trading trends end of week post

Technical Analysts say that repetitive patterns are the corner stone to all charting systems and so this week I have been looking for some patterns that I can incorporate into my strategies.

I already look for what are called “Inside and Outside Bars” for clues when to get into and out of trades. Having watched a webinar for the software (Metastock) that I use for analysis of UK Companies like XEL and GKP I now have started looking for a few more candlestick patterns, using the Stochastic indicator. Here’s a link to help guide you – http://youtu.be/1fB3EF7XeXU

Earlier in the week I spotted that Gulf Keystone was in a “Bull Flag” which then turned into a “Bull Pennant”. It looks likely that we get to the apex and break either way. If we can close either above a recent high then the odds look good for a continuation of the recent bull run. When I consider the price action in GKP that has happened these last couple of weeks, it definitely looks to me as though the downtrend is now coming to an end or, in fact has ended. 

GKP DAILY CHART

Unfortunately my long term hold in Xcite Energy doesn’t look as easy to trade and unless we get some real movement towards the key £1 level, I fear we’ll be stuck here for a bit longer.

XEL DAILY CHART

The mentors that I trained with have given us an automated strategy to test and over the last couple of weeks I spent a lot of time back testing it. At the end of the month, I will be able to show how well the strategies work together without any influence from me. To follow their results go to http://www.myfxbook.com/members/iamnev/fxcm-1247255/339999. If, by the end of this month, I have as positive result as I have this last couple of weeks , I will put the auto trading on to a small account and see how well it does with real money.

The actual trading that I have done this week has not been as profitable as I would have hoped for. Normally when the account doesn’t move either way, it just means that we are in a consolidation period or that the prevailing trend has reversed. Due to the Monday 9th madness that I detailed on this blog and where I closed out my positions for a loss of -2.2%, I have spent all week just getting the account back up to break even for July. I have several open trades and the open P/L is positive for the month so far, so I am hopeful for the rest of July that I will end the month up!!

My short EUR/USD trade looks like it is one that may go against me. On the daily chart the Stochastics are oversold, and on Friday we had an outside Bullish reversal. If price closes above the 8 ema , I will be a lot more concerned but as I am following the strategy that got me in to this trade I wont exit until that indicates me to do so. My USD/CHF is exactly the inverse to the EUR/USD trade.

EURUSD CHART

The EUR/GBP, EUR/JPY and GBP/CHF are all going in the right diection and the EUR/GBP is looking particularly Bearish with the GBP/CHF looking very Bullish. The moving averages are all spread apart and the only thing that I am watching is the fact that price is moving far away from the 8 ema. At some point it will be attracted back to that ema.

The reason for looking into different ways of analysing charts, even though I have strategies to follow, is that at some point I hope to increase the probabilities of getting the most out of the trend. Knowing what a reversal candlestick pattern looks like will prove invaluable to tightening stops. Knowing when to get out of the trade or locking in profits is one thing, knowing when to get back in without risking the gained capital is another. The strategy that I follow calls for large stops that trail along at quite a distance. This is generally not a problem as the strategy also comes in 2 parts. The first part closes quite early and then you are trading the second part at break even or better. My aim is to try and recognise the false signals that sometimes get me into a trade when I shouldn’t have – easier said than done as no doubt many of you can relate?!!

Fingers crossed the next 2 weeks are profitable for all.