Gaps are a magnet for a stock price

The simplicity of trading for short term profits or long term wealth for retirement is really down to the basic dynamics concerned with how to actually trade in an effective, objective and logical manner.Thus if there are only three things you can do in the market after all, that is buy it, sell it or do nothing. It doesn’t get much simpler then that stick to your trading plan.  Once you are in a trade you have to decide for yourself what you are going to do next. Traders need to gain experience and keep working to improve their performance.
New traders are either going to win on the trade, lose on it or maybe break even from time to time but whatever the outcome, this is the one true unknown element and thus, is what makes the act of trading not so easy. When traders kept records and got consistently better at finding decent trades, they soon learned that if they took the smart profits off the table when they had the chance to do so, they made money consistently. When traders didn’t, They would lose money. Yes we all want the most out of trades when we take them but we never really know how far they will run, so why not take a profit that is possible rather than hope the trade is going up more this is a mistake. Most successful traders hope this makes an impact in their results and more money in their accounts.

Trading Gap Zones

USD/JPY

The Japanese yen has made huge gains on Tuesday, as USD/JPY trades in the high-115 range on Tuesday. Late in the European session, the pair is trading under the 116 line, marking a 4-month low. On the release front, Japanese Manufacturing PMI was unchanged at 52.1 points. Later in the day, Japan will release Trade Balance. In the US, today’s major events are Building Permits and Housing Starts.
The yen has served as an unwilling punching bag for the US dollar for months, and last week USD/JPY pushed above the 121 line. However, the Japanese currency has turned the tables this week, as the yen has gained 200 points on Tuesday and some 320 since the start of the week. The safe-haven yen took advantage of a dip in the Chinese Flash Manufacturing PMI, which came in at 49.5 points. This pointed to contraction in the PMI for the first time May and raises concerns about the soft global economy.
Japan’s ruling Liberal Democratic Party registered a convincing election victory on the weekend, giving Prime Minister Abe a comfortable majority in the lower house of parliament. However, winning the election is likely to be the easy part, as the economy is stumbling and Abe’s economic reforms will face resistance from the upper house. Growth and inflation have not met the government’s target and the yen has tumbled to around 120 under “Abenomics”, with the BoJ implementing radical monetary easing. Meanwhile, the Japanese Tankan indices were a mix in the Q3 readings. The Manufacturing Index dipped to 12 points, down from 13 points in Q2. There was better news from the Non-Manufacturing Index, improving to 16 points, up from 14 points in Q2. The yen showed little response to these key releases.

USD/JPY has posted gains on Monday

USD/JPY has posted gains on Monday, following huge losses last week as the yen rebounded. In the European session, the pair is trading just shy of the 119 line. On Sunday, Prime Minister Shinzo Abe’s Liberal Democratic party swept to victory in parliamentary elections. On the release front, the all-important Tankan releases were mixed. In the US, there are no major events to start off the week. Empire State Manufacturing Index looked awful, slipping to -3.6 points. Later in the day, we’ll get a look at Industrial Production. Both indicators are expected to improve, which could give the US dollar a boost. There are no Japanese releases on Monday.
Japan’s ruling Liberal Democratic party registered a convincing election victory, giving Prime Minister Abe a comfortable majority in the lower house of parliament. However, winning the election is likely to be the easy part, as the economy is stumbling and Abe’s economic reforms will face resistance from the upper house. Growth and inflation have not met the government’s target, and the yen has tumbled to around 120 under “Abenomics”, with the BoJ implementing radical monetary easing. Meanwhile, the Japanese Tankan indices were a mix in the Q3 readings. The Manufacturing Index dipped to 12 points, down from 13 points in Q2. There was better news from the Non-Manufacturing Index, improving to 16 points, up from 14 points in Q2. The yen showed little response to these key releases.
USD/JPY posted strong gains early in the Asian session, testing resistance at 118.69. The pair then retracted. In the European session, the pair has pushed higher and broken above the 118.69 line. USD/JPY is steady early in the North American session.
118.69 has switched to support role as the dollar has pushed higher. It could see further activity in the North American session. 117.94 is stronger.
On the upside, 119.63 is an immediate resistance line. USD/JPY ratio is pointing to gains in long positions on Monday. This is consistent with the pair’s movement, as the yen has posted losses. The ratio has a majority of long positions, indicative of trader bias towards USD/JPY continuing to gain ground.

USD/JPY has posted strong gains on Thursday

USD/JPY has posted strong gains on Thursday, following strong gains by the yen for most of the week. In the European session, the pair is trading in the mid-118 range. The yen lost ground after Japanese Core Machinery Orders tumbled by 6.4%. As well, Tertiary Industry Activity disappointed with a reading of -0.2%. In the US, today’s major events include unemployment claims and retail sales. There are no Japanese releases on Thursday.
Japanese manufacturing took a downturn in October, as Japanese Core Machinery Orders swooned, posting a decline of 6.4%. This was the first decline since June, and was much worse than the estimate of -2.1%. Tertiary Industry Activity also disappointed with a drop of 0.2%, its second decline in three readings. The economy is clearly in trouble, as two consecutive quarters of negative growth mean that the country is officially in recession. Another ominous sign is that consumer confidence indicator continues to weaken. Not surprisingly, the Japanese consumer is less optimistic, as Consumer Confidence softened for a fourth straight month, falling to 37.7 points in November.
USD/JPY posted strong gains early in the Asian session, breaking above resistance at 117.94. The pair continued to post gains in European trade, testing resistance at 118.69. The pair has since retracted.
117.94 has reverted to a support role as the dollar has pushed higher. The next support line is 116.66.
On the upside, 118.69 is under strong pressure. 119.63 is stronger. USD/JPY ratio is pointing to gains in long positions on Thursday, resuming the trend we saw earlier in the week. This is not consistent with the pair’s movement, as the yen has posted losses. The ratio has a majority of long positions, indicative of trader bias towards USD/JPY gaining ground.

EUR/USD is showing little movement on Wednesday

EUR/USD is showing little movement on Wednesday, as the pair is trading in the high-1.23 range. On the release front, it’s a quiet day, with no major events out of the Eurozone or the US. In the Eurozone, French Industrial Production disappointed, posting a decline of -0.8%. In the US, today’s highlight is Crude Oil Inventories.
The Eurozone continues to struggle with low inflation levels, and a senior ECB official is warning of deflation dangers. Speaking in Washington on Tuesday, an ECB board member Peter Praet said that falling oil prices could push Eurozone inflation into negative territory. Such a scenario would spell bad news for the sluggish Eurozone economy and could push the euro to lower levels.
German numbers have been mixed recently and the trend has continued this week. On Tuesday, Trade Balance climbed to EUR 20.6 billion, marking a 3-month high. This easily beat the estimate of 18.1 billion. On Monday, German Industrial Production didn’t look sharp, posting a weak gain of 0.2%. This was a sharp drop from the 1.4% gain a month earlier. As the Eurozone’s largest economy, the euro is sensitive to German data and could lose more ground if key German data misses expectations.
EUR/USD has shown little movement in the Asian and European sessions.
1.2407 remains a weak resistance line. 1.2518 is stronger.
1.2286 is a strong support level.
Current range: 1.2286 to 1.2407 EUR/USD ratio is pointing to gains in short positions on Wednesday, continuing the trend we saw a day earlier. This is not consistent with the pair’s movement, as the euro is almost unchanged. The ratio is pointing to a majority of short positions, indicative of trader towards the dollar posting gains.