01.02.2014
#2

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

It was a very volatile past 7 days, I have stuff that I want to add to the PREMIUM SERVICE library of useful training tools but I just have not had the time to physically take a few hours. I really thought that we were going to have a quiet week with only the FED and RBNZ creating any meaningful volatility. The Emerging Markets crisis certainly put my thoughts in the bin, as soon as Turkey followed by South Africa grabbed the headlines with rate hikes.

The FED stood firm on tapering and now I think that the lines have been drawn. I will write my thoughts and how I view the EUR/USD later in this blog.

January was a great income month. Winning trades certainly out-numbered losing trades.
<p align="center"><b>RADAR TRADES:
</b><b>Total Trades: 23
</b><b>Profitable Trades: 17 (65%)
</b><b>Losing Trades: 6 (35%)</b></p>
<p align="center"><b> </b><b>FLASH TRADES:
</b><b>Total Trades: 25
</b><b>Profitable Trades: 24 (96%)
</b><b>Losing Trades: 1 (4%)</b></p>
<p align="center"><b> </b><b>TOTAL JANUARY 2014 PERFORMANCE:
</b><b>Total Trades: 48
</b><b>Profitable Trades: 41 (83%)
</b><b>Losing Trades: 7 (17%)</b></p>
<p align="center">(The summary above does not include any trades opened in January that have not yet been closed)</p>
 There were some great scalping / pullback trades in the month (all charts later). If we can keep this performance for the year happy days!!
Realistically I usually look at a 70% / 30% split over an extended period as the average winning to losing trades. The key is to limit losses in financial terms.

January also saw the launch of my FUNDAMENTAL trades, based upon my macro level view of where I see world economic and political events drawing the forex market. I only intend to have a small number of trades in this category and I am hoping to let them run for months if possible.

Once again, I just want to re-iterate my comment from last week. I notice that not very many of you have signed up for “Twitter” updates via @ThePremService. I list all my thoughts here as the week progresses as well as all the trade set-ups. Not all of my thoughts are repeated here in this blog. But, as promised I will post here a full and complete list each weekend of trade set-ups that interest me. I would also add however, I do not chase the market; I will not trade for the sake of trading. I trade only to make money and I manage my risk, very, very tightly. Therefore sometimes there may NOT be many set-ups listed.

I know that I have been in touch with several of you in the past few days and you are more than happy to trade only weekly from the set-ups posted in this blog. But if you want more background, log into Twitter and you will receive more data and thoughts via @ThePremService.

<b style="line-height: 1.5em;"><span style="text-decoration: underline;"> </span></b>

<b><span style="text-decoration: underline;">2. RADAR, FLASH and FUNDAMENTAL TRADES -TRADING SUMMARY:</span></b>
<p style="text-align: center;"><b><span style="text-decoration: underline;"> </span></b><b><span style="text-decoration: underline;">JANUARY 2014 and YEAR to date:</span></b></p>
Below I show the up to date excel spreadsheets for my various trading styles.
<p style="text-align: center;"><b><span style="text-decoration: underline;">RADAR TRADES:</span></b></p>
<p align="center"><b><span style="text-decoration: underline;"><a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/01/RADAR-TRADES-1-01.02.2014.png"><img class="aligncenter size-full wp-image-3169" alt="RADAR TRADES 1 01.02.2014" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/01/RADAR-TRADES-1-01.02.2014.png" width="544" height="472" /></a></span></b></p>
<p align="center"> <a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/01/RADAR-TRADES-2-01.02.2014.png"><img class="aligncenter size-full wp-image-3170" alt="RADAR TRADES 2 01.02.2014" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/01/RADAR-TRADES-2-01.02.2014.png" width="541" height="494" /></a></p>
<p align="center"></p>
<p align="center"><b><span style="text-decoration: underline;">PROFITS FROM SINGLE LOT COMPLETED RADAR TRADES:</span></b></p>
<p style="text-align: center;"> 1 x MICRO-LOT:
20 trades at $0.10 cents each = $2.00 risk for a $3.80 reward.

<span style="line-height: 1.5em;">1 x MINI-LOT:
</span><span style="line-height: 1.5em;">20 trades at $1.00 each = $20.00 risk for a $38.00 reward.

</span><span style="line-height: 1.5em;">1 x STANDARD LOT:
</span><span style="line-height: 1.5em;">20 trades at $10.00 each = $200.00 risk for a $380.00 reward.</span></p>
<p style="text-align: center;"></p>
<p style="text-align: center;"><b><span style="text-decoration: underline;">FLASH TRADES:</span></b></p>
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<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/01/FLASH-TRADES-1-01.02.2014.png"><img class="aligncenter size-full wp-image-3167" alt="FLASH TRADES 1 01.02.2014" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/01/FLASH-TRADES-1-01.02.2014.png" width="492" height="482" /></a>

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/01/FLASH-TRADES-2-01.02.2014.png"><img class="aligncenter size-full wp-image-3168" alt="FLASH TRADES 2 01.02.2014" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/01/FLASH-TRADES-2-01.02.2014.png" width="497" height="502" /></a>
<p align="center"><b><span style="text-decoration: underline;">PROFITS FROM SINGLE LOT COMPLETED FLASH TRADES:</span></b></p>
<p style="text-align: center;"> 1 x MICRO-LOT:
24 trades at $0.10 cents each = $2.40 cents risk for a $74.70 reward.</p>
<p align="center">1 x MINI-LOT:
24 trades at $1.00 each = $24.00 risk for a $747.00 reward</p>
<p align="center">1 x STANDARD LOT:
24 trades at $10.00 each = $240.00 risk for a $7,470.00 reward</p>
<p align="center"><b><span style="text-decoration: underline;"> </span></b></p>
<p style="text-align: center;"><b><span style="text-decoration: underline;">FUNDAMENTAL TRADES:</span></b></p>
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<p align="center"><b><span style="text-decoration: underline;"><a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/01/FUNDAMENTAL-JAN-2014.png"><img class="aligncenter size-full wp-image-3171" alt="FUNDAMENTAL JAN 2014" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/01/FUNDAMENTAL-JAN-2014.png" width="468" height="470" /></a></span></b></p>
<p align="center"><b><span style="text-decoration: underline;">COMBINED FLASH, RADAR AND FUNDAMENTAL TRADES PROFIT PERFORMANCE</span></b></p>
<p align="center"><b><span style="text-decoration: underline;">JANUARY 2014…SO FAR:</span></b></p>
<p align="center">(There are no closed FUNDAMENTAL TRADES at the present time)</p>
<p align="center">TRADING MICRO-LOTS:
44 trades at $0.10 cents each = $4.40 risk for a $78.50 reward.</p>
<p align="center"> TRADING MINI-LOTS:
44 trades at $1.00 each = $44.00 risk for a $785.00 reward.</p>
<p align="center"> TRADING STANDARD LOTS:
44 trades at $10.00 each = $440.00 risk for a $7,850.00 reward.</p>
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The profitability examples detailed above are based solely upon single lot trading, regardless of lot type. If multiple lot sizes are traded the profitability margins will be different than those shown.

Just to provide more information so you understand where I am coming from with the risk / reward statements above. All of my trades are of different sizes. I like to add to trades, profits are taken as the trade progresses and my overall cost average moves several times. All of my trades are of different lot styles. I trade a mixture of micro lots, mini lots and standard lots across my brokers.

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<b><span style="text-decoration: underline;">3. THE FUNDAMENTAL TRADERS OVERVIEW:</span></b>
<p align="center"><b>THE FED versus THE ECB
“THE FED STANDS FIRM / ECB WILL BE LOOKING FOR A CAN TO KICK”</b></p>
Last year when Ben Bernanke announced (surprising the market with the timing) that tapering was going to start at $10 Billion per month and that the FED would be reducing bond purchases by this amount most months until it reaches zero, it was a huge change in FED monetary policy.

I do not believe until maybe this week that the markets actually fully understood what this meant medium to long term looking forward. Equity market traders having been supported by an overly active FED policy for a number of years through QE simply know nothing but “Buy the dip” when it comes to market participation. However now, as Dylan sings “The Times They are a Changing”

There was a lot of chatter pre FOMC that the “Emerging Markets” issues may cause the FED to postpone a cut this meeting. Not a whisper about Emerging Markets in the statement affecting the decision or being taken into any serious consideration. The FED stood firm.

This opens up a topic that I have referred to a number of times over the past 12 months….Where does this take the EUR/USD?

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<p align="center"><a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/01/EURUSD-MONTHLY-01.022014.png"><img class="aligncenter size-large wp-image-3165" alt="EURUSD MONTHLY 01.022014" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/01/EURUSD-MONTHLY-01.022014-1024x516.png" width="1024" height="516" /></a></p>


The chart above is a long-term (Monthly) chart. As you can see we are in a descending wedge and recently we tested the upper down sloping trend line. Where are we heading next?

A confirmed breakdown through 1.3500 certainly opens up a much larger downside opportunity. I am focused initially on the 61.8% Fibonacci retracement level of 1.3320 from the big 1.1659 to 1.6007 move. After this I think that levels of sub 1.3000 appear to be mentioned over and over again (1.2650 is favourite one of my own!!). I really find it hard to see the EUR/USD drop below 1.3000 and stay there.

At the back of my mind though, the following haunts me. I look at the FED and the way that it has tackled matters since the financial crisis of 2007-2008 and directly compare it to the ECB way of managing matters. It is a chalk and cheese matter.

The FED is proactive, highly communicative and tries through forward guidance to give markets stability by taking away uncertainty.

On the other side of the Atlantic Ocean, Jean-Claude Trichet, followed by Mario Draghi operate an ECB driven by reactive policies, most times as a result of the market calling it a crisis.

A typical example of this was the last ECB rate cut. It followed deflation data (which by the way still exists), when within 48 hours Draghi cut ECB interest rates. It was a total surprise to most people and a knee-jerk reaction. At the ensuing press conference the cut was also described as a measure being taken to help periphery countries.

What good did it do?

The EUR/USD aggressively sold off about 150 pips and bounced back to below levels we are at now. Basically, it did nothing.

This is the difference between the FED and the ECB.
<p align="center"><strong><i><span style="text-decoration: underline;">“The FED does and the ECB does not”.</span></i></strong></p>
This last comment may be a little unfair but in the Eurozone the battle to resurrect everything back to “normal” is much, much harder because of the number of countries involved, the ego’s of the personalities involved and the basic mistrust that exists between some countries and politicians

The ECB still has many issues to fix: -
<p style="text-align: center;">U<strong>NEMPLOYMENT (in particular youth unemployment)</strong>
<strong>DEFLATION</strong>
<strong>BANK LIQUIDITY (yet another stress test is being planned)</strong>
<strong>BANKING STRENGTH (The long awaited banking union)</strong>
<strong><span style="line-height: 1.5em;">PERIPHERY GROWTH
</span><span style="line-height: 1.5em;">RESTORE MARKET CONFIDENCE IN HOUSING MARKETS</span></strong></p>
For too long they have been “Kicking cans down the road” and now that the U.S. is starting to bounce back and cut QE the differences in comparisons will become more evident.

The ECB needs a crisis to happen to force the issue. Many people are stating that full blown QE is required to fix the Eurozone. I am not 100% sure this is accurate but a market moving definitive LTRO is needed to support the banks. Additionally, they need to be forced through an aggressive ECB rate policy to lend money to small business to create growth. We need another ECB crisis.

A crisis will add fuel to USD strength and drive the EUR/USD towards 1.3000 and possibly below.

Draghi, with Merkel (in Berlin) pulling his strings will procrastinate and say things are in-line with expectations. The backdrop is Germany has the chequebook and does not want the invoices to fix the Eurozone as well. I totally get it.

As a trader I would look forward to another Eurozone crisis….

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<b><span style="text-decoration: underline;">4. TRADER TOPICS:</span></b>

<b>TRADE PLANS (Delayed):</b>

I am in the very early stages of writing the next piece for this section on Trade Plans

I want to include some details of my own plan. This year it has reached 17 pages (including inserts) I am still refining sections in it so that it becomes an almost perfect template moving forward. I am hopeful that I can have ready for next week.

After TRADING PLANS I have been asked to review the following in this section:
<p align="center"><strong>HOW MANY BROKERS SHOULD YOU HAVE?</strong></p>
<p align="center"><strong>WHAT TRADES TO TAKE WITH WHAT BROKERS.</strong></p>
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<b><span style="text-decoration: underline;">5. MY CURRENT LIVE TRADES:</span></b>
<p style="text-align: center;"><strong><span style="text-decoration: underline;">FLASH TRADES:</span></strong></p>
<p style="text-align: center;"><strong> FT21:</strong>
<strong>EUR/CAD</strong>
<strong>Long</strong>
<strong>Cost Average: 1.5150</strong>
<strong>Stop Loss: 1.4880</strong>
<strong>Limit / Target: 1.7500</strong>
<strong>My Position Size: 10%</strong>
<strong>Closing Weekly Position: 1.5006</strong>
<strong>Profit / Loss: -144pips</strong></p>
<p style="text-align: center;"></p>
<p style="text-align: center;"><strong><span style="text-decoration: underline;">RADAR TRADES:</span></strong></p>
<p style="text-align: center;"><strong> RT29</strong>
<strong>GBP/CAD</strong>
<strong>Long</strong>
<strong>Cost Average: 1.8460</strong>
<strong>Stop Loss: 1.8200</strong>
<strong>Limit / Target: 2.0000</strong>
<strong>My Position Size: 10%</strong>
<strong>Closing Weekly Position: 1.8292</strong>
<strong>Profit / Loss: -168pips</strong>

<strong>RT30</strong>
<strong>AUD/NZD</strong>
<strong>Long</strong>
<strong>Cost Average: 1.0740</strong>
<strong>Stop Loss: 1.0660</strong>
<strong>Limit / Target: 1.1031</strong>
<strong>My Position Size: 12.5%</strong>
<strong>Closing Weekly Position: 1.0821</strong>
<strong>Profit / Loss: +81pips</strong></p>
<p style="text-align: center;" align="center"><strong> </strong></p>
<p style="text-align: center;"><b><span style="text-decoration: underline;">FUNDAMENTAL TRADES:</span></b></p>
<p style="text-align: center;"> <strong>FUN01</strong>
<strong>EUR/AUD</strong>
<strong>Long</strong>
<strong>Cost Average: 1.5550</strong>
<strong>Stop Loss: 1.5250</strong>
<strong>Limit / Target: 1.7500</strong>
<strong>My Position Size: 7.5%</strong>
<strong>Closing Weekly Position: 1.5401</strong>
<strong>Profit / Loss: -149pips</strong></p>
<p align="center"><strong>FUN02</strong>
<strong>GBP/AUD</strong>
<strong>Long</strong>
<strong>Cost Average: 1.8950</strong>
<strong>Limit / Target: 2.2000</strong>
<strong>My Position Size: 5%</strong>
<strong>Closing Weekly Position: 1.8773</strong>
<strong>Profit / Loss: -177pips</strong></p>
<p align="center"><strong><span style="text-decoration: underline;"> </span></strong></p>
<b><span style="text-decoration: underline;"> </span></b>

<b><span style="text-decoration: underline;">6. TRADES THAT ARE ON MY RADAR:</span></b>

I have the following RADAR trades that I will be placing with my brokers on Sunday evening (02.02.2014).

As you can see they are the USD majors. I am expecting USD strength to start picking up now following the FOMC. We have several market moving news events this coming week. With this in mind enter small, limit your risk in accordance with your account size and add to your trade sizes as the trades’ progress.
<p align="center"><strong>USD/CAD</strong>
<strong>Long</strong>
<strong>Entry Level: 1.1050</strong>
<strong>Stop Loss: 1.0950</strong>
<strong>Limit / Target: 1.1520</strong></p>
<p style="text-align: center;"><strong> USD/JPY</strong>
<strong>Short</strong>
<strong><span style="line-height: 1.5em;">Entry Level: 102.80
Stop Loss: 103.40
Limit / Target: 101.25</span></strong></p>
<p style="text-align: center;"><strong> AUD/USD</strong>
<strong>Short</strong>
<strong>Entry Level: 0.8820</strong>
<strong>Stop Loss: 0.8860</strong>
<strong>Limit / Target: 0.8660</strong></p>
<p align="center"><strong> NZD/USD</strong>
<strong>Short</strong>
<strong>Entry Level: 0.8180</strong>
<strong>Stop Loss: 0.8250</strong>
<strong>Limit / Target: 0.8000</strong></p>
<p align="center"><strong> GBP/USD</strong>
<strong>Short</strong>
<strong>Entry Level: 1.6520</strong>
<strong>Stop Loss 1.6600</strong>
<strong>Limit / Target: 1.6280</strong></p>
<p align="center"><strong> USD/CHF</strong>
<strong>Long</strong>
<strong>Entry Level: 0.9030</strong>
<strong>Stop Loss: 0.8950</strong>
<strong>Limit / Target: 0.9250</strong></p>
I have one potential FUNDAMENTAL TRADE to add at this time.
<p align="center"> <strong>GBP/NZD</strong>
<strong>Long</strong>
<strong>Entry Level: 2.0190</strong>
<strong>Stop Loss: 2.0000</strong>
<strong>Limit / Target: 2.1200</strong></p>
<p align="center"></p>
<b><span style="text-decoration: underline;">7. LOOKING FORWARD…THE KEY SUPPORT &amp; RESISTANCE LEVELS WITH THE USD MAJORS:</span></b>

<b>EUR/USD: Closing Price 1.3485.</b>  We ended the week closing below the key level of 1.3500. There are lots of high-level news items this coming week, in particular the ECB Interest Rate decision and Press Conference on Thursday and then on Friday U.S. Non-Farm payrolls. We could see a huge amount of volatility with this pair. Recent Draghi press conferences have apart from the rate-cut event, been in the main Euro supportive. Having written that I do believe that we are now thanks to the FED having a EUR/USD sentiment change, I therefore see more down side pressure on this pair. Bear in mind though; it will not be a straight down affair. We will push and pull one way then another stepping down towards 1.3000 in my opinion. For this immediate time the range to look at is support at 1.3450 initially, below there 1.3400 and then my target of 1.3320. Upside resistance is good at 1.3585 and 1.3650.

<b>GBP/USD: Closing Price 1.6438.  </b>Not much of a closing price difference week on week. I do see downside pressure with this pair continuing, but I do find cable hard to read and difficult to follow. The charts show a double top in play with a measure downside move to 1.6300. Resistance should be very good at 1.6525.

<b>AUD/USD: Closing Price 0.8753</b>.  This pair has been quite elevated all week. When I think that it is going to fall it stays well bid. The RBA meet Monday on Interest Rates and later in the week RBA governor, Stevens releases the latest Monetary Policy Statement. It is well known that the RBA want this pair trading in the mid to low 0.80’s. We are not far away but I still expect a few words on that subject. Do NOT fight a Central Bank.  The Key levels for me right now are 0.8660 to 0.8820

<b>NZD/USD: Closing Price 0.8074</b>.  I am annoyed that I missed this pair heading lower, but I would not be surprised to see it bounce, strange as that might seem. For now I think we test 0.8000 as support and 0.8180, 0.8250 will offer resistance in the other direction.<b> </b>

<b>USD/CAD: Closing Price 1.1127. </b>The “Loonie” did it’s thing yesterday (Friday) not quite sure what that was all about but the currency strengthened like crazy and in so doing screwed up my CAD cross rate trades, which I am still in albeit down considerably on pips. If we sell off again at the open tomorrow (Sunday) there could be a great buying opportunity. I see the range though being supported at 1.1085 to 1.1220.

<b>USD/CHF: Closing Price 0.9058</b>.  Not a bad ending to the week if you are thinking of establishing a long position.  Support should be good at 0.8970 and the topside should have some resistance around 0.9125.

<b>USD/JPY: Closing Price 102.00. </b> Ready to fall. That is how I would describe the present USD/JPY closing position. 101.75 offers support, if this is broken I can see a bigger move lower. It would be great to get a Sunday night bounce to resistance at 102.80 first and enter short at that level if possible.

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<b><span style="text-decoration: underline;">8. MAJOR FOREX NEWS THIS WEEK THAT INTERESTS ME:</span></b>

SUNDAY: AUD – Building Approvals.

<span style="line-height: 1.5em;">MONDAY: GBP – Manufacturing PMi.
</span><span style="line-height: 1.5em;">MONDAY: AUD – RBA Statement and Cash Rate.</span>

TUESDAY: GBP – Construction PMi.
TUESDAY: NZD – Employment Data and Unemployment Rate.

WEDNESDAY: GBP – Services PMi.
WEDNESDAY: USD – ADP Non-Farm Employment Change.
WEDNESDAY: CAD – Building Permits.
<span style="line-height: 1.5em;">WEDNESDAY: USD – ISM Non-Manufacturing PMi.
</span><span style="line-height: 1.5em;">WEDNESDAY: AUD – Retail Sales and Trade Balance.</span>

THURSDAY: GBP – Asset Purchase and Bank Rates.
THURSDAY: EUR – ECB Interest Rates and Press Conference.
THURSDAY: CAD – Ivey PMi
THURSDAY: AUD – RBA Monetary Policy Statement.

FRIDAY: CAD – Employment Change and Unemployment Rate.
FRIDAY: USD – Non-Farm Employment Change and Unemployment Rate.

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

To say that we have a week with market moving news is a little bit of an understatement. I am expecting a great deal of volatility this week.

I have lots of trades open and several placed with limit orders. I will be trading 50% sized positions this week to allow for the chaos and disorder that will probably be served up.

This is the type of week, when the news items openly encourage numpty politicians to crawl out from under rocks and make stupid attention grabbing headlines. Watch out in particular for this to happen in the Eurozone.

I have listed many potential trades in this blog. Let me confirm, I have not placed these limit orders with my brokers yet. Wait for twitter for confirmation if you are following these suggestions. If you are not yet signed up for Twitter, pleased give it serious consideration.

Always, always remember. There is market everyday. You do not need to trade everyday to make your financial goals. Over the coming weeks I will visit as many topics on trading tips as possible to hopefully help and aid better trading success.

Good luck and trade within your TRADE PLAN guidelines and most importantly use MONEY MANGEMENT SKILLS to control your risks.

Scott Pickering
The Pip Accumulator
Saturday February 1st 2014

EMAIL / FOLLOW ME AT:
premiumservice@weeklyfxdrivethru.com
Twitter: @pipaccumulator
Twitter: @ThePremService
<span style="line-height: 1.5em;">Google+/scottpickering
</span><span style="line-height: 1.5em;">StockTwits; thepipaccumulator
(01.02.2014 – 2.2)</span>

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