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

The past 7 days were great for trading. I have, however, found myself to be a scalping trader all of a sudden. This is not my usual trading style but if needs must at least I have shown my versatility

I still have my longer-term trades in position and I am reasonably comfortable  with the way that they are now moving, although I seem to be scalping to make daily $$$ targets and leaving my longer-term trades alone carrying overnight swap rates. I will continue this strategy for the coming weeks or until I feel that the chop fest has ended.

I think right now it’s about seeing the quick opportunity and taking it. But much, much more than this it’s about being completely risk management  and money management savvy and seizing the moment.

Below is an example of a group of trades from Thursday last week.

I tried several times to enter positions short term to see if they would develop into swing trades to no avail. The best example of this was Thursday afternoon, after much thought I decided to go short USD/JPY, EUR/JPY, GBP/JPY, AUD/JPY, NZD/JPY, CAD/JPY and CHF/JPY. I was fully expecting carnage in Asia overnight Thursday/Friday, it just never happened the way I thought so on Friday morning I had 7 trades most of which were still around entry levels from the previous day. We had poor financial data from JP Morgan and the JPY pairs dropped I took my profits of +151 pips from all but the USD/JPY.

This was the low risk option, why?

If it were any other day other than a Friday I may have let the trades run.

I took the profits and 2.5 / 3 hours later I was happy. The S&amp;P fell just below support so I was expecting a bounce, a typical reaction. The previous time that the 1826-30 level in the S&amp;P was tested we saw a huge bounce and the USD was taken to the cleaners.

I decided this was the low risk option that I should take - better to bank +151 pips than be in 6 negatives trades over the weekend.

What is just a pleasing for me is that The PREMIUM SERVICE continues to make money albeit at a slightly reduced level due to the tougher market conditions but it’s an increasing overall profit and I am very happy. I detail the updated numbers later. If you are not yet subscribing there are many options now available: -
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<b><span style="text-decoration: underline;">2. THE VIEW FROM MY TRADING DESK:</span></b>
<p align="center"><b>PULLBACK OR CORRECTION…WHAT ARE THE BEST CURRENCIES TO TRADE?</b></p>
From my viewpoint, it’s not just what currencies to trade at the moment, but also what time of day to trade also. Combined with those thoughts it is also not the time to be a hero, but to trade with good MONEY MANAGEMENT, RISK MANAGEMENT and above to all use your TRADING PLAN. I think that I have said this many, many times before -  PLAN YOUR TRADES and TRADE YOUR PLAN.

Over the past few months, sometimes it feels like years, I have been warning about the bull market coming to an end. A five-year bull market is quite frankly a dangerous market. As we approach key Fibonacci extensions there are bull/bear fights and the markets become even more volatile than normal in particular as we have been testing 123.6%, 150.0%, 161.8% and the “Golden Fib” of 261.8%.

The fib levels alone have not prompted the selling that we have seen recently, personally, I think that the Chinese import and export data that was so poor last Wednesday night has something to do with matters. We have risk aversion in the market but the USD has not picked up steam, which is a little surprising to me. At the end of the day, we have a good pullback in play across the board in equities, the “BUY THE DIP” mentality has shifted. Looking at the whimsical side of the markets for a moment, God help CNBC they have 5 years of programming based on the back of the “BUY THE DIP” mentality towards the markets.

Whichever way we slice the news we are literally held at support on the S&amp;P around 1826-1830. The NASDAQ looks broken to me. We had a trend line break that was re-tested and then we have fallen ever since, as I see it about 3400 is the next level of support then 3200. The bottom line is that equity markets hold all the keys moving forward….and I do not like that based on the fact that the FX market has not reacted to the present pullback the way I believe it should have.

Why?

I am not sure 100% why; my only thoughts are that no one believes we are actually selling off. There is a FEAR of a huge drop, but there is also a belief that support levels will hold. Therefore, until we break a bit lower the USD will not react the way I think it should.

In situations like this, we have to look at the trading signals that we have and trade managing risk the best way that we can.

As the USD is acting in line with an equity market sell off, to me it looks like the USD pairs are split into groups: -

GROUP 1: EUR/USD and GBP/USD  - When you look at the USD index and the EUR/USD – it is by far the greatest weighted currency in the basket of currencies, the USD index is not really moving lower in line with equities. This is because the EUR continues to be supported and although GBP/USD looks lofty at current levels the EUR/USD will influence how it moves in the big picture.

GROUP 2: USD/JPY – Works on its own and does its own thing. Right now it is reacting how I think it should in line with a falling S&amp;P this currency and all its cross-rates are also falling. The drop really needs to accelerate below 101.00 for me to truly believe the market correction is on the way.

GROUP 3: AUD/USD, NZD/USD, USD/SEK and USD/CAD – These currency pairs hold the key. We are trying to obtain a level of consistency with these pairs in the sense that they move in tandem lower with the S&amp;P sell-off. Of all the four groups listed these are the only USD pairs that I would enter fresh trades on. We saw a nice move on Friday morning where they all weakened but that was short lived as we came to a halt early with it being a Friday. We then just consolidated and drifted into the close.

GROUP 4: USD/CHF – The fact that any political moves in the Ukraine will affect the Eurozone due to it’s close proximity means the Swiss effect comes into play as a safe haven. Therefore, unless you are already in a USD/CHF trade I would not enter a fresh one.

Apart from the commodity currencies, where else would I look? Personally, I think cross-rates are the best solution to trade from a risk tolerance / risk management perspective, using the different effects that you can see between the EUR and Commodity currencies.

Later in the blog for PREMIUM SERVICE subscribers only I have my exclusive trade set ups for trades that you can place with your brokers looking forward in line with my thoughts.

It is still a very difficult market so it is hard to be decisive. Charts will tell us a lot of things and fundamentals do matter but right now many of the charts are terrible to read. So, we have to be modest with expectations and as usual I repeat PLAN YOUR TRADES and TRADE YOUR PLAN.

Remember two factors drive all financial markets…FEAR and GREED. Manage these and you will be successful.

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<b><span style="text-decoration: underline;">3. LOOKING FORWARD…THE KEY SUPPORT &amp; RESISTANCE LEVELS WITH THE USD MAJORS:</span></b>

<b>EUR/USD: Closing Price 1.3884.</b>  Is the EUR strong or the USD weak? I think that that is a great question. Being the major currency within the USD weighted index and having seen equities fall off the pages in the past week, I like many other traders expected the USD to strengthen. It never did with this pair. I suppose being positive we have the 52-week high just above were we closed at 1.3967. Shorting this pair at least gives you an edge in the sense that you know where your risk lies. I am presently short this pair and out of the money, by some margin. I have stuck with this pair on the basis that eventually when the markets realize we are having a correction and the FED is NOT going to jump in - the USD will strengthen and in so doing the EUR/USD will fall. Am I am right, or, am I wrong? Only time will tell. I see my range as resistance at the 52-week highs of 1.3967 and support at 1.3750. Not until we get back to the lower level of 1.3750 do I see the bears back in control.

<b>GBP/USD: Closing Price 1.6732.  </b>I hate this currency. So many times it lures you in and then gives you a good old smack on the arse for being so cheeky as to trade it. Like the EUR/USD, we are sooooooo close to the 52 week high which sits at 1.6822. Again, at least as a trader you know and understand the risk of any trade. The levels to watch with the GBP/USD are resistance at 1.6822 and support at 1.6650.

<b>AUD/USD: Closing Price 0.9393</b>.   We ended the week about 100 pips higher on the previous week. Having said that we have had the markets fall all over Asia, Europe and the U.S. Yes, I know what you are thinking and so am I, regardless of Australian news and there was great employment data last week this pair should be lower given the strength and breadth of the market sell off. It’s yet another mystery for Hercule Poirot to solve, because I am buggered if I can. The recent highs are at 0.9460 and I see this level as resistance. Support that places the bears back in control I think is much lower at around 0.9210.

<b>NZD/USD: Closing Price 0.8680</b>.  Just like the AUD/USD, this pair has seen highs recently that give us a risk level that is fairly easy to follow. 52-week highs sit at 0.8744, which is well within striking distance of the closing position. This level will act as resistance in my view, with support at 0.8600.

<b>USD/CAD: Closing Price 1.0979.</b>  We closed last week almost where we closed the previous week. If you trade and view the price action each day we have been involved in a “Six Flags” roller coaster ride of epic proportions. As long as we are above the multi-decade trend line at about 1.0850 one should view this pair as bullish and trade accordingly in my opinion. Levels to watch are support at 1.0910 and resistance to get a squeeze on is at 1.1050.

<b>USD/CHF: Closing Price 0.8758</b>.  I am currently long this pair and I am not a happy camper. The 52-week low lies at 0.8698. If we fall through this level bye bye swissy…..swissy bye bye. It’s only about 60 pips from the closing price. So the 52-week lows act as support and the resistance level is 0.8850.<b> </b>

<b>USD/JPY: Closing Price 101.63. </b>This pair is on the verge of a breakdown and last week the Dow closed -2.15% at 16,026, NASDAQ closed -2.56% at 3,999 and the S&amp;P closed at 1815 -2.33%.  For the last hour of trading or so it rallied a little as the sell of equities intensified.  We are just 40 pips or so from the wheels coming off the bus. If support at 101.20 gives way - I see 100.00 being tested very quickly tested. Resistance lies at 102.15.

<span style="text-decoration: underline;"> </span>

<b><span style="text-decoration: underline;">4. MAJOR FOREX NEWS THIS WEEK THAT INTERESTS ME:</span></b>

SUNDAY: N/A.

MONDAY: USD – Retail and Core Retail Sales.

TUESDAY: CAD – Manufacturing Sales.
TUESDAY: USD – Core CPi and FED Janet Yellen speaks.
TUESDAY: NZD – CPI.
TUESDAY: CNY – GDP.

WEDNESDAY: USD – FED Janet Yellen speaks.
<span style="line-height: 1.5em;">WEDNESDAY: CAD – BOC Rate Statement and Press Conference.
</span>WEDNESDAY: JPY – BOJ Kuroda speaks.

THURSDAY: N/A.

FRIDAY: N/A.<b></b>

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

<b><span style="text-decoration: underline;">5. THE PREMIUM SERVICE:</span></b>

As we have now completed the first quarter of 2014, I thought that it would be a good idea to show the year to date performance so far on the success of the PREMIUM SERVICE.

Full details of what the PREMIUM SERVICE is all about and the benefits that it can bring to your trading can be found at <a href="http://www.weeklyfxdrivethru.com">www.weeklyfxdrivethru.com</a> by selecting PREMIUM SERVICE, SIGN UP or SPECIAL OFFERS from the drop down menu at the top of the welcome page.

There are now many sign up options to suit all budgets to enable you to try and see if the PREMIUM SERVICE adds value to your trading. If you have questions you can email me <a href="mailto:premiumservice@weeklyfxdrivethru.com">premiumservice@weeklyfxdrivethru.co</a>m
<p align="center"><b><span style="text-decoration: underline;"> </span></b></p>
<p align="center"><b><span style="text-decoration: underline;">RADAR, FLASH and FUNDAMENTAL TRADES
</span></b><b><span style="text-decoration: underline;">APRIL 2014 and YEAR to date:</span></b></p>

Below I show the up to date performances for my various trading styles. Full excel spreadsheets are in the subscriber area of the PREMIUM SERVICE.

<b><span style="text-decoration: underline;"> </span></b>
<p align="center"><b><span style="text-decoration: underline;">RADAR TRADES – APRIL 2014…TO DATE:
</span></b><b><span style="text-decoration: underline;">PROFITS FROM SINGLE LOT COMPLETED RADAR TRADES:</span></b></p>
<p align="center">1 x MICRO-LOT:
5 trades at $0.10 cents each = $0.50 risk for $13.50 profit.</p>
<p align="center">1 x MINI-LOT:
5 trades at $1.00 each = $5.00 risk for $135.00 profit.</p>
<p align="center">1 x STANDARD LOT:
5 trades at $10.00 each = $50.00 risk for $1,350.00 profit.</p>
<b></b><b><span style="text-decoration: underline;"> </span></b>
<p align="center"><b><span style="text-decoration: underline;">FLASH TRADES – APRIL 2014…TO DATE:
</span></b><b><span style="text-decoration: underline;">PROFITS FROM SINGLE LOT COMPLETED FLASH TRADES:</span></b></p>
<p align="center">1 x MICRO-LOT:
15 trades at $0.10 cents each = $1.50 cents risk for $39.60 profit.</p>
<p align="center">1 x MINI-LOT:
15 trades at $1.00 each = $15.00 risk for $396.00 profit.</p>
<p align="center">1 x STANDARD LOT:
15 trades at $10.00 each = $150.00 risk for $3,960.00 profit.</p>
<p align="center"><b><span style="text-decoration: underline;">FUNDAMENTAL TRADES – APRIL 2014…TO DATE:
</span></b><b><span style="text-decoration: underline;">PROFITS FROM SINGLE LOT COMPLETED FUNDAMENTAL TRADES:</span></b></p>
<p align="center">1 x MICRO-LOT:
2 trades at $0.10 cents each = $0.20 cents risk for $3.40 profit.</p>
<p align="center">1 x MINI-LOT:
2 trades at $1.00 each = $2.00 risk for $34.00 profit.</p>
<p align="center">1 x STANDARD LOT:
2 trades at $10.00 each = $20.00 risk for $340.00 profit.</p>
<p align="center"><b><span style="text-decoration: underline;">COMBINED FLASH, RADAR AND FUNDAMENTAL TRADES PROFIT PERFORMANCE
</span></b><b><span style="text-decoration: underline;">APRIL 2014…TO DATE:</span></b></p>
<p align="center">TRADING MICRO-LOTS:
22 trades at $0.10 cents each = $2.20 risk for $56.50 profit.</p>
<p align="center">TRADING MINI-LOTS:
22 trades at $1.00 each = $22.00 risk for $565.00 profit.</p>
<p align="center">TRADING STANDARD LOTS:
22 trades at $10.00 each = $220.00 risk for $5,650.00 profit.</p>
<p align="center"><b><span style="text-decoration: underline;">COMBINED FLASH, RADAR AND FUNDAMENTAL TRADES PROFIT PERFORMANCE
</span></b><b><span style="text-decoration: underline;">TOTAL 2014…SO FAR.

</span></b>TRADING MICRO-LOTS:
162 trades at $0.10 cents each = $16.20 risk for $260.00 profit.</p>
<p align="center">TRADING MINI-LOTS:
162 trades at $1.00 each = $162.00 risk for $2,600.00 profit.</p>
<p align="center">TRADING STANDARD LOTS:
162 trades at $10.00 each = $1,620.00 risk for $26,000.00 profit.</p>
The above examples are for illustration purposes only:

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 and different size lot types. The above does not reflect the actual trading performance, but it does show you the direction of the performance of the trades placed.

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.

The above results simply display your profit or loss if you placed a single lot trade on all the set-ups suggested and did nothing else.

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

<b><span style="text-decoration: underline;">6. FINAL THOUGHTS:</span></b>

I am looking forward to the next week’s trading. I am really hopeful that we will see a huge directional and momentum move to the short side in equities, dragging the USD with it. The markets look broken. The great news is that we have some FX market moving news items this coming week to add into the mix.

Having just written that, we should not be complacent in our thoughts or trading. I have set out a lot of trade set-ups and my thoughts and views on the entry levels in the TRADES ON MY RADAR section of the PREMIUM SERVICE blog.

Please, please remember you do not need to be a hero and trade them all. You should only trade within your TRADING PLAN guidelines as per the examples I have written about and posted to the PREMIUM SERVICE trading essentials section of the website. You should at this time, trade smaller position sizes with stops in place that are within the guidelines of your TRADING PLAN. If my stops are too wide for you, reduce your position sizes to stay within your TRADING PLAN guidelines.

Take care and good luck. Be careful with position sizes.

Scott Pickering
The Pip Accumulator
Saturday April 12th 2014

EMAIL / FOLLOW ME AT:
drivethru@weeklyfxdrivethru.com
Twitter: @pipaccumulator
Twitter: @ThePremService
<span style="line-height: 1.5em;">Google+/scottpickering</span>

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