FXstreet.com Live Sessions Archives

Mechanically Trading Fibonacci Levels

Date: November 30, 2005 15:00GMT 10EST

Expert: David Lyder, Co-founder of iExpertAdvisor, LLC,

Topics:

• What is the strategy?
• Where is the opportunity?
• Can the strategy be automated?
• What are the obstacles?

Who is David Lyder?
David Lyder is a co-founder of iExpertAdvisor, LLC, as well as the author of Automatic Alpha: How to Build a Winning FOREX Trading System. iExpertAdvisor is a newly formed company dedicated to providng information and ideas about FOREX trading systems. Visit us at http://www.iExpertAdvisor.com .

Speech Material:

What is The Strategy?
Leonardo Fibonacci introduced the Fibonacci series in about 1200 A.D. The Fibonacci series is a numerical sequence built by adding the previous two numbers (of the series) together. For example: 1+2=3 2+3=5 3+5=8 5+8=13 8+13=21 ....

If you run the series out far enough, any number is about 1.618 times the preceding number – and about 0.618 of the next number. The series is said to converge to these ratios.

The 1.618 ratio is also referred to as the “golden mean” or “golden ratio”. The Fibonacci series, including the “golden ratio”, can be seen throughout nature – from the rate at which rabbits reproduce to the way that branches grow from a tree.

It has been said that “good” math is discovered, while “bad” math is invented. Does the appearance of the Fibonacci series throughout nature prove the series is “good” math? Does the series accurately describe our world, including FOREX price behavior, using the universal language of mathematics?

The answer to these questions: Per this conversation, we don’t really care!

It is not important if the Fibonacci series is “good” or “bad” math. What is important is that people think the series is a good indicator of natural phenomenon.

And some of these people place trades on the foreign currency exchange.

So whether the Fibonacci series can be used as an accurate indicator of FOREX price action, or it is simply a self-fulfilled prophecy, is not important. What’s important is that there may be a trading opportunity here.

Typically, FOREX traders take the golden ratio (0.618) and derived two other important numbers:

0.382 = 1 – 1.618

0.500 = (0.382 + 0.618)/2

The technical analyst then finds the high and low price after a sustained move in one direction. The analyst defines the Fibonacci levels as:

61.8% of the high price

50.0% of the high price

38.2% of the high price

Where Is The Opportunity?
The Fibonacci price levels are referred to as retracement levels. They now represent levels of support or resistant, and are played by the technical analyst in the same fashion - depending on whether the price bounces off of or pierces through the level.

Most traders that use Fibonacci look for confluence of Fibonacci retracement levels. That is, they look for the retracement price levels of several time frames to align. The appearance of confluence, when combined with volume data, often generates a trade signal.

Can The Strategy Be Automated?
Yes, this strategy can be automated. But as always, the first step toward implementing the system is to detail each step. At iExpertAdvisor, we start this process by describing the System Concept.

As quoted from Automatic Alpha, “The first step of the process to move toward implementation is to define the System Concept. The System Concept is used to summarize the general description of the system. The System Concept should briefly and concisely describe how the creator envisions the behavior of the system …”

The System Concept describes the Market Setup, the Trade Setup, the Trade Trigger, and finally the opening and closing of the trade.

We can briefly describe each of these steps for a Fibonacci trading system as follows:

- Market Setup : The currency pair has made a new high (or low).

- Trade Setup: After the new high, the currency pair has begun to retrace towards a Fibonacci retracement level. (This level may or may not align with retracement levels of other time frames.)

- Trade Trigger : The currency pair has reached the retracement level and has confirmed that the price has either (i) pierced the level, or (ii) bounced off the level.

- Trade Open and Close: The trade is opened using a stop-loss just outside the current retracement level, and a take-profit near the next retracement level.

What Are The Obstacles?
The obstacles of building a mechanical Fibonacci trading system are similar to those present for building most other trading systems.

In this case, the System Concept contains a few phrases that will require a significant test effort to find the “right” parameters. At a minimum, the following questions need to be addressed:

- How is the “lookback” period determined?

- What if there are two or more significant highs or lows in the “lookback” period?

- Exactly what constitutes a “bounce” or a “pierce” of a retracement level?

A good way to address these concerns is to construct the system using variables that can be easily modified for any of the parameters that are questionable.

This system can be implemented using MetaTrader 3.0. The language is relatively easy to learn and the platform is free.

The FibExpert MQL code forms the start of a workable Fibonacci trading system. Although the system is not yet profitable, enhancements can be made to move the system towards profitability, including:

- Test the Takeprofit value before entering the trade and make sure the risk is worth the reward;

- Convert the code into a UserFunction; use the UserFunction on several time periods to test for confluence;

- Test the volume when the price pierces or bounces from a retracement level;

- Use another criteria to test the Market Setup. Only enter trades when this other criteria is valid (perhaps a moving average or a candlestick pattern).

The MetaTrader 3.0 MQL source code of the FibExpert can be view and /or downloaded at http://www.iexpertadvisor.com/freeMQLcode.asp.

iExpertAdvisor is not a registered investment advisor or broker/dealer. Readers are advised that the material contained herein should be used solely for informational purposes. iExpertAdvisor does not purport to tell or suggest which investment securities members or readers should buy or sell for themselves. Site users should always conduct their own research and due diligence and obtain professional advice before making any investment decision. iExpertAdvisor will not be liable for any loss or damage caused by a reader's reliance on information obtained in any of our newsletters, special reports, email correspondence, or on our web site. Our readers are solely responsible for their own investment decisions.

The ECB and the impact on the Euro €

Date: November 29, 2005 15:00GMT 10EST

Expert: Piet Lammens, KBC Head of research

Topics:
- ECB’s Trichet pre-announces December rate hike
- Monetary policy still accommodative
- Is this the beginning of the ECB tightening cycle?
- Where will rates end up?
- How will this influence the shape of the curve?
- And how will the spread between German and US yields evolve?

Who is Piet Lammens?
Piet Lammens Born in Louvain, Belgium on February 28 1958. Law degree, Catholic University of Louvain, Belgium Legal advisor 1982-1989.CERA: Economist Research Department 1989-97. CERA Investment Bank Analyst dealing room 1998.KBC Head of Research dealing room 1998

Speech Material:

ECB’s Trichet pre-announces December rate hike

Monetary policy still accommodative
Is this the beginning of the ECB tightening cycle?
Where will rates end up?
How will this influence the shape of the curve?
And how will the spread between German and US yields evolve?
After a speech in Frankfurt on Friday, ECB President, Jean-Claude Trichet, gave markets a very clear signal that the ECB will raise interest rates at its next policy meeting on December 1st. The tone of his comments suggests that the ECB will raise rates by 25 basis points. In Trichet’s own words, the ECB will ‘modestly augment’ the present level of rates.

Today’s remarks are probably as close as the ECB can come to pre-announcing a rate rise.Trichet added that this move will only withdraw ‘some of the accommodation which is embedded in present monetary policy and we will maintain moderation and accommodation. The policy would remain accommodative’. This suggests December’s moveis set to be the first stage in a gradual process of raising rates. In essence, this seems to be the ECB’s effort to replicate the US Federal Reserve’sassurances that it [the Fed] would act in a ‘measured way’. Trichet’s comments on Monday before EU parliament however dented this outlook, as he said ‘It would be no good working assumption to consider that we are at the start of a series of interest rate increases’.

We would not draw too much conclusions out of these remarks. We still believe that the ECB is eager to bring rates to a more neutral level. The pace is however very data-dependent. So, upward pressure on rates looks set to persist. We expect the ECB will raise rates on a quarterly basis to end up the year at around 3-3.25%.
A change in ECB policy rates would mark a dramatic change in the interest rate climate. The European Central Bank’s key policy interest rate has remained unchanged since June 2003 (when it was cut to an historic low of 2 per cent). You have to go as far back as October 2000 for the last ECB rate increase.

The current extremely low level of rates has prevailed for nearly 2½ years and was put in place in response to exceptional weakness in the global economy in the aftermath of terrorist attacks of September 11th. As a result, it could be said that ECB policy rates have been at an “emergency” setting for nearly 2½ years.

Dereks Live Weekly Outlook

Date: November 28, 2005 15:00GMT 10EST

Expert: Derek Frey, Head Trader of Odom and Frey Futures & Options

Topics:
- Do not miss your opportunity to be updated in your trading needs this week.
- Derek Frey brings his view point of the forex market for coming week.
- Discuss market reaction to news.
- Enjoy his currency pairs predictions.

Who is Derek Frey?
Derek Frey has been a futures trader since 1989 and is Head Trader and partner at Odom & Frey Futures & Options, a firm that specializes in high probability, defined risk option spread trades for the futures markets. Derek is also co-author of O&F News & Views, a weekly newsletter that is published by several publications and over 20 financial websites including FXStreet.com.

Speech Material:

Do not miss your opportunity to be updated in your trading needs this week.
Derek Frey brings his view point of the forex market for coming week.
Discuss market reaction to news.
Enjoy his currency pairs predictions.

The use of Advanced Technical Indicators to identify trading opportunities in Forex

Date: November 23, 2005 15:00GMT 10EST

Expert: Ed Young, Team leader for the ATSFX Trading group div of Man Financial

Topics:
- Trade identification
- Trade formulation
- Trade management
- Using confluence within an array of indicators

Who is Ed Young?
Edward L. Young is the team leader for the ATSFX Trading group div of Man Financial. Ed Young is a Graduate of Valparaiso University. He has been a trader for over 20 years specializing in Algorithmic Trading Solutions (ATS). ATS is located at the Chicago Board of Trade and offers a full range of Financial services. Ed Young is a registered Stock Broker, and was a pioneer in developing online trading. Ed Young has also been a driving force in the futures industry managing customer funds for over 20 years. Now he brings his experience and expertise to the Forex Markets.

Speech Material:

- Trade identification
- Trade formulation
- Trade management
- Using confluence within an array of indicators

Wave counting and Bollinger Bands

Date: November 22, 2005 15:00GMT 10EST

Expert: Igor Belitsky, Currency Analyst of Fx Currency dealer.com

Topics:
- General Elliot Wave principle.
- Impulse Wave progress and Bollinger Bands rule.
- Correction patterns inside Bollinger Bands.
- Trading System example

Who is Igor Belitsky?
Igor Belitskyis a specialist in applied mathematics and trading systems development. Since 1996 he has been working as a forex market analyst in a Moscow based financial company.

Speech Material:

1. General Elliot Wave principle
According to Elliott Wave theory the market always moves in a sequence of 5 impulse waves in direction of the global trend and then in 3 corrective waves against trend. It is so called 5/3 pattern. In fact it might be more then 5 impulse waves but we always can subdivide them into classic 1-3-5 pattern.

2. Impulse Wave progress and Bollinger Bands rule
We will be using standard Bollinger Bands with period=22 and deviation=1.85. Our rule is very simple: In an up-trend, as long as price continuously touches upper Bollinger Band, impulse wave 3 or 5 is in progress. If the price action touches lower Bollinger Band then correction wave is in progress and next impulse wave to be followed soon. Opposite is true for a down-trend.

Below is example with GBP/USD 240 min chart. Next 1-3-5 impulse pattern started from 1.7900 level. Wave 3 has broken Lower Bollinger Band around 1.7550 and finally hit 1.7325. In order to profit on the wave 3 we had to sell GBP/USD on any bounce from the Lower Band.

Wave 4 was formed as symmetrical triangle pattern. Wave 5 started near Upper Bollinger Band and has broken Lower Band around 1.7370. Best tactics would be selling GBP/USD on small bounces from the Lower Band. Wave 5 total move was from 1.7500 down to 1.7100.

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3. Correction patterns inside Bollinger Bands
Corrective waves are often named as A-B-C. There are two standard types of corrective waves: Zig-Zag pattern and flat pattern. But in reality there is large quantity of corrective wave patterns as well as combinations of basic patterns.

Below is example of GBP/USD 240 min chart and composition of correction patterns. The correction phase started after wave 3. It lasted 3 weeks from 12-Aug to 31-Aug 2005 and consisted three patterns: Zig-Zag, Symmetrical Triangle and Expanding Triangle. Nearly one pattern per week.

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4. Trading System example
Below is sample automatic trading system. Buy signal is generated every time the price breaks Upper Bollinger Band. Sell signal is generated every time the price breaks Lowe Bollinger Band. This system generally produce more losses then profits if no additional rules is applied. We use it as example of implementation of our rule from section #2.

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Dereks Live Weekly Outlook

Date: November 21, 2005 15:00GMT 10EST

Expert: Derek Frey, Head Head Trader Of Odom and Frey

Topics:
- Do not miss your opportunity to be updated in your trading needs this week.
- Derek Frey brings his view point of the forex market for coming week.
- Discuss market reaction to news.
- Enjoy his currency pairs predictions.

Who is Derek Frey?
Derek Frey has been a futures trader since 1989 and is Head Trader and partner at Odom & Frey Futures & Options, a firm that specializes in high probability, defined risk option spread trades for the futures markets. Derek is also co-author of O&F News & Views, a weekly newsletter that is published by several publications and over 20 financial websites including FXStreet.com.

Speech Material:

EUR/USD: The Euro is trying to stabilize above 116. Fridays news of a possible ECB rate hike is welcome news for bulls and could turn the tide back in favor of the Euro. Look for a move above 118.50 to confirm this.

USD/CHF: We did see my 132.50 target hit this week and we are now seeing a bit of a pullback from there. Longterm a consolidation between 130 – 133 should be good for this market.

GBP/USD: Well the Pound broke through support and is now trending lower. This was a major support level and now that we are through it, it opens the door to what could be a big move towards 160.00. Get short and hang on for a wild ride.

USD/JPY: The Yen did manage to extend its rally. I must continue to say that this market needs to slow down and consolidate this rally or risk a rather ugly breakdown. Sell stops at 117.50 are a nice way to catch a breakdown if we see one.

AUD/USD: The Aussie has now managed to find some support at the 7300 level. The You would think that the strength in metals and other commodities would have turned this currency higher but for now the trend is still down.

USD/CAD: The Canadian got close to 120 before backing off. This market continues to trade rather slowly and act “tired”. Overall I am not nearly as excited about this market as I was just a few weeks ago.

USD/MXN: The Peso also ran straight for my target of 10.60 and bounced. From where I sit it seems this market is going to continue lower for the time being. Nest target is 10.53

Monthly Technical Outlook

Date: November 18, 2005 14:00GMT 10EST

Expert: Sam Shenker, Technical Analyst of FXCM

Topics:
Market reaction to news!
-This week's data and events
- Pairs to discuss:
- EUR/USD
- GBP/USD
- USD/JPY
- USD/CHF
- USD/CAD
- AUD/USD
- NZD/USD

Who is Sam Shenker?
Sam Shenker is a Technical Currency Analyst for Forex Capital Markets (FXCM). Sam is the author of the Daily and Weekly Technical Research reports at FXCM. His reports include: Daily Technicals, Daily Crosses and the Weekly Chart Analysis. Prior to joining FXCM, Sam spent a number of years on Wall St and has traded many different products, including: equities, equity derivatives and futures. He also specialized in research and analysis of high yield bonds, corporate bankruptcies, restructurings, reorganizations and venture capital. He holds a Bachelors degree in Finance and Business Management from Pace University and is an active currency trader. Sam is frequently quoted on FXStreet, and his research can be found daily on Bloomberg.

Speech Material:

FXstreet.com is delighted to bring a new informative, analytical, review of the market week.

We are delighted to have the experts from Forex Capital Markets (FXCM) starting with Sam Shenker on board monthly to bring you spontaneous updates on the goings-on in the Forex market, specialising on signals or measures that tell us how the economy is performing & economic indicators.

Weekly meet with the FXCM expert, listen to their thoughts and inside view on the market as they see it.

Euro

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Euro remains confined in a downward sloping channel, which is confined in a large downward sloping channel thus compounding the overall downward sloping bias. This month the markets witnessed an unparalleled dollar strength as greenback pushed the Euro into the 2003 territory following the break of the 2005 low at 1.1876 and 2004 low at 1.1760. Currently the pair is encountering the support created by the 38.2 Fib of the .8349-1.3670 EUR rally, however given the break of the Weekly Head and Shoulders pattern, which confined the pair within a large trading range, the next move to the downside will most likely see the pair head toward the 1.1000, a 50 Fib of the .8349-1.3670 EUR rally.

British Pound

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Pound like its European neighbor also remains confined to a downward sloping channel, however, a breakdown of the 1.7321, a key 38.2 Fib of the 1.3695-1.9555 GBP rally combined with a break of the previous 2005 Low will most likely see the sterling accelerate to the downside and aim for the 50.0 Fib of the 1.3695-1.9555 GBP rally at 1.6620. A move of such magnitude will most likely reaffirm the overall dollar strength and add to the downward bias for the pair.

Japanese Yen

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Japanese Yen remains confined to an upward sloping channel with the latest swing to the upside establishing a new 2005 high at 119.57, right below the psychologically important 120.00 handle. A further move to the upside will most likely see the pair break above the 120.00 figure and target the 61.8 Fib of the 135.16-101.68 JPY rally at 122.37. A reversal from these levels will most likely see the pair break below the channel’s lower boundary and aim for the greenback bids around 118.42, a 50.0 Fib of the 135.16-101.68 JPY rally.Japanese Yen remains confined to an upward sloping channel with the latest swing to the upside establishing a new 2005 high at 119.57, right below the psychologically important 120.00 handle. A further move to the upside will most likely see the pair break above the 120.00 figure and target the 61.8 Fib of the 135.16-101.68 JPY rally at 122.37. A reversal from these levels will most likely see the pair break below the channel’s lower boundary and aim for the greenback bids around 118.42, a 50.0 Fib of the 135.16-101.68 JPY rally.

Swiss Franc

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Swiss Franc remains confined to a large upward sloping channel with the latest move to the upside breaking above the neckline of the inverse Head and Shoulders pattern. A further move to the upside will most likely see the pair head higher and break above the psychologically important 1.3500 handle, and with sustained momentum head toward the 1.4000 figure, a level which is currently defended by the 38.2 Fib of the 1.8226-1.1271 CHF rally at 1.3927. A subsequent reversal will most likely see the pair bounce back toward the 1.3300-1.3500 zone.

Canadian Dollar

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Canadian dollar proved to be the strongest major as USD/CAD remains confined to a downward sloping channel. As the recent price action suggest, Canadian dollar will most likely retreat toward the channel’s upper boundary, however it’s advisable to wait for a confirmed break for any perspective greenback bulls, as a breakout will most likely target the 38.2 Fib.

Australian Dollar

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Australian dollar remains strong like the rest of the commodity block majors, however the recent price action suggest that the pair is losing steam as the trading range began to shrink and the pair has established a downward sloping channel. An inability by the Aussie longs to hold a 23.6 Fib will most likely se the pair break below the.7300 handle and move toward the 38.2 Fib at .6800 , thus seeing the pair break the consolidation range that kept the pair confined for the pat two years.

New Zealand Dollar

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New Zealand dollar is proving to be a stronger antipodean neighbor as it continues to consolidate within a large triangle and with the inability by the Kiwi longs to break above the .6900 handle, marked by bottom of the Nov-May consolidation range. A collapse below .6800 figure, will most likely see the pair head toward the .6647, a 23.6 Fib of the .3973-.7473 NZD rally, A sustained momentum on the part of the US dollar longs will most likely see the pair head lower and break below the psychologically important .6500 handle in an attempt to test the Kiwi’s bids around the 38.2 Fib of the .3973-.7473 NZD rally.

Technical Viewpoint of the EUR/USD

Date: November 16, 2005 15:00GMT 10EST

Expert: Justin Strausbaugh, Currency Analyst of CMC Markets

Topics:
- In-depth analysis of the key/support resistance levels.

Who is Justin Strausbaugh?
Justin Strausbaugh serves as the in-house Analyst at CMC Markets in New York. CMC Markets was established in 1989 and has evolved into a market leader in real time Internet trading. After launching the world's first real-time Internet Foreign Exchange trading platform in 1996 the firm has evolved and now services clients in over 100 countries, offering them real-time internet trading in thousands of products.

Speech Material:

In-depth analysis of the key/support resistance levels.

Short, Medium, Long-term Technical Viewpoint.

We will look at momentum, trend indicators, & candlestick patterns.

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FOREX Trading Lab: Position trading strategies

Date: November 15, 2005 15:00GMT 10EST

Expert: Dr.Sivaraman, CEO and Founder of iknowindices.com

Topics:
- Market rewards patience
- Develop long term views and set short term goals
- Market forecast

Who is Dr.Sivaraman?
Dr. Sivaraman has nine years experience in working with the Forex Market forecast, professional trading training Trading and Portfolio and forex fund Management. He provides professional Forex, Indices and commodity markets analyses using unique proprietary forecast algorithm.

Speech Material:

Position trading in Forex market - will be a more rewarding experience:
There are various types of trading, namely – spot or day trading with in the day. Swing trade with in the session, scalp trade or quick with more volume and less spread of profit and position trades with less position with less risk and maximize the reward.

In my 7 years of forex forecast and consultancy services to traders and institutions worlds over, found very few traders have the courage and confidence to do position trading.

One of the reasons I found responsible for it is impulsiveness – emotional approach to market. The general traders’ psychology is to allow the loss to grow without having the mid to cut it when small and close the position quickly when a small profit is seen.

Instead, to get average or net profit in their positions they tend to take more exposure at close ranges - failing to realize the long-term market spread and associated risk - and make distress trades and find the equity erosion.

But, if you aim to be come a professional trader you need to view the market swings as good trading opportunities in your spot and position trades.

Thumb rules: To start with, aim for around 1% exposure of equity in your position trade with 75 pips profit limit. Take limited risk of keeping 75 pips advance hedging order (entry stop) if there is limited equity. Once the position makes 50 pips profit, keep stop at entry and change the limit to 150 pips.

Trail the stop if you are watching the market maintaining 50 pips from it, or you can leave the trade to see the market has closed your position with profit in your absence.

In case, when you find the position is not closed and the market moved away, then keep second buy order or take position 150 pips below the original buy position, or 150 pips above the sell position and keep 150 pips limit.

This is what called spread the risk with very limited exposure. If you have the confidence and patience, you will find the trades become more rewarding experience.

Certain conditions: Take position only after the spread between the low and high in the market has become 75 pips or more. You will be mostly find 150 pips limit is filled in a day or two. If there is initial correction, take buy position near the low when the low is not cut for more than 30 min, after the start of the European or US sessions. If there is initial rise take a sell position near the high when the high is not cut for more than 30 min. and keep a limit as mentioned above. Use trailing stop once the profit is seen in the position – the spot trade will be converted to position trade.

Understand monthly trend reversal moves: Take position in Euro or GBP only, average them only by taking additional positions every 150 pips in the same pair. Using hedging in averaging trades, multiple trades and mixed position trades require frequent monitoring and the trading strategies are explained in our professional Trading training (PTT).Position trades are to be done with the long-term view of the market. The best position trades could be between the highest and lowest levels formed during monthly trend reversals, capturing the spread of 600-1300 pips profit in single trade.If you are not able to understand long term market trend, then position trading can be done by keep buy orders for every 150 pips drop in EURO/USD and USD/CHF, or buy order for every 200pips in GBP/USD and USD/YEN and 150 pips limits in those orders. You will witness alternative profit booking during either way swings of monthly market cycles.

Trade in line with the trend at ease: If you avoid taking positions during month beginning and month ends, and take positions mostly during 2-3 weeks inline with the visible market trend, the trades will earn easy money.Since many traders are addict to trading and get struck with unfavorable positions during trend reversals – i.e. holding a buy position near the high or a sell position near the low for the season.

Then they become more and more panic when the market moves away from them and develop margin call fear and liquidate the position during the next trend reversal. You can reflect and see how you have done many times the trades like that.

For example – some traders opened Euro long position around 1.32 and closed (sell) around 1.19 and later view the rise in euro again to 1.24 recently. So we need to recognize prolonged upward stop hunt moves as upward trend reversal phase and prolonged downward stop hunts and downward trend reversal phase.

Part time trading: Many traders come to market when they are compelled to trade and earn extra money to offset some unexpected debts outside or in the market. There are some who want to invest and maximize the return.In both conditions they are not able to either focus on the job or the trades. In such a condition position trade will be the real solution. They can easily do directional position trades.

What is that? - Always do trades in other majors as follows
Sell and buy trades in EURO/USD and GBP/USD - sell every rise of 150 pips with 100 pips limit
Buy and sell trades in USD/CHF and USD/YEN – buy every drop of 150 pips with 100 pips limit

You can try these trades in demo platform for 1-2 months and send the results with the details of your trading as feed back to Fxstreet..

Market rewards patience: once you have learnt position trading –your mindset will get rid off impulsive trading urge and become calm and aim to do leisurely trades. You will never regret of missing any big move of the market, as you know market continue to give good position trade opportunities by the expected –“unexpected swings”.

Position trading strategies – basics:
A decent equity size to take at least 5% exposure of the equity in 5 single lot positions in a monthly cycle – i.e. say $10000-15000 in a mini trading platform, or $50,000 –75,000 in a standard platform.

Calm mind with least market fear and greed

Ability to determine the monthly trends of the market

Recognision and differentiation of the monthly and yearly trend reversal moves

Focused systematic trading approach without being bothered to hypes- the news, rumor, and data release and data interpretations.

Self-confidence and ability to judge the truth in varied commentary, market analyses and projections.

Reasoning ability without bias when listening to media – don’t develop bullish or bearish feel and understand that the forex positions are different from the actual economic conditions.

Understanding the structure and limitations of the market.

A clear mind to earn money from market, and not a mere ego satisfaction by making bullish or bearish statements and calls leading to emotional trading.

Derek's Live Weekly Insight

Date: November 14, 2005 15:00GMT 10EST

Expert: Derek Frey, Head Trader of Odom & Frey Futures and Options

Topics:
- Do not miss your opportunity to be updated in your trading needs this week.
- Derek Frey brings his view point of the forex market for coming week.
- Discuss market reaction to news.
- Enjoy his currency pairs predictions.

Who is Derek Frey?
Derek Frey has been a futures trader since 1989 and is Head Trader and partner at Odom & Frey Futures & Options, a firm that specializes in high probability, defined risk option spread trades for the futures markets. Derek is also co-author of O&F News & Views, a weekly newsletter that is published by several publications and over 20 financial websites including FXStreet.com.

Speech Material:

Stocks: Stocks rallied most of the week mostly due to softening energy prices. We went right through my 10635 resistance point this week and now my next target is 10,743, then 10,780. I do think this rally will either stall or at least pause before rallying above 10,800 if it can get that high at all. If you are still on the side lines what are you waiting for? This is as good as it gets in terms of seasonal trends that one can rely on!

Forex Currencies: Derek Frey

EUR/USD: The Euro continues to run lower. Support levels have not held and I fear we could see a rather strong sell off this week if the dollar remains strong.

USD/CHF: The Swissy remains strong and I still bet my target of 132.50 will be hit this week.

GBP/USD: The pound continues to hold support, unlike the Euro, and stay above the July lows. If 172.73 support is broken then look out but that does not seem likely.

USD/JPY: The yen is stalling out around the 118 handle and I expect this market to go sideways for at least the next week or two before resuming the rally.

AUD/USD: I continue to hold my shorts here with a target of 71.00 near term.

USD/CAD: The Canadian is moving rather slow but is maintaining its upward trend. 120 is still the target this week.

USD/MXN: Peso continues to slide lower. I see nothing stopping this market from testing 10.60 near term.

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