FX Path

EUR/JPY - Near Bottom of Large Triangle

James Chen — Thu, 19 Nov 2009 16:42:25 +0000

Price action on EUR/JPY, a daily chart of which is shown, is displaying dramatic yen strengthening today on stock market declines that is also abundantly clear on other major yen pairs/crosses like USD/JPY and GBP/JPY. In the case of EUR/JPY, price has descended all the way down to approach a dynamically-ascending support line extending from the April low. For more technical analysis on this currency pair, please click here for Thursday’s (11/19/2009) Chart of the Day.

- James Chen, CTA, CMT

* For information on my book, Essentials of Foreign Exchange Trading (Wiley), please click here.

* Follow my intraday forex updates on Twitter: http://twitter.com/JamesChenFX

Upcoming Webinar - Honing in on Oscillator Analysis

James Chen — Wed, 18 Nov 2009 18:44:29 +0000

I will be holding an FXstreet.com Premium webinar next week on Monday, November 23, 2009 at 16:00 GMT (11:00 AM U.S. Eastern Time) entitled, Honing in on Oscillator Analysis.

Oscillators are often considered by traders to be secondary indicators reserved for confirming momentum
and overbought/oversold conditions during sideways trading ranges. Many traders have not yet taken advantage of the power of oscillator analysis during all market conditions. Discover the ways in which an oscillator can take center-stage as the primary analytical tool for trading in the forex market.

For more information and to pre-register, please click on the following link for more information: http://www.fxstreet.com/live/sessions/session.aspx?id=4a76b1b2-580c-4f48-a9cb-a7356c735f5f .

Hope to see all of you FXstreet.com Premium members there!

- James Chen, CTA, CMT

* For information on my book, Essentials of Foreign Exchange Trading (Wiley), please click here.

* Follow my intraday forex updates on Twitter: http://twitter.com/JamesChenFX

AUD/USD - New 15-Month High

James Chen — Mon, 16 Nov 2009 17:07:22 +0000

Price action to start the week on AUD/USD, a daily chart of which is shown, has just tentatively broken through to establish a new 15-month high for the pair, but only by a handful of pips thus far. This currency pair continues to operate within the context of a long-term uptrend extending from March. For more technical analysis on this currency pair, please click here for Monday’s (11/16/2009) Chart of the Day.

- James Chen, CTA, CMT

* For information on my book, Essentials of Foreign Exchange Trading (Wiley), please click here.

* Follow my intraday forex updates on Twitter: http://twitter.com/JamesChenFX

Webinar Recorded and Posted - Combining Candlesticks with Western Technical Analysis

James Chen — Mon, 16 Nov 2009 14:08:48 +0000

The webinar I gave last week entitled, “Combining Candlesticks with Western Technical Analysis,” has been recorded and posted for all to view. Please click on the following link to view the recording: http://transcripts.fxstreet.com/2009/11/combining-candlesticks-with-western-technical-analysis.html . Thank you!

- James Chen, CTA, CMT

* For information on my book, Essentials of Foreign Exchange Trading (Wiley), please click here.

* Follow my intraday forex updates on Twitter: http://twitter.com/JamesChenFX

EUR/USD - Bearish Correction within Uptrend

James Chen — Fri, 13 Nov 2009 16:47:24 +0000

Price action on EUR/USD, a daily chart of which is shown, has corrected back down to an uptrend support line after falling short of re-testing the 14-month high just above 1.50. Until a significant downside breach of this support trendline occurs, this currency pair is still very much in uptrending mode. The key upside level to watch is still in the region of the 1.5060 long-term high, as any significant breakout above this level would confirm a continuation of the uptrend that has been in place since March. For more technical analysis on this currency pair, please click here for Friday’s (11/13/2009) Chart of the Day.

- James Chen, CTA, CMT

* For information on my book, Essentials of Foreign Exchange Trading (Wiley), please click here.

* Follow my intraday forex updates on Twitter: http://twitter.com/JamesChenFX

Webinar Reminder - Combining Candlesticks with Western Technical Analysis

James Chen — Thu, 12 Nov 2009 15:16:09 +0000

Just a quick reminder that I will shortly be giving a webinar entitled “Combining Candlesticks with Western Technical Analysis.” It is open to all, and will be held today, November 12, 2009 at 17:00 GMT (12:00 PM U.S. Eastern Time).

Learn how to identify the best combinations of Japanese candlestick patterns and Western technical analysis to find high-probability forex trading opportunities. When used in conjunction with each other, this powerful combination unveils potential entries and exits that are far more reliable than when either element is used alone.

For more information or to register for this free webinar, please click on the following link: http://www.fxstreet.com/live/sessions/session.aspx?id=03d77947-739f-4631-b04e-5d5dacdef86a .

I hope to see everyone there!

- James Chen, CTA, CMT

* For information on my book, Essentials of Foreign Exchange Trading (Wiley), please click here.

* Follow my intraday forex updates on Twitter: http://twitter.com/JamesChenFX

USD/CHF - Bearishness Approaches 15-Month Low

James Chen — Wed, 11 Nov 2009 17:03:56 +0000

Price action on USD/CHF, a daily chart of which is shown, has dropped to within just a few pips shy of the 15-month low (1.0030) that was hit just a couple of weeks ago. This occurs within the context of a clear and continuing accelerated downtrend that has been in place for almost a year now. For more technical analysis on this currency pair, please click here for Wednesday’s (11/11/2009) Forex Chart of the Day.

- James Chen, CTA, CMT

* For information on my book, Essentials of Foreign Exchange Trading (Wiley), please click here.

* Follow my intraday forex updates on Twitter: http://twitter.com/JamesChenFX

USD/JPY - Triangle Consolidation within Downtrend

James Chen — Tue, 10 Nov 2009 16:07:34 +0000

Price action on USD/JPY, a daily chart of which is shown, is currently on the verge of a bearish breakdown below a newly-formed symmetrical triangle consolidation pattern. This occurs in an overall environment of USD/JPY bearishness within the context of a general downtrend that has been in place since April. Within this downtrend, price has broken down below several bullish corrections and pattern consolidations, as shown on the chart. For more technical analysis on this currency pair, please click here for Tuesday’s (11/10/2009) Chart of the Day.

- James Chen, CTA, CMT

* For information on my book, Essentials of Foreign Exchange Trading (Wiley), please click here.

* Follow my intraday forex updates on Twitter: http://twitter.com/JamesChenFX

AUD/USD - Reaching for New Long-Term Highs

James Chen — Mon, 09 Nov 2009 16:06:57 +0000

Substantial dollar-weakening to begin the week has just approached the 14-month high for AUD/USD, a daily chart of which is shown. This occurs after price action broke out cleanly above a short-term downtrend resistance line extending from that high. AUD/USD, much like EUR/USD, continues to operate within the context of a long-term uptrend extending from March. Also much like EUR/USD, if the 14-month high on AUD/USD (around 0.9325) is broken strongly to the upside, an uptrend continuation will have been confirmed. For more technical analysis on this currency pair, please click here for Monday’s (11/09/2009) Chart of the Day.

- James Chen, CTA, CMT

* For information on my book, Essentials of Foreign Exchange Trading (Wiley), please click here.

* Follow my intraday forex updates on Twitter: http://twitter.com/JamesChenFX

Turtles Trading

James Chen — Fri, 06 Nov 2009 17:14:18 +0000

Just to provide some light reading for the weekend, I wanted to talk briefly about the famous “Turtle” traders, for those who may not be familiar with them.

In the early 1980’s, a well-known commodities trader by the name of Richard Dennis gathered a group of individuals and trained them to trade commodities using his specific trend-following methodology. This came about because Dennis intended to prove to his friend, another trader by the name of William Eckhardt, that good traders were made, and not born. The individuals that were recruited for this experiment were attracted to the opportunity by major newspaper ads. The final group was narrowed down through interviews with Dennis, and the ones that made the cut were eventually dubbed, the “Turtles.” This was due to the fact that Dennis had just returned from Singapore, and he wished to “grow traders just like they grow turtles.”

The set of trend-following trading rules that Dennis taught the Turtles are now widely-known. Back in the 80’s, these rules helped the Turtles earn over $100 million in trading profits as a group. The trading rules, which were based largely upon Richard Donchian’s channel breakout methods, are generally simple and easy to follow. One of the primary differentiators between those Turtles that were successful and those that were not as successful was the ability to follow these rules to the letter, without emotions or individual biases. In a nutshell, the entry rules, at their most basic level, are described by the following two sets of general system guidelines:

System #1 (shorter-term) – Enter a long position on a breakout above the price high of the preceding 20 days, or enter a short position on a breakdown below the price low of the preceding 20 days. If the most recent breakout was a true breakout that resulted in a winning trade, any current breakout entry signal would be ignored. If the most recent breakout was a false breakout (i.e., one that moved against the position by a certain predetermined amount after the breakout signal was given), the current breakout signal could be taken. If a breakout signal is not taken due to a winning trade on the most recent breakout, a trade would be taken anyway on a 55-day breakout signal to capture any major price moves.

System #2 (longer-term) - Enter a long position on a breakout above the high of the preceding 55 days, or enter a short position on a breakdown below the low of the preceding 55 days. Unlike System #1, regardless of whether the most recent breakout was a winning trade or a losing trade, all breakout signals are taken.

- James Chen, CTA, CMT

* For information on my book, Essentials of Foreign Exchange Trading (Wiley), please click here.

* Follow my intraday forex updates on Twitter: http://twitter.com/JamesChenFX