Monday, January 18, 2010

My trading setups for the upcoming week

I used to call this segment 'Right on the money', but after I figured in trading you can never really be right on the money unless you have a crystal ball, so I dropped that after a few posts. I used to try to 'predict' the best pairs to trade and help other people make some money in the meantime and I actually did! But I'm going way of course now so let's get to the point.
Wall Street closed today because of MLK day, but I haven't sit still doing my usual research and found a few interesting things. Interesting enough to leave a message here. I'm going to use the classic charts I've been using because I think they'll give more instant overview of what is going on.
I have a few trade setups lined up for tomorrow or when they hit target prices.
First setup is the EUR/USD.

Stocks in Europe were up by 0.72%, which means it is likely that the DOW will finish stronger tomorrow, a classic recession pattern is always that the EUR will gain strenght when this happens because investors are willing to take on more risk abroad. I'm going long this pair if I can find a good entry point, most likely around 1.4395 or if I can get it cheaper since this is going to be a swing trade having targets set @ 1.4450.

Here's an interesting one. I'm not quite familiar with this pair but I know a good entry point when I see one. First of all my SSI (Speculative Sentiment Index)  is through the roof. More then 78% of traders are long this pair and I can see why. The USD trading at it's low support level in a long time against the CAD. I'm joining the club and go with a buy position @ 1.0250 if I can get it, along with the herd this time, still cautious having my SL set @ 1.0180.

Then there a real interesting one the EUR/JPY. I often don't do cross currency trading because of volatility issues equals higher risk, but you can make a lot of money doing it. Let's take a look.

Now this trade is based on a technical swing trade if the pair drops below 1.3015, if it rises higher especially above 1.31 the trade would become invalid. This is a buy. with 1.3120 as a target.

So far all my trade prospects have been BUY BUY BUY! (EUR/USD buy, USD/CAD buy and EUR/JPY buy)

Disclaimer:

All opinions expressed, trade recommendations/advice on this website are solely of John van der Munnik and are not affiliated with any investment firm or any other organization. You should not make an investment only based using this website VDM Trading for your trading needs without seeking help from your own financial advisor.