What I want YOU to learn about how I made money from Technical Analysis

USDCHF.. Hmm, this is one of the pair that I talked about last week in my blog, here is the link if you missed it. http://www.xchange-currency.com/2011/03/what-did-you-learn-from-these-few.html

Well, last week was very interesting, USDCHF has gone up, and it is still going up. Here are the Daily, 4 Hours, and 1 Hour Chart that I want to show you how to analyze it, and get a benefit from it.

Let us look at the bigger time frame, Daily Chart.

When you look at MACD at the bottom of the chart, there was a tiny little green arrow, to show the MACD Divergence UP signal. That was a very good evidence saying that, USDCHF "might" go up at that moment. Therefore, what I was doing is, I waited for 2 more days, and I looked at the smaller time frame to give me a solid prove. By the way, from that moment, which was 20 March 2011, I could say, there was about 60% of probability to say that, USDCHF will go up. 

Like I said just now, after I had been waiting for 2 days long, I looked back 4 Hours Chart, which was my favorite time frame. What I saw in 4 Hours time frame was that, the market was so "confusing". You can look at the blue color line, which I draw. The market was doing very unstable, and when you look at the MACD, which is the bottom there, I draw 3 blue DOWN arrow, which was saying that, hmmm, USDCHF had not gone above 0 line to positive number. Therefore, at that moment, I told myself, it came out a conflict signal to me. ( Daily Chart signal out Bull market, however, 4 Hours signal out Bear market ) 

I was confused. When someone confuses about the market, the only thing you can do it WAIT! Do not ever think of enter the market and bet it, just like in casino, that is crazy,NO WAY for me, for you as well! Therefore, I lowered down the probability to 50 - 50 % chance to go up and down. 

After two more days of waiting, there came out a long white candlestick which you can see from the "4 Hours USDCHF" photo above. The market finally cross above the MACD and go up to the positive number ( look at the bottom of 4 Hours chart, the UP arrow I draw ) Therefore, it is a good signal and it tells us that, it is the time to enter the market and go LONG for USDCHF soon.

The market went pretty high, and then, it pull back. Market rebounce and went up again. And there it is, I checked the Daily Chart again, which showed all the way blue signal in MACD. It gave me a very strong confidence for saying that, USDCHF will go up. Probably 70-80% of chance to go up. Therefore, there is go, final checking for 1 Hour chart 

1 Hour Chart showed a very good signal. The market pulled back and went up again, which is the blue line I draw. After that, it came out a very confusing signal, but it was above the MACD positive number ( round and square I draw). At that moment, I entered the market and went LONG for USDCHF.

Eventually, it has been going up until Friday 25 March. I am not sure where will it goes, but enter and exit require the same analyzing skill. I will wait for the signal come out and exit the market.

Isn't it easy to trade Forex? Hmm,yes it is. If you analyzed the market like I did, then, you might get a better chance to earn a profit from it. From this analyzing, there is always no 100% of guaranteed that USDCHF will go up, however, if you took the higher chance of probability like I did, control pretty well about the risk management, you will earn money. Easy huh? Yes it is! 80-90% of chance that I will earn money if I continued to use the same method and pattern to enter the market. Therefore, why should I afraid? I have only 10-20 % of chance to loss my money, control efficient it, then not a problem.

I hope you enjoy the fun of trading game.

Thanks

Charles BY 

What did you learn from these few months?

What happened to our market recently? If you were a trader or investor, you might found that, the market has been moving rapidly and most of the stocks appeared "red" everyday.

As a currency trader, we found out that, during Japanese Crisis and Libya war, USD did not act as safe haven currency. However, Swiss Franc becomes the biggest winner. But WHY?

According from the book Currency Trading For Dummies, "we prefer to view Swiss Franc as the panic button of forex markets. When unexpected geopolitical news hits the proverbial fan, USD/CHF usually reacts the fastest and the farthest." The reason behind this is because Swiss Franc has a direct link with Gold. There is no price change between Swiss Franc and Gold price. Which means that, Swiss Franc is Gold; and Gold is Swiss Franc. You can go to Switzerland to change the real Gold with the fix price of Swiss Franc. Therefore, when everyone see of the crisis and war, people tend to change their currency into Gold and which makes Swiss Franc appreciate.

Commodities currency such as Australia Dollar has depreciated to as low as 0.97025. From my own perspective view, this Australia dollar with the high yield bond will recover pretty soon back to its average price, or it might goes beyond the history high as commodities price will keep rising and people especially in Japan need food and rebuild, which will appreciate commodities currency.

Pound
Pound continues to appreciate as based on the technical analysis prospective. Pound has been continuing appreciated since Jan 2011, therefore, I would be looking forward that Pound will touch Nov 2009 high point, 1.67400.

As a result, try to understand the direction of market and with a basic knowledge of country currency, we will get a great result from trading currency. Knowledge is what we need before we do anything. You can say this is difficult to earn money from currency trading, but when you understand and take the higher probability chance to get into the game, you might probably earn money instead of losing.

This is just a probability game, 50/50 chance you will win and lose; however, with a support of technical tools as well as fundamental analysis, such as read the daily news, think about what would happen and what the majority people will do, follow the main trend, stick with your strategic. 60% or even 70% or 80% you will get in this game, then you will become the winner.

Look at the bigger time frame such as Monthly and Weekly, then looking at Daily and smaller time frame. Compare with these time frame, and find the main trend, then you will find a direction.

To reach professional level, training is the only way.

Good Luck
Charles BY
    

  

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