The USD/SGD is starting to show signs of a possible trend reversal as indicated on the M15 and H1 chart of this currency pair. This is not an immediate entry and as always we let the trade come to us instead of chasing (and hoping that a trade will go where we want it to go.
We will wait for the Stochastic Oscillator on the M15 to reach the “overbought” area and then only look for a SELL entry point on the M5 Stochastic Oscillator. Determine your own entry point with a combination of technical indications, in this case we are using the Stochastic Oscillator, Regression Trend and various Daily/Weekly Resistance Areas as a possible indication for our entry point.
With this being a possible MAJOR trend reversal we can expect some aggressive Stop Loss hunting from the Non Commercial Institutions it is therefore of utmost importance to use a fairly wide Stop Loss which can only be done if you only risk 1% of your account.
The Daily/Weekly Resistance Area have been tested twice in the past with one historical test and one recent this. This is therefore only the second recent test which makes this Resistance Areas not one of the strongest resistance areas but also not a weak area.
With the Daily Trend currently in a Consolidation Zone this could be a possible indication of a Bullish continuation.
The Monthly trend is Bearish
The Weekly trend is Bearish
The Daily trend is consolidating with a Bullish tendency
The H4 trend is Bullish
The H1 trend is Bullish
We are going with the general trend of the Monthly and Weekly chart but are going against the Daily, H4 and H1.
COT (Commitment of Traders) Report Analysis:
The Commitments of Traders (COT) is a report issued by the Commodity Futures Trading Commission (CFTC). It aggregates the holdings of participants in the U.S. futures markets (primarily based in Chicago and New York), where commodities, metals, and currencies are bought and sold.
COT Report on the USD currency:
The current COT status which is always one week old indicated that non-commercials (banks etc. are 70% LONG and 30% SHORT on the USA currency. The commercials (retail traders like us) are already 89% SHORT and 11% LONG. Another perfect example why 80% plus of all retail traders fail, this could obviously change once we have last Friday's COT report which is only available later this coming week.
No COT Report available on the SGD.
Currency Strength Indication:
Monthly:
The USD is stronger than the SGD with a LOW STRENGH.
Weekly:
The USD is weaker than the SGD with a LOW STRENGH.
The currency strength indication is NOT IN LINE with this trading idea.
Fundamental Consideration:
For the USD we have the following on Friday 14 February (NZ time):
Consumer Price Index (CPI) – NEUTRAL expectation
Core CPI – POSITIVE expectation
For the USD we have the following on Saturday 15 February (NZ time):
Core Retail Sales – NEGATIVE expectation
Advance Retail Sales - NEUTRAL expectation
No Fundamental Consideration available on the SGD.
Retail FX Community Outlook:
Retail Community Outlook is a statistical analysis on what the market perception is under Retail Traders like you and me, this does not include Banks and big Corporate Financial Institutions.
The Retail Community Outlook for this trade is as follows:
SHORT – 95%
LONG – 5%
With the majority of retail traders already SHORT for this trade idea there is a very high possibility that some major stop hunting will occur so a wide stop loss is important with a later entry, consider using the stop hunts as part of your entry point, just don't be caught in a bear trap should the trade not turn at all.
This trade is SHORT – we are IN-LINE with majority of retail traders, which is NOT GOOD
Entry:
Entry point as indicated on the chart and as explained in the above analysis
Take Profit:
TP1: as indicated on chart
TP2: as indicated on chart
TP3: as indicated on chart
Stop Loss:
As indicated on chart, an even wider SL can also be considered.
Risk Reward for this Trade
1 to 4
My Trading Analysis Score:
My trading analysis score for this trade idea is 45% which means it is considered as a HIGH RISK trade. I might not even take this trade but will be watching it closely and make my own personal decision once it reached my suggested entry point, and I will only consider entering into this trade once I have identified the Three Phase Market Setup.
Have you forgotten about the 3 phase market setup that I have shown you in some of my earlier trades? Here it is again, now go and identify these phases before you even consider entering into this trade idea.
The Three Phase Market Setup Analysis:
This is basically what the Forex market is build on and you see this trend over and over, it is simply a case of training yourself to be able to identify it. This is in a nutshell the Forex Market setup, we can even call it the Forex Market's own strategy.
It is therefore important for you to be able to identify this setup every time before you place a trade, by doing this you will know exactly where the market is and how in line you are with the market. Let me repeat it again you will see this setup time and time again on every timeline. Make sure that you strategy is in line with the market's strategy. When the market is setting up, you are setting up, it has nothing to do with your opinion on what you think.
Phase 1:
Phase 1 is the Contraction phase where the volume starts to decrease dramatically due to Banks and Big Firms starting to take profits and getting rid of their previous long positions, this can further be determined by having access to a COT Report (or create your own COT* analysis)
You never trade phase 1, never ever enter a trade in phase 1. This is a basic rookie mistake where they see a market trending sideways and then they think that the market is reversing, this is where the market simply takes your money as it moves into phase 2.
* The Commitments of Traders (COT) is a report issued by the Commodity Futures Trading Commission (CFTC). It aggregates the holdings of participants in the U.S. futures markets (primarily based in Chicago and New York), where commodities, metals, and currencies are bought and sold.
Phase 2:
Phase 2 is the Expansion Phase where we see Increasing Institutional Volume. The range now start opening up, it is now taking out highs and lows and there goes the retails traders stop loss. How many times have you seen a trade going in the actual direction you predicted but simply for you to get stopped out before it start trending in your direction, now you know the reason.
Smart money is now accumulating positions at discounted prices and retail traders who don't know what they are doing gets beaten up like crazy during phase 2. You still do not trade phase 2 and you simply use phase 2 to start identifying a clear trend reversal where you can have a possible entry point. The Linear Regression Trend is one method the you can use to identify a possible entry point
Phase 3:
Phase 3 is the trend phase where Institutional traders is start to take profits, also known as the payout cycle. The market now start making its moves to higher or lower prices (in this case, lower prices).
Retail traders will now make temporarily profit in phase 3 since they are going to trade right back into phase 1 again with their late entries, fear of missing out (FOMO) and not knowing where to place their take profits (TP) Whatever profits most retail traders make in phase 3 they will loose again in phase 1 as the market cycle repeats itself.
Retail traders who enter late (about 80% of all retail traders) simply give the Institutional traders (Banks and Big Firms) their liquidity to cash out again, and so the cycle continues. This cycle is as consistent as the sun coming up every day.
Good Luck – Trade Responsible
Use 1% risk per Position!
Always strive to continuously improve your trading strategy and knowledge
“Rise and Rise Again until Lambs becomes Lions”
We will wait for the Stochastic Oscillator on the M15 to reach the “overbought” area and then only look for a SELL entry point on the M5 Stochastic Oscillator. Determine your own entry point with a combination of technical indications, in this case we are using the Stochastic Oscillator, Regression Trend and various Daily/Weekly Resistance Areas as a possible indication for our entry point.
With this being a possible MAJOR trend reversal we can expect some aggressive Stop Loss hunting from the Non Commercial Institutions it is therefore of utmost importance to use a fairly wide Stop Loss which can only be done if you only risk 1% of your account.
The Daily/Weekly Resistance Area have been tested twice in the past with one historical test and one recent this. This is therefore only the second recent test which makes this Resistance Areas not one of the strongest resistance areas but also not a weak area.
With the Daily Trend currently in a Consolidation Zone this could be a possible indication of a Bullish continuation.
The Monthly trend is Bearish
The Weekly trend is Bearish
The Daily trend is consolidating with a Bullish tendency
The H4 trend is Bullish
The H1 trend is Bullish
We are going with the general trend of the Monthly and Weekly chart but are going against the Daily, H4 and H1.
COT (Commitment of Traders) Report Analysis:
The Commitments of Traders (COT) is a report issued by the Commodity Futures Trading Commission (CFTC). It aggregates the holdings of participants in the U.S. futures markets (primarily based in Chicago and New York), where commodities, metals, and currencies are bought and sold.
COT Report on the USD currency:
The current COT status which is always one week old indicated that non-commercials (banks etc. are 70% LONG and 30% SHORT on the USA currency. The commercials (retail traders like us) are already 89% SHORT and 11% LONG. Another perfect example why 80% plus of all retail traders fail, this could obviously change once we have last Friday's COT report which is only available later this coming week.
No COT Report available on the SGD.
Currency Strength Indication:
Monthly:
The USD is stronger than the SGD with a LOW STRENGH.
Weekly:
The USD is weaker than the SGD with a LOW STRENGH.
The currency strength indication is NOT IN LINE with this trading idea.
Fundamental Consideration:
For the USD we have the following on Friday 14 February (NZ time):
Consumer Price Index (CPI) – NEUTRAL expectation
Core CPI – POSITIVE expectation
For the USD we have the following on Saturday 15 February (NZ time):
Core Retail Sales – NEGATIVE expectation
Advance Retail Sales - NEUTRAL expectation
No Fundamental Consideration available on the SGD.
Retail FX Community Outlook:
Retail Community Outlook is a statistical analysis on what the market perception is under Retail Traders like you and me, this does not include Banks and big Corporate Financial Institutions.
The Retail Community Outlook for this trade is as follows:
SHORT – 95%
LONG – 5%
With the majority of retail traders already SHORT for this trade idea there is a very high possibility that some major stop hunting will occur so a wide stop loss is important with a later entry, consider using the stop hunts as part of your entry point, just don't be caught in a bear trap should the trade not turn at all.
This trade is SHORT – we are IN-LINE with majority of retail traders, which is NOT GOOD
Entry:
Entry point as indicated on the chart and as explained in the above analysis
Take Profit:
TP1: as indicated on chart
TP2: as indicated on chart
TP3: as indicated on chart
Stop Loss:
As indicated on chart, an even wider SL can also be considered.
Risk Reward for this Trade
1 to 4
My Trading Analysis Score:
My trading analysis score for this trade idea is 45% which means it is considered as a HIGH RISK trade. I might not even take this trade but will be watching it closely and make my own personal decision once it reached my suggested entry point, and I will only consider entering into this trade once I have identified the Three Phase Market Setup.
Have you forgotten about the 3 phase market setup that I have shown you in some of my earlier trades? Here it is again, now go and identify these phases before you even consider entering into this trade idea.
The Three Phase Market Setup Analysis:
This is basically what the Forex market is build on and you see this trend over and over, it is simply a case of training yourself to be able to identify it. This is in a nutshell the Forex Market setup, we can even call it the Forex Market's own strategy.
It is therefore important for you to be able to identify this setup every time before you place a trade, by doing this you will know exactly where the market is and how in line you are with the market. Let me repeat it again you will see this setup time and time again on every timeline. Make sure that you strategy is in line with the market's strategy. When the market is setting up, you are setting up, it has nothing to do with your opinion on what you think.
Phase 1:
Phase 1 is the Contraction phase where the volume starts to decrease dramatically due to Banks and Big Firms starting to take profits and getting rid of their previous long positions, this can further be determined by having access to a COT Report (or create your own COT* analysis)
You never trade phase 1, never ever enter a trade in phase 1. This is a basic rookie mistake where they see a market trending sideways and then they think that the market is reversing, this is where the market simply takes your money as it moves into phase 2.
* The Commitments of Traders (COT) is a report issued by the Commodity Futures Trading Commission (CFTC). It aggregates the holdings of participants in the U.S. futures markets (primarily based in Chicago and New York), where commodities, metals, and currencies are bought and sold.
Phase 2:
Phase 2 is the Expansion Phase where we see Increasing Institutional Volume. The range now start opening up, it is now taking out highs and lows and there goes the retails traders stop loss. How many times have you seen a trade going in the actual direction you predicted but simply for you to get stopped out before it start trending in your direction, now you know the reason.
Smart money is now accumulating positions at discounted prices and retail traders who don't know what they are doing gets beaten up like crazy during phase 2. You still do not trade phase 2 and you simply use phase 2 to start identifying a clear trend reversal where you can have a possible entry point. The Linear Regression Trend is one method the you can use to identify a possible entry point
Phase 3:
Phase 3 is the trend phase where Institutional traders is start to take profits, also known as the payout cycle. The market now start making its moves to higher or lower prices (in this case, lower prices).
Retail traders will now make temporarily profit in phase 3 since they are going to trade right back into phase 1 again with their late entries, fear of missing out (FOMO) and not knowing where to place their take profits (TP) Whatever profits most retail traders make in phase 3 they will loose again in phase 1 as the market cycle repeats itself.
Retail traders who enter late (about 80% of all retail traders) simply give the Institutional traders (Banks and Big Firms) their liquidity to cash out again, and so the cycle continues. This cycle is as consistent as the sun coming up every day.
Good Luck – Trade Responsible
Use 1% risk per Position!
Always strive to continuously improve your trading strategy and knowledge
“Rise and Rise Again until Lambs becomes Lions”