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

Another week into 2013 and I am both frustrated and  bored with the Forex markets.

I am making money but......... because in the past when I first started trading, I used to make so many silly moves to enter trades, and, I was burnt so many times on entering long at the top,  and short at the bottom of moves, I vowed once I got my head and brain in gear never to do this again. Adopting this discipline, I must have watched $1,000's of dollars pass me by on the  numerous JPY trades that I could have just jumped into gone long and closed my eyes. For this reason I am frustrated. My trading plan, from which I am now very disciplined by, is clear and unambiguous......"NO CHASING TRADES" so I don't.

The relentless rise/weakness in the Yen has been without doubt the big trade of 2013 so far. I talked about it's possibility via this blog in 2012 and made good money in the early stages of the move but the last 300-400 pips have passed me by. It's enough to drive you to drink if you were weak....can you imagine then how I felt when the unwinding trade of the year took off and caught almost the entire trading community by surprise. Yes, the EUR/CHF has started to unwind..........500 pips in 6/7 days....I completely missed this move, although on the first day of the move, maybe 7/8 days ago, I remember tweeting something along the lines of  "Why is the EUR/CHF moving? Groups in Switzerland were calling for the peg to be raised to 1.2500 from the existing level of 1.2000. During the past week it hit 1.2500 but pulled back yesterday to rest at 1.2440.

As mentioned in last weeks blog, I am currently trading and have made $$$ out of the GBP/USD short and I still see further downside potential. After the China GDP release on Thursday night, I went short on the AUD/USD but never committed to other than a short-term scalping set of trades. I did this on the back of the fact that the numbers were positive and that the knee jerk reaction lower, would be just that, a knee jerk reaction and I did not want to end up being short when after the dust settles the Aussie would be pressing 1.0600!! Well, I got that wrong!!

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<span style="text-decoration: underline;"><strong>2. THE VIEW FROM MY TRADING DESK:</strong></span>
<p style="text-align: center;"><strong>THIS IS THE TIME NOT TO CHASE....BUT TO LET THE TRADES COME TO YOU</strong></p>
I was going to write about my favourite subject; The Eurozone, following UK Prime Minister highly anticipated speech on the UK and the Eurozone that was to have taken place yesterday. By all accounts this 800lb gorilla in the room was about to get more than a bunch of bananas thrown at it. Regretfully, because of the Algerian Hostage on-going situation DC's moment in the limelight to savage the Eurozone and its bureaucarcy has been postponed.

Instead, I thought it a good time to look at trading characteristics that sometimes goes unnoticed.

Early last week I was "Tweeting"  about the fact that trading was so range bound and tight and that the Fx markets were being held hostage by the S&amp;P being in such a tight range, maybe it would be a good time to go on a break for a week or so hoping that things might have freed up upon your return.

The one thing I am exercising so well right now is patience. It has been said so many times that patience is a virtue.....well to be successful in trading the Forex markets you have to demonstrate the ability to be patient. Wait for the trades to meet your criteria before entering a trade.

This is what trading the Fx markets is all about. You cannot be in every trade and you cannot get in at the lowest level going long nor can you get in at the highest level going short. You will miss trades......many, many trades will pass you by. The key is to keep disciplined and let the trades come to you. Set your levels, set  your exit and manage your risk accordingly. I remember being told sometime ago, You cannot lose money in a trade if you are sitting in cash, a rather obvious statement. It is better to miss out on one trade than risk an entry. In fact, I am getting so disciplined now, I am starting to think of myself being a Risk Assessor/Manager rather than Fx trader. At the end of the day risk assessment is closer to what I am doing.

There are so many big moves in play right now. All the JPY pairs are relentless in their goal to weaken, there have been so many multi-hundred pip moves, plus the EUR/CHF is on the tear as well as many of the EUR crosses. If you missed the move and like me you will not chase pairs either up or down, you must find the markets a little frustrating. It is better to be frustrated sitting with cash in your broker account that be in a risk trade because you are chasing the market.

I think what has frustrated me more than usual is that the commodity currencies linked to the USD; AUD/USD, NZD/USD and USD/CAD in particular,  pairs I would trade daily, have been so range bound not really moving that I have not been looking at them much. I have my desired entry and exit levels in position but I am having to wait for the movement to come back into the market. This will only happen if the S&amp;P breaks out of it's clearly defined trading channel  to the long or to the short side. I do not care which way, I just want a break out!!

There are major news events on the horizon that will deliver huge volatility to the markets......next week we have the BOJ Policy delivery where the BOJ has to say that they are going to fight tooth and nail for a 2% inflation target.....any wayward delivery and the JPY could be smashed.....Eurozone news has been less headline seeking of late as the cost of government borrowing has decreased, in particular, this is really helping Spain and Italy...but Portugal also. This WILL NOT last forever. As I tweeted and blogged last week nothing has really been fixed in the Eurozone it is just the can has been kicked down the road a little bit further. The U.S. senate and congress are still at loggerheads over the on-going debt and the various cliffs that are in front of the U.S. The republicans appear to be hell bent on creating as much havoc as possible. We could see downgrades from the rating agencies.

There are plenty of news items that can screw with your trades. Take this time to look around the currency pairs, make notes of interesting levels and create orders..if they trigger all well and good if they do not  - do NOT force them.

I reiterate, now is the time to let the trades come to you - do not rush in just to trade.

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<span style="text-decoration: underline;"><strong>3. MY CURRENT LONGER TERM TRADES:</strong></span>

<strong>GBP/USD:</strong>
From last weeks blog, I was able to find an initial entry that suited short. I have traded in and out of this pair for the last few days. I have banked great profits so far. The trade is set up to hopefully fall further this week. Yesterday, we had one huge "Red"candlestick and a broken trend line through 1.6000 that has been supporting this pair for weeks. Institutional traders will be looking at this candlestick and will be setting themselves up for a continuation of the downside move. My longer term goals are for a move to the mid 1.50's at least. The UK Chancellor, George Osborne wants the GBP lower and it looks like it could be "Ball in his court". Nothing is guaranteed, but this pair does look bearish. I will add again to take this trade to an 80% and then 100% size on a break below 1.5800 and 1.5750, the latter is a very big level of support.
<p style="text-align: center;"><strong>GBP/USD</strong>
<strong>Short</strong>
<strong>Closing Price:1.5864
Current Position: +25 pips</strong>
<strong>Cost Average: 1.5891</strong>
<strong>Trade Size: 60%</strong>
<strong>Stop Loss: 1.5924</strong>
<strong>Limit/Target: 1.5500</strong></p>
<p style="text-align: left;"><strong>EUR/GBP:</strong>
I entered this trade early yesterday to establish a short position based upon 0.8400 being a good resistance level. Now, not so sure about this trade but I will review and tweet my actions.</p>
<p style="text-align: center;"><strong>EUR/GBP</strong>
<strong>Short</strong>
<strong>Closing Price: 0.8394</strong>
<strong>Current Position: -32 pips</strong>
<strong>Cost Average: 0.8364</strong>
<strong>Trade Size: 20%</strong>
<strong>Stop Loss: 0.8427</strong>
<strong>Limit/Target: 0.8250</strong></p>
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<span style="text-decoration: underline;"><strong>4.  LOOKING AHEAD INTO THIS WEEK - THE KEY SUPPORT AND RESISTANCE LEVELS IN THE USD MAJORS:</strong></span>

<strong>EUR/USD Closing Price: 1.3319.</strong> This pair despite all the "Huff 'n Puff" is still stuck in a range of 1.3300 to 1.3400. It flirted below 1.3300 for a period today but could not sustain the move. Many analysts still believe that we are in the middle of a  move to 1.4000 with this pair but it's failure to take out 1.3400 on about two or three attempts so far has me not so sure. I do not care one way or another, but I would imagine that there are lots of stops just above 1.3400 so if it should break it would springboard to 1.3500 pretty quickly. The EUR cross rates up to yesterday had huge upside moves, EUR/CHF, EUR/GBP, EUR/CAD, EUR/NZD, EUR/JPY etc and these helped keep the EUR/USD above 1.3300.
There will be volatility next week associated with the Eurozone and this could manifest itself by creating a downside move in the EUR/USD, however it could of course have the opposite effect. The market is geared for an upside move so a move lower could shift sentiment to a bearish tone. This would add to the drag on the GBP lower. Key support levels are 1.3250 after 1.3300. A break of 1.3250 would gear sentiment bearish. Upside resistance is at 1.3400, then 1.3460 and 1.3500.

<strong>GBP/USD Closing Price: 1.5864.</strong> This pair ended the week with a massive bearish candle and a break through the key supporting trend line that had held the pair above 1.6000. Sentiment is definitely bearish and it will take a huge market move to change direction. I see 1.5800 before 1.6000 being re-tested again. The charting pattern is very definite and the moves whilst looking somewhat oversold are very powerful. A pullback should be on the cards, if it is only shallow it will further support the downside move. Support lies at 1.5800 then 1.5750. Resistance is at 1.6000 and then big resistance at 1.6100.

<strong>AUD/USD Closing Price: 1.0509.</strong> This pair has drifted below 1.0500 for a couple of short periods in the past few days. The trading range is now 1.0490 to 1.0630. This pair needs to break down or break out to the upside in style to get things moving. The problem is, the S&amp;P is holding all the commodity pairs hostage. The S&amp;P is trading in a very tight range and until it breaks free the commodity currencies, in particular, are range bound.

<strong>NZD/USD Closing Price: 0.8365.</strong> The trading range in this pair is basically 0.8300 to 0.8400.

<strong>USD/JPY Closing Price: 90.08.</strong> What a currency pair. The politicians in Japan, in particular, Shinzo Abe the Prime Minister want the Yen weakened at all costs. One of his junior ministers at the start of last week poured cold water on the fact the Yen was weakening too fast. The Yen strengthened as as result of his comments. A day later Abe, give him a good slapping and then he retracted his comments and then the Yen weakened across the board in spectacular style. Now we closed the week at 90.00. After here we look towards 90.50, then I think we are off to 95.00, with a few stops on the way. Support is at 88.60.

<strong>USD/CAD Closing Price: 0.9916.</strong> If this pair moves above 0.9950, I think its time to get very, very long the USD. This pair has been so range bound for so long it is wound up like a coiled cobra waiting to pounce. Support 0.9880 and resistance 0.9950.

<strong>USD/CHF Closing Price: 0.9340.</strong> Support is at 0.9250 and resistance at 0.9400. This pair has been moving quite well this week on the back of the cross rates EUR/CHF an GBP/CHF.

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<span style="text-decoration: underline;"><strong>5. MAJOR NEWS EVENTS THAT INTEREST ME IN THE NEXT WEEK:</strong></span>

The chances of mucho volatility this week are heightened on Monday as the U.S. markets are closed.

MONDAY: EUR - There are a series of Eurogroup meetings/wine tastings/major hospitality events. Be on alert for a dumb quote/sound-byte from an idiot politician.
MONDAY: JPY - Monetary Policy Statement and BOJ Press Conference. The biggie...be ready.

TUESDAY: EUR - "Super" Mario Draghi set to mutter a few words of wisdom.

WEDNESDAY: GBP - Unemployment Numbers and MPC Minutes.
WEDNESDAY: - CAD - BOC Rate Statement and Interest Rate, plus a BOC Monetary Policy Report and a Press Conference...no less.
WEDNESDAY: - CNY - HSBC Flash Manufacturing PMi

THURSDAY: EUR - German Flash Manufacturing PMi

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<strong><span style="text-decoration: underline;">6. CLOSING THOUGHTS AND COMMENTS:</span></strong>

Should be an interesting week for trading ahead. As I have said a couple of times already in this blog, let the trades come to you and do not over extend yourself believing the trades will come back to you. Set your stops and stick to them.

As I have said several times before, trade nimble with wide stops and prepare for volatility.

Good luck,

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Scott Pickering
The Pip Accumulator
Saturday January 19th 2013.

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