October 13, 2015 Daily Analysis

10/13 Analysis: Slow Developing Market

Slow Developing Market

Today is a good example that shows the need to have patience in trading as an entry pattern didn’t emerge until 22 minutes into the London session.

The CHF (turquoise line) is strong up top with a steep line to the far right which indicates a lot of current momentum in the market.

The AUD (orange line) is weak down below with a steep line to the far right indicating the same amount of momentum to the downside.


Even in a worst case scenario where you entered at the bottom of the price bar that coincides with the pattern we see on our indicator, you would have hit your 20 pip profit target on the breakout strategy.

Watch the entire video analysis below:

[00:00 – 05:52]

[slide]              [1st view: red line above rest but fairly flat, blue lowest, but also flat]

                        Hello, I’m James Edward from CompleteCurrencyTrader.com with another Currency Strength Analysis training video and today we’re looking at the London Open today because it was actually quite a slow start to the London session today which has given us an opportunity to look at how you would wait and observe the currency-strength tool developing and watch the conditions unfold and know what to look for within the first sort-uv 20 minutes or so of the Market when things don’t get off to the fastest start.

So, this is what the indicator looked like at the Open of the London Market today. You can see that you have some currencies that are standing out to the strong side and the weak side, but, if you look carefully at them and actually read what is happening in the Market, the initial move came back [points circularly near left side] here, which is 60 minutes ago or so. Then–from then, [draws pointer across indicator] it’s pretty much been going flat, if we look at the (red) British Pound (GBP) up here. [points red line] And the weak currencies are (actually) starting to turn back into the zero line, so, although they initially weakened in the first sort-uv 30 minutes in that hour previous to the London Open, from this point here, the [points far rt pink line] (pink) Euro (EUR) we have here, the (blue) Swiss Franc (CHF), and so on, are starting to move back up.

So, we don’t have any valid entries immediately at the Open and that’s often the way it is at the Market Open, although we are trying to take advantage when a flurry of new activity as a new session comes into play and we see a quick burst of momentum. That doesn’t always happen, so you do need to know how to be able to read the indicator. Hopefully, I can kind of show you what to look for; the kinds of conditions you should wait to see unfold before you do take an entry opportunity when the conditions get off to a bit of a slower start. So, if I fast forward–

[slide]              [2nd view: lilac steep peak left, green high n flat, blue peaks but climbing]

                        (continues)… through the indicator and get to this point, here, which is the 12-minute point, so we’re only 12 minutes into the Market but you can already see that it’s been a pretty messy start. [points circularly over center] There isn’t any huge bursts of momentum, but there are two things here–or two currencies that should first catch your attention and that you should pay attention to and that is the (orange) Australian Dollar (AUD) moving down to weakness and the (blue) Swiss Franc (CHF) moving up to strength. [points blue]

Now, that is not, necessarily, immediate entry at this point. That may not be blatantly obvious as a strong burst of momentum. We are in a relatively-slow market at this moment. But that is the kind of move that you should be watching and anticipating developing into something else, so that, then, you can be very quick on the trigger if it does get bigger. So, right now, I have been watching the (orange) Australian Dollar (AUD) and the (blue) Swiss Franc (CHF) at the 12-minute point.

And, then, if I–

[slide]              [3rd view: blue / orange steep up / down mirrored]

                        (continues)… fast forward it through to the 22-minute point–so we’ve waited 10 minutes of observing what is been happening between those two currencies–you now have a much-better entry opportunity because the (blue) Swiss Franc (CHF) is overall the strongest currency. [points blue line center indicator] You can see it has continued to strengthen from way back here. Right now, it is moving very steeply on the strong side and the same is true on the opposite side with the (orange) Australian Dollar (AUD). It has been weakening from back here, [points central] moved down gradually and, is now almost vertical and is moving very steeply. So, what that shows you is that now you have that burst of momentum that, typically, you’d like to see right at the start of the session, but it doesn’t always happen, but it can happen a little later and, at the 22-minute point, this is well within the realms of still trading a break-out strategy and taking advantage of the flurry of activity as a new financial center comes into play.

So, let’s go over to–

[slide]              [B&W vertical line AUDCHF.MS]

(continues) … the AUD:CHF five-minute chart now. The first move that I pointed out that would’ve caught your attention and first become obvious on the indicator is this [points longer bar just left of center] this price bar here. So, this is at the 12-minute point. This is ten-minute price bar. So the move would’ve happened in here at 8:12 London time. Not necessarily an entry there.

And then, this burst of momentum on this [points 2 rt at center] price bar is the one that coincides with the pattern that we’re looking at here,–

[slide]              [previous 3rd view: blue / orange steep up / down mirrored]

                        (continues) … that I would consider a much-stronger–

[slide]              [B&W vertical line AUDCHF.MS]

(continues) … entry situation because you have that increase in momentum pushing down.

So, had you entered at the start when you first saw the move at the 12-minute point. If we work on a worst-case scenario and entered at the bottom of that price bar, [cross point, diag down to bttm lowest point] in total that price there has gone down over 26 pips, so you’d have easily got[ten] your 20-pip profit target. And, then, if you’d have waited for the more obvious signal, which is this price bar [points 7 left of lowest point] here, coinciding–

[slide]              [previous 3rd view: blue / orange steep up / down mirrored]

                        (continues)… with this pattern on the indicator.–

[slide]              [previous B&W vertical line AUDCHF.MS]

(continues)… And, again, we’ll go with a worst-case scenario where we’re entering at the bottom of that indicator [cross point] Even then, the [diag to bttm lowest point] price has gone down around 22 pips in total, so you would’ve got[ten] your profit target, your 20-pip profit target.

Initially, you can see that the price has moved down around 13 pips. It did pull back up to your entry. [line pulled horizontally 6 bars rt] You wouldn’t have been stopped even with a trade-in stop-loss because you’d still have had seven pips behind you and, then, the price pushed on down and you would’ve taken that 20-pip target.

[slide]              [previous 3rd view: blue / orange steep up / down mirrored]

                        (continues)… So, that is the kind of thing that you should be looking for when you are observing the Market and looking at the indicator, when things don’t get off to the fastest start. It was a bit of a slow start to the London session today which is why I used that as an example, because it’s given us the opportunity to look at a little bit more in depth at what to look for what conditions are when they aren’t perfect right at the start. But, you give them several minutes and, in this case, it was 20–or 12 to 22 minutes for the right conditions to develop. And you’re still looking for exactly the same pattern and, as soon as you see it and you’ve trained yourself to identify that steepness and the momentum in the Market, you can still get in and still take advantage, even in a relatively-slow Market session.



You can see that our Currency Strength Indicator is an effective tool for picking out the highest probability, lowest risk trade set ups while avoiding market conditions that aren’t favorable. If you keep using this tool every day along with our daily Forex analysis, you will increase your win rate and be on your way to becoming a profitable trader long term.

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James Edward
James Edward has been a successful Forex hedge fund manager & educator for over a decade. He founded Complete Currency Trader, a London based firm that has consistently trained individuals to become professional and profitable traders long term using the individual currency strength analysis methodology. CCT is an elite Forex educational firm and has a reputation second to none with over 90 positive reviews and an overall 4.538 out of 5 rating on the third party verification site Forex Peace Army. James’s affable personality, expert knowledge, notoriety for getting results, and steadfast dedication to his clients, has secured his position as one of the most trustworthy, liked, and in demand authorities in the industry.