels him always act appropriately, given the psychological conditions and the nature of price movement.

The most effective and functional trading belief that he can acquire is "anything can happen." Aside from the fact that it is the truth, it will act as a solid foundation for building every other belief and attitude that he needs to be a successful trader. Without that belief, his mind will automatically, and usually without his conscious awareness, cause him to avoid, block, or rationalize away any information that indicates the market may do something he hasn't accepted as possible.

Trade Smart - Things you need to know before placing your order

2009-11-21T17:16:00.005Z

London Time 17:00 - 18:00 - Time for Breakouts and Reversals

The Big Players employs traders who, as many other workers, arrive and leave their office at business time.

Breakouts and Reversals has seen to happen not only at the opening of London/US session, when these traders are placing positions based on their individual market analysis but, specially, at the London session close, when (almost) all professional traders in London close their positions for day and take the next tube towards home.

Big groups of people opening or closing orders at the same time can have the power of moving the market. As the London session accounts for the vast majority of the money flow throughout the globe, pay attention on its 06:00 - 09:00 opening and 17:00 - 18:00 closing times.

Watch the Clock and Watch the Pivots! If price is near a Pivot at the opening or closing of London session, plan your ahead for Fast Reversals.

EUR/USD - USD/CHF - GBP/USD Correlations

The Suisse maintains a incredible inverse correlation with the Euro, so it can explain and unveil many opportunities in the Euro trading.

Although not so correlated, the Cable is also a good pair to trade with the Euro. Looking at the two pairs together, they can anticipate each other's move. Also splitting an order between the Cable and Euro at the same is a good strategy to diversify the trade and lower the risks.

Watch the Suisse (USD/CHF) and the Cable (GBP/USD) while trading the Euro (EUR/USD)!

R2->M4-R2

Recommended Forex Book: Intermediate and Beginner Traders

2009-11-21T13:01:00.013Z

FX Bootcamp's Guide to Strategic and Tactical Forex Trading by Wayne McDonell

This book, initially written to sharpen intermediate traders skills is a key tool on how to successfully trade the Forex market in a conservatively and consistently manner.

Along the way, McDonell takes the time to discuss the various challenges a Forex trader faces, such as greed, fear, loss, and isolation.

FX Bootcamp's Guide to Strategic and Tactical Forex Trading is a most read for every trader willing to improve his trading skills, filter out bad trades and win a consistent trading style based on minimum acceptable performance objectivies over the day, week and month trade time.

Wayne McDonell have made a lot of excellent forex trading videos that are free for viewing on the internet. You will easily find most on videos.YouPip.com.

Other Resources from FX Bootcamp: