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The EUR/USD Shows Some Crack Just when I was starting to give up on the US Dollar, but couldn’t find a really good fundamental reason to do so, the EUR/USD turns around and bends over and shows some crack. We’ll see if the single currency is just teasing. More on that later. The Canadian Dollar came back from the dead overnight as well, which makes no sense at all since oil finally retreated yesterday. Oil strength usually translates quickly into CAD strength, but in the Bizzaro World of 2011, correlations don’t matter. Thankfully, I’ve stopped questioning this insanity and I’d recommend the same to anyone else burned by the general breakdown of Stuff That Was Working Just Fine a Month Ago. Good U.S. economic news is good for the US Dollar, except when it isn’t. Whatever. Right now I like temporary CAD strength, CHF weakness; temporary to medium-term USD strength; and long-term weakness of the JPY, especially against the GBP. So: 1. I’m long CAD/CHF and gripping tight to the trade. 2. I had a short EUR/USD overnight. 3. I’m planning a long-term GBP/JPY buy to 150.
The Wallaby Book is Coming Soon
What is the Wallaby?
Wallaby Trading is counter-trend trading. For trend-traders, that means that the Wallaby is a method for watching for a pullback on a short-term chart to trade with the longer-term trend. For straight-up contrarians, the Wallaby trade is a step-by-step guide through the world of trading divergence and looking for peaks and valleys in price movement. The book is at the printer. It’s coming soon.
Rob Booker’s Market Notes | February 24, 2011 | Rob.bz (blog), RobBooker.com (free ebooks + managed accounts), @robbiebooker Trading involves substantial risk of loss. Past performance is not necessarily indicative of future results. This is not a trade recommendation and is provided for informational purposes only.
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Hypothetical Results: HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS.com (free ebooks + managed accounts). This is not a trade recommendation and is provided for informational purposes only. It should not be relied upon for the purpose of making an investment decision for your own account. THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. You should be aware of all the risks associated with foreign exchange trading. Not A Trade Recommendation Nothing in this document should be interpreted as a trade recommendation. HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK. IN ADDITION. SOME OF WHICH ARE DESCRIBED BELOW. THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. and seek advice from an independent financial advisor if you have any doubts. unless specifically noted otherwise. You must read and sign a full (regulated) disclosure document before investing. Rob Booker’s Market Notes | February 24. Before deciding to trade foreign exchange you should carefully consider your investment objectives.Risk Disclosure Trading foreign exchange on margin carries a high level of risk. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. Any results listed in this morning notes document are hypothetical in nature. Page | 2 . THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. and Rob does not take every trade idea that is listed herein. or to invest in for Rob’s managed account service. and may not be suitable for all investors.bz (blog). These notes are part of Rob’s daily preparation for trading and are provided to you for informational purposes only. and risk appetite. @robbiebooker Trading involves substantial risk of loss. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. Past performance is not necessarily indicative of future results. AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. 2011 | Rob. The high degree of leverage can work against you as well as for you. IN FACT. FOR EXAMPLE. RobBooker. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. level of experience.
4100 or higher. or argue about fundamentals.3700. EUR bulls are getting a gift right now – and could look for low-risk (tight stop) entries at the round numeral 1. This pair doesn’t know what it wants. 2011 | Rob. Page | 3 .bz (blog). I’d suspect the fundamental driver would be European inflation worries and a lack of the same in the States. If I were still short. which is a 50% retracement and a missed pivot level.3700 or even lower at 1. But let’s not get crazy: This pair hasn’t necessarily started a giant downtrend.: LT EUR/USD 4 HR: Sweet Relief for Dollar Bulls Katy Perry said it best: You’re hot and you’re cold.com (free ebooks + managed accounts). Rob Booker’s Market Notes | February 24.3862 could bring us to 1. A move above 1. It’s best not to question anything anymore. @robbiebooker Trading involves substantial risk of loss. I’d target 1.3650. USD bulls are getting sweet relief. and then you drop 100 pips. Past performance is not necessarily indicative of future results. RobBooker. This is not a trade recommendation and is provided for informational purposes only.
com (free ebooks + managed accounts). Past performance is not necessarily indicative of future results.EUR/USD 15M: Divergence Success Trading divergence against the prominent trend assures two things: frustration and mocking Twitter posts. Like this one. Page | 4 . RobBooker. Once the red 62 EMA crosses below the 200 SMA. It’s also a fine place to move one’s stop to break even and try for more. depending on your trading style. but it does suggest there is more to come. A bounce off the 200 SMA would reaffirm the trend. Rob Booker’s Market Notes | February 24. @robbiebooker Trading involves substantial risk of loss. This is not a trade recommendation and is provided for informational purposes only. It either resumes the trend or provides a selling opportunity. The blue 200 SMA is a reasonable target in these contrarian trades. there is often a very volatile pullback to the 200 / 62 area – and this comes without warning. and the corrections can be sharp. 2011 | Rob. The decisive move below the 200 SMA doesn’t ensure a stronger move.bz (blog). It also eventually works out.
This is an early warning sign that the daily pivot will eventually be hit. this trading style was better suited to wide drawdowns and worked nicely with higher leverage. a trader could initiate a buy trade with a stop below 81.80 – the 50% retracement of the pair’s recent downward stretch. On the same day. and a first target at 82.USD/JPY 4 HR: Classic London Pivot Setup A Classic London Pivot Trade is my original pivot trading system: on Day 1 a daily pivot is missed (the pair finishes the day without touching it).50 (Thursday’s missed pivot). Page | 5 . These trades can sometimes take weeks to play out. You’ll see in the green circled area that the USD/JPY on Thursday fell to its red S3 level.com (free ebooks + managed accounts). Rob Booker’s Market Notes | February 24. This is not a trade recommendation and is provided for informational purposes only. RobBooker. R3 or S3 is hit as well. Past performance is not necessarily indicative of future results. It also missed the daily pivot.bz (blog). 2011 | Rob. In the absence of higher leverage or a tolerance for drawdowns.00. @robbiebooker Trading involves substantial risk of loss. Next target would be 82.
target 1.com (free ebooks + managed accounts). The pink shaded area is a what I call a “Trifecta Fib Zone.” and it’s simply a trade from the 23% retracement level to the 33%. Below that? Not sure. RobBooker. and inflation pressures in the UK aren’t going to abate that quickly.GBP/CHF 4 HR: Classic London Bridge Falling Down? My favorite pivot trading pair is either setting up a brilliant move upward. or it’s preparing for another giant failure. This is not a trade recommendation and is provided for informational purposes only.bz (blog).5020.4550 comes into view. but that’s so far down there. stop 1.4975.4880. If we fall below the 0% line at 1. Rob Booker’s Market Notes | February 24. I’d most likely wait for a good price on a buy trade rather than trade the move. then 1. 1. Page | 6 . The entry zones are clear and I’ll do my best to be ready. 2011 | Rob.5070.4840 is fairly doable: it’s the missed weekly pivot from the second week of January (around the 7th). @robbiebooker Trading involves substantial risk of loss. I have an order to buy at 1. Past performance is not necessarily indicative of future results.
That’s a good place to move my stop to break even. To see more about the plans for this trade.bz (blog).CAD/CHF 4 HR: Long and Strong? Jennifer turned me onto this trade. but I’m planning on moving that up. At least . Page | 7 . RobBooker. @robbiebooker Trading involves substantial risk of loss.9403. and it had a lot of what I look for in a pivot setup: Giant downward move.9520.9650.9340.bz Rob Booker’s Market Notes | February 24. visit http://Jennifer. The pair has crossed into the 23% fib zone. Past performance is not necessarily indicative of future results. a tendency for the pair to range. I bought at . This is not a trade recommendation and is provided for informational purposes only.com (free ebooks + managed accounts). Stop was at . 2011 | Rob. My target is the missed weekly pivot from this week. and a sharp reversal off a reversal candle. and it’s got a missed pivot from Wednesday (circled in green) up around .
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