Selected Excerpt:

AUDUSD is at the top of a very loose channel that has developed on the four hour chart. It is very possible that the price could break near the top at its current position, but there is a chance that the price will head back towards the bottom of the channel before coming back up to break the top.

If the channel is broken near the current price of 0.9315, look for a move up to the light resistance at 0.9360. This level will probably be broken easily, so watch for a move past 0.9360 up towards 0.9475. The trend might stop at this level, so watch out for consolidation at this point.

If the channel doesn’t break immediately, and the price bounces back towards the bottom, watch out for some support points at 0.9235 and 0.7170 if trading the bounce off the top. After a possible bounce at the bottom around 0.9115, look for the price to head back towards the top and break around the SR zone near 0.9235. After the break, follow the directions given above for an immediate break.

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The technical levels used in the “Technical Levels” section of this report were generated using the Integrity FX Support and Resistance calculator. To download this calculator in Microsoft Excel format, please click here.

Selected Excerpt:

GBPUSD did break the triangle at the predicted point of 1.5700, but then returned to the inside of the triangle. After a bounce off the support trendline, AUDUSD then broke the upper trendline again a little below 1.5700. After the break, the price pushed straight through 1.5735 because of its momentum, then consolidated around the resistance near 1.5790. After a period of loose consolidation, GBPUSD pushed back through 1.5735 and made a small bounce off the upper trendline created by the triangle. Expect the price to push back through the triangle towards the support at 1.5650.

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Selected Excerpt:

GBPUSD has consolidated into an ascending triangle on the thirty minute chart. Look for a break of the resistance trendline to occur somewhere around 1.5700. After the break, look for a short move to 1.5735. If the market has momentum, it might pass throught this level, but if the triangle is broken during a slow period, some light consolidation and then a break might occur at this level. After GBPUSD moves through 1.5735, look for a sharp move to 1.5790. At this point, the market might rally and bounce off the resistance. Expect some consolidation, then a break of 1.5790 up to 1.5855.

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Trading. The wonderful art of losing money in the most stressful way possible. Also the art of making decisions as complicated as possible. Wait a second, man! I don’t make complicated decisions! I use my moving averages and my stochastic oscillator and my Fibo lines and my RSI and when they line up I check my pivot points. If those check out and there aren’t any news releases coming out and all my indicators line up and Pluto, Jupiter, and Mars are in alignment, I make a trade. That isn’t complicated, it is informed.

This is a very common way of trading. Everything has to be in order. Everything has to line up and look right. More information is better information. Right? Well, that might be the case if you’re in FBI hunting a dangerous criminal or an archaeologist running through Egypt looking for the Ark of the Covenant, but not in Forex. In retail Forex, we are in the middle of an information overload.

Every day FX traders look at their chart with all the indicators and other bells and whistles attached and try to make a good trading decision. They hope that if everything is lined up just the right way, a good trade will appear. The thing is, most of the stuff people put on their charts tends to lag, contradict other indicators, or just plain not work.  This leads to people looking at a bunch of different signals and listening to all sorts of different advice and choosing what signals or which advice is right. So, instead of just trying to buy or sell, you have someone sitting there trying to decide which of the things telling him to buy or sell is right. The process of making a simple decision just tripled in complexity.

Now, tell me how this makes sense. How does complicating a decision lead to a better outcome? Think about it for a second. It doesn’t make sense. We don’t do this in real life. When deciding what to eat a restaurant, we don’t call up our favorite aunt or Google the recipe, or look up the chef’s Facebook to make sure he’s a nice guy. Instead, we make a decision based on what we like to eat. And how do we know what we like to eat? From experience.

Almost every decision we make is based on experience. Why don’t you just run out into the street when you want to get to the other side? Maybe because we saw Fluffy do that once and learned that when a 2 ton vehicle traveling 50 miles an hour and a 2 pound kitty get in a shoving match, the kitty isn’t going to win. After we witnessed this event and became traumatized for life, we learned not to run out into the middle of the street without looking.

So, if we make everyday decisions based solely on experience and not on a bunch of rainbows and magic numbers, why don’t we do the same with trading? The reason is simple: most people just don’t have the necessary experience. Most people just want into the market without any preparation or education. That way, they can start turning their $250 dollars into a million in under a week! Sound familiar?

The entire point of this article is to show the necessity for experience. Forex is not something you can learn in a month or a year or even a few years. Learning how to trade FX takes time. It is just like any other career. You don’t just hand a random guy on the street a badge and a gun and call him a cop. When you want to be a doctor you don’t head to the store, buy a knife and call yourself a brain surgeon. For both of these jobs, and every other actual career in the world, there is a huge amount of education involved to learn how to do the job. Plus, even once the whole education period is over, there is still a lot of time spent actually becoming good at the job. Again, this isn’t a six month process. This is a process that takes years.

This same approach should be used with Forex. Instead of jumping straight into the market, a new trader should spend at least a year on learning how to actually trade, instead of the commonly accepted six months learning on a demo account. After that year or so, try opening a very small live account. “WHAT!?!?!” is what most traders would say to this statement. Almost everywhere you go on the internet, people are always saying to use a demo account for six months before trading. Well, the thing is, demo accounts are nothing like live accounts. Once you actually start trading live, you essentially have to re-learn how to trade. You now have to worry about slippage, re-quotes, low liquidity, and many other things. This changes the whole game. Instead of first demoing and eventually relearning how to trade, open up a $250 account and practice with micro lots. You will probably lose this money. If you don’t have $250 to lose, you probably shouldn’t be in an industry where you can lose thousands of dollars in seconds.

I’m not saying you should entirely throw out the demo account. You need the demo account in that first year of learning in order to first, learn your platform, and second to learn how the market works. You don’t want to learn about lot sizes and how to place trades while fooling around with real money. The demo account is crucial for this. The trick is to not get used to trading in the demo account. When the time comes where you want to place actual trades to try and make a profit, do it in your mini live account. This might sound odd, but the time in a trader’s career when he loses the most money is in the transition from demo to live accounts. He has just finished his six months in demo and now he thinks he’s a big bad trader and tries to trade the same way in his brand new live account. Then he loses. Everyone has done it, including the most successful traders in the business. The whole point to opening that small $250 account and learning to trade there is to eliminate the transitory losses.

This is actually why most people actually fail in Forex market. Not because they lose money, but they haven’t lost enough money. A trader needs to be able to keep funding his account over and over again to stay in the market because he will lose money. This builds experience. After a certain period of time, 3 years of full time trading and 5 years of part time trading, most people will start to see a significant increase in trading ability. However, they can only see this increase in ability if they stay in the market, and they can only stay in the market if they can keep funding their account. This whole concept is pretty much like any other small business (which trading FX is): most people don’t make a profit for five to six years and will not receive a salary in that period.

When beginning the whole trading process, a trader has to start by viewing the whole thing as an investment. Not as a way to make a quick buck, but as starting a business. This way, he won’t give up once he starts losing money. He will have to invest quite a bit of capital before he starts seeing returns.

This all sounds pretty crazy, right? I mean, no one ever spends a year on education or three to five years making small trades. That’s ridiculous! Yeah, most people don’t do things this way, but most people who enter the retail FX market also are not successful. Maybe there is a reason for that. Maybe, if these people had actually taken the time to build up a knowledge base and some actual experience, then stayed in the market long enough, they might be successful traders.

Now, how does this whole “taking the time to actually learn” thing go back to un-complicating decisions? Well, after you actually have that lovely experience we’ve been talking about, you won’t need all those indicators and reports and all the other junk. You can still use them and use them profitably, but now you will know how to use them. You will know how the market works and how to react to it. this way, you won’t need to consult your indicators or your magic ball on what to do. You will look at the chart and make a decision. It is actually that simple. You will be making the decision based on experience.

Most of the people reading this probably aren’t new traders and the people who are won’t want to spend all that time to learn how to trade. However, at least listen to what was said about experience. The only way to become a truly successful trader is to build experience. If a trader can stay in the market long enough and go through the right amount of trial and error, that trader can become consistently profitable in the long run.

Selected Excerpt:

USDCAD broke near the predicted price of 1.0695 five pips higher at 1.0700. After the break, it head up towards the resistance points near 1.0725 and 1.0745. USDCAD then bounced just above the zone near 1.0745 and started a downwards range. At the moment, the price is at the support zone that has been created around 1.0650. If it breaks this level, look for a move down to support at 1.0605.

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Boxers or Briefs?

If you look anywhere on the internet, there are so many people that tell you how to trade. Whether it’s with indicators, trading naked, or using the positions of Jupiter and Sirius to determine the tidal flows of Neptune, you are constantly bombarded with articles or PDFs telling you how to trade. Some people make it seem easy; some people make it look hard. In this article, you will see that it isn’t necessarily hard to learn how to trade, but that the application of that knowledge is. This article will also deal specifically with mostly price action based trading. No astrology or chicken bones here. Most of the methods described here can be learned elsewhere, but that isn’t the point. The point is to show you in what order to learn these things. In order to describe the best way to learn how to trade, it’s time to look at a super awesome analogy: clothes.

In order to start getting dressed, there is one important set of garments you need to put on before the rest of your clothes. These are your undies. The cool trading method that underwear is supposed to represent is support and resistance. If you don’t get the whole connection between support and underwear, you need to talk to Michael Jordan. If you don’t get the lame underwear commercial reference there, I’m sorry. I give up.

Support and resistance levels are zones in the markets where price action occurs. These are places where the price either bounces or breaks depending on the strength of buyers and sellers in the market. A bounce occurs when the price reaches a level, touches it, and moves the opposite direction. A break occurs when the price reaches a level, touches it (tests it) a few times, and then continues in its original direction through the level. By the way, support is below the current price, resistance is above, or, support levels are near the valleys, resistance levels are near the peaks.

The reason these levels are so important in Forex is that all price action occurs along or around these levels. All of the moves in the market either start at a support or resistance point, or after consolidation, break through these points. A few things to note about support and resistance (from now on abbreviated as SR) are that these levels aren’t specific prices, they are more like zones, and that some SR levels are stronger or weaker than others, but that’s for a later day.

SR levels are one of the most important aspects of trading. Now that you know the market from your naked trading, you can start trading these SR levels. You know how the market reacts in certain conditions or certain times of day. Now, using that information, you can look for SR levels and try to base your trading around these zones. For example, you know from your naked days that during the shift from the Asian session into the Euro session, the EURJPY makes a big move either way. The current price is 130.05. You see a support level at 127.50 and a resistance level at 131.75. Once the shift occurs, the price starts moving down. There is no other support level except the one that you found before. There is a pretty good chance that EURJPY is going to move to your support level. Congrats! You are making demo money! That’s super fun, right?

So basically, SR trading is the means with which to apply the knowledge you gained from trading naked. Also, you will continue to learn how the market acts by looking at SR. These levels open up a whole new realm of market activity for you to explore and learn about.

To view POYTC Part 1, click here.

Selected Excerpt

USDCAD is about to break out of the symmetrical triangle that has developed on the one hour chart. Look for the break to occur somewhere around 1.0695. After the break, look for the price to enter the resistance zones around 1.0725 and 1.0745. Expect some consolidation or even a range between the two zones, but eventually look for the price to break 1.0745 and head up towards 1.0810. When there, watch out for more consolidation and then a break towards 1.0855.

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Selected Excerpt

AUDUSD is nearing the end of the descending channel that has been developing on the hourly chart. Look for a break against the main trend of the channel around 0.9000; anywhere within the circle on the chart. After the break, look for AUDUSD to push up to the first resistance zone around 0.9080. Expect some light consolidation at this level, but look for the price to push past 0.9080 up to 0.9175. There might be a bounce at this level and might be a good place to close the trade or secure profit. After the bounce, the price should break this level and head up towards 0.9275. The price will either bounce off this level, or continue right through it with no resistance to 0.9315. The trend should end at this level.

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EURUSD

EURUSD is about to break the top of the descending wedge on the hourly chart around 1.4580. After the break, look for EURUSD to move up to the first resistance point of 1.4625. After a break of this level, watch for a move up to 1.4695, and then a break of this level after some consolidation. Look for a move up to weak resistance at 1.4745, and then a move up to 1.4815 for a completion of the trend.

AUDNZD

AUDNZD is near the breakpoint of the ascending wedge on the one hour chart. Look for AUDNZD to break around 1.2190, and then move to the first support at 1.2155. After some light consolidation, look for a move down to the second support at 1.2130. Look for a break of this level and then a move down to 1.2095. After some more consolidation,watch for a break and expect the trend to finish around 1.2055

USDCHF

The ascending channel on the hourly USDCHF chart is nearing completion. Expect the break to occur against the trend around 1.0365. After the break, look for USDCHF to move down to the first support zone at 1.0320. Look for a break to move down to the next support at 1.0275. Watch out for some consolidation at this point, and then look for a move down to 1.0250. After a break of this support, look for the trend to fiish around the support level at 1.0220.

Nudity and You

If you look anywhere on the internet, there are so many people that tell you how to trade. Whether it’s with indicators, trading naked, or using the positions of Jupiter and Sirius to determine the tidal flows of Neptune, you are constantly bombarded with articles or PDFs telling you how to trade. Some people make it seem easy; some people make it look hard. In this article, you will see that it isn’t necessarily hard to learn how to trade, but that the application of that knowledge is. This article will also deal specifically with mostly price action based trading. No astrology or chicken bones here. Most of the methods described here can be learned elsewhere, but that isn’t the point. The point is to show you in what order to learn these things. In order to describe the best way to learn how to trade, it’s time to look at a super awesome analogy: clothes.

Before you get dressed, you are always naked. No clothes, just the good ole birthday suit. This is also how you want to start off trading. The best way to learn how the market works and how to get general experience in the market is to start off trading naked. Trading naked, for those who don’t know, is trading with absolutely nothing on the charts. This means no oscillators, no moving averages, no fancy market watch computer thingies. It is just you and the candlesticks. The reason this type of trading is first on the list is because it clears away all the clutter of complicated indicator systems (and because of the whole being naked/trading naked thing).

When you trade naked, all you see is the price. You get to see how the market moves at certain times, how the price reacts to different levels, the different patterns a certain currency pair develops, etc. To be more specific, you are learning. When you have a ton of indicators on your chart on the first day, or when you are trained by someone else to trade when two lines cross, you aren’t learning anything. You are just following the recommendation of a couple of lines on your screen. This is ok if that’s all you think you can do with trading, but, if all your indicators were taken away, you would be more lost than a camel in Antarctica.

The way you would naked trade starting out is by not trading. Yes. This does sound ridiculous. At this point in the learning process, you really shouldn’t be trading anyways. Instead, you should pretty much just be watching the price. Learning how it moves. If you absolutely can’t contain yourself and need to trade, then the best bet would be to start out on a demo account and just follow movement. Trust your instincts and go with the direction that the price is going. Real quick, just so you know, once you put some more clothes on, this is NOT how you want to trade, but for learning purposes, it is all right for now.

Trading without indicators teaches you to rely on yourself. You start to develop this thing called experience. The most successful traders in the market are those with years of trading experience. Granted, you don’t want to spend thirty years learning how to trade, but this stage in the learning process definitely helps with all the next stages.