Wednesday, April 29, 2015

New Signal USD/JPY & USD/CAD

*Position Update:  At 04/29/2015 @ 23:07 EST The Global Currency Scalper liquidated 75% of the correlation trade between USD/JPY & USD/CAD.  The USD/CAD long was closed at 1.20260 picking up 12.6 Pips and the USD/JPY short was closed at 118.733 for a profit of 20.7 Pips giving us a total of 33.3 (24.9) Pips of profit.  We will hold 25% of our position while the correlation narrows over time.

As of 04/29/2015 @ 20:30 EST:

The Global Currency Scalper has identified a possible opportunity in a correlation trade between USD/JPY and USD/CAD.  The trade:   Long USD/CAD and Short USD/JPY.

We will be initiating a position in a correlation trade between USD/JPY & USD/CAD.  As you can see the correlation has widened to approximately 450 Pips but over the past year we have seen these pairs spread as wide as 1,200 Pips.  With that said we will slowly build into our position, initiating just 25% of our ultimate size.  If the spread continues to widen this will give us an opportunity to lower our cost basis.  If the current width of the spread happens to become the max over the next few days or weeks we will still participate by having our 25% position.  This evening we will get the interest rate decision from the Bank of Japan which may present an opportunity to add to our position.

Trading a correlation strategy greatly reduces any directional risk one takes when taking a normal long or short position.  Over the past year this pair has an 87% correlation which gives us great odds of having a profitable trade.  Proper money management combined with solid odds gives you staying power in the trading business.

Tuesday, April 28, 2015

New Correlation Trade In AUD/JPY & EUR/JPY

*Position Update:  As of 04/28/2015 @ 23:11 The Global Currency Scalper liquidated 75% of its correlated trade between AUD/JPY & EUR/JPY with a profit of 32 Pips.  We will be holding 25% of the position for the remainder of the closing of the correlation gap.

As of 04/28/2015 @ 19:05 EST:

The Global Currency Scalper is taking a correlation trade between AUD/JPY & EUR/JPY.  As you can see over the past year the correlation has fluctuated quite a bit, even crossing at times exchanging the lead.  Currently AUD/JPY has taken the lead over EUR/JPY and the spread in the correlation has widen to approximately 500 pips.  Throughout the past year, the widest the spread has become 500 - 600 pips.

The Global Currency Scalper will be taking 1/2 of a position by going Long EUR/JPY and Short AUD/JPY.  With news slated to come out of New Zealand this evening and the Fed meeting on Wednesday the spread could widen to 600 or slightly more pips enabling us to add to our position.  If the spread starts to narrow we will see a nice profit without taking much directional risk.

Monday, April 27, 2015

New Correlation Signal AUD/USD & GBP/USD

*Trade Update:  The Global Currency Scalper took 1/2 its position with a long in AUD/USD @ 0.78693 and a short in GBP/USD @ 1.52212.  We covered the positions at 0.79975 & 1.53197 respectfully picking up 29.7 Pips on 75% of our 1/2 size position.  We will be holding the remaining 25% while the correlation continues to narrow.

As of 04/27/2015 @ 22:45 EST:

The Global Currency Scalper is watching and taking half a position in a correlation trade between AUD/USD & GBP/USD.

In the chart above you will see AUD/USD is the candlesticks, GBP/USD is the blue line and the yellow line is EUR/USD.  We will be ignoring EUR/USD for this trade.  The correlation we are targeting is exclusively between AUD/USD & GBP/USD.  As you can see during the past year the correlation between the two fluctuates between trading in parity to spreads as wide as 600 Pips.

Today this spread is approximately 200 Pips therefore we will be initiating 1/2 our position, this will allow us to get involved in the trade while waiting for the spread to widen.  Our position will be LONG AUD/USD and SHORT GBP/USD.  If we see a spread of 300 pips or more we will add the second half of our position.  If the spread narrows from our entry we will take the profit and move on to another trade.

This trade does not present the amount of risk a directional trade does and allows us to profit when the correlation narrows, and it will narrow.  Patients is needed with these trades and the Global Currency Scalper recommends not using high leverage as these trades can take many days or even a couple of weeks to work themselves out.  Not using high leverage will allow you to take your traditional directional trades while holding a correlation position.

Sunday, April 26, 2015

New Signal NZD/USD

As of 04/26/2015 @ 21:30 EST

The Global Currency Scalper is watching NZD/USD for a potential big move, favoring the downside.  As you can see from the chart above this pair has been in a downtrend since August of 2014 although recently a bid has been found, indicated by the higher lows being set since early March of 2015.

The NZD/USD has also been setting lower highs as shown by the green line, these tops could prove to be too much to overcome and enable the shorts to prevail.  As the two trend-lines converge they are getting closer in distance, setting up for a powerful move.  The Global Currency Scalper is favoring the short side for this trade but we will be prepared to act with a breakout to the upside as well.

We have set alerts just below the green line and just above the red line to give us a price warning.  The Global Currency Scalper will be looking for a close below the red line or above the green line before taking action.  Since we are favoring a short trade we would like to see this pair close below 0.75500 as of today but as the days go by this price will rise along the red trend-line.

Also giving us confidence for a short trade is from the Fibonacci levels as shown on the chart below. As you can see this pair has retraced to the 38.2% level and has failed to maintain price action above it.  The NZD/USD has recently fallen from this Fibonacci level and could attempt to rollover in the coming days.  We could be in for a wait of a few days to a week or more as the apex on these charts in not until mid-May 2015.  But as these two lines converge the battle between buyers and sellers will eventually be won by either side creating a potentially strong move.  We could potentially see a 300 - 400 pip move.

The Global Currency Scalper will be looking to short with a close below 0.75500 with a stop of 0.77450 and a forecast of 0.71600.  As mentioned above we will also be open to taking a long position as soon as we get a close above the red trend-line.

Saturday, April 25, 2015

New Signal GBP/AUD

As of 04/25/2015 @ 19:35

The Global Currency Scalper will be watching the GBP/AUD for a major move.  Right now it is pulling back from the 19455 area for the 3rd time in two days.  This pair also pulled back sharply from just 10 pips higher at 19465 on the 15th of the month. So we’ll keep an eye on this area. Even if it does break out, it will need to push through and close above the 1.95600 level where downward sloping trend resistance lies running back to the February high.

There are a series of higher lows in place since the 8th of last September which conveniently connect to one another forming upward sloping support. The two opposing trend-lines are quickly converging, meaning an explosive opportunity is quite possibly on the horizon. I've got the apex extending out to as late as the end of the second week of May, so we might need to be patient.

The rising trend-line from September is helping to keep GBPAUD guided higher, making a breakout to the upside preferred, and seemingly probable as long as GBP maintains. However, should it break down, we’ll be ready for that too. The potential move for this high flyer is 400+ pips based on size of the wedge, exciting stuff.

The Global Currency Scalper is favoring a long trade with a daily close above the 1.95600 level.  Our stop will be with a break of 1.93000 and a forecast of the major figure of 2.00000.