New book by Larry Connors Click here Improve your trading - See how
Dave Floyd is a professional FX and stock trader based in Bend, OR and the President of Aspen Trading Group. Dave's approach to FX combines technical and fundamental analysis that results in trades that fall into the swing trading time frame of several hours to several days. To learn more about how Dave trades, click here.
Here Are Some FX Set-Ups I am Watching
The sideways chop continues to keep us cautious about placing new trades – today’s 24-Hour Target Trades reflect this, as we see only one modest short set-up.
The Dollar Index (DXC | Quote | Chart | News | PowerRating) continues to struggle with the 88.80 – 89.55 range and shows no sign of breaking just yet.
We suggest limiting risk capital until price action improves.
Wednesday's 24-Hour FX Targets
Notes/How To for The 24-Hour FX Targets
Today's FX traders are now demanding a more systematic approach, and this new feature will nail those desires right on the head. With our 24-hour forecasts you have specific entry prices, stop-loss and price targets.
Entries: entry prices are meant to be taken at the time of posting by simply placing an order to buy or sell at the market. Targets will typically be posted by 5 AM PDT.
Stop-Loss: we suggest that all traders place a stop-loss equivalent to ½ of the value of the projected gain in pips. For instance, if the price target for the EUR/USD is 1.2200, and it is trading at 1.2100 at the time (100 pip gain) of the forecast, we would suggest setting a 50 pip stop loss (1.2050).
We also discuss a basic trailing stop strategy at the end of this article.
Exits: traders should take profits when the ‘Target Price’ is achieved. If, by 5 AM PDT the following day, the stop-loss or target price has not been achieved, simply close the trade at market.
Let's look at an few example as a way to illustrate how this will work. Below is a screenshot from Thursday October 20th, it is exactly the same format that will be posted here each Monday and Wednesday.
GBP/USD went on to achieve both targets.
Naturally, not all of the forecasts will play out, and like
most systematic approaches, the number of iterations will increase your
success. Pairs like USD/JPY and EUR/USD did not achieve their
targets and were stopped out, resulting in a loss of 65 pips, while AUD/USD,
USD/CAD and USD/NOK easily offset the 65 pip loss with solid
gains.
Trailing Stops:
Traders may also look to employ a trailing stop strategy to protect gains. We suggest using a trailing stop equivalent to 1/4 the value of the targeted gains. So, in the example of the GBP/USD above, the target is for a gain of 70 pips, therefore a trailing stop of 17 pips might be a prudent approach.
Ultimately the decision is yours. Other traders/clients simply use our forecast(s) as a guide and then identify their own entry points based on their trading methodology.
As always, feel free to send me your comments and questions.
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.
