Forex Blog

Three new articles from the author that is well-presented on my site were uploaded today. Marquez Comelab writes mostly about obscure topics related to the Forex trading. I can recommend the following articles for both experienced and beginning Forex traders:

The Power of Small Consistent Returns — Explains the difference between earning small and large consistent returns over the long periods of time. Finding balance between risk and return can be hard, but getting always too small rewards isn’t a good experience too.

The Advantages of Trading Alone — Some traders prefer to trade in groups, some like to share their experience with others, some like to ask for advices, but some traders prefer to trade alone. Are you one of them?

I am Happy with My System, What’s Next? — Having problem «finishing» your system development? Do you constantly change your completed system when you think that it’s trading wrong? That’s a big problem for some traders (and it’s becoming a problem for me currently). Read this article for the ideas on how to leave your successful system alone.

EUR/USD trend: sell.
GBP/USD trend: hold.
USD/JPY trend: hold.
EUR/JPY trend: sell.

EUR/USD declined today from 1.5596 to 1.5560. Although the early decline was strong, the U.S. employment report disappointed many traders who bought dollars and it corrected almost a half of its earlier gains. But even after the report dollar is still trading higher against euro than it closed yesterday.

Nonfarm payrolls declined by 51,000 in July — at the same rate as in May (revised up from 62,000 decline). The average forecast was 75,000 decline. Unemployment rate propelled to 5.7% against 5.5% last month and 5.6% forecast for July.

Total public construction spending dropped 0.2% in June compared to May after losing 0.4% in May. The consensus forecast for June was 0.3% decline.

ISM manufacturing index (PMI) went down slightly in July — from 50.2 to 50, but the market analysts expected a much worse decline to 49.2, so the current report can probably be ignored by the Forex participants.

EUR/USD soared up today immediately after the report on advance GDP figures for the second quarter of 2008 came out in U.S. It disappointed the investors and is currently pressing on the greenback. Employment data also came out much worse than the majority of the traders expected today. EUR/USD is currently trading near 1.5633 level after reaching as high as 1.5700 in early trading after GDP report.

Advance GDP growth in the second quarter of 2008 was reported to be 1.9%. Although it’s better than 1% growth in Q1, it’s much worse than the expected 2.3% growth for the second quarter.

Initial jobless claims were at 448,000 last week — the growth from 404,000 claims a week before. Average forecast for the last week was 395,000.

Chicago PMI rose from 49.6 to 50.8 in July. It was forecast3ed to decline to 49.0 this month. It was the first growth posted by this indicator in last five months.

EUR/USD continued to fall today after a very sharp decline yesterday. Many traders got surprised by the ADP employment report, which helped to strengthen the dollar, but the greenback gained even before the report release. This is the second day this week when EUR/USD falls. Monday gave some uprise to this currency pair, but it’s nothing compared to the current decline. EUR/USD is currently trading near 1.5542 level.

ADP employment report showed that the nonfarm private employment increased by 9,000 from June to July after having decreased by 79,000 a month ago. The median forecast for the change in June was -60,000 — so, that’s quite a nice surprise for every dollar bull-trader.

Crude oil invetories dropped 0.1 million barrels last week and are in the lower half of the average range for this time of year. Last week they lost almost 1.6 million barrels.

I uploaded a new ebook to the Advanced Trading Books part of the site today. It’s actually a rather small article than a real book — Trend vs. No Trend by Brian Dolan. It was originally published in TRADERS’ Magazine in 2005. It describes the advanced methods of the trend detection that would work in the undetermined trend conditions. Brian describes the trend/no trend paradox that occurs often with the standard methods of trend detection. He offers additional technical indicators that would work not only in a clearly trending markets but also in the beginning and the end of the sideways market, where the majority of the trend-loving traders fail to recognize any signs of danger.

To avoid getting caught in the paradox, this article will suggest using several technical tools in conjunction to determine whether or not a trend is in place. This will in turn dictate which technical indicators are best used to gauge entry/exit points as well as provide some risk management guidance. Rather than setting forth a list of concrete trading rules, this article seeks to outline a dynamic approach to the use of technical analysis to avoid getting caught in the trend/no-trend paradox.

EUR/USD trend: sell.
GBP/USD trend: buy.
USD/JPY trend: buy.
EUR/JPY trend: buy.

The  U. S. dollar rose against the euro after the important statistics came out in U.S. today. Although the daily gain is almost absent, EUR/USD went significantly down from its daily maximum at 1.5753 after the news releases and is now trading near 1.5683 level.

Durable goods orders rose unexpectedly in June — they gained 0.6% after 0% change in May and negative (-0.3%) forecast for the last month.

Michigan sentiment index, which measures the consumers confidence, rose significantly in July — from 56.4 to 61.2. It was expected to remain at 56.4 level this month.

New home sales declined 0.6% in June compared to May’s 533k (annual rate), but the May value was revised up from 512k, so the current 530k is actually a good surprise for the market participants.

Trade Assistant is the second multi-timeframe indicator after TRO MultiPar, which I’ve posted in April. I’ve found this indicator on the forex-tsd.com forums; it was originally created and posted there by Tom Balfe. As with other multi-timeframe indicators it looks very nice and informative with the table output layout of the buy/sell signals. It can be attached to any timeframe chart and it works well with all currency pairs. Trade Assistant will show you the signals for M5, M15, M30, H1, H4 and D1 timeframes. As the base for its signals it uses Stochastic Oscillator, RSI and CCI (Entry and Trend signals). I noticed that when all four indicators show the same signal for the whole timeframe and the neighboring timeframes, it can produce some nice profit. The only problem is that you need to enter positions just right after the signals have switched to a good combination and exit immediately when they have changed. Overall Trade Assistant is one of the most interesting MetaTrader indicators I’ve encountered in months.

EUR/USD gained a little today, correcting from the previous daily drawdowns, after the jobless claims and existing home sales statistics was released today in the United States. Dollar was standing at a strong upward position on the Forex market for the last today, but today it reacted sharply on the fundamental data and after a high intraday volatility lost somewhat to euro.

Initial jobless claims soared from 372k to 406k last week after consensus forecast of 380k; the previous week claims were also revised up from 366k.

Existing home sales declined in June. They fell 2.6% from 4.99 million to 4.86 million (annual seasonally adjusted rate). The average forecast was a fall to only 4.95 million.