<p style="text-align: left;" align="center"><b><span style="text-decoration: underline;">1. INTRODUCTION:</span></b></p>
The chop fest continued during the past week.

The PREMIUM SERVICE continues to make money albeit at a slightly reduced level due to the tougher market conditions but it’s a profit and I am very happy. Subscriber levels increase each week and the new DAILY FX POST with a brief overview of my initial thoughts plus any trading ideas is now a week old. The number of tweets to the exclusive subscriber Twitter Account is now past 1,000 since the PREMIUM SERVICE was launched. So all is good…I just want the market to show a consistent direction. But as long as it keeps making profits and moving forward..that is the key goal and objective.

The two big news events over the last 7 days have passed.

The ECB press conference on Thursday last was a joke as far as I am concerned and I have thought long and hard about what Draghi actually said and didn’t say. I have decided to make this the subject of the comment piece this week.

U.S. Non-Farm payrolls came and went with the usual flurry of guests on CNBC guessing beforehand then with egg on their faces after the event denying what they had previously said. Great TV….is this station part of my Disney package? It must be it’s not a serious business channel.

Prior to NFP I was in one trade the USD/CAD. I added trades in USD/CHF, USD/SEK, NZD/USD and placed limit orders on AUD/CHF and CAD/CHF. This was an active NFP day for me. Usually I watch and giggle as the forex market takes out traders at both extremes. My lead indicator USD/SEK was the hook to pull me in. It never really jolted about and that was the determining factor as far as I was concerned.

In addition, I must comment on the fact that U.S. equities sold off very hard after NFP. Why?

My belief is that we are starting to see the sell-off that I have been talking about for a while based upon the fact that inter-market correlations are not functioning as usual and that there are huge market dis-connects in play.  Time will tell if I am right but there appeared to be a huge move out of momentum stocks and many technology stocks after bio-techs had been hit earlier in the week.

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<b><span style="text-decoration: underline;">2. TRADING SUMMARY:</span></b>
<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.
<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:
2 trades at $0.10 cents each = $0.20 risk for $3.00 profit.</p>
<p align="center">1 x MINI-LOT:
2 trades at $1.00 each = $2.00 risk for $30.00 profit.</p>
<p align="center">1 x STANDARD LOT:
2 trades at $10.00 each = $20.00 risk for $300.00 profit.<b style="line-height: 1.5em;"><span style="text-decoration: underline;"> </span></b></p>
<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:
6 trades at $0.10 cents each = $0.60 cents risk for $26.10 profit.</p>
<p align="center">1 x MINI-LOT:
6 trades at $1.00 each = $6.00 risk for $261.00 profit.</p>
<p align="center">1 x STANDARD LOT:
6 trades at $10.00 each = $60.00 risk for $2,610.00 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:
10 trades at $0.10 cents each = $1.00 risk for $32.50 profit.</p>
<p align="center">TRADING MINI-LOTS:
10 trades at $1.00 each = $10.00 risk for $325.00 profit.</p>
<p align="center">TRADING STANDARD LOTS:
10 trades at $10.00 each = $100.00 risk for $3,250.00 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></p>
<p align="center">TRADING MICRO-LOTS:
150 trades at $0.10 cents each = $15.00 risk for $236.00 profit.</p>
<p align="center">TRADING MINI-LOTS:
150 trades at $1.00 each = $150.00 risk for $2,360.00 profit.</p>
<p align="center">TRADING STANDARD LOTS:
150 trades at $10.00 each = $1,500.00 risk for $23,600.00 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. 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.

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<b><span style="text-decoration: underline;">3. THE FUNDAMENTAL TRADERS OVERVIEW:</span></b>
<p style="text-align: center;"><b></b><b>IS DRAGHI AND THE ECB COUNCIL A LAUGHING STOCK, OR ARE THEY JUST VERY CLEVER FECK**S?</b></p>
Those of you who have been following me for sometime will know that one of my favourite subjects to write about is the ECB. I have joint citizenship UK / Canadian citizenship and lived for 6 years in both Ireland and Spain. I have history in that part of the world, I find the politics fascinating but at the same time childish, amateurish, inept and 100% reactive. Yes…you guessed it I have very strong opinions of Eurozone politics!

Last Thursday the latest installment of the Draghi rock show took place. As usual he glided into the room as if 100% coated in Teflon, looking shifty like a corner street drug seller. He sits down in his chair and the pre-release document provided to him by Angela Merkel and the Bundesbank is read out and hard copies released to the press. Draghi’s testicles are connected to the AC in readiness for the Q &amp; A section while state of the art hidden strings and a virtual hand device are attached to his back. Finally, he placed a number of empty “Pepsi” cans on the table and placed an Adidas running shoe on this right foot.

The scene is now set.

Interest rates were left unchanged 45 minutes prior to the press conference and the much talked about negative deposit rates were not adopted. In my mind I thought this would be a non-event. He will divulge what in his mind (rather Angela Merkel’s) is a huge amount of information, without actually telling us anything. This is basically what happened.

Draghi is convinced that the markets will always buy verbal intervention without any evidence of follow through. This is a rather mis-guided belief in my opinion, Draghi did all he could to talk down the Euro at the press conference. At one point he actually said that the recent CPi numbers showing a Eurozone inflation rate of 0.5% was a surprise to him and that Easter coming late this year could be affecting the data. Holy Mother of God…an ECB President blaming Easter for his non-intervention… I have heard it all now.

Draghi continually said that the ECB council talked about easing, and talked about QE, in fact he thought long and hard about the implications of QE, surely to God he did all his thinking and researching on QE long, long ago not just in the previous 5 minutes…pathetic.

He had options to encourage growth in the Eurozone: -
<ol>
	<li>An interest rate cut from the existing 0.25%.</li>
	<li>A further LTRO (Long Term Refinancing Option).</li>
	<li>Full on Quantitative Easing.</li>
	<li>Negative deposit rates for Eurozone banks depositing money in the ECB.</li>
</ol>
Apparently all four of the options above were discussed but none of the board members felt any of them warranted a meeting with Angela to see if they could get permission to introduce one of these options to help Eurozone members and stimulate growth.

Draghi was told to remain dovish and this is what he did. He talked about stimulus…but talk is cheap. The Eurozone has DEFLATION and every politician and central banker is in denial even after numbers are released. It is quite a pathetic catalogue of quotes and excuses for no action.

So are Draghi and his cronies idiots and a laughing stock on the worlds stage or are they very clever feck**s?

Talk is cheap…he said nothing and did nothing and the EUR/USD dropped…result.

Draghi said he and he buddies at the ECB talked over all the options and that easing with conventional and unconventional measures are not ruled out. QE, Interest Rate Cuts and Negative Deposit Rates all discussed. He talked about the EUR exchange rate being increasingly important but it was yet to be a policy in its own right. He also said that the Eurozone economic outlook is still looking to the downside and that Protracted Stagnation is still a huge fear. All of these items are negative for the single currency moving forward.

On the single currency positive side he stated that the ECB council did not agree that March’s data should be used in isolation to affect their outlook. CPi was not as weak as PPi. (My daddy’s got a bigger one that your daddy!!). Deflation risks had NOT increased (lie) he stated that he expected April to pick up (Crystal ball time). The ECB were very, very happy with forward guidance (I am happy for them).

Those last two paragraphs basically summarized what happened.

The problem that I have is that Eurozone deflationary data has been published month after month and the ECB is in denial. They offer nothing other than verbal intervention and do nothing. They really do adopt the “Kicking of the can down the road” approach to all matters. The 2014 Pontius Pilate approach to managing the Eurozone is far from impressive and lacks decisiveness and leadership.

Quite frankly, although the German control of the Eurozone may add stability to the financial markets, it actually holds back the periphery. Record unemployment and stagnation is not an equitable trade off in my opinion.

Personally, I think the whole puppet approach to the ECB from Frankfurt and Berlin makes the ECB a laughing stock but they are clever feck**s the way they do nothing but are able to manipulate the markets. How long this manipulation can continue for is debatable, but as long as the markets are mis-informed yet still able to drive themselves forward on “GREED” based initiatives nothing will change. Central Bankers around the world do not want to make hard / tough decisions and bring “FEAR” into the marketplace so I think the people of the Eurozone in particular have to put up with Austerity, no jobs, poor social support and lack of spending on health, education and infrastructure. It's a very sad world.

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<b><span style="text-decoration: underline;">4. TRADER TOPICS:</span></b>
<p style="text-align: center;"><b></b><b><span style="text-decoration: underline;">MAXIMISING PROFIT POTENTIAL BY PROPERLY SIZING POSITIONS:</span></b></p>
Many traders begin trading by risking one lot (micro, mini or standard size) for each trade. For the purpose of this document, I am going to assume that the novice trader has already learned how to plan their entries and exits and have a TRADING PLAN.

Regardless of the magnitude of the trade, new traders tend to use the same size position for every trade. Therefore a trade with a 200-pip stop will carry 5 times the risk of a trade with a 40-pip stop. This means an uncontrolled variable can have a huge effect and can greatly adjust the results. To eliminate this variable all we have to do as traders is simply adjust the position size of a trade so that every trade carries with it a similar amount of risk. As I have written before I think that it is sensible to risk only 1% maximum of your account balance in any trade. This I think is an acceptable risk tolerance.

Calculating position is very easy. First take your account balance and multiply it by 1%.

A $10,000 account at 1% risk tolerance equals $100.00 per trade risk.
<div>
<p style="text-align: center;"><strong><span style="text-decoration: underline;">TRADE EXAMPLE - 1:
</span>EUR/USD</strong>
<strong>Present Price: 1.3800.</strong>
<strong>Stop Loss level: Fibonacci level 1.3855 (allowing 15 extra pips for stop loss run potential).  </strong>
<strong>Stop Loss level is therefore1.3870 (70 pips in total)</strong>
<strong>$100 (risk tolerance) / 70 (pips stop loss) = 1.42.</strong>
<strong>Rounding down for this trade the maximum limit is 1 x mini lot</strong>
<strong>Or</strong>
<strong>Using micro lots the maximum trade is 14 x micro lots.</strong></p>

</div>
<div>
<p style="text-align: center;"><strong><span style="text-decoration: underline;">TRADE EXAMPLE - 2:
</span>AUD/USD</strong>
<strong>Present Price: 0.9280</strong>
<strong>Stop Loss: 0.9320 (40 pips in total)</strong>
<strong>$100 (risk tolerance) / 40 (pips stop loss) = 2.5.</strong>
<strong>Rounding down for this trade the maximum limit is 2 x mini lots.</strong>
<strong>Or</strong>
<strong>Using micro lots the maximum trade is 25 x micro lots.</strong></p>

</div>
As you can see as you trade down in position sizes the flexibility in approach increases. Trading mini lots does not allow you to trade the maximum risk available within your TRADING PLAN.

In the above example, you can trade 2 x mini lots to meet your TRADING PLAN guidelines. However, by trading in micro lots you are able to trade 25 micro lots to maximize your trade size and also your potential profits without breaking your risk tolerance as per your TRADING PLAN.

Additionally, let us assume that the trade limit target was 0.9210. 70 pips below the entry level and that this trade played out perfectly.

If you had just traded 2 x mini lots as per your options your profit would have been 70 x 2 = $140.00.

However, had you traded 25 micro lots your profit from the same trade maximizing your risk tolerance would have been 70 x 2.5 = $175.00 (25% more).

This is very simple and effective without breaking your TRADING PLAN guidelines.

If you have a larger account balance the same applies when trading down from Standard Lot sizes to Mini lots.

This is all about making your trading work for you. In my daily trading activity I trade all three-lot sizes and trade standard, mini and micro lots based upon the currency pair that I am trading and the type of trade that I have entered (FLASH, RADAR or FUNDAMENTAL). This gives me as much flexibility as possible with my trading.

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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> USD/CAD</strong>
<strong>Long</strong>
<strong>Cost Average / Entry Level: 1.1061</strong>
<strong>Stop Loss: 1.0850</strong>
<strong>Limit / Target: 1.1600</strong>
<strong>Weekly Closing Price: 1.0980</strong>
<strong>Position - 81pips</strong></p>
<p style="text-align: center;"><strong>USD/CHF</strong>
<strong>Long</strong>
<strong>Cost Average / Entry Level: 0.8937</strong>
<strong>Stop Loss: 0.8800</strong>
<strong>Limit / Target: 0.9250</strong>
<strong>Weekly Closing Price: 0.8911</strong>
<strong>Position – 26pips</strong></p>
<p style="text-align: center;"><strong>USD/SEK</strong>
<strong>Long</strong>
<strong>Cost Average / Entry Level: 6.5442</strong>
<strong>Stop Loss: 6.5000</strong>
<strong>Limit / Target: 8.0000</strong>
<strong>Weekly Closing Price: 1.65533</strong>
<strong>Position +112 pips</strong></p>
<p style="text-align: center;"><strong>NZD/USD</strong>
<strong>Short</strong>
<strong>Cost Average / Entry Level: 0.8588</strong>
<strong>Stop Loss: 0.8650</strong>
<strong>Limit / Target: 0.8000</strong>
<strong>Weekly Closing Price: 0.8572</strong>
<strong>Position +16 pips</strong></p>
<b><span style="text-decoration: underline;"> </span></b>
<p style="text-align: center;"><b><span style="text-decoration: underline;">RADAR TRADES:</span></b></p>
<p style="text-align: center;">I have no LIVE RADAR trades at the moment.</p>
<b><span style="text-decoration: underline;"> </span></b>
<p style="text-align: center;"><strong><span style="text-decoration: underline;">FUNDAMENTAL TRADES:</span></strong></p>
<p style="text-align: center;"><strong>FUN14 (This trade is hedged from -150 pips)</strong>
<strong>GBP/NZD</strong>
<strong>Long</strong>
<strong>Cost Average: 1.9950</strong>
<strong>Stop Loss: 1.9000</strong>
<strong>Limit / Target: 2.2350</strong>
<strong>My Position Size: 7.5%</strong>
<strong>Closing Weekly Position: 1.9249</strong>
<strong><span style="line-height: 1.5em;">My present Profit/Loss position: - 601pips</span></strong></p>
<p style="text-align: center;"><strong><span style="text-decoration: underline;"> </span></strong></p>
<b><span style="text-decoration: underline;">6. TRADES THAT ARE ON MY RADAR:</span></b>

There are not a great number of trades on my radar this week. These will hopefully evolve as the week progresses. I am not trading for the sake of trading.
<p style="text-align: center;"><strong>AUD/CHF</strong>
<strong> Long:  </strong>
<strong> Limit order entry: 0.8250</strong>
<strong>Stop Loss: 0.8040</strong>
<strong><span style="line-height: 1.5em;">Limit: 0.8720</span> </strong></p>
<p style="text-align: center;"><strong>CAD/CHF</strong>
<strong> Long: </strong>
<strong> Limit order entry: 0.8100</strong>
<strong>Stop Loss: 0.7970</strong>
<strong><span style="line-height: 1.5em;">Limit: 0.8450</span></strong></p>
<p style="text-align: center;"><strong>AUD/USD</strong>
<strong>Short</strong>
<strong>Limit Order Entry: 0.9320</strong>
<strong>Stop Loss: 0.9350</strong>
<strong>Limit: 0.8500</strong></p>
I am looking at the commodity cross rates like the EUR/NZD, GBP/NZD, EUR/AUD, GBP/AUD, EUR/CAD and GBP/CAD as well as the AUD/NZD but right now these pairs need in most cases to cross certain levels in order for me to get interested in trading them, such as EUR/AUD. I hate trading this short and I really want to see a move back above 1.5000 before I can get serious. The EUR/CAD is another case in point; I really want to see 1.5150 again before I can get serious about trading this back in the long direction.

The reaction next week with the AUD/USD and NZD/USD will be instrumental on my trading activity in the sessions ahead.

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<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 1.3701.</b>  We close at the breakdown level. The next few trading sessions next week will determine the general direction of the upcoming forex moves in the market overall. As the most liquid currency pair the EUR/USD directs, pulls and influences currencies with it, whichever way it trades.  I see the trading range as 1.3640 to 1.3850. A break from this range should, I hope, set up the market nicely for some nice moves.

<b>GBP/USD: Closing Price 1.6559.  </b>We close the week below 1.6600. I had thought earlier in the week that should I witness this event I would be over this pair like a rash to the short side. I haven’t even thought about trading it.  I have real fears about trading cable as it has a nasty habit of getting you as a trader set up for a move and then it just turns about face and heads off in the opposite direction. Technically it looks like 1.6250 is next major support and then it does not get bullish again unless we break above 1.6750.

<b>AUD/USD: Closing Price 0.9288</b>.  There was a nice bullish run after NFP to take this pair back towards resistance at 0.9300. I am looking to short this pair again soon…I was going to enter short the same time that I shorted the NZD/USD after NFP but I wanted to wait for stops to be taken above 0.9300. That of course did not happen and now I face the timing issue of entering short.Ideally, I wanted to get short around 0.9320.  The trading range that I will be monitoring over the coming sessions is 0.9200 to 0.9320.

<b>NZD/USD: Closing Price 0.8572</b>.  Just like the AUD/USD, this pair had a lovely little bull run to enable all those traders like myself to enter short around 0.8600. At this level you know what your ultimate risk is, which is of course multi year highs at 0.8693. Support that I really want to see taken out lies at 0.8450.

<b>USD/CAD: Closing Price 1.0980.</b>  I am getting very frustrated by my home- based currency. It really does live up to its name the “Loonie”. I am still bullish as long as we are above 1.0880, which is a multi year support trend line. I really want a loonie move to take out resistance above 1.1230 to really set this pair up for a run at 1.1600, which is where I think the technical stake us. I fear that we will hover around 1.0950 to 1.1050 for a while. There is no major CAD news this week so hopefully it will consolidate and get ready to bounce upwards.

<b>USD/CHF: Closing Price 0.8911</b>.  I am long this pair and looking to add other CHF crosses. I have as per the section TRADES ON MY RADAR two further limit orders waiting to be triggered. We closed above 0.8900, which was crucial. Now I believe that a move to 0.9300 is possibly worth talking about in the medium term. We shall see if that trade will happen early next week depending upon the first few trading sessions, nevertheless I remain bullish this pair as it is in breakout territory. The trading range that I am looking at is support at 0.8850 and resistance at 0.9000.

<b>USD/JPY: Closing Price 103.23.  </b>This pair closes the week up over last weeks close but down significantly on where it started just prior to NFP. The next few sessions will be crucial for the USD/JPY and all the JPY crosses. If equities start to sell off, Abe’s vision of a weakening JPY currency may be placed on hold for a wee while. The range going forward that interests me is support at 102.60 and resistance back at 104.45.

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

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

SUNDAY: N/A.

MONDAY: N/A.

TUESDAY: N/A.

WEDNESDAY: USD – FOMC Meeting Minutes.
WEDNESDAY: AUD – Employment Data.

THURSDAY: N/A.

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

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

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

Not a huge amount of news items catch my eye this week. There is not much to talk about in my view; I think equities will direct the forex market over the next few sessions. Only the FOMC and Australian Employment Data really interest me

As you know, I am always looking for the signs that show that equities are starting to reverse and with the NASDAQ sell off on Friday last week, this could be where it starts. The EUR/USD is on the cusp of a breakdown and this will also pull the forex market.

In addition, I still think that there is a degree of uncertainty in the equity market regarding the grind higher and any excuse will be used to both start and justify the pullback / correction.

Therefore, this is not a time to be a hero. Do not try to pick tops or bottoms just go with the flow and trade if you see an opportunity. Do not force trades let them come to you?

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

Scott Pickering
The Pip Accumulator
Saturday April 5th 2014

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

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