14.12.2013

<b><span style="text-decoration: underline;">1. INTRODUCTION:</span></b>

Many of you may have read the undertones from last week’s blog, referring to my trading activity. I think that as soon as I see December on a calendar, like may people regardless of profession a certain mind set comes into play. As a trader I think “lower liquidity” “volatile moves for no reason”. Well, I have been there and done that, so they say, I’ve got the DVD and I am wearing the T-shirt as I write!

Look my trading style is simple: -
<p align="center">FUNDAMENTALS MATTER TO ME</p>
<p align="center">I TRADE TO MAKE MONEY…NOT TO PICK TOPS OR BOTTOMS</p>
<p align="center">I TRADE LOW RISK</p>
<p align="center">I DO NOT CHASE MARKETS</p>
<p align="center">I LIKE THE TRADES TO COME TO ME</p>
<p align="center">I LIKE TO MOMENTUM TRADE</p>
<p align="center">I LIKE TO TRADE WITH DAILY, WEEKLY AND MONTHLY CHARTS SUPPORTING THE DIRECTION OF MY TRADE</p>
<p align="center">I USE FIBONACCI LEVELS TO ENTER &amp; EXIT ON MANY TRADES</p>
<p align="center">PLUS</p>
<p align="center">MY TRADING STYLE IS MIXED EVEN WITH THE ABOVE CRITERIA</p>
<p align="center">I USE THE PULLBACK STRATEGY TO ENTER TRADES AND I LIKE SWING AND LONGER-TERM TRADES (WHEN POSSIBLE)</p>
During the past 7 days as I wind down for the end of the year, I have only traded 3 new RADAR TRADES. I had two existing trades that were held over from last weekend which were closed early last week. In total  I added over 250 pips to the RADAR TRADES for December 2013 in the past 7 days. This totals over 600 pips so far for December, and the month has not ended yet. All this and I am winding down. It’s not easy, but it’s all done with low risk, in my view.

The chart below details the RADAR TRADES that were posted in this blog and tweeted live via twitter.com/@pipaccumulator this month.
<p align="center"><b><span style="text-decoration: underline;"><a href="https://weeklyfxdrivethru.com/wp-content/uploads/2013/12/DEC-2013-RADAR-TRADES14122013-BLOG.jpg"><img class="aligncenter size-full wp-image-2237" alt="DEC 2013 RADAR TRADES14122013 BLOG" src="https://weeklyfxdrivethru.com/wp-content/uploads/2013/12/DEC-2013-RADAR-TRADES14122013-BLOG.jpg" width="391" height="388" /></a></span></b></p>
<p align="center"><b><span style="text-decoration: underline;">POTENTIAL PROFITS FROM SINGLE LOT COMPLETED TRADES:</span></b></p>
<p align="center">1 x MICRO-LOT:
13 trades at $0.10 cents each = $1.30 cents risk for a $60.80 reward.</p>
<p align="center">1 x MINI-LOT:
13 trades at $1.00 each = $13.00 risk for a $608.00 reward.</p>
<p align="center">1 x STANDARD LOT:
13 trades at $10.00 each = $130.00 risk for a $6,080.00 reward.</p>
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I am launching very, very soon the PREMIUM SERVICE. This will bring a host of new tools to enable better trading…more consistently.

Details of my new PREMIUM SERVICE that gives you the option to follow the RADAR TRADES, amongst other things, follows later in this blog.<b></b><b><span style="text-decoration: underline;">
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<b><span style="text-decoration: underline;">2.    RBA BANK GOVERNOR STEVENS LAYS IT OUT PURE AND SIMPLE FOR THE MARKETS…AND I HAVE MY PLAN</span></b>

Here is a direct quote from last week’s blog. It was from Section 2, when I was writing about adapting to longer-term trading as the market's reaction to news has changed.
<p style="text-align: center;"><b><i>“Let me use RBA Stevens as my example. He has stated personally, and the RBA statements have read for the past three / four months maybe even longer, that the AUD is over-priced. They targeted in a published report months and months ago that 0.8500- 0.8800 was the goal for the AUD/USD exchange rate. To say this 5/6 years ago was enough to strike fear in the markets and the AUD/USD would be at its guide price by now. In 2013, you need QE (Quantitative Easing policies), direct intervention in the money markets and talk of negative rates to be believed these days”.</i></b><b><i> </i></b></p>
What did Stevens do last Thursday?

He re-iterated it all again and this time actually said 0.9500 as the AUD/USD is too high...I think 0.8500 is more where it should be. There was great sell-off and now we are trying to consolidate positions

From my perspective as a fundamental trader here is what goes through my mind: -
<p align="center"><i>The AUD/USD come hell or high water is moving lower.</i></p>
<p align="center"><i>Do not trade against a Central Bank.</i></p>
<p align="center"><i>Wait for the FOMC first to announce 'tapering or not' this week to look for entries.</i></p>
<p align="center"><i>Look for a good pullback in the AUD/USD to get short.</i></p>
<p align="center"><i>Check charts of the EUR/AUD, GBP/AUD and AUD/NZD to get familiar with pricing.</i><i> </i></p>
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At any other time of the year, I would have established positions already based on the RBA statement from governor Stevens. Right now, Ben and the FED announcement via the FOMC this Wednesday trumps all news for me and I will wait.

My reason, the 200 pips or so in the AUD/USD are not the big factor here. The unwinding of the cross-rates EUR/AUD and GBP/AUD is much, much bigger. There are thousands of potential pips available with these pairs alone. Plus how will the NZD react in a week or two, better still early 2014?

I may set up limit orders with my broker after the FOMC announcement. That depends on the news itself and the market reaction. I will tweet my intentions and reactions Wednesday afternoon.

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<b><span style="text-decoration: underline;">3. THE VIEW FROM MY TRADING DESK:</span></b><b><span style="text-decoration: underline;"> </span></b>
<p align="center"><b><span style="text-decoration: underline;">THE FINAL SCHEDULED BIG NEWS EVENT OF 2013 IS THE FOMC…WHAT AM I DOING, WHAT ARE THE OPTIONS?</span></b></p>
It is quite appropriate that given all the “Taper” - is it on?, or, is it off ? talk for most of the past three/four months, that this subject should be the focus for the last major news event of 2013.

The big question that I have is - “Is tapering as big news for the FED as it is for the TV news channels?”

CNBC are once again at fever pitch, bringing in all and sundry to debate the point. It was odds on given that the “Santa Claus” rally has not materialized this year…yet. We  have to keep in mind that this process that we are entering has never been executed before. All the conjecture is just that, pure speculation. No one knows what will really happen.

The USD is strengthening a little ahead of Wednesday’s Press Conference, probably a result of all the taper talk people preparing. Could you imagine, if the FED did start tapering what would happen.

My initial thoughts are, firstly, should Ben taper, this represents the beginning of a change in U.S. monetary policy. Do not underestimate that fact. The USD index will rally hard, and, coupled with the fact we will be in thin trading times the move would be fast, long and hard for USD bears to cope with, they will be running for the hills. Just imagine, the volatility with little liquidity.

My gut tells me however, that there is little chance of any taper this week. I just cannot see it being implemented at the end of the year, even with an agreement in Washington over the U.S. Federal Budget in the wings.

I think with this FOMC press conference it really is all up for grabs. From a trading perspective, the conservative approach would be to wait until the press release before deciding what if any trades to place. Trying to second-guess the news and the market reaction is dangerous. You certainly do not want to be the wrong side of a trade at the end of the year when there is little liquidity.

The simple response to the FED 'taper or no taper', one would imagine would be;
<p style="text-align: center;">“TAPER” – get long the USD and short the EUR/USD, GBP/USD etc.</p>
<p style="text-align: center;">“NO-TAPER” – get short the USD and long the EUR/USD, GBP/USD etc.</p>
Wait for about 10 to 15 minutes after the news has broken before entering a trade. Make certain that the direction is sorted.

Remember, there is a press conference to follow the prepared statement, and, whilst Ben should not say anything that was not in the released press statement he does have to answer questions from the journalists and TV stations that are invited to the press conference. There could be a stinger of a question, so beware and be on guard.

It all really depends on your trade style and your risk tolerance. I may not even trade the FOMC at all. I want to end 2013 on a big positive and enjoy the Christmas holidays. I hate these thin trading conditions and try my best to avoid them like the plague.

I will tweet around the news and should I take on a flash trade I will tweet the information.

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<b><span style="text-decoration: underline;">4. MY CURRENT LIVE TRADES:</span></b>

I have no live trades at the moment.

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<b><span style="text-decoration: underline;">5. TRADES THAT ARE ON MY RADAR:</span></b>

As I have stated several times, I am winding down for 2013 and as such given the fact that we have a major news release like the Fed FOMC statement and press conference on the horizon, I am not looking at anything right now.

I may look at potential trades after the FOMC, should I do this I will tweet my thoughts.

The trading pairs that are at the back of mind are: -
<p align="center">EUR/CAD
GBP/CAD
EUR/AUD
GBP/AUD
AUD/USD
AUD/NZD
USD/CHF</p>
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<b><span style="text-decoration: underline;">6. LOOKING FORWARD…THE KEY SUPPORT &amp; RESISTANCE LEVELS WITH THE USD MAJORS:</span></b>

<b>EUR/USD: Closing Price 1.3738.</b>  We finished the week higher than last week. At one stage in the past seven days I thought that this pair was about to run and test 1.4000. In fact we stalled just ahead of 1.3830 and this remains the upside resistance that needs to be taken for the bulls to have control. Obviously, the big FED FOMC news on the horizon will calm things down for a day or two. The range that interests me with this pair is 1.3630 to 1.3830. Trade within this range, buy dips if you must trade. Personally, I will be watching until after the FOMC.

<b>GBP/USD: Closing Price 1.6290.  </b>A little lower on the week. Many traders must be totally confused with the cable's actions. On the daily charts there is a double bottom in play with a measured move to 1.6600, we headed in that direction and then the wheels came off the bus, and we moved lower towards key support at 1.6250. This support level of 1.6250, if breached, places the USD bulls back in command. I would play 1.6250 to 1.6450 until either end is broken.

<b>AUD/USD: Closing Price 0.8963</b>. Well RBA Governor Stevens told it as it is on Thursday morning EDT. The Aussie nose-dived and once again the market now knows where the RBA wants to see this pair trading in the future. That is around 0.8500. We closed yesterday at 0.8963, which is well over 100 pips lower in the last seven days. There are important levels ahead for this pair. Support at 0.8875 and resistance around 0.9150. These two levels should contain this pair ahead of the FOMC. There is not much to say about this pair except DO NOT TRADE AGAINST THE RBA. If the AUD/USD rises use it as an opportunity to enter short.

<b>NZD/USD: Closing Price 0.849</b>.  During the past seven days there has not been much movement with this pair. It is still very resilient and affected by the effects of the AUD/NZD cross-rate. I know that RBNZ Governor Wheeler, has stated many confusing facts of late and one of them is his desire to raise rates in New Zealand probably in the Spring of 2014...but he has also sent conflicting  messages to the markets. I just do not know what to think at times with this pair. We seem to be in the range of 0.8200 to 0.8340. It is difficult to call, so it may be best to leave this pair alone.

<b>USD/CAD: Closing Price 1.0582.  </b>Just not certain where this pair is going. Yesterday (Friday) I thought it was so bullish. Then it falls 75 pips to end the week below 1.0600. The range as I see it is 1.0540 to 1.0700.

<b>USD/CHF: Closing Price 0.8882</b>.  We ended the week pretty much sitting on a major support level of 0.8880. This has to be a good trade to pick up long if we see a stop run through this level. The only thing that is stopping me is the boring market and the FOMC. 0.8850 offers a great area to go long just below support, and resistance should be good now at the round number of 0.9000.

<b>USD/JPY: Closing Price 103.16. </b> I am not touching this pair at the moment. Soooooooo many  institutions and traders are long the JPY looking for 105.00 - it's a bit scary. I am not certain what to do or what to suggest other than write down the support of 1.0260 and resistance of 103.40.

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<b><span style="text-decoration: underline;">7. MAJOR FOREX NEWS THIS WEEK THAT INTERESTS ME:</span></b>

SUNDAY: CNY – HSBC Flash PMi

MONDAY: EUR – French &amp; German Manufacturing PMi
MONDAY: EUR – Draghi Speaks.
MONDAY: AUD – RBA Monetary Policy Meeting Minutes.

TUESDAY: N/A

WEDNESDAY: GBP – Unemployment rates.
WEDNESDAY: USD – FOMC Statement and Press Conference.
WEDNESDAY: NZD – RBNZ GDP.

THURSDAY: JPY – BOJ Monetary Policy Statement and Press Conference.

FRIDAY: CAD – Core Retails Sales.

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<b><span style="text-decoration: underline;">8. THE PREMIUM SERVICE:</span></b>
<p align="center"><b><span style="text-decoration: underline;">THE WEEKLY FX DRIVE-THRU</span></b><b>
<span style="text-decoration: underline;">PREMIUM SERVICE  2014 </span></b>

Next year I am looking to introduce a “Premium Service” for those who want it.

The “Drive-Thru” in its current format will remain a weekly blog post although it will be a lot shorter. There will be one major exception in its current format  “RADAR TRADES” will now only be available via the Premium Service. In addition, “Trade Ideas and Set-ups” that are tweeted will also only be available to Premium Service subscribers inside the secure section of the Weekly Fx Drive-Thru. There will be lots of posts to the PREMIUM SERVICE section of the Weekly Fx Drive-Thru and in addition, I will also be introducing “Flash Trades” - these will be up to the minute as they happen trades.

Over the past several months, feedback from subscribers to the “Drive-Thru”, or from readers of the blog via Google+, LinkedIn or Twitter have been raising many questions about Forex Trading in general, such as: -<b> </b>

</p><p align="center"><b>Placing Stops</b></p>
<p align="center"><b>Strategies on entry and exit</b></p>
<p align="center"><b>Working with a Trade Plan</b></p>
<p align="center"><b>What is a Trade Plan?</b></p>
<p align="center"><b>Risk Assessment</b></p>
<p align="center"><b>When to fade trades</b></p>
<p align="center"><b>How to cost average effectively</b></p>
<p align="center"><b>How to use Trade Zones effectively - Buy Zones and Sell zones</b></p>
<p align="center"><b>Working with Fibonacci levels</b></p>
<p align="center"><b>How to find a good broker to partner with</b></p>
<p align="center"><b>Chart analysis</b></p>
The list is quite extensive, however, it refers only to all the recent questions that I have answered.

To have a learning centre available and to look at the trades that are on my radar at the same time seemed to be a very good fit as a trading philosophy…hence the Premium Service.

I am also looking to offer training and information based “Webinars” to Premium Service subscription members, if I have sufficient participants. These will be fee based to cover costs.

Whilst upon first look, it may appear that the Premium Service is directed solely at new traders, or those with intermediate skill levels, please note this is not my intention. Trading can be lonely, and sometimes it is good to feel that you are part of a team. With this in mind, I am thinking that a “Chat Room” style area would be of benefit to all traders to share ideas and trade set-ups. Plus, whether a new trader or experienced trader, it is always good to have a library of information available close at hand.

The Weekly Fx-Drive-Thru will remain, and will continue to be posted weekly on Saturday’s although it will be a shorter version.

The Midweek Fx Fix will cease immediately and in 2014 the Premium Service will be available to those who want to take advantage. The training and background support material will be added on a regular basis to grow into a library of effective Fx trading tools.

What are the costs?

My initial thoughts are as follows: -

There will be 40 weekly blogs / issues per year (I will not write in the Summer and over Christmas periods), with an unlimited amount of follow ups during the week to review and act upon “Radar Trades” and issues emanating from previous blogs. In addition trade ideas for trades already in play would also be part of the service, as I will be trading my own trade recommendations.

I do not want to become a finance administrator on a daily basis so I want to keep the subscription options as few as possible.
<p align="center"><b>ANNUAL (40 WEEK) SUBSCRIPTION: $750.00 (this equates to $18.75 per week) </b></p>
<p align="center"><b>20 WEEKS SUBSCRIPTION: $450.00 (this equates to $22.50 per week) </b></p>
<p align="center"><b>10 WEEKS SUBSCRIPTION: $250.00 (this equates to $25.00 per week) </b></p>
<p align="center"><b>(ALL FEES ARE IN USD)</b></p>
I would like to get your feedback to this proposal.

If you have the time please respond to me at <a href="mailto:scott@pickering.bz">premiumservice@thepipaccumulator.com</a> with your thoughts on the “Premium Service” and whether you think that this is something you would sign up for and take advantage of. I would like to Thank all of you who have already done so.

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<b><span style="text-decoration: underline;">9. FINAL THOUGHTS:</span></b>

There are several interesting bigger ticket news items this week; obviously the FOMC is the pick of the bunch. Personally, I think that this will be my final week of trading for 2013, so my positions, if any, will be small.

We are heading into ‘silly season” on thin trading volumes. Smaller and thinner trading volumes create wilder moves sometimes based on nothing. This can cost you money so be careful.

As always, trade smaller with wider stops to establish your position, only then do you add in, but it should be in line with your trading plan. Do not over-stretch yourself and let the trades come to you. Price your entries and establish your risk prior to taking a trade. This is a sound practice and it works.

Good luck and take care.

Scott Pickering
The Pip Accumulator
Saturday December 14th 2013

EMAIL / FOLLOW ME AT:
<a href="mailto:drivethru@thepipaccumulator.com">drivethru@thepipaccumulator.com
</a><a href="mailto:premiumservice@thepipaccumulator.com">premiumservice@thepipaccumulator.com
</a>Twitter: @pipaccumulator
Google+/scottpickering
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