USDJPY Trade

Check out this graph! The Fib is so accurate! Amazing! The Fib was drawn on 21-Sep when the price was sitting on 61.8% level. I entered the trade when the price broke below 100% level. Stop was placed at the 0% level (which up to the limit that I can absorb if the trade went north). My exit point was at 161.8% (pre-set).

Check it out! Not only hit my profit target but further went straight to 261.8%. It was a good trade and more than 100 pips gain in total. This really make a killing.

However, the graph beside is my "paper account". It showed USD743.98 (standard account). Wow! Haha. For me, I did grab this good chance, but just placed one MINI lot in my real account, which only have about USD45 in profit. Still no bad.

USDJPY in Low Trend

UsdJpy formed was consolidating from 08-Sep to 10-Sep. Upon breaking out fromt the channel, the ADX broke above 25 (gaining sufficient strength for the bear), RSI hit below 40 (Bearish half). It headed towards the 1.618 level and broke through it. It was almost touching 2.618% (at 89.96). Now it's consolidating again. The bear is losing strength, RSI went into the grey area. Upon gaining sufficient strength for the bear again, it would head towards 2.618 level.

Kidding Green Shoots?

Futures:

News:

- General Motors is locked in a critical countdown.

- Asian markets was rattled by the N.Korea's nuclear tension.

Commodities:

Analysis:

- $INDU now is sitting at the Jan-Feb 09 Resistance and Nov-Dec 08 Support.

- Once 8223 support is broken, it is expected to hit 7994.

- Opinion of today's market: down

Is There Any Excuse Not to be Bearish?

Pre-Market Futures

Analysis:

- Oils proce dropped.

- European markets tank.

- Asian markets darkened.

News:

U.S. stock futures slipped Thursday, as Standard & Poor's move to lower the credit-rating outlook on Britain raised fears that a downgrade of the U.S. government's debt rating could be coming soon as well.

Data released Thursday showed continuing claims rising by 75,000 in the latest week, though initial claims dropped by 12,000. Still to come are releases on a Philadelphia-area manufacturing gauge for May and leading economic indicators for April that are due at 10 a.m.

Opinion:

- Down big

FOREX Trade

USDJPY(5mins)

Analysis:
· Harami at the downtrend was observed, signaling end of downtrend, might go sideways or reversal. Need conformation.
· Followed by Bullish Engulfing, showed strong reversal pattern. Huge commitment should be followed after the Bullish Engulfing. However, the 2nd candle turned out to be small. Fearing of 3rd candle reversal, the LONG entry was on-hold. 3rd candle showed Marubozu. This showed a strong confirmation and commitment.
· A LONG entry was placed at 96.40 for 1 mini lot (1 x 10000). 4th candle turned out to be large commitment.
· Fearing of 5th candle reversal, the LONG position was closed at 96.72 for 1 mini lot (1 x 10000).
· Indeed, the 5th candle reversal was confirmed and followed by a doji. Then the candles went for sideways.

Trade:
Long Entry at 94.60 for 1 x 10000
Exit at 94.72 for 1 x 10000
Profit = 12 pips

GBPUSD(5mins)

Forex Trade (USDJPYm)

This trade was based on mainly Fib retracement technique + (RSI & ADX & SMA) convergence. Several retracement was observed. Furthermore, the 1.618% confluence was found in between 96.84 ~ 96.84. As this zone has been penetrated, the next confluence (Fid zone) is at the zone between 95.87 ~ 96.17.

DHI JUN11.00 PUT

Pattern
DHI retraced at the Fib 61.8% (COP) level. Upon breaking below the B (OP) level, entry triggered and target at DHI stock = 11.78 (Fib 1.618%, XOP)

Indicators
All showed convergence. No excuse not to trade.

Trade
Entry: Bought JUN11.00 Put Option at premium = 1.25, 4 contracts (DHI stock @ 11.34).
Entry: Bought JUN11.00 Put Option at premium = 1.35, 10 contracts (DHI stock @ 11.25).

Stop: pending order, sold JUN11.00 Put Option, 4 contracts if DHI <= 10.78.
Exit: Stop triggered, sold JUN11.00 Put Option at premium = 1.50, 4 contracts (DHI stock @ 10.78).
Exit: Close all, sold JUN11.00 Put Option at premium = 1.40, 10 contracts (DHI stock @ 10.94).

Profit/Loss
USD100.00 (first 4 contracts) + USD150.00 (second 10 contracts) = USD250.00

Warning Sign of Emerging Bear

My Analysis
$INDU(5y1w)

$INDU(1y1d)

The price now retraces at the 2008Q4 support, unable to breakout. Indicators are showing mostly divergence. Based on the Fib, the next low is expected coming soon. As per Conrad's analysis, the next low should be at around 6000.

SPY(1y1d)

SPY(5d5m)

Still waiting for the price to break below the OP level. Today, the market opened gap down and the window was closed at 10.05am. Based on the volatility alone, one could scalp the market.

My Opinion

$INDU & SPY: sideways + bearish

Market Continues Downtrend

BMO News Released:
Caterpillar swings to loss on workforce charge
Heavy machinery giant Caterpillar Inc. on Tuesday says it swings to a first-quarter loss, hurt by charges related to job cuts, as the prolonged economic slump and falling commodities prices continue to sap demand from the company’s top customers.

U.S. stocks start down as corporate earnings weigh
U.S. stocks opened lower on Tuesday, extending the prior session's steep decline, amid worries about the health of banks and as earnings reports weighed on sentiment. The Dow Jones Industrial Average fell 32.58 points to 7,809.15. The S&P 500 Index declined 3.24 points to 829.15, while the Nasdaq Composite shed 4.16 points to 1,604.05.

After Market Opens
U.S. stocks tilt mostly higher as Western Union delivers
U.S. stocks on Tuesday mostly erased opening losses as investors considered a mixed bag of corporate results, including better than expected results from Western Union Co. . The Dow Jones Industrial Average fell 6.30 points to 7,835.43. The S&P 500 Index climbed 1.16 points to 833.55, while the Nasdaq Composite gained 14.09 points to 1,622.30.

Technical Analysis
SPY(5d5m)

Fibonacci
Plotted a downside Fib, found that now the price retraces near the COP (61.8%). If it reverse at the COP and goes down pass the OP level, a short entry could be placed.

Indicators
6 indicators shows upside convergence. However, Stochastic and RSI are at their overbought level, starts to form reversal. Upside trend shows a weak strength, losing momentum.

Candlestick
Harami at the uptrend from the swing low point shows 'end of the uptrend'. It was then followed by a series of smaller candles of consolidation pattern. This further shows a strong signal of possible reversal.

Entry
Short entry could be placed upon the price retraces down passing the OP level.

Daily Market Analysis

News:
Oracle acquiring Sun Micro rather than IBM
Highly acquisitive Oracle and swashbuckling CEO Larry Ellison strike definitive agreement to buy the company behind the Java operating system for $7.4 billion. The $9.50-a-share price — about what IBM had reportedly considered paying for Sun — carries 42% premium.

PepsiCo offers to acquire pair of bottlers for $6billion
PepsiCo bids to buy its bottlers. Soft-drink producer bids 17% premiums for Pepsi Bottling Group and PepsiAmericas. PepsiCo also reports slight earnings decline.

Tech stocks sink led by Oracle, Sun soars
Technology stocks staggered into the red Monday morning led by Oracle Corp. whose shares plunged more than 6% on its surprising bid for Sun Microsystems Inc. . Sun shares were up more than 35%. The Nasdaq Composite Index was down 1.8% to 1,642, while the Morgan Stanley High Tech 35 Index was off 0.5% and the Philadelphia Semiconductor Index was down 2.3%. The Dow Jones Industrial Average was down more than 120 points.

SPY Daily Outlook
5D5min Chart

Price hit the 161.8% resistance level. Upon market opens, the price gap down due to Tech stock news and profit taking.

1Y1D Chart

Price now is locating at 78.6% resistance level in Feb09. MACD shows time running out. Hence, for today's direction: downside consilidation.

AMC Analysis:

Market went downside consolidation.

Daily Market Outlook

News Released:
-U.S. CPI down 0.4% in past year, core CPI up 1.8% .
-U.S. March industrial production down 1.5% vs -0.8% expected .
-U.S. March capacity utilization falls to record low 69.3% .


Event of the Day:
- Federal Reserve Chairman Ben Bernanke speaks (13:30). Forex Factory expected a hawkish effect.
- Fed Beige Book (14:00) .

SPY Analysis:
-Market open gap down.
-2 Days 5 minutes chart forms a downside channel that suitable for scalping.

Late Rally

SPY Paper Trade (2D5min)


BMO & Upon MO
Market open with a gap down due to profit-taking of previous 246-surge on last Thursday (3-Day Weekend, self-fulfilling prophecy, last Friday was Good Friday). Besides, the news of GM reportedly preparing bankruptcy, which The New York Times reports GM has been told by the Treasury to lay the groundwork for a bankruptcy filing by a June 1 deadline, also helped to push the SPY further down. The gap down was from 85.81 (previous close) to 84.91 (today’s open).

Technical Analysis
MRE
Window was closed at both 9.40am. At both 10.30am and 1.00pm, the window remained close.

Breakout Pattern
Price broke out the upper resistance of the ascending triangle. Upper target of the triangle = 86.09.

Fibonacci
Upside Fib applied, 1.618 was sitting at 86.06 (coincide with the target of the triangle).

Entry
Went long at 85.72 for 100 shares, target at 86.16 for Day Trade (time 3:08am)

Outcome
Target hit 86.16 and further to 86.34, profit took at 86.21 at 3:38am. Profit was USD49. Deducted USD10 for commission (USD5 to open and USD5 to close), net profit was USD39.

Post Trade Observation

Price further rose to 86.54 before reversal. The late rally was due to the rally of the financial stocks.

The news released from MW was:
NEW YORK (MarketWatch) -- Major financial stocks rose broadly Monday, bucking what had been a down market for much of the session, as investors' expectations grow over what this week's financial results will show.
Citi, which reports first-quarter results later this week, has decided to include Nikko Citigroup Ltd. in its plan to sell Nikko Cordial Securities Inc. and Nikko Asset Management Co. in Japan, Kyodo News reported on Monday, citing sources familiar with the matter.
"Enthusiasm over Citi's rise on Monday should be tempered by putting the bank's stock price in perspective," said Art Hogan, chief market strategist at Jefferies & Co. "Twelve months ago the stock was $30 and now it's at $3. It's bouncing off the bottom because they're selling assets."
Hogan added that assumptions that all 19 banks, including Citi, are going to pass the government's stress test also have had the effect of bolstering the stock, as well as that of Bank of America Corp.

How I Got It?
Correct TA was applied and MRE was used for minimizing risk.

How Can I Improve?
Earlier long entry at 1.20pm at 85.42 could reap me more profit as it has already hit the OP level. Furthermore, with referring to the Standard 6, all the indicators showed convergence. However, the ascending triangle breakout pattern has not been confirmed but the gap-up opening Marubozu candle could possibly show a bullish signal too.

USDJPYm Analysis

Trend

Price traded within the downtrend channel. A breakout pattern formed on 09-Apr-09. Now it is forming ABC pattern with retracement at 61.8%. However, it needs to wait for the price break above B to hit the Target, which is 101.54. However, the RSI is in between 40-60 and ADX is below 25. DMI too, does not show the dominant signal. Hence, even if the price breaks above B, it could go sideways first before hitting the target. If it does break above B, the time target to hit 101.54 is 14-Apr-09 or 15-Apr-09. For this to happen, RSI must > 60 and ADX must > 25 and +DMI as dominant. If it doesn't, then I am expecting a consolidation pattern until a confirmed reversal pattern appears.

Other Perspective(H4)

Wider View

From Daily chart, the RSI is at around 60 where ADX shows Price-to-ADX divergence. This states that the price most likely consolidates for few more days until the next reversal pattern appears, depending on which DMI (+ or -) show dominance.

Summary

Monday(13-Apr) Trend: sideways

Trade: Wait for ADX confirmation (>25 with +DMI dominant) to trade the ABC pattern.

Wash and Rinse

USDJPYm (30m)

This is a typical Wash and Rinse pattern (Double Top in western) where the price “re-tested” the previous resistance. As you can see, the second long shadow has just tested the previous resistance (100.85) and moves 1 pip higher to 100.86.

My Entry
It was based on candlestick pattern. I spotted the Three Black Crows reversal pattern (pattern in box). I went short at the next candle when it opened gap down and moved lower. My entry price was 100.33. My stop loss was at the previous high (53 pips higher than my entry). My target profit was 99.56 (77 pips lower than my entry).

Analysis
After the Three Black Crows, piercing pattern was observed. Failed reversal pattern will continue. True enough, it consolidated for 4 hours before the Abandoned Baby formed. A strong reversal warning was given. Next, the bearish Harami pattern was added in as confirmation that the uptrend has come to an end. It was followed by a major conviction (long bearish candle).

My Exit (My Mistake)
In my opinion, the rickshawman was a profit-taking candle. Its shadow was stretched to “collect” the “thick” stop-loss. My stop-loss was placed at 100.86. So, it was “taken” too. I should not have placed the stop-loss there at the first place.

My Lesson Learnt
I should have placed my stop-loss at previous (x2) high at 101.09. However, it was a bit much for me (76 pips ≈ US$75) as my target profit only around US$76 (77 pips). Alternatively, I could place at previous high + 1 candle, which is at 100.86 + 0.10 (average bearish candle) = 100.96.

Journey Rekindles

I commenced my trading path in by trading Forex, in Oct-2008, the period where the stock market crashed tremendously. I was totally a blur newbie at that time. I opened a real cash account with local broker and traded solely based on my bloody "gut feel". Needlesss to say, "losing trades" were my return. My account shrunk 20%. I blamed on bad luck.

I knew, I was gambling and I could not trade in this way. Then, I sought help from my uncle, a savvy and experienced trader, to receive a proper education on Forex. I got to know some useful indicators and charting. I also started reading mountains of books in Forex Technical Analysis, Candlesticks patterns, Fibonacci and etc. By pointing the blame to the costly commission of my first broker, I opened another account in another broker which was commission free. I thought I was to attack the market again... Due to the beginner's luck, I was able to gain a 'two-week' constant small profit. In the following week, I suffered 5 consecutive days losing trades and wiped out all my previous profit. I blamed on market. I started getting anxious and traded emotionally by compromising my stop loss and exit plan. I In a week more, my new account shrunk 30%.

I got nothing to blame again... I got proper education from my uncle. He repeatedly reminded me to put stop loss and not compromising it. I did not follow. During actual trading, I let my emotion overrode. I have read a lot of trading books but I applied none of the techniques. I began to realize another extremely crucial trading factor, psychology. I knew I needed to have a "pause" in my trading journey to obtain a complete trading education.

I went back to my uncle again. He recommended me to read a book called "Secret of Millionaire Investor" and introduced me the 'Wealth Academy Trader' -- a proper financial education, trained by a Singapore top coach, Conrad Alvin Lim. After reading Conrad's book, I realized that there were so much knowledge I still need to acquire before qualifying myself as a "trader". I attended Conrad's preview and signed up for the WAT (Wealth Academy Trader) in Jan-2009. I began learning everything from ground zero again.

In WAT, I built my foundation in trading. I learnt the proper trading psychology. I learnt how to use different financial instruments such as options, futures, Forex and etc. I learnt a solid Technical Analysis and reliable Fundamental Analysis. I learnt money flow. I learnt how to enter and most importantly, how to exit. I learnt trading defensively. I learnt "trade to trade well".... These are the things which I have neglected before. Now I realize that how stupid I was previously. My savvy uncle spent years to master the art of trading and I thought I could be like him in months??? You see how ridiculous I was.

3 months passed. After much hard work, I am now a graduate from WAT. I now restart my trading journey over again. In other words, my trading journey rekindles. I commence by practising in paper trading. Not until I've finished polishing my trading skills in paper trading, I will not trade the real money.

Thank you uncle, without you as my mentor, I won't get back to the right track of trading. Thank you Conrad, without you as my coach, I won't get to know the real art of trading.

I am a trader now.

2 Losing Trades

SPY

Gap down from the previous day. Lower low was observed. Downtrend was noted. Standard 6 shows convergence even though the MACD shows a bit of time running out. Applied Fib found that the downtrend retracement is at COP 61.8%. Short SPY at 82.64.Stop loss at previous previous high at 83.2589. Target profit is at 1.618 XOP at 82.04. MRE analysis was valid ad at 10.30am, the gap was not closed. Similarly at 1.00pm, the gap is still not closed and lower high was observed. MW news released: Sun shares plunge on reports of IBM deal collapse. Big Blue's offer of $9.40 per share rebuffed by Sun board, reports say. Also, high tech sector plunged. Hence, SPY is expected down today.

Actual Outcome

Losing trade

What went wrong?
Could not find any news. Moreover, this is SPY (index ETF). It can only be moved by Interest Rate and Earnings. Earning seasons started from this week (week15-20). The only reason was self-fulfilling prophecy (Apr is the most bullish month of the year). Also, the stop-loss of previous (x2) should be based on day candle, not less than that. If I used the day candle of previous (x2) high, I won't be stopped out. Instead, I should have earned a profit.

EUR/USD

Losing trade
After the Italy earth quake, EUR/USD saw a downtrend. Fid analysis provided a beautiful trend. Both XOP and XXOP were tested.I performed candlestick counting technique.

What went wrong?
I was mistaken as I counted the Doji as the first candle. The Doji supposed to be discounted. However, the candle-counting still valid as the 5^th candle reversal was observed.
My loss: $40 cut loss.