The FX market is the largest and most liquid market in the world, with an average daily trading volume of over $6.6 trillion. If you’re reading this article, I’m sure you want a piece of the pie. This is the 1st weekly forex market forecast published on the Alltribe Capital blog. I will be posting weekly forecasts every Monday. I try to be as transparent as possible with my trading. I have attached links to my journal and discord server where I post my trade ideas in preceding sections of this article. Let’s dive in.
Disclaimer
While I’ll provide valuable forex trading insight, the information in this video should not be considered as financial advice. It’s essential to do your research, and practice due diligence before making any investment decisions.
Active Trades
1. XAUUSD (Gold)
Trade Details
- Position: Buy
- Timeframe: Daily
- Risk : Reward: 1:4
This setup is part of the setups covered in my trading plan. I call it the extreme swing point buy position. The name is not as important as understanding the confluence behind the setup. I obviously can’t explain all the confluences in all of the trades I include in the weekly forecast articles. Click here to see all the setups in my watchlist.
Confluences
- Market in an uptrend
- Market took longer in correction phase than in the impulse phase
- Order placed in an area of support, specifically a Demand Zone
This trade is currently floating in profits of about 3R at the time of writing this article. I previously took partials at 1.5R after a new internal (Time-frame lower than the entry time-frame) structure had been formed. Click here to see the historical performance of this setup.
2. USOIL
Trade Details
- Position: Sell
- Timeframe: H2
- Risk : Reward : 1:3.4
I call this setup the extreme swing point sell position. Again don’t focus on the name but the setup. I placed this trade on Nov 20th 2023 and I’m still holding the position. On Thursday this week, there’ll be an OPEC meeting whose outcome might affect the trade. I’ll either take partials or close the trade entirely depending on the trades progress on Thursday.
Confluences
- Market in a downtrend
- Market took longer time in the correction phase than in impulse phase
- Risk entry at a supply zone which cause a clear break of market structure
- Supply zone also happens to be in the swing high (Resistance)
Technical Analysis - Trade Ideas
1. AUDJPY
Trade Properties
- Position: Buy
- Timeframe: H2
- Risk : Reward: 4.2
Note
This position is not valid until the price has dropped to the marked demand zone. If the price brakes the previous high, this setup will be invalidated.
Confluences
- Market in an uptrend
- Market must take longer time in the correction phase than in impulse phase
- Risk entry at a demand zone which cause a clear break of market structure
- Demand zone also happens to be in the swing low (Support)
2. GBPJPY
Trade Properties
- Position: Buy
- Timeframe: H2
- Risk : Reward: 4.3
Note
This Setup is not valid until price trades out of the zone highlighted in red. Even if price trades to the demand zone, don’t take it until it’s out of the zone in red (Waiting for price to take at least 1X the time it took in the impulse phase).
The confluences in this trade are similar to the ones in the AUDJPY trade above.
Fundamental Analysis
Fundamental analysis of the forex market involves analyzing economic data and news events to try to predict future exchange rate movements. Some of the key factors that traders consider include:
- Interest rate
- Economic growth
- Inflation data
- Employment data
- Housing data
- Policy makers sentiment about the economyÂ
- etc.
I will soon publish another detailed article explaining how you should do your fundamental analysis in forex trading but in this forecast, allow me to leave it at that.
Major Upcoming Events & Data Releases
Wednesday
- AUD:- CPI (Measure of inflation in the economy).
- NZD:- Monetary rate statement (Affects Interest rate).
- EUR:- German & Spanish CPI (Measure of inflation).
- GBP:- Bank of England’s Gov speech (Policy maker’s sentiment about the economy).
Thursday
- Oil & CAD:- OPEC meeting; oil prices can affect all currencies esp because most economies rely on oil for production, logistics, and heating during the winter season.Â
- EUR:- European Central Bank President’s speech (Policy maker’s sentiment)
Friday
- USD:- Fed chair, Powel speech (Policy maker sentiment).
Geopolitical Events
Political stability across the globe is also important for currency markets. Investors are more likely to invest in currencies from countries with stable political environments. At the moment, the world is experiencing several geopolitical tensions from the Ukraine war to the Middle east tensions between Israel and Palestine. At high risk times like the ones we are experiencing, investors tend to invest their money in currencies or markets regarded as safe havens such as Gold, Swiss Franc (CHF) etc.
Risk Management
Risk management is essential for forex traders, as the market can be very volatile. Before placing a trade you should know exactly how much money you’re risking and what your exit price will be both when you’re right or wrong. To determine the exact lot size to use in your trades, I recommend checking out our position size calculator.Â
Some of the key risk management techniques include:
- Using stop-loss orders:Â A stop-loss order is an order to sell a currency if it falls below a certain price. This can help to limit your losses if the market moves against you.
- Diversifying your portfolio: Diversifying your portfolio by trading multiple currencies can help to reduce your overall risk.
- Using margin carefully: Margin is a form of leverage that allows you to trade more than you have in your account. However, margin can also magnify your losses.
Trading Journal
Keeping a trading journal is a great way to track your progress and identify areas where you can improve your trading. Click here to visit my trading journal to see my past performance. You can use my journal to judge whether my trading strategy can fit into your personality or not depending on your risk appetite and preferenceÂ
Your trading journal should include the following information:
- The date and time of each trade
- The currency pair traded
- The price at which the trade was entered and exited
- The profit or loss on the trade
- Any observations you have about the trade
Conclusion
Forex trading can be a profitable way to invest, but it is also a risky activity. It is important to understand the risks involved before you start trading, and to develop a sound risk management plan.
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