In this video:
00:23 A lot of strength this week in the AUD and NZD
02:29 Really good high win rate and a 6.3% account gain this week
05:13 How I use the strength and weakness analysis
We’ve had some big trends this week and that’s led to some big profits. Let me share more details with you right now.
Hi everybody, it’s Andrew Mitchem here, the Forex Trading Coach, today is Friday the 28th of March, welcome to my weekly video and podcast. And this week we’ve had some fantastic trends.
A lot of strength this week in the AUD and NZD
We’ve seen a lot of strength this week in predominantly the AUD and the NZD. We’ve had a lot of weakness in the EUR, the CHF, and also the USD. Now what this has led to is a lot of good trends that we’ve been able to trade in the same direction for a large part of the week.
Now, so far this week I’m up +6.3% on my account by risking just 0.5% risk per trade. That’s a fantastic return following on from last week’s great return also. The breakup of that is that on the daily charts I’m up +1.1%, on closed trades and on open trades I’m up +0.4% heading into Friday, on the four hourly charts I’m up a fantastic +4.8% so far this week, and I still have one trade open behind me on the AUD/CHF buying that and the trade is almost full profit, and I’ve taken one trade on the one hourly charts and that made me 0.4%. And so really a decent return so far – that was two trades on the hourly charts with 0.4% net gain. So a really decent return so far this week with +6.3% on closed trades and +0.4% on open trades.
Really good high win rate and a +6.3% account gain this week
Like I mentioned, following on from last week’s great performance as well, you can see with just a few trades and with high probability and low risk per trade, how you can make some fantastic returns from this market. Now of course the strong trends have certainly helped in terms of identifying which pairs to trade and in which direction, and so far this week for my clients I’ve identified thirty-one strength and weakness analysis pairs over the five days so far. And out of those thirty-one suggestions, twenty-five of those have ended the next day in the anticipated direction and only six have not. So just a really good high win rate there.
How I use the strength and weakness analysis
Now when I’m looking for strength and weakness, what I do is I go through the different charts looking for where I see as predominant strength or predominant weakness on the charts in anticipation of helping me trade the upcoming twenty-four hours, so the next day. Now the great thing with that is gives me an idea and a bias of where different currency pairs are likely to be heading. I’ll give you a great example; so far this week I’ve been looking at mostly weakness in the Euro, and for a couple of the days this week, I’ve seen strength in the GBP. You put the two together and you see weakening in the EUR and strength in the GBP. That tells you the likelihood is that the EUR/GBP currency pair is likely to be falling. Now you go and look at your charts and have a look back at what’s happened this week and you’ll see that the EUR/GBP has fallen quite a lot. So, by having the idea in the back of your mind that the EUR looks weak all round and the GBP pound is looking strong, that's telling me that the ideal scenario when trading the EUR/GBP, on any time frame, but especially the shorter time frame charts, like the four hourly charts, the one hour, or down to anything shorter, ideally I want to be looking for setups that are giving me short positions, because that has a higher probability of success in my opinion, because my longer time frame perspective, my longer time frame bias on that pair, is for the pair to drop.
Now, of course, you could let’s say on an hourly chart be looking at buy-trades on the EUR/GBP, and if there were any showing using your strategy, then you’ve got two options. One you say, well it’s against my daily longer term opinion and my weekly opinion on this pair, and therefore if I see a buy-trade setup, I’m just not going to take it, I’m just going to ignore it, leave it, let it pass. And the other option you have, of course, is to take that setup, knowing full well that you are trading against the likely overall direction. Now just because the EUR/GBP, I’m looking for it to drop, doesn’t mean to say it’s just going to fall like a stone; of course there will be pullbacks and retracements back against that trend, and that’s what you’re anticipating if you see good buy setups on the pair. And if you do take them, you’re just accepting that you’re trading against the predominant trend, but you just may be catching that pullback. And then, the way I prefer to trade, is to then look for that short position after a pullback and then look to ride the pair down again, because my overall longer term bias is for the pair to drop.
So that’s how I use the strength and weakness analysis that I publish each day. It’s not to say I’m taking every single one as a trade in that direction; it’s to say if I see trade setups in that direction and on that pair that has a higher probability of success than taking the same pair but the opposite direction.
So, I hope that helps explain the analysis that I put out there each day on my website. Now, of course my clients get a lot more information than that, they get actual trade suggestions with reasons for the trade, the actual setup in terms of the entry price and the exit prices, of which of course they all learn themselves over time within the course, but there’s a lot more information given there to the clients as you’d expect. But in terms of strength and weakness that I publish each day, that’s how you should be looking at using that information. And as I’ve said so far I’ve had twenty-five trades end the day in the anticipated direction of what I’ve given out so far this week, and only six gone the other way, so there’s a very high percentage of success there, which has led to higher probability trades on the shorter time frame charts, hence so far for me a +6.3% return so far for this week.
So, I hope you’ve enjoyed that, I hope you’ve learned something from that information. Have a fantastic weekend; I look forward to talking to you again this time next week. This is Andrew Mitchem from the Forex Trading Coach.