What trading information do you need to know? – Andrew Mitchem talks Forex
In this video:
00:28 – What’s happening in the world right now and how you can use that information
00:43 – Another recession on the way soon?
01:06 – The charts tell me all I need to know
01:30 – Have a look at your Forex charts and see these trades
02:35 – Big moves, reversal trades and some excellent trades
04:10 – A technical trader watched the charts and acts upon that information
04:44 – I’m speaking in Hong Kong at the iFX Trading Expo 26-28th January
As a forex trader, there’s so much information to try and understand, so how do you know what is the best information to read and how do you understand it? Let’s talk about that and more right now.
Hi forex traders, it’s Andrew Mitchem here, the Forex Trading Coach, and in today’s video and podcast.
What’s happening in the world right now and how you can use that information
I want to talk about what’s happening in the world right now within the news, the whole global economy, and how you can read and understand that information, absorb it, and then take that through to your trading and make some money out of the currency market. It’s quite difficult, there’s so much information out there. From what I can gather right now, there’s a lot of doom and gloom out there.
Another recession on the way soon?
They’re talking about another recession coming, oil’s getting lower and lower, it hit $30 and it’s now gone down lower. Potentially 20 is now the next level. Commodity currencies like the New Zealand dollar, the Aussie, and especially the Canadian dollar are getting an absolute hammering. You’re just trying to read all that information, absorb it, and think “How can I best trade?”
The charts tell me all I need to know
For me, as a technical trader, I like to trade what I see on the charts and I’ll give you some examples why, because so many people out there say “Andrew, you need to understand these fundamentals, and you have to use that information.” Yes, you can use that information, but you’ve got to be really careful that it doesn’t overtake what you think becomes the absolute. You’ve got to actually see what’s happening rather than just thinking this is going to be happening.
Have a look at your Forex charts and see these trades
The examples that I wanted to share with you are some trades that I took just yesterday on Thursday. Go and have a look at your charts for Thursday the 21st of January. I shared some of these trades with my clients on the membership site and I also discussed them on my live webinar with clients just last night. As an example, the euro Canadian dollar has moved to over 2000 pips since the beginning of December. I took a sale trade on the euro Canadian dollar yesterday, it’s gone up and up and up. Just have a look at the charts, it’s a massive upward movement.
Most people would look at thinking “Yeah, the Canadian dollar’s getting absolutely hammered, so why on Earth would you want to be taking a sale trade on the euro CAD, which is effectively saying weakness in the euro and some strength in the Canadian dollar.” That is exactly what happened. I only took that trade because I saw the setups showing on the charts. I’m not to say that I’m taking complete reversals against 2000 pip movements all the time, I’d much rather wait for a pullback and then ride it back up again, because long-term it still looks like it’s about to go up further.
Big moves, reversal trades and some excellent trades
However, there was a great reversal trade setting up, and there was a great opportunity to make some money on that pullback or on the retracement because, as you know, a market cannot go up and up forever. At some point, there has to be a time where the market pulls back and retraces. If you understand how to trade as a technical trader, you can find those opportunities to ride the market back down again and get out. Yes, I’m trading against massive 2000 pip movement, yet I still made a great 3.61 rewards risk trade yesterday, or a 1.8% account gain with only 0.5% account risk against that massive trend.
Some other examples from just yesterday, the Canadian dollar against the Swiss franc. That’s gone down over 1000 pips in the last month, yet there was a great buying opportunity there. The Canadian Japanese yen, that’s moved over 1400 pips in the last month. Then you go to a longer term example, the US Canadian dollar has moved over 5300 pips in largely one big straight upward movement since around April of 2011. 5300 pips, now of course, it didn’t do that in a straight line. It’s had pullbacks and gone up again, but when you look at the longer time frame charts, it’s been that massive big movement upwards, yet there’s been a great opportunity to sell the US Canadian dollar.
Again, I’m not looking for that to move 1000s of pips, I’m just looking for it to move over one day or maybe over a couple of days and then be out of the trade. Then look for buying opportunities again later on that same pip.
A technical trader watched the charts and acts upon that information
Moving on from there, it really comes back to the fact that as a technical trader, you need to see what’s happening on the charts right now. Understand them, read how to use them, and try to get your mindset away from what’s out there on the news and oil’s dropping and gold’s dropping and everything else is dropping and the recession’s coming and therefore commodity characters, as an example, are going to just weaken and weaken.
Yes, they probably will longer-term, but certainly there are opportunities when you have retracement, so that’s the important information I wanted to get across to you is to trade what you see on the charts.
I’m speaking in Hong Kong at the iFX Trading Expo 26-28th January
Elsewhere, I just wanted to quickly remind you that if you are in the Hong Kong region, try and get along to the IFX Expo in the Hong Kong convention center, it’s on next week. I’m speaking there on Wednesday and I’ll be on a panel, so you can come along and say hi, meet me, and see me speak. I’d love to catch up with you.
This time next week I’ll be bringing you my weekly video and podcast from Hong Kong and look forward to sharing the information that I find out at the show and at the expo with you this time next week.
This is Andrew Mitchem, the Forex Trading Coach, have a fantastic weekend and a great trading week next week.