Up 2,500 points this month

The market is back in full swing and we have been rewarded handsomely. In the last 24 hours I have had some nice gains and I am on track to another good month.

Perseverance goes a long way in this business. I started out this month from behind after  losing 4 trades in a row and digging myself into a small hole. I continued to execute my plan and manged to make back my losses and then some. I have also brought my batting average back to a respectable level.

The best way to pull yourself out of a losing streak is to have amnesia when you approach new positions. You got to forget about the last trade and how much you made or lost and move on to the next trade. Every trade is different and you do not want your emotions spilling over to the next trade. This allows you to stay focused and execute your plan based on what you see is happening instead of your emotions taking over and dictating what you do.

Risk to Reward

I have been so busy this week that I have not been able to trade my personal account much. But here is an update of where I am at as we approach the middle of the month.

If you notice my batting average has suffered severely because I have not been able to pay as much attention to my positions. But because I maintained a solid risk to reward on each position I have still been able to see consistent results. Stay Tuned!

AUD/USD Trade Update (Up 264 pips)

I can’t forget about my good ole AUD/USD long position. We are up 264 pips at the moment and still got some good size on. Our stop-loss is at break even so we are trading with the houses money at this point. I am expecting a pull back so that I can add to my position. If price action fails to pullback, gives us a shallow retracement and then decides to rally, then be mindful of the resistance at the 1.06321 level stay tuned.

A body in motion tends to stay in motion

Newton’s first law of motion is often stated as, An object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force. 

So in our case it is safe to say that a candle in motion will tend to stay in motion in the same direction, unless compelled to change that state by external forces acted upon it. To explain this matter in further detail. If we have had a bullish month on the monthly chart where the momentum on the previous or current candle is with the bulls then there is a great probability that the next candle on the monthly chart will be a bullish candle. If we have had a bullish week on the weekly chart where the momentum on the previous or current candle is with the bulls then there is a great probability that the next candle on the weekly chart will be a bullish candle. And if we have had a bullish day on the daily chart where the momentum on the previous or current candle is with the bulls then there is a great probability that the next candle on the daily chart will be a bullish candle. I think you get the point.

AUD has been the big boy on the block. It has been very bullish for the last 2 months and has been out preforming the other currency pairs. Looking at the Monthly AUD/USD chart below you can see I have an arrow pointed at last months candle. Notice how last months candle wiped out 80% of  Mays candle. Based on where last months candle closed we can see how the momentum has shifted in the bulls favor. As this months candle comes to a close and sets us up for a potential buy setup  it looks like unless something drastic happens price action will follow through and continue the momentum from last months candle in the direction of our long bias.  Although we have a much higher long term target for this pair, our next target is at the prior high on the monthly. Now there are other aspects to this strategy that must be implemented in order to have success using newtons law in the markets, but when you have mastered this strategy you will find it a lot easier to develop a directional bias and stick to it.