WEEK ENDED 1.3.2014

Let us have a look at a few major forex pairs, namely EURUSD, GBPUSD, GBPJPY and USDJPY.
But provided I have time to do a review on all four pairs.

First forex pair up for review is EURUSD.

1 HOUR CHART

As you can see, it has quite a few signals for entry, due to the recent 'side-way-ness' of the EURUSD pair.

The first buy signal (blue circle on the far left) was a failed signal.
Entry could have been around 1.36340
Price dips to a low of around 1.3480 - a massive drops of 154 pips!
Now, my normal trading way is to set a Stop Loss (SL) of 200 pips, so in this case I have survived.
Is a bit of a mental game, once you set your SL, please forget it. If you keep going back to check your position most likely when your trade drops more than 100 pips - you will be in panic mode and bailed out manually.

Looking at the next sell signal (the yellow circle in middle), I consider this a failed signal as well.
Entry could have been around 1.35410
Price dips to low of around 1.3480 - a small gain of 61 pips.
Being greedy like most of us do, which means we will be holding on tight and hoping for more gains.
And then tragedy strikes...prices rebound upwards and trending upwards which bring us to the last buy signal (blue circle on far right).

The last buy signal occurs on 11 Feb 2014.
Entry could have been late since this is a manual entry strategy.
Let us assume entry at 1.36805
Last price closes at 1.3798 - a small gain of 118 pips.

Now as usual, my advise is to move your Stop Loss and Trailing Stops once you are in the pips (gain).

Overall, could have been a net gain of > 118 pips (assuming the first two signal we bagged in some pips from our Trailing Stops/Stop Loss.

4 HOUR CHART

 

 
Again, we can see 4 Hour chart gave us similar bad signal for entries.

The first blue circle on the far left, consider this as a average entry, not perfect as you can see prices reverses down shortly after.
Entry could have been on 1.32680
Price peak to around 1.34000 - making a gain of 132 pips

Thereafter prices make a reversal and drops to 1.2809 triggering a sell signal (yellow circle).
Price drops further to 1.2758 - a small gain of 51 pips
But it made a sudden reversal and has been trending up since then.

The last buy signal (blue circle on right) on 22 July 2013
Entry could have been on 1.3235
On 6 Sept 2013 prices dips to 1.3104 - represents a drop of 131 pips - missing our Stop Loss of 200 pips.
At recent price of 1.3798 - that will be a massive gain of approximately 563 pips!

So in fact, having Stop Loss of 200 pips is sufficient.
For those who are more risk-adverse, by setting Trailing Stops - your entry could have been exited long time ago before it reaches today's target of 563 pips.

DAILY CHART

Daily chart shows a recent buy signal on 20 September 2013.

We probably entered late at 1.35080.
Price did a massive drop of 215 pips on 7 November 2013 - wiping out this trade.
But of course, it did made a peak of 1.3832 on 25 October 2013 - a potential gain of 324 pips. For a few lucky and less riskier trader - this will be their exit point.
For those who are greedier, the 200 pip loss is guaranteed.

Next, we will review GBPUSD!