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After a week like we just had there are two options. Option one- there is nothing left to say. Option two- there is so much to talk about one doesn't even know where to start.
We will try to compromise.
We have witnessed moves that were amazing. For some currency pairs like NZD-USD, NZD-JPY, AUD-USD and AUD-JPY these were truly unprecedented times. At least over last 20 years. We must go back to early 1980 in order to see anything like what we have seen here over last few days.
JPY crosses also had a stunning week. GBP-JPY had daily ranges of about 1000 pips both Thursday and Friday. These are conditions not seen since 1998, pretty much moves of the decade. EUR-JPY, CAD-JPY and CHF-JPY also plummeted. USD-JPY held it's own for a long time but eventually it also plunged about 500 pips on Thursday.
Financial press has been repeating 2 separate stories; the "unwind" of the carry trade and credit crunch brought by "sub prime implosion" in USA. On Friday FED stepped in, cutting discount rate. That didn't really calm the markets, only caused a wild reversal.
We did fine during this time. "Rainbow" produced a good gain of 630 pips. We didn't have as many trades in JPY pairs as we should have, but the reason is really quite simple. There were no set ups we use for "Rainbow" trades. We do not trade hunches and opinions but trades must meet specific chart patterns and those were simply not happening. Prices just fell. Despite that, we feel pretty good about last week.
"Daily Pound" took some losses, especially on wild action of Friday. There was an issue with trade on Wednesday, so scroll down this page and read what happened in our account.
"Daily Euro" had a choppy week until Friday, when it caught a nice upside move and finished the week on a good note.
Please see results below and use the link provided to view the details of all our trades.
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Here are the results we achieved last week:
- Rainbow made 630 pips in closed trades;
- Daily Pound lost 87 pips;
- Daily Euro earned 91 pips for the week;
Follow the link on the right to view details |
Last week's results. |
| Look back at our "Trade of the week" from 08.12.2007. Set up was to go short GBP-USD at 2.0140, with a target 1.9950. We adjusted it slightly to 2.0130 for our "Rainbow" service. Trade came to a speedy conclusion and we closed it a little prematurely at 1.9970 for a nice gain of 160 pips. Target was met shortly after. |
| Here is the issue we faced with a "Daily pound" trade from Wednesday. As you can see we had BUY order at 1.9942. Once our SELL trade was stopped out, BUY order was triggered at 1.9915, almost 30 pips to our advantage. We don't know why and we didn't press the issue with our broker. This trade ended with a small gain for us, while in fact it should have been a loss of about 30 pips. That's what we reported in our results. If you are a "Daily Pound" subscriber and you experienced even bigger discrepancy, contact us. |
Next week's trade.
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Instead of suggesting a trade this week, we are going to step back and take a longer term view at JPY pairs. We are using EUR-JPY as an example. In our view, the long term up trend in Yen crosses has been broken. Things should calm down a little bit, with prices moving less swiftly. We think that EUR-JPY will move back up to about 160 or so, after which there will be a resumption of down trend, ultimately reaching an area of 135. Predicting time frame is very tricky here. If the prices continued their wild behavior, which we don't think they will, all this happen in 3 weeks. Realistically, we think the above mentioned scenario will play itself out in 8-12 months time.
Remember, you've seen it here first!
Have a great trading week! |  |
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Once again we must stress that the trades highlighted here are only a small sample of our trades. If you have any comments or would like to obtain more information please contact us at info@spectrumforex.com .
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Risk disclaimer:
Substantial risk is involved. Forex trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the Forex markets. Don't trade with money you can't afford to lose. Nothing in our website shall be deemed a solicitation or an offer to Buy/Sell futures and/or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on our site. Also, the past performance of any trading methodology is not necessarily indicative of futures results. Trading involves high risks and you can lose a lot of money.
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