Sunday, February 20, 2011

Pre-Release FX Market Analysis February Week 4

This week we will be looking forward to a pound for a much more dollars. Let discuss the play.

A fine example has been shown last week. EUR were bullish on Friday last week by the hawkish statement from ECB member Bini-Smaghi and this sentiment will be brought up to this week trade. Below are the quoted statements. 

“Today’s comments from ECB member Bini-Smaghi further confirm that some members of the central bank are thinking along the same line as investors. Bini-Smaghi said point blank that the “ECB may raise rates as press pressures mount” He said the central bank has repeatedly communicated its alertness and can take pre-emptive action if needed.”

We are well learned that the correlation between currency pair cannot be put aside. A simple example which trader A sell USD Buy GBP and once GBP are too high, Trader A Sell GBP and looking for low yield currencies. Fund being transfer all the time depend on which will benefit traders the most. So in this case, USD is being in least favour to the traders because of its unstable statement and flips flopping momentum.  The currencies that will be most benefit from this is GBP & EUR with their strong fundamental support.

So here we look at the strong and trendy currency which at this moment were EUR, GBP & AUD. This both 3 have quite stable correlation statistically and part of the element that we want to see is that they are now come up with bullish technical probability. Technically these 3 major currencies have a very high probability on pawning USD next week. 

The best trade for this week would be on Wednesday where the MPC Meeting Minute will be held. Forecasted where 3 of the members voting for a GBP interest rate hike. It’s best advice to trade on sentiment on this very day.   

*** REMEMBER... Every strong thrust neither bullish nor bearish always had been powered by a good retracement. Market move in wave, just make sure next week we ride the bull from the ground.  Buy Low & Sell High. ***
Let’s put a simple summary on last week commentary and find conclusion toward next week trade. Fill this up for this week trade on GBP/USD; Rumour, Probability, Data, Pattern & put a Conclusion toward the trade on either to go short or long. Well, this will be an easy homework for you all.

By the way, for those who already has an account (FXCM) with ASIA ALLIANCE CAPITAL will get our full FX Market Analysis on those 4 elements plus complete drawing on chart technical probability.

I have written about the market elements. Click here to read.

P/S: The trade that I’ve been waiting for is on the month of March, 1st week. The title will be ‘Will this be the last Bullish for GBP?’ I’ll quote Jesse Livermore book on how he plays the games.   

The currency pairs that I will look closely on this week are GBP/USD, GBP/JPY & AUD/USD. These pair have high technical probability & strong fundamental support but carrying less risk. But if there is any opportunity on other pairs, surely I will update the post.

Thank you. 

Kind Regards,
Ahmad Shahmi Ahmad Nordin

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Monday, February 7, 2011

The 4 Element of Market Analysis

Hello everybody,

Below is my article for this week. Feel free to read.

There are 4 elements in Market Analysis;

1) Rumours
2) Probability
3) Data
4) Pattern

Each of the element play a significant role in contributing into the movement of the market price.  To understand each element, we need a simple method called balance trading which interpret in a better word a hybrid approach.

Let discuss each element.

Rumours are what you read on the market commentary. It’s basically an unverified account or explanation of events circulating from person to person and pertaining to an price, event, or issue in public concern. Rumour can be taken from 2 type sources which are Probability and Data. Most of the time, rumours create sentiment in the market.  

Probability is a way of expressing knowledge or belief that an event will occur or has occurred. Which when we interpret into FX will be the knowledge of technical analysis. From this part of studies, we need to find the probability of certain price level which at the historic pattern movement create a simple probability of bullish or bearish movement.

Let’s take an example of Fibonacci Retracement;

There is a swing form from point A to point B. The retracement preferred bounce level is around 61.8%. So here I put a probability of the price will hit 61.8% Fibonacci level and after that bounce back to the specific level which are also a probabilities.

Probability can be put as sums of all hidden connections between price and technical pattern. Technical Analysis in specific is a Probability Analysis.  

The term data means groups of information that represent the qualitative or quantitative attributes of a variable or set of variables.

In FX we’re using data from an Economic Calendar which soon be interpreting in our daily trading. Some data can bring high impact to the currency market and some are low.

Data can also bring sentiment to the market by their connection to the rumours of speculation on the data. This can make an obsessive amount of misleading toward the real market price.

In trading, pattern can be defined as sum of trading experiences. Part of our everyday trading, we’re collecting price pattern which include momentum, price action, price probabilities, data action and etc.

This pattern somehow generates a better understanding toward our trade. Most of cases show that senior traders made more accurate position than a new traders. Part of the building a pattern is by acquiring knowledge from senior traders by attending a courses and seminars. There is no complete knowledge as some suggest as there is no fact in the market itself. The will to understand the theory depend on each person and their capabilities. Some may proceed with only probability and some act more on data feeds. Each trader has their own way of studies and proceeds with their pattern reading.      

The general meaning of pattern is your trading skills.

Conclusion to these 4 elements is that we need to study the market before we jump into trading. Regardless of what one understands, the market always reacts by these elements. To be in any single element will contribute frustration and confusion toward our trade.

The best part about mastering this 4 element, you can already reason the movement of the chart. Moreover, you might consider making your own Market Analysis and try to compare it to other a senior market analysis. 

By all mean, there are no ends toward knowledge. Every day is a new day and everyday people change. Changes are what impact the market most of the times.     

That is rumour, probability, data & pattern. Hope you guys enjoy it. ^_^

Good luck & Happy Trading!  

Warmest Regards,

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Friday, February 4, 2011

Pre-Release - Weekly FX Market Analysis

Hi all, 

Below are our Key Support & Key Resistant for next week.

Key Support: 1.59000 Minor Support: 1.6050
Key Resistant: 1.63000

If the price is around 25pips below or above this key S&R, please proceed with a Bounce Strategy.

The sentiment for GBP/USD for next week will be bullish base on high probability of GBP interest rate hike. Probability been brought up earlier on 26 January 2011 in the Monetary Policy Committee (MPC) Meeting which 2 out of 9 members of this commitee cast a vote to increase interest rate. 

Data: Interest rate decision for GBP/USD will be on 10th February 2011.    

Technical Probability: As for now, we can see that the market approaching the 0% of Fibonacci Extension on 4 hr graph. There are also a minor support for GBP/USD which hold at 1.6050 base on October, November and January S&R. Any approach of buying at this point must be supported with a stop order. 

Pattern: Please be aware of incoming news and any technical setup in other pairs due to probability of early price corrections.

Happy Trading.

Warmest Regards, 

For more information on our Weekly FX Market Analysis, please sent your interest to

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