Tech Mahindra - A long term buying opportunity in the making

Tech Mahindra is a fundamentally strong Indian company that appears to be a good contender for a medium term trade with a low risk. The Monthly chart shows strong areas of Support - 468 & Resistance - 747Current market price or better yet, any retracement to the support area is a definite buying opportunity. Charts dictate that I use 419 as the stop loss essentially keeping my risk very low at 49(468-419) and the profit target being 747, the potential reward is 279 (747-468) finds me jump in to this trade at a risk:reward of 1: 5.70. Its a buy and hold strategy. Can take a few months of patience but should give investors a stress free 6% return.Copyright iTradethecharts.com 2014

Posted on: 15 August 2015 | 6:19 pm

EURO downside continues

EUR/USD made its historic low in October 2000 and the highest ever in July 2008 before recession hit the financial world and since then it has been a rather turbulent declining ride. Since May last year, I have seen the Euro do nothing but make lower lows. My mantra has been to Sell Euro, make money, repeat.While I don't know when this slide will end, one thing is for sure. Identifying corrections to the upside when the pair's direction is fairly one sided is not that hard and you do make a lot of money shorting every time an opportunity presents itself. For now though, I do think there is a definite possibility of the pair going further South. When should we cash out? I don't know. But I would watch out price action when Euro equals the Dollar(1.00)Copyright iTradethecharts.com 2014

Posted on: 20 April 2015 | 1:20 am

The Greenback had its way at the cost of Loonie

In the previous Price Action Analysis I had said that the Loonie is strengthening and the fact that spotting a few long upper shadows meant that it was rejection of a significant price level. A short trade was initiated in USD/CAD but then unfortunately it did not quite work out that way. The stop at 1.1003 got hit and our trade is now over. I really wish there was never a losing trade but unfortunately it isn't that way so far. For now, I will try and learn a thing or two from this trade and look to minimize the losses.Copyright iTradethecharts.com 2014

Posted on: 10 September 2014 | 2:18 am

Loonie Strengthening Further? Let's find out with this new trade idea.

Loonie was at a critical resistance level of 1.0953 as discussed in The weekly chart of Loonie says it all. There has been some indecision/pricing war amongst the investor community for about 3-4 weeks now in regards to the future direction of this pair. Amidst all of this, Price action traders always know the underlying investor sentiment by simply glancing at the weekly price chart. So let us look at the same:You don't need to be a 'Certified Market Technician' to conclude that higher prices are being rejected or 1.0953 resistance is holding up well. Help is available to make the distinction that it is actually quite simple to discern the valuable sentiment information that these price action charts portray. There are bearish pin bars and volatile bearish candles with lower closing prices telling me that the market is headed South. Anyway, without further ado here it is:Trade Plan: Sell Usd/Cad @ 1.0953 or slightly below                     Stop Loss: 1.1003                    Target: 1.0616                    Risk:Reward 1:6.74Copyright iTradethecharts.com 2014

Posted on: 4 September 2014 | 1:51 am

Getting Fearful when others are Greedy - Time to exit from EURUSD with +840 Pips

Back in March this year, a EURUSD trade recommendation was made and price action has been on our side the whole time. These kind of trades embody 'patience' in a trader, a skill I believe that can be developed if only one realizes how productive and profitable they can be by doing little in the market. Staying Patient is counter intuitive for most but it is an expression of or giving a tangible form to your knowledge about the markets. In August we reviewed this trade and thought the bearish sentiment might continue down till 1.3153. If you missed it see here, EURUSD price action review  Our view was well supported with EURUSD Price action taking it down to 1.3153 last week. An important thing to note from last week's candle is the fact that it was a relatively large gap down opening hinting further bearish sentiment among speculators. Having said that I am not too sure if its just going to continue falling below the 1.3000 Round number support. Trader Psychology dictates an exit at this level(1.3000)Traders who don't mind risking a few hundred pips in anticipation of a larger windfall may use trailing stops  to ride it down below 1.3000 if it were to slide further. As far as i'm concerned I'm out at 1.3000.  Trade Result: Sell Eur/Usd @ 1.3830                         Stop Loss: 1.4000 (Risk: 170 pips)                          Target: 1.3486 1.3156 1.3000 (Reward: 830 pips)                         Final Risk:Reward 1:4.88Copyright iTradethecharts.com 2014

Posted on: 4 September 2014 | 12:54 am

The Power of a Trading Checklist

Each and every day hundreds of new traders fund their accounts with their hard earned money hoping they would one day be able to trade for a living. While the idea is right it requires proper planning and the right mindset to be able to trade for a living. Despite the vast learning resources online amateur traders seem to lack the guidance and real world trading experience. Starting out for the first time, they tend to approach trading like learning blackjack at the casino tables.Approaching the markets with the right attitude will make the learning process short. Trading forex is like flying, it is mandatory for a pilot to have a flight plan and checklist before every flight as much in trading. Traders need to make preparations before hand by having a Trading Plan and a Trading Checklist. What they essentially do is inculcate good trading habits and help the trader with maintaining the discipline that is so important in this profession. The BIG BONUS is that these tools vastly help traders to keep emotions at bay which is one of the biggest challenges that traders face even years into this career.Trading Checklist is one of the most important tool that will help you progress much faster than 90% of the traders out there trying to shoot in the dark. A trade checklist will examine the critical trade criteria before jumping into the markets with your hard earned cash. With proper planning/management give yourself the edge to succeed.Download my FREE Trading ChecklistCopyright iTradethecharts.com 2014

Posted on: 6 August 2014 | 12:15 pm

Loonie back upto critical weekly resistance

The end of June saw the rejection of a crucial support level (1.0616) as can be seen from the weekly chart of USD/CAD below. Ever since then the Green back catapulted to the weekly resistance(1.09537). Now from the looks of it there could be an intermediate term trade developing from this level. What remains to be seen is the price action at the week's close to determine the direction of our trade.Copyright iTradethecharts.com 2014

Posted on: 6 August 2014 | 9:47 am

Profit from the EUR/USD trade: +427 Pips and counting!

From the previous price action analysis of EUR/USD, conclusions were drawn that this pair was headed down to its next support(1.3486). That wasn't the end of it. This trend now seems to have gained some strength and the week that ended on July 20 saw price break this crucial support level and now the pair is probably headed to the next critical support(1.3156) Long term Price action traders who took this trade should have bagged +427 pips by now. Although the profit looks very tempting there is no reason to exit this trade right now while its gaining momentum.Having said that its a highly profitable trade already and you do not want to give up the profits, use trailing stops as we move along.                                                                                      SHORT POSITIONS IN EUR/USD ---- HOLDCopyright iTradethecharts.com 2014

Posted on: 6 August 2014 | 2:10 am

EUR/USD ready to go back down?

The Euro-Dollar pair is yet again testing the magical number, the long term 61.8% Fib retracement of the down move from May'11 to July'12 on the weekly.The Down Trend from May 2011 to July 2012Ever since this down move was recorded, the pair has been testing the crucial level of 1.3830 resistance level(the 61.8% fib retracement)  for the 3rd time since October last year. All of this price activity from the weekly charts. Its interesting to note that when the price tested this level for the first time in October there was huge bearish rejection(see the big bearish candle) followed by an obvious pin bar rejection of this level in December.The Chart above shows the Retracement off the lowPrice action in March isn't in support of a bullish move. I certainly do not see any obvious bullish momentum from the candle sticks. In support of my directional bias, last week there's been a close back below this level. Traders can initiate a Short position from current levels(or from the fib level 1.3830) This is a high probability trade with decent amount of confluence. Trade Plan: Sell Eur/Usd @ 1.3830                    Stop Loss: 1.4000                     Target: 1.3486                    Risk:Reward 1:2Note: Seasoned traders who have experienced profits from my earlier signals may execute these trades with confidence while traders who are new to the forex market or are new followers of my system may place practice trades on a demo account before going live.Copyright iTradethecharts.com 2014

Posted on: 25 March 2014 | 10:24 am

Nifty touched its all-time high while Sensex ended flat

Key stock indices inched higher on Tuesday, closing at fresh lifetime highs amid continued strength seen in the rupee against the US Dollar. It was a lacklustre session which saw both the index move in a narrow range.Capital goods, realty and power stocks led from the front while losses in oil & gas heavyweights offset the gains.The 50-unit National stock exchange (NSE) Nifty index edged 6 points higher to end at its all-time high of 6,589.75.The 30-share Bombay Stock Exchange (BSE) Sensex ended flat with a negative bias at 22,055 levels, it touched an all-time intra-day high of 22,079.96 during the day.Investor sentiment remained subdued globally as uncertainty over Ukraine loomed amid concerns over global economy. Meanwhile, hopes of economic reforms in China after recent slowdown capped the downside in stocks. Copyright iTradethecharts.com 2014

Posted on: 25 March 2014 | 7:11 am

Nifty Futures Rangebound

The Nifty futures index made a lifetime high of 6480 in the week ending 13th December however while being a bearish Wide Range Body(WRB) candle crashing back down to the current support(previous resistance) of 6209.Fast forward 3 weeks and we notice the 6209 support holding decently as for now. The market seems to be shuttling back and forth between critical weekly pivot levels 6100 and 6380. Every time we spot weakness near these levels traders can look out for price action signals to buy from 6100 and sell when price action sell set-ups form near 6380. Copyright iTradethecharts.com 2014

Posted on: 6 January 2014 | 11:39 am

Wishing all traders and friends a Happy New Year 2014

I would like to wish all my followers a Very Happy New Year. Currency markets have traditionally experienced periods of low volatility during the Christmas & year end holiday period. Its no different this time around. Trading volume has been low but I'm sure we will see higher volumes with momentum picking up in the coming week.It's the beginning of a New year and it's a universal perception that there is no better time to envision new goals, set resolutions and embark on newer journeys. I am no different! For the most part of 2013 I have been tracking the Indian stocks and the 50-share Nifty index with a desire to make the switch from trading currencies to stocks.Why would I want to do that?Primarily because regulatory authorities in India no longer permit retail trading in the spot market. The Central bank of India has certain restrictions when it comes to banking transactions with forex brokers.Talking about the advantages - Trading in Indian Stocks and Derivatives allows for substantial savings in brokerage at the end of the year. Indian stocks seem to have a greater predictability percentage.What's that?Its just a fancy financial term I made up to emphasize that its easier to ride the trend, easy to predict where the market is headed simply because of the fact that India is an emerging market which has been posting excellent growth rates year on year. Corporate balance sheets have never been better. The charts reflect this optimism allowing you to ride the trend for a long time. Also unlike the currency market, when you are trading stocks you have a very powerful tool called VOLUME which when used in combination with Price and Open Interest can be a leading indicator which when used correctly can be very effective.Having said that, since the majority of my followers are FX traders from all over the world, I will still include high probability price action set-ups in the currency market from time to time in my commentary. However I will not trade them personally. Unfortunately, going forward the majority of my swing trading analysis would be focused on the Indian markets. I apologize for any inconvenience and  look forward to an exciting trading year ahead in 2014.Copyright iTradethecharts.com 2014

Posted on: 2 January 2014 | 7:07 am

The Australian melt down - How to profit from the falling Australian Dollar?

First up, Congratulations to all the Gold Traders from last week and thanks for your lovely emails. Keep them coming - They inspire me to educate and reach out to more traders.As we are nearing the end of the trading week I am able to spot a few obvious high probability trade set-ups. The Australian Dollar has been weakening for several weeks and with the recent rising expectations from the Federal Reserve of the United States to taper off the monetary stimulus, the US dollar has been strengthening against a basket of currencies. In terms of market sentiment this is an ideal situation for selling the Australian dollar. But of course from our perspective we are looking at an area of price action confluence and 0.9372 will be an area to look out for price action sell signals. If price starts rejecting the 0.9372 level with obvious price action candle stick sell signals then we will sell @ 0.9372 with a profit target of around 600 pips either trailing profits or exiting @ 0.8782. Expect this trade to be active for a few weeks atleast.Copyright iTradethecharts.com 2014

Posted on: 27 June 2013 | 2:22 am

This Gold trade gives another reason to celebrate

                            Yet another highly profitable trade - This time for 800 pips from our trade signal in GoldAfter the big fall in April, Gold had been in a tight range all this time lurking around the 1400 resistance for over 2 months. As price action traders would see it, in a prevalent downtrend, prices started to really squeeze towards the right of your screen which only meant it had to break out of the range some time.With the recent bearish momentum in the commodity its not hard to tell which way it was going to break out now, was it? This trade is now over and time for a new one! I would be publishing another highly profitable trade opportunity very soon, so stay tuned! Copyright iTradethecharts.com 2014

Posted on: 25 June 2013 | 3:52 am

Gold facing stiff resistance at 1400

As promised here we go for a highly profitable trading opportunity. After breaking out of the crucial 1400 level in mid May gold has been consolidating and unable to go back above this level. As you can see in the chart below, there seems to be quite a lot of supply in this zone and hence the strong weekly candle stick rejections for 3 consecutive months. This price action is suggestive of a new swing lower. In effect, short trades can be initiated at around the 1400 level(for a good margin of safety)and can start taking profits at around 1321 for a good 800 pips profit with extremely low risk.Copyright iTradethecharts.com 2014

Posted on: 14 June 2013 | 1:01 am

USD/CAD Trade Update: An excruciating trade netting a profit of +190 Pips

Hi Traders. Its been a long time coming for this post. We had looked into a trading opportunity in the USD/CAD in the month of March. Here's the link if you missed the trade:http://www.itradethecharts.com/2013/03/weekly-charts-are-the-best-to-identify-trends-in-the-forex-market.html.This USD/CAD Price Action Trade lasted nearly a month and a half and we made +190 pips.Normally price action trades with profit targets like these do not last so long. This probably is an exception.Hope some of you could last this long excruciating trade and profited from this trade signal.I have been particularly busy in the last couple of months with business activities and imparting some knowledge about 'Value Investing'. In this period besides this ongoing trade, I was able to make some healthy profits from the dramatic fall in Gold. I apologize for not being able to blog about the Gold Signal but very soon I will be posting a highly profitable trade - I promise.Copyright iTradethecharts.com 2014

Posted on: 13 June 2013 | 1:19 am

USD/CAD at 78.2% Fibonacci level

Since early September last year, the US Dollar gained fair ground against its Canadian counter part and accelerated towards the long term 78.2% Fibonacci level which comes at 1.0264. However things look a little different since February this year as this pair has been printing pin bars and inside bars at this crucial level suggestive of a reversal.There is a good opportunity - a fantastic entry point at 1.0227 to go short and to trail profits from 1.0100 all the way down to 1.0036 which coincides with the 50% fibonacci retracement level and beyond.Copyright iTradethecharts.com 2014

Posted on: 26 March 2013 | 9:27 am

Australian Dollar gaining strength after huge pin bar

The Australian dollar has been spiraling up ever since it printed a huge pin bar off 1.0114 on the 4th of March. The AUD/USD pair after making a huge bearish wave from February to June last year has been in a corrective phase since July and particularly confined between the 50-78.2% Fibonacci retracement levels. Having said that its headed again for the 78.2% level that comes at 1.0574 by the look of things.Copyright iTradethecharts.com 2014

Posted on: 26 March 2013 | 8:58 am

The Weaklink in Japanese Yen.

Last week in our article "GBP/JPY breaks uptrend" we discussed a new price action trade setup. Price action in this pair validated our entry to go short from 144.75 and stay in the trade till 141.54.This trade is now active and we will let it play out over the next few days without analyzing any further.The USD/JPY has been on the rise for several months now clearly due to interest rate differential between central banks of these countries. This becomes an ideal playground for long lasting trends and that's precisely what we are witnessing right now in this pair. More investor money is buying the US dollar. After pausing  multiple times at 94.45 we saw some amount of profit taking in the later part of February. The pair started its run up again breaking past 94.45 in the first week of March followed by a retest on Monday and a close above it. For traders looking to enter long, this is sufficient price action confirmation. 96.44 is a very important resistance level in this pair. Traders are advised to protect their profits from this point onwards.Copyright iTradethecharts.com 2014

Posted on: 19 March 2013 | 5:48 am

GBP/JPY breaks uptrend

Last week we discussed the Cable trade in our previous article "How to identify trends based on price action?" This week there is an interesting confirmation for what we had earlier determined as the end of a trend. The GBPJPY pair had broken a long term up-trend line, retested it and also rejected an important resistance level 144.75. This week we believe this level may get tested once again while we wait patiently to enter a trade; aiming to go Southbound. If this trade triggers at 144.75, we will look to protect our profits at 141.54 and aim for 139.36.Copyright iTradethecharts.com 2014

Posted on: 12 March 2013 | 2:28 am

How to identify trends based on price action?

In my last article "How I missed the Kiwi trade due to greed" I emphasized the importance of the 50% retracement entries instead of waiting for price to re-test the support/resistance areas.The Cable has been selling off relentlessly after a huge pin bar rejected the 1.0380 level on January 2.  Upon inspecting the charts for the current impulsive wave we have found that the we are in a bearish trend.Our next spot of concern is to join the trend and ride all the way down. We do this by looking for Candlestick exhaustion signals at crucial support/resistance levels which is equivalent to pin pointing a logical area to enter trades based on retracements. For this purpose we saw a nice inside bar fakeout setup formation on Tuesday which is typically suggestive of exhaustion in profit taking and resumption of the trend. As for profit target, zoom out on the daily chart and you will see that the next support does not come until 1.4808 level and that gives us a good profit margin on this trade.Copyright iTradethecharts.com 2014

Posted on: 6 March 2013 | 2:56 am

How I missed the Kiwi trade due to greed

Good evening Traders. For the past couple of weeks I have been away from any trading activity and markets in general and it surely feels good to be back!Right at the fag end of this week as I was scanning the markets, I came across a good trade opportunity which I am about to share with you.But before that let me ask you something. Do you know the two worst enemies of a trader? Well, I am pretty sure most of you have heard this at some point of time. If you had spent any amount of time reading 'The Psychology of Trading' you would recall that they are Fear and Greed. Now let us examine how these overwhelming feelings personally affect us as traders. At the time of writing this post this trade has already panned out and guess what?  I couldn't get a fill on this trade due to 'greed'The NZDUSD has been consolidating between the support at 0.8291 and the 0.8466 resistance since early December. The Kiwi started selling off aggressively from the past couple of weeks from the key resistance  0.8466 and finally entered the support zone between 0.8319 and 0.8291. It printed a bearish pin bar candle yesterday with the pin bar rejecting the 0.8319 level. Conventionally I would enter at the 50% retracement of the pin bar to go short around the 0.8291 level. However, I didn't enter at the 50% level expecting the market to retrace up to the pyschological 0.8300 level and in the bargain I didn't get a fill. This is what Greed can do to a trader. Not really the way in which greed affects most traders by having them over trade but still  few days away from the market and you have to work at getting your trading discipline back.and here's the chart in the NY session on Friday, after the trade almost hit the second profit target with out being in the trade ending up staying out of a high risk:reward trade.Copyright iTradethecharts.com 2014

Posted on: 1 March 2013 | 10:47 am

What makes trading the daily charts so beneficial?

From the past week or so the currency markets are range bound. Markets aren't really at any clearly perceivable low risk entry levels and volumes are quite thin following President’s day holiday yesterday in the United States. These are the days we need to be "Strongly Disciplined" as a trader instead of putting money down the line, on a trade not worth taking.I have dabbled with different time frames in my trading journey right from 1 Hour down to 1 Min charts. However, in my experience, the daily charts are better for the following reasons.Clear entry and exit signals      Compared to other time frames, there are few trade signals on daily charts but they are more pronounced. I have realized that on daily charts, you may get less than 10 trades in a month yet on say 4hr charts; you would get even up to 20 trades in a month or even more if you are on a 1 hr. chart. So there are obviously more opportunities on the 4hr chart and 1hr. However, the entry and exit signals are clearer on the daily charts as compared to 1hr chart and 4hr chart.  Limit on over-trading      By default, trading daily charts limits the amount of trades you take unless you are not following a trading strategy. Even those using indicators on daily charts find that they have few entry points as compared to lower time frames. So by default, you are limited to the number of trades that you take hence avoiding over trading. Trading outside the noise Trading the daily charts allows traders to more accurately determine the flow and trend of the markets without the wild swings the intraday charts such as the 5min and 15min charts are prone to. Small times frames such as the 5min chart can react with extreme volatility whipping traders out of their positions making it hard to profit even if they do pick the correct direction. Also the beauty about trading daily charts is that all the news items and alerts are factored in at the end of the day. It really chops out lots of noise that would otherwise take lots of a trader’s time hence taking away the freedom to do other things in life.              Lifestyle      Traders can look at the charts once at the end of the daily chart close and make entries, manage trades or take profit from existing  trades. There is no reason to watch trades for hours on end. All the trader must do is check in once each candle is closed every 24 hours.       Freedom to do other things in life Makes Trading Stress Free! What do we all want as traders? Freedom, ofcourse! One of the reasons I love trading is the freedom it gives me to do other things. Besides trading I also run a business that takes some of my time so basically I cannot and do not wish to spend hours on end infront of my computer fishing for trades. It gives me freedom to teach others. It allows me to spend time analyzing the charts and identifying high probability trade setups. It allows me time to go for all activities that I consider important to me. And while doing all those, I still trade.  As a scalper, you most definitely cannot do that. Even H4 charts don’t give you that much freedom though they are much better than lower time frames. Long story short - I am no psychologist but if statistics are any indication then 90% of the traders lose because they apparently lack an understanding of their own trading psychology. The ultimate solution to most trading psychology problems is Trading the Daily Charts. The Daily chart almost always single handedly keeps you out of these self destructing trading behaviors. So what I am saying is the daily charts can not only help you become better at finding the best possible trade set-ups thereby eliminating reducing the ambiguity from trading but also in the process eliminate self destructing trading behaviors like lack of discipline, over trading & trading smaller time frames thereby inculcating patience in a trader, the importance of which I cannot emphasize enough. Copyright iTradethecharts.com 2014

Posted on: 19 February 2013 | 4:18 am

GBP/JPY - Simple profit taking or Reversal?

Yesterday's GBP/JPY trade was a loser. The market appeared to be in a panic mode with a deeper correction than I had anticipated due to aggressive selling. At this point we need the pair to close above 144.21-144.81 to still remain bullish. Alternately if this pair makes lower lows(lower than 141.89) & lower highs(lower than 147.97) than the prior swing, it may prompt an end to this uptrend bringing a reversal of sorts in this market.   Copyright iTradethecharts.com 2014

Posted on: 15 February 2013 | 1:56 am

GBP/JPY pullback allows for a great trade set-up.

This week's Silver trade set-up was a huge winner! Moving on, The GBPJPY has taken a breather after trying to cross over the 148.00 and failing to do so. 144.81 is probably the support level from where buyers can reload and shoot for 150.00 level. There isn't a significant resistance level from where we are right now and the next big resistance and an important psychological 150.00 level. This week we've had a decent pull back to bring prices awfully close to the 145.00 level and now we are all set to take this trade:                                                                                        Buy@144.81 - S/L: 143.42 - T/P: 150.00.Now look at the H4 chart and notice an inside bar from support wherein the mother bar is a pin bar  rejecting the support. That's a classic retracement trade!Copyright iTradethecharts.com 2014

Posted on: 14 February 2013 | 3:20 am