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Trading the EUR/USD

 
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itrade2

Trading the EUR/USD

Hello, I would just like to start a discussion on trading the EUR/USD. This will be a place where we would share charts, trade setups, trades, trading ideas, best trading times, etc. Also, perhaps other traders can start similar threads regarding other popular major pairs like GBP/USD or even major crosses. Thanks.

Mon, 09/05/2011 - 8:31pm
 
Maitha

This would be great itrade2, but I am wondering if we could be able to attach charts there the discussion will be very useful.

Colton, can you do something about this, where It would be possible to attach charts into our discussion?

Many Thanks,

 
itrade2

Gee, I guess I'll lead off by example. Chicago time 18:15, looking at a 1 minute chart, Eur/Usd breaks out of it's consolidation area from the morning session sell-off. Is there enough buying momentum to take out 1.4040 target?

 
itrade2

Is 1.4040 a possible price cycle pivot area? What are the fib retracements? Let's have some good/fun technical dialogue...bzzzz.

 
highlink26

I have the EURUSD HITTING an up trend line we should have a bounce up for 9/7/11

 
Prodigalpops

Pah! - could have done without that 95 pip spike aroound 8:05-8:10 GMT when the German courts reported their rejection of the bail out suit. Cost me 25 pips - thank you stop loss. Fortunately I recovered 23 pips on the upward part of the spike.
News - don't you just love it!

 
Craig Whiteside

I find trading this pair is best starting in final hour of Asian session into London opening (7:00 - 8:00AM GMT). I find it's often quieter in the afternoon leading to things warming up for the last hour or so. New York opening (1:00PM GMT) doesn't generally have a major impact on trends. Assuming nothing major is announced like the Swiss with their decision to peg to the EUR causing a rapid overvaluation.
That spoiled my initial plan yesterday, causing me to ditch out early of my EUR/USD short positions. Ouch! I was kicking myself for deviating from my strategy until I realised the fundamental weak picture had not changed with the EUR, and regained losses easily on the inevitable retrenchment (making new lows not seen since Jul 17), for an easy 80+ pips.
This morning I made another 58 pips on the bounce. I tried a new tack today, basing trading largely on a 4 & 1hr chart. I was surprised to see the position hit my target in less than 2 hours! I placed a GBP/USD long position at the same time because of the strong correlation with the EUR, but this hasn't closed out yet (as expected at time of writing), and is just 28 pips ahead. Still winning so far. Lesson learned for me: stick to the plan, and try not to be overly distracted by market noise. Short term technicals are one thing, underlying fundamentals quite another. This is VERY uncharacteristic of me, as I play the game with zero emotional involvement.I got spooked because of my uncertainty of where the swiss 1.20 peg would put the euro knowing the swiss government had committed "unlimited" funds to supporting this ceiling.

 
Chad

With the SNB trying to hold the EURCHF above 1.20 that gives the opportunity to hedge EURUSD with USDCHF. What are your thoughts on this?

 
Craig Whiteside

Seems to me USD still remains comparatively stronger, and if I were to trade these pairs I would be long on USD. It will be interesting to see how long SNB props up the EUR given it's inherent weakness across eurozone economies. It's probably going to be an expensive failure longer term in my view. Even the swiss won't have a bottomless pit of cash and patience, even if it does provide a short term remedy for their exports.

 
Craig Whiteside

Back to scalping EURUSD & GBPUSD today after experimenting with other strategies. It was a "whippy" market to say the least, although I managed to grind out a fairly respectable +62 pips on EURUSD, and +132 pips on GBPUSD. 17/18 good trades. My plan today was to grab small 10+ pips moves as they occur. Seemed to work out pretty well. Apart from studying price action, I used the MACD & RSI indicators as guides. Not bad, but I'm still trying to get to grips with a longer term strategy on trading bigger moves over a longer period of time. Scalping is fun, but I'd rather not be staring at two monitors all morning.
How's everybody else doing?

 
itrade2

After Curtis' class I feel more confident in setting up my platform and making executions. I just finished manually paper trading the EUR/USD. I took 5 trades 3 winner's 2 losers, I ended up with a positive $350.00. Now I just have to perform on the MT4 Platform. I need get some sleep, trading these hours is fun but I'm use to morning sessions.

Craig W., you sound like a swing trader...I've come to realize that starting with 10k and with a 2% daily draw down, it's going to be tough, especially if you can take more heat knowing it'll eventually go your way. Your thoughts...

 
Craig Whiteside

Yup, that's basically me. I like to get into it with fast moving pairs, and over time you get to know the rhythm of the market. I keep an eye on news for major hits on market moves, but I basically "trade what I see". I'm getting better at the momentum trades, timing my entries & exits more tightly when I pull the trigger. Nothing worse than getting into a trade that my indicators are suggesting a strong sell for it to notch up higher and ruin things. I pay close attention to the length of the body part of the candles (& wicks) to also guide (mostly) when a reversal is most imminent to enter/exit my trades.
Today was pretty good, I got home to trade the last half hour of the London session. There was a nice little run up to the bell, buying EURUSD all the way (4 trades), then as they topped out where I thought, closed them, then I sold 'em all the way back down again to pretty much where I started.
Total trades = 8, all winners, +88 pips, time spent = exactly 1 hour. $880 to the good. The best part, no $200 stop outs as I managed to time all trades within bounds. Thats what I'm focusing on. For me, it's all about the entry, and I don't much care how far it goes as long as it heads in the direction I thought.
Good job on the wins itrade2. You just got to get into it. Try different timeframes, pairs and whatnot to find your style. The one you're most comfortable (& profitable) with. All you can do, is trade. What's the worst that can happen trading your demo account? A re-set? Pfft, that's no big deal at all. In fact, disasters are expected until you get a grip on what's going on. It's not like Shawn or Curtis are going to come over to your house and yell at you, right?
Get your platform organized, and get familiar with it after setting all your preferences. Maybe create your own template or two. Forget "paper trading", seriously. There's no substitute for actually going something. That's the whole idea of a demo account. You get to play live, and experience actual market conditions. More importantly, you experience YOUR REACTIONS to market conditions. You will learn a lot about yourself, how you think, feel, and react. Trust me. It's a good way to find out if you are prone to panic, anxiety or other trade killing emotions. Learn to deal with your emotions when you trade. Your goal is to eliminate emotion from your trading. Emotion is irrational, and causes illogical and adverse reactions. Before you start trading, all you need is a plan. Then execute the plan. Nothing else. If something happens that affects the desired outcome of your plan e.g. your position moves against you, deal with it immediately, and move on. Take your hits, but do not dwell on them. So what if you only made 4 pips when you thought 20 or more was on the cards. There's no point in over-thinking, and playing "coulda, shoulda, woulda" on paper after the fact. You won't feel the market paper trading. You have to be in it. Best of trading to you. Notice I didn't say luck? You don't need luck, you're a stone cold trader! ;-)

 
itrade2

They will reset your account? - Really?!!! I thought that if you lose in the Demo, you would have to build it back up. That's why I didn't want to use it until I understood how the MT4 Platform worked. I didn't want to buy Eur/Usd by clicking something that meant sell, or to go flat but ended up scaling, etc.

Since they'll reset the demo account then I'll go CLICK HAPPY till I figure out the MT4 Platform. Thanks Craig W.

 
Craig Whiteside

Sure will, if you lose all your initial $10k grubstake, you'll just get another $10k. It turns out gains/losses roll forward to the next month too. If you go under your initial deposit the stats report will print the amount as the "Absolute Drawdown" in your detailed statement. Run your detailed report by right clicking any trade on your MT4 "Account History" tab. Do this weekly to track your Profit Factor, and other interesting facts about your trading.

I thought the account reset to $10k at the start of every new month, so at the end of the month, just for kicks to see how it feels to watch a huge loss unfold, I deliberately cratered my account just to see what happens when I leave out key pieces of my trading strategy. I contrarily bought EURUSD when fundamentals & technicals screamed sell. I pulled the plug when I hit the floor back at $10k. Over $6k in losses. Heheheh! Never done that before, and sure as heck would not have done that with real money in play.
At the time I figured it would just start out again at $10k anyway, so what the heck. I got to feel what a huge loss feels like, and reinforce key points in trading. Never in my life have I lost "money" like that before, and it was a valuable lesson to me.

If Shawn and the guys were watching that, I bet they thought I'd lost my mind. Sorry guys, I was just playing. Won't be doing that again, because I actually want to get funded. ;-)

 
Jerold

This is just a caution so don't take it personal, its not meant that way. This was given to me early on by my mentor. Trading is like any other profession. I liken it to professional sports.

Regardless of what you think or intend you what you do in practice you will do in the game. Pro athletes know this, pro traders know this. So, never, ever, violate any of your rules even on practice accounts. So, even though you and I know that would never be that reckless with real money you have just told your subconscience that if it did happen, its not that bad.

I pray this never happens to you but the extension of what I'm saying would go like this:

You are having a great month and need this last trade to go in your direction to make your goal. Not looking good so you violate your rule, just this once, and add to a loss because you know you got this, just got in a bit too early. Low and behold, it works, price came back in your favor, you exit and make your goal, plus some. You feel great, not realizing that is actually the worst day in your trading life, because a small violation didn't hurt.

So now, going forward, you stick to your rules most of the time and rarely violate them but when you do, its not that bad. You can see where I'm going with this,...the end of the story is a blown out account.

Think about Jeter in batting practice, intentally taking wacks, just to see what it feels like (yes I'm a Yankees fan) or Phil Mickelson on the practice green intentially putting wide to see what it feels like, doesn't make sense does it.

Sorry, I don't intend to lecture, just keep in mind the fact, regardless of what you think or intend you will do, in the game, what you do in practice.

 
Jerold

Craig this isn't meant as a response to you, you probable think I'm a know it all AH by now. But for those who are interested in this concept that " regardless of what you think or intend, what you do in practice you will do in the game" read "Talent is Overrated" by Geoff Covin; not a book on trading but rather on achieving greatness. Available in audio form at Audible.com

 
itrade2

Thanks Jerold, by the way are you funded? If so what level?

 
itrade2

Finally got out of my very first trade on the MT4 Platform, and what a trade. Not how I would normally trade, but patience, discipline and good technical reading of charts can give a bit of confidence to my conviction. Now I can trade my scalps correctly and build up my small account to a level where I can hold my swing trades for a few days....bzzzzz.

 
itrade2

Anyone thinks eur/usd is going to take out 1.31350 by the end of the year?

 
itrade2

Craig W., are you trading the Gbp/Usd, if so what time do you like trading the Gbp/Usd?

 
Craig Whiteside

Jerold, nicely put, and you are spot on. Don't worry, I don't feel targetted by your responce, and I certainly don't think negatively of you, or any other Apiary member. We're all here to learn, and I'm trying to learn the game the best I can. I'm still finding my feet. Yup, sometimes I do get "lucky", and you're absolutely correct, it sucks! Because I know the trade should have gone my way because of adherence to proper trading principles, and not a kind twist of fate. Some things I try work out OK, and other things I experiment with turn out horribly in terms of pips lost, but invaluable in experience. It's all good, and I thank you for your comments. I will be happy when I settle into a consistent system I'm comfortable with. It'll come eventually, with patience, and an open mind. For now, I'm happy experimenting with different approaches gleaned from what I see, and hear on this site and other sources. It's how I APPLY all of this new information I'm getting to grips with. It's funny, sometimes I look at a chart in dismay, and think "what the heck is going on here?".

itrade2, Congrats on your first trade! The first of many successful steps towards profitable trading. I trade GBPUSD generally in the mornings (except Mondays). I live in the UK, so being around for the opening in London is not a problem. I start by looking where the Asian session finishes, and what happens in the first half hour of the london session. It's amazing to see the frenzy of activity up & down before settling into what I think is a tradable pattern. Looking at EURUSD, & EURGBP offers some clues before I think about trading GBPUSD.

 
itrade2

Thanks Craig W. I'll look at GBP/USD at the London Open. I have another question to you or to anyone reading this.

I paper traded Aud/Jpy just now (yes, paper traded because I've never traded this pair before) and I went long at 75.5410 and exited at 74.7800. Question: Can someone show me the math on converting this to US Dollars?

Thanks.

 
itrade2

oops I meant, I went long 75.5410 and exited the trade at 75.7800 in AUD/JPY.

 
ertimertmtj

(75.78 - 75.541) x lot size / USDJPY

 
itrade2

Thanks ertim.

 
itrade2

Hmm, technical charts seem to agree with him.

http://www.youtube.com/watch?v=kpg76VjTa58&feature=related

 
ertimertmtj

The shark exposed finally. Nice video.

 
itrade2

Frustrating week when adjusting to a new style of trading - that's fine, I'll still succeed.

 
itrade2

Do you have what it takes to trade a Million Dollar Account?

This is just 1 of 18 episodes. Watch the rest over the weekend:

http://www.youtube.com/watch?v=68cciZYNqn0

 
itrade2

Hmm, let's see if EUR/USD will fill the gap. 1.3380. It's a slow push up.

 
rebecca

Is anyone using Shawn's M5 Momentum Blast strategy? I am really liking it.

 
itrade2

M5 Momentum Blaster? Wow, I don't see it on the indicator list. But that's alright, ever since they implemented the 2% rule, I had to adjust my trading style. It's just a matter of time before I get back what I loss.

 
itrade2

So who's still trading EUR/USD?
And how are you guys/gals doing?
Anyone know where it might close by the end of this week?
Anyone notice that All the Majors are following EUR/USD?

 
AliHuzaifa

itrade thanx for the video series,i think its same as apiary recruiting traders :D

 
gerhard

Not sure where it will close, perhaps this helps? http://apiaryfunds.com/10-4-11-eurusd-weekly-briefing/

 
itrade2

Thanks gerhard, I didn't even know that link existed. Now if only Apiary had a place that explains how we get paid.

 
itrade2

I wanted to hold my position over the weekend, but finding a fine balance between scalping, day trading and swing trading are sign of a well rounded trader.

Since the implementation of the 2% rule I've been nickel and dimming EUR/USD. I have to be careful NOT developing into a "Penny Wise - Dollar Foolish" trader.

But I chose the conservative approach, better safe than sorry. lol. There will be lots of opportunities to trade aggressive. I exited my last trade for the week for 4 pips.

buy 1.00 eurusd 1.38774 1.38815 41.00

 
itrade2

Craig W., are you still trading EUR/USD?

Anyone in the HIVE, care to guess what or where EUR/USD is going next week? Come on, guess, if you're wrong SO What. Don't be discouraged if you're wrong, just make sure it doesn't affect your equity too much. lol. I'm serious, you can't take being wrong too seriously if you want to succeed in your trading career.

Ok, I'll start if off. Conservatively, I see 1.4000 being filled. Aggressively, I see it hitting 1.4140 or higher. So if you're like Goldie Locks and the three bears, I would go for the middle of 1.4070.

There, so have a great weekend, have fun, and always - Happy Trading!

 
Prodigalpops

Ok.. I see a consolidation zone that needs to be cleared - above 1.39362 from 15th September. Using a 4 week ATR that would put a potential target near the high of 1.42810. This also matches up with a 61.8% retracement from the May 4th high/October 4th low. However, there's a small hiccup in the middle around the 1.41000 area (6th-8th september) which may hamper proceedings (also around 50% retracement).
Of course it could all turn to mush and go the other way. It would need to break below 1.36525 and various levels exist where it could hold up it's movement. Likely target downside (again using ATR and fib levels is likley to be 1.36500, being a 50% retrace from the recent high, maybe as lows as 1.34400.
Of the two scenarios, I think the upside is the better option, but keep an open mind.

 
itrade2

At least there's two of us so far that are siding with the bulls. Anyone else? Hmm, I think Craig W. got called up to the big leagues and is now a funded trader.

 
Prodigalpops

Well - we're showing the dedication, checking the forum at weekends...
Or perhaps we need to get a more diversified set of interests outside of trading :-)

Only kidding.

 
itrade2

lol Prodigal, I guess you and I just luv trading, it's in our blood sort of speak lol. I've joined Apiary late Sept. and they allowed me to get a head start, so Oct. is considered my first month. How about you, how when did you start?

 
Prodigalpops

I signed up at the end of August. Had two good weeks trading my "normal" style, did some fool hardy experimentation for the next two weeks (trying to chase the stats as well) - dumb move.
Currently sitting just above 10k having just about come to terms with the 2% limiter.

 
itrade2

Hey Prodigal, it's all good. It's making the adjustment from your own personal style and adjusting to a new set of condition upon your trading rules/style.

I'm hoping their a bit flexible about this 2% rule with some traders because if you want to trade the 1hr chart, you'll be bound to have that 2% get in your way before you can get he 1 hour chart to be a runner. And runners are where the $$$ is at. And they know it.

You were right about EUR/USD being in consolidation at the moment, just look at the daily. But most new traders aren't aware of this when they're trading the 1 minute chart and how the daily consolidation affects the 1 or 5 minute chart.

But it's all good, I just got keep WORKING at what ever trading level I'm at. I'm wondering if they're waiting for us to get 50% return on the 10k or is it 100% roi.

I'm like you I'm just above my 10k, at the beginning I was 25% ROI but after the 2% implementation I practically went flat line. But now I'm doing ok adjusting, hopefully, they'll allow me to trade the 1 hr chart so I can get a 50% ROI, by the end of Oct., if not, then I'll be nickel and dimming the 1 minute chart which will only produce more losses and little gains.

 
Prodigalpops

I think I read somewhere that there is a possibility of a larger than 2% limit, but it needs to be after careful evaluation by the risk managers before it is agreed to.
My main chart period is 15 mins, with suitable review of 1hr/4hr and daily time frames.
When I started (mid 2007) I used to think that I could trade 5 min charts using a short term momentum method. Despite believing I was taking the longer term trend into account I found it was too easy to become blinkered and only see the short term direction - usually to my cost.
Some of the main things I learned from this is that.
1. The market doesn't care what you want and just because you want it to move in a direction doesn't mean it will (no matter how much you buy/sell!)
2. If you trade opposite to the longer term trend, expect to get slapped.
3. Trust what you see and your own judgment rather than a broker/commentator. (i.e. Trade what you see).

 
AliHuzaifa

Apiary can u please provide option to attach charts (pictures) in our posts?

 
itrade2

Hmmm, it seems like EUR/USD will pull back to the 1.3860 area with a possible twist of the knife's edge to 1.3840. Regardless if it pulls back or not, 1.4000 area is still locked and loaded for target.

 
Prodigalpops

We're only one day in and after yesterdays rather lacklustre movement I think it's to soon to call. Also, we need to get the next euro meeting out of the way.

 
AliHuzaifa

there is no point to trade Eu at this moment,nothing is clear,even the experts are confused,no clear signal.

 
Prodigalpops

Never said I was trading it - I agree there's no direction :-)

 
AliHuzaifa

euro is just bangling on wall and bouncing back from both suppports and resistance.

 
Prodigalpops

Of course - the fact they've just cancelled tomorrows Euro meeting might cause a bit of movement in the market... ah yes, a 100 pip whipsaw - nice 8^}

Especially as it's not the meeting they think - apparently the ECOFIN meeting.

Some twitchy trigger fingers out there - be careful.

 
AliHuzaifa

yes lol 100 pips whipsaw.I am sure many micro account got wiped out.

 
itrade2

Well, my analysis of 1.3860 pull back was correct. Unfortunately, I forced the trades, then I got my ego involved, then I tried experimenting timing the 1 minute with the 1 hour - I ended up paying dearly for that.

Oh well enough experiments with my trading gains, back to sane trading, getting back the profits won't be a problem. Finding the correct balance in trading the 2% and trading the larger time frame will be just a matter of time.

Eur/Usd might have to pull back further before it can take out 1.4000. So in the meantime, I'll go back nickle and dimming the market until the 1 hour sets up again. I think that will be a better plan in finding the correct balance in trading with Apiary.

 
Ned W.

I've been trading the EURUSD on the 1 min chart and this last week has been especially painful. I get a lot of practice but the moves are making me a bit dizzy. I'm thinking about moving out on the time frame and looking at another tight spread pair.
The most difficult thing I'm finding about learning this way is the only feedback I get is from my P&L. I can look at my stats and figure out what I'm doing wrong but it is much more difficult for me to figure out what to do right. Thankfully I'm persistent, read stubborn - ;o)

 
AliHuzaifa

good day to screwup whole performance lol thankgod I stayed sideways

 
Prodigalpops

Absolutely.

 
Chad

Definitely.
By the way, I like how the forum now goes right to the last unread post.

 
Prodigalpops

Just to add to Chad's last point, I'm not sure the "go to last post" works if ther is more than one page of comments. It goes to the end of the first page.

 
Prodigalpops

Well itrade2 - one day to go and so far my prediction isn't looking too bad. Seems to be in the "hiccup" zone around the 1.41 area. I wonder if we'll see it push to the 61.8% retracement or collapse...?

 
Prodigalpops

Hey Colton - you pop up eveywhere :-)
I would have thought going to the last post should be to the last post on whatever is the current last page.
Hope you're all set for the session later.

 
itrade2

Prodigal, your analysis is correct. Most traders don't realize that they need to be an analysis to trade successfully. So Prodigal are you funded yet?

Colton, no worries you can post where ever you want to.

Have a great weekend all!

 
Prodigalpops

Thanks itrade2, I was pretty close. It didn't quite reach the 61.8% fib retracement, but if I'd had the means to put on a trade based on my analysis (time frame waaay to large for me) I would have been happy with the results :-)
Notice also that for most of the week it barely broke below the 38.2% line.

Here's a chart with the fibs on it and the range I referred to (in yellow).

No, I'm not funded yet. Still working towards those elusive stats (not able to get average win greater than average loss at the moment) and currently flip-flopping either side of $10k.

eurusd_20111028.gif
 
AliHuzaifa

last Thursday can be written as black thursday ,i personally know few guys who booked heavy losses with real money,they were all short on EU guessing a retrace which never happened.

kind of a short sqeezed day for many bears.

one of the guy lost whole of his yearly salary :O

 
Prodigalpops

Only one thing to say to that... where did they put their stop losses?

 
itrade2

Prodigal, don't worry about the stats too much. The bottom line for me is "equity," the ROI of the 10k for each month. Example, you can have greater losing averages compared to the winning averages and you can be up 50%-70% on your equity.

One stat, for me to concentrate on is what is your equity at the end of the month, because that's your payday. My understanding is at the new month, you start over again at 10k, then after a while of proven trades you can get to 50k, etc.

But I can be WRONG on this, so maybe an Apiary Staff can clarify this for us wanna-beez funded traders. lol.

 
AliHuzaifa

2% loss of equity and trading get stop,this can be very useful rule for days like thursday.

 
Prodigalpops

True - the increase in equity is a core driver, but the average win/loss ratio will go to assist that.

 
k15hor

wow, a hive of activity with the euro today..
First time i was on the right side of the trends and took a lot of scalped pips..

I got my signal to enter at 19.03hrs (London time) - 1.39163 1 lot size. on 1 min TF

(Got into at the Green line)

Still in after 19.30 (London time) closed half position .

I have a moving stop loss (dotted red line) when i physically move the line my SL is adjusted too.

So supprised i walked into a couple of these today ... logged nearly $2k

Sorry the chart looks a bit messy but there is form in that there chaos..!

euro usd.gif
 
itrade2

k15hor, that's an AWESOME trade Congrats!!! I got my A$$ handed to me on that nasty short.

 
Prodigalpops

Ha! - DailyFx just reported...
GREEK PARTY OFFICIAL: PAPANDREOU MAY WITHDRAW REFERENDUM PROPOSAL.

No wonder my EURUSD trade just shot 35 pips in under 2 minutes. Shame all it did was give me a small profit (it wasn't looking pretty until that point).

From a political perspective, it just makes the whole situation look like it's being run by a bunch of amateurs.
Regardless of whether it's true or not, the official should possibly have held his tongue as it just adds to the uncertainty.
If it turns out to be false - he's added a market spike where perhaps there should not have been one.
If it's true, Papandreou is just made to look like a fool/puppet of Merkel/Sarkozy/IMF.

All in all - you couldn't write a Broadway/West End farce that was better.

eurusd_20111103.gif
 
Matthew Smith

Expect more volatility today (a lot more!). A possible rate cut, ADP unemployment, ISM, and G20. I have a feeling today is going to rocky, moving from one headline to the next. Good luck out there!

 
Prodigalpops

I've walked away - too easy to get caught on the wrong side of these headlines.

Latest news posts from DailyFX - ...UNCONFIRMED REPORTS THAT GREEK PM PAPANDREOU MAY RESIGN

And just to mix it up a bit, Medvedev decides to open his yap with potential IMF support!

Think I'll take the dog for a walk, have some lunch, and review some of the recordings.

Good luck all.

 
Matthew Smith

What part of the world are you from Prodigal?

 
Prodigalpops

South West of London, UK (Near Hampton Court)

 
Matthew Smith

Nice! I am a monster Chelsea fan! Spent some time in London a few years ago. Too bad Arsenal gave them a whipping on Saturday :(

 
Prodigalpops

Where are you then?

 
Prodigalpops

Just watching all the smiling G20 faces on BBC News 24 - not sure how long those smiles are going to last :-)

 
Matthew Smith

Pennsylvania (near Harrisburg) in the USA

 
Prodigalpops

You're up early :-)
I try and trade from 8:30 GMT up to about the NY open - depends how well I do.
Monday/Friday I'm able to trade from home, Tuesday-Thursday isn't as convenient as I trade from work and as you may have seen in other posts, sometimes my internet connection is unreliable.

Today however I'm trading from home... and totally messed about by Europe news (in profit though)!

 
Matthew Smith

Total chaos out there today! Hard to pinpoint a good entry point but there are tons of opportunities out there that is for sure!

 
Chad

Worked out good today for me. First trade hit the stops, then small profit on second, then a nice run for the best of the week.

 
donbrown

I made $683 on my first trade and have dribbled down to 10,385 I plan to be patient and wait for a double bottom W set up. This is where I am confident of an entry.

 
itrade2

I'm Back! Got my system up a running LATE this morning but I had a signal and took it. Short eur/usd @ 1.3587 current price 1.3530. I think I'll let it run. Protective stop at 20 pips.

Since Apiary wont let me play the cycle for the 1 hour chart I'll have to play the 1 minute chart and time it with the 1 hour. I know they know what I know but they just wont let me do it.

Each time they pull my trades the market turns to my favor for a profit. lol. But it's all good. It's my 2nd month and I'll play by their rules. lol!

 
Prodigalpops

Welcome back itrade2!

 
itrade2

Darn, place my protective stop too tight before bed time, missed my run. oh well, there's more opportunities. lol.

 
bayfisherman

What do you think +300 short at the moment close it or hold it...nice break tonight in the Asian session neckline/lows broken @ 1.34837....look out below.

 
bayfisherman

Here's a EU 240 chart lots of potential here...

http://www.screencast.com/t/J2gRhCh4dvDY

fear and panic...let's make some dough...lol!

 
rebecca

I think you are are right, BFM...lots of downside. (going to try to post a chart and see how it works)

Cool! Works well.

4x chart.gif
 
odanno82

esqreb,
What is your chart setup and indicators you have there. Is it working for you? How do you trade it?

 
bayfisherman

Here's a weekly chart of the EU for longer term outlook...see swing trader thread for other charts.

Euro weekly.jpg
 
bayfisherman

some levels to watch

EU60min.jpg
 
bayfisherman

anyone lucky enough to catch the break? Last night in the asian session there was a good sell off as well...just something to note:

http://my.jetscreenshot.com/demo/20111123-2d1p-192kb

 
VON

Wow. Did anyone get blindsided by the coordinated central bank effort to lower interest rates on dollar swaps?

eur chart.gif
 
AliHuzaifa

yes I did catch it

 
mikesingletary

Good luck for you Ali. I woke up to the news, literally watched the spike as I turned on my computer. Too little too late. I'll catch it on the way back down...and I predict eventually, it will go down again, just as quickly. :)

 
David B.

deleted

 
Matthew Smith

Just broke through resistance @1.2945! Looking for a possible move higher to the 1.30 level and possibly the next area of support around 1.3077. Thoughts anyone?

chart.gif
 
kitsap1

the move down for the S&P dismantling the European bonds friday 1.2870 to 1.2623
Throw a fib on it and your looking for 61.8% and it blew through it == and the 78.6% and the 100% and barely got through the 127.2%

Strange thing about these fib levels, if one does hold the next one might.

Now Tomorrows Pivot R1 is around 1.3024

Next, you know that you will see divergence on sometime like MACD Histogram. The most accurate is the Awesome Oscillator.

I will be watching he 1.3024 - 1.3077 for a Porform Pivot Semaphore, negative divergence and trend line break and expect to see price go to the 2880 area when it does reverse.

The 2623- 3025/3077 will be the AB leg. The move back to 2880/2890 the bc and the CD wiil be equal to the AB -- if goes as per text book.

And thus, my thoughts.

 
Matthew Smith

Thanks for the post Kitsap, well done tonight in the presentation. I think we will see some resistance around 1.30 (as it is a psychological level) and there may be DNT options in play with the heavy move downwards. I am staying cautious about this move up as I feel it is a mostly a reaction to the string of "no bad news" out of Europe and not "good news".

 
kitsap1

correction to last. I would expect a 50% retrace of the move up from 1.2623 to the 1.3034/3077 region. That would take price back to the 1.2820.

Nothing moves in a straight line. Because it is a correction , I expect a sideways move before reversing into the C wave up and approaching the Wave 2 high aground 3220.

if this pans out, the calcs suggest as ensuing low around 1.11 in May 2012.

 
Matthew Smith

These guys know their stuff. This is something to put into consideration:

http://www.forexlive.com/blog/2012/01/20/eurusd-sizeable-1-3000-strikes-...

 
kitsap1

The EURUSD hit the Weekly Pivot R2 and is overbought on the H4 time frame. Reversing from that 1.2987 high and finding support at the 2880 region was a clue to use the Fib-EXP tool and look for a reversal in the 50-78.6% retrace. Price came back to 61.8% and is showing overbought on lower time frames.

This now gives a target for the pull back to about the 1.2830-1.2855 region.

Another exciting thing here. -- A price reversal to the 1.2851 will bring a 38% retrace of the move up and set up the Gartley Triple Top Buy pattern that H.M. Gartley wrote about in his 1935 tome Profits in the Stock Market. (pages 200 - 250)

The classical pivot for weekly R1 and S1 are tested better than 70% of the time. You can see this demonstrated several times during the current bearish move. The pull-backs have been capped at the Weekly R1 and then continue the plunge.

And that is my "opinion" on what we may see in EURUSD in Monday's trading session and an area to watch for reversal.

 
kitsap1

Last week the EURUSD Weekly support 1 was at 1.2840 and price tested 1.2854 The weekly R1 was at 1.3189. These numbers are generated by the previos weeks 1.3233 high, 1.2854 low and 1.3229 close.

Statistically, 70-80 percent of the time the market will trade at the R1 and S1 just as we see the market trading at the daily R1 and S1 about 80% of the time during the trading day.

In the week of 1/30 - 2/3 we have a weekly pivot at 1.3105, a Weekly R1 @ 1.3356 and Weekly support at 1.2977.

The Dollar is testing its 38% Fibonacci Retracement. The Dixie (dollar index) has a strong trend line support at about 1.7850 and my anticipated lows suggest we will be testing this as well.

Now the end of the month often brings "flows" that promotes the typical end of month dollar strength. It will be interesting to see if this is true again.

There is a support on the EURUSD at the 1.3174 level and very close to the daily support pivot on Monday. We also have a tremendous amount of resistance at the 1.3240 - 1.3260

The EURUSD also stands at the area of support turned resistance from late October and late November. Looking at market structure the M5 does not have proper UTAH Fig 15 divergence. This may allow a test of the EMA 144/169 tunnel and complete the push to a higher price with lower MACD. Negative divergence will be in place on all time frames and allow trading the EURUSD lower toward that weekly S1 Pivot.

 
kitsap1

Head and Shoulder pattern on the EURUSD H4 bar. Target is 1.3050 where we have weekly confluence support. Real target, by using Fib Expansion as demonstrated in webinars is 1.2960.

The weekly support level is at 1.2860. it is not illogical for this to be hit since it is the first bullish move in several months.

 
bjmck

You nailed that call! 1.3041 was today's low. Well done.

 
kitsap1

2.1
The Head and Shoulder pattern was the most awkward of many we have seen. The only thing that gave the sell context hope was the dark cloud cover candle pattern.

The 4 hr context is bearish.

To be really clear, My thought is we are in a Wave 2 and target is 1.35422 (around 1.35). The wave 2 is of 3 waves. My thought is the wave A complete at 1.3237 and we are headed down in wave B composed of 3 waves( a-b-c) with price going to raround 1.2840 -- Then up to complete wave C and wave 2 above 1.35. KEY THING -- this is opinion.

But for now I am focused on the B wave. The first fib support is the 38.6 @ 1.3004. Just below that we have the Monthly Pivot at 1.2983 and the 161% expansion of the quasi H&S pattern at 1.2959. This is the region I will be looking for the reversal and end of 'a' of B and start the b wave of the B and upside target around 1.3140 for said 'b' of B.

My wave B target is around 1.2840. This generally comes in around 50- 61% of the A leg (1.2623 to 1.3237).

In terms of time -- this next Leg that will start around the 2960 - 3000 will take about 4 weeks. to reach the 2840. That does not mean the market will not move its usual 100 or so pips each day. This is a wave B and this is where a lot of newbie traders get into trouble with whipsaw and such. Patience is my (our) best friend - especially - here.

For now - I am looking for reversal in the 1.3004 - 1.2960 region. It will probably be adamantly signaled by a major Proform pivot on the M30 with CCI-14 cutting up from below the -100. This Proform Pivot will be on all time frames below M30.

 
kitsap1

The B wave of 2 started at the 1.3237 high. We are looking for 3 waves in The B wave marked a-b-c. The 'a' segment completed about the time I wrote the above note (1.3020). I was looking for the CCI(14) to break through -100 going up and a major Proform Pivot in place on all lower time frames below the M30. Coming back up to the 1.3220 highs leaves me to think this will work out as a flat with price eventually working its way back down to around 1.3000 before going to the 1.3500 to finish this wave 2 correction.

That said, I am looking for price to come back down to 1.3160 and then back up to about 1.3230 before reaching 1.3000 and starting an impulsive move toward 1.3500.

Again. when the move down to 1.3160, My focus will be the same thing. A major ProForm Pivot in place around 1.3220 with the CCI-14 breaking through 100 and heading down. The divergence on the CCI will give me confidence that the Pivot is now fixed.

 
kitsap1

the Awesome Oscillator posted a new peak high with the 1.3217 high and with bar divergence. We know from UTAH Fig 15 that the AO normally goes back to (or below) zero to give us the wave 4. We also know that the wave 4 usually bottoms around the EMA 144 and EMA 169 (aka Tunnel) and that is currently at 1.3131. This may be the area where the next reversal to a new high (and a lower AO).

 
kitsap1

The Fib-exp on the 1.3217 high down to the 1.3145 (most current low) shows a 50% retrace back to the 1.3180. That will bring the 100% (the usual target) to 1.3110. I am looking for Proform Pivot in that region with the CCI reversing below -100 and an obvious divergence on it. The target will be around 1.3230.

 
kitsap1

The Hour bar posts an AO peak that still has not returned to zero. The Tunnel sets at 3100.

The M30 bar AO has came to zero meeting minimum status of the UTAH Fig 15 and has pierced the Tunnel as it usually does after a new extreme on the Awesome Oscillater

The Proform Pivot manages to repaint as the related zigzag indicators on which it is based repaints. This repainting stops when divergence of any sort is observed.

As noted before, the structure appears to support a return to the 1.3230 - 1.3270 area before coming to the Wave B of Wave 2 low around 1.2960

A major Proform Pivot 3 has formed on all time frames M30 and Below. I am watching for a divergent CCI-14 to cross the -100 going up for an entry to the long side.

 
kitsap1

The spike to 1.3190 on China's verbiage was "all hat and no cattle." The M5 still has not completed the UTAH fig 15 and the Hour bar AO still has not came to the zero line.

The logic continues -- The target for the move up is the Tunnel on the Daily bar and that is also the 50% retrace of the move down from 1.4248 to 1.2624.

I saw a note on FXLIVE to short EURUSD at 1.3250 with target at 1.2250. I do expect a move to 1.3270 or so after a divergence on the M5 and M15, as consequent to only to about 1.2960 before price retraces to the daily bar tunnel. THAT IS OPINION.

If this logic introduced by assuming veracity of UTAH Fib 15. A low below 1.3117 will be seen before breaking the 1.3190 highs.

The handy thing about spikes is they prove resistance. (1.3190)

 
kitsap1

The M15 and M5 still has lacks proper divergence to comply with the ideas of FIG 15 of UTAH.

The M5 tunnel is at 1.3142 and the Fib-exp off the low target has 1.3139 as target before taking out the 1.3084 low.

When I see proper divergence, I will look for an entry with major Proform Pivot on all time frames (M30 and below) and the CCI-14 to cut through -100 from below on M30. The CCI-14 will most likely show divergence on the M15 and M5.

 
kitsap1

The spikes have done their job -- they have proven to traders where the resistance is. We have about 7 touch points on the upper downward sloping trend line (which may prove to be a bull flag).

From the perspective of the UTAH fig 15, we have lower AO peaks on the m1, m5 and m15 that have not been answered with a lower low on price and a higher Awesome Oscillator (hence proper divergence).

The most recent spike has produced a very high M1 peak on AO but it was not a new peak. What we did get from the last spike was the AO coming to zero on the higher time frames.

The presence of bar divergence ( price making new high but AO not getting a higher bar) usually shows the move has exhausted and I look for price to return to the tunnel (1.3141), eventually to give a lower low (below 1.3083) and a higher AO value.

 
Ned W.

John, when do you sleep?

 
Ned W.

Could you attach a chart to the description? I would find that very helpful -thanks.

 
kitsap1

You are right -- thank you.

My charts are horrifically messy with a ton of fibs and I am always complaining like the guy with TV service and 64,000 channels that there is never anything to watch and for me - there is not enough colors (that's colours to our UK friends) to paint the lines I draw. But I will clean it up and make it work so we can get the most out of this forum.

I am retired Navy. I stood 4 by 4 watches for so many years and the most I sleep at a time is about 4 hours. I'll hit the rack and wake up about 4 hours later and not be able to get back to sleep.

The second factor is Pu-erH tea. You can get it for about 11 cents a bag where most others run about a quarter. But -- if you can also pay 8 bucks an ounce for it from health food stores because it is regarded as a weight loss product.

In the 13th Century a peasant shop keeper would be visited by the Emperor and the Emperor would have tea. But when a drought came, the shop keeper pulled out some tea that had been is storage for what was regarded as "too long." When he served this to his highness, the Emperor had the shop keeper executed immediately. The royal one found it to be so good he was offended that the now deceased proprietor had been holding out on him.

This Pu-erH tea is good for the digestion, very calming and one should not drink it if you plan on going to sleep for the next couple of days. Its not full of vitamin Pee like coffee and no coffee jitters. And you know, that we want to be very calm when trading.

 
Matthew Smith

John, great comments as always. I look forward to reading your posts each day! Thanks for all of your hard work!

 
kitsap1

And thank you, Matthew. The respect and appreciation is mutual.

With the spikes we've had, my OPINION remains the same. We still don't have the divergence to send he market up and that not until the 1.3083 low is taken out unless something else happens.

I adamantly state OPINION because in this business, only facts matter. We are being told the market is oversold. Is there a dipstick on the ocean saying it is too full? Or that because some oscillator has extended to the upper zone where price has reversed before that price must reverse again. We have been watching the charts long enough to know that opinion can be disastrous.

In Greek methology Janus has two faces, one looking right and one looking left, the metaphore for technical analysis - that by looking behind we can have an idea of what is coming next. That supposes we match the right pattern by which to interpret. In this forum, I choose to use things learned from Elliott wave. And not to get wrapped around the axle with wave counts but alert to high probability price patterns , and we can trade while managing the risk.

If someone was to ask us the silly question, what comes after sideways, after all the time we've been watching these charts, we know that if we were to be silly and answer with a question of "what came before, we would have a good chance of being right. The "Sideways" is usually a 4th wave and they come after the AO has made an extreme. It usually hugs the tunnel. Often is shows up as a bear or bull flag. And we know that our FIB-EXP tool works well enough to give us an accurate target about 80% of the time. (Its about 99% good on a zigzag.)

I have a screen shot of the M5 after the spike into the 1.3185 region. You will see I have put a red colored FIB-EXP on it and the 100% is our logical target.

We have dropped a Fib-EXP from the high @ 1.3217 down to the 1.3084 low and put the retrace line back to the 1.3187 high in dark blue. It shows a target for this move down around the 1.3073. When you look at the M30 chart attached, you will see how it fits with our UTAH figure 15 studies.

Then the most recent move down and retrace give a target 1.3101.(100%)

I have attached the M30 chart also. You observe the AO has a new peak low and no proper divergence. Fig 15 suggest that the AO returns to the waterline (aka zero) which it did on spike to 1.3187 and now will go down to push a new low with a higher low on the AO. This will give the "proper divergence" that completes the wave 5 and sends price to the 1.3270 region to complete the b wave of the B wave of wave 2.

Because this is the "B" wave we anticipate a lethargic move. The move up from 1.2623 took 13 days. The B wave usually takes about twice as long and half the range. It does this by thrashing back and forth and choppy. We have been in this move for about a week and it has went ???

attached is a pdf with some ideas about trading with help of the CCI. I use it with the Proform Pivots to open positions.

The CCI is an oscillator -- and that means it goes divergent. If we remember we are using it as a confimicator we can do well. When we see major Proform Pivots on several time frames this can give us a heads up that price is at or near an extreme. But it the Pivot method does repaint. So, when we see major Proform pivots on all time frames M30 and below and the CCI is divergent on those time frames below the m30, there is a good chance we have reached extreme and can enter the trade with the wind at our backs.

I hope to demonstrate this in more detail as we go forward.

2012.02.02. m30. 1950 gmt.gif 2012.02.02. 1950 gmt.gif
AttachmentSize
CCIstrategies.pdf 76.52 KB
 
odanno82

The EUR/USD has been seemingly pegged at 1.3150 range for the past 4 hours, afternoon US trading hours. On a 15 minute the bollinger bands are extremely pinched. I have it surrounded on both sides with stop orders to entry. It should expand one way or another. It seems weird to be clamped in such a tight range for so long in the middle of a trading day.

 
Prodigalpops

NFP tomorrow - might be linked to the lack of movement.

 
kitsap1

Using the Fib-Exp tool I see a possibility of 2 things happening. Focus on the H4 bar, the 1.3027 low and the 1.3221 high

A FE (fib-exp) off the 1.3024 low to the 1.3221 high (A and B) and drag the retrace leg to the C point at 1.3084 low of this morning - gives a D leg target at 1.3280.

Now, off the 1.3221 high down to the 1.3084 low of this morning (A and B) with the retrace leg pulled to the 1.3187 high as the C gives a target of the 1.3054.

Either case, the target around 1.3280 stands as long as the 1.3024 low is not taken out. Based on experience, we would anticipate about 5 days from now.

On the Elliott wave speculation, some say we're in a wave 2 with the A wave complete, started the B wave. This B wave is setting up as an irregular (page 43 Frost and Prechter) and we will get a high that cuts into new territory above the A wave (2630 - 3240). The B wave is made up of 3 waves and I am thinking the 'a' ended at the 1.3024 low. We're now up for the 'b' and then we'll head down to about 2690 and finish the 'c' and the B, before we head for the daily Tunnel to complete this correction (in about a month from now).

If we trade in context of the higher time frames, we will have the wind at our backs better than 50% of the time.

2012.02.03 h4. 0918 gmt.gif
 
kitsap1

currently working in a fib expansion pattern off the 1.3083 low from 2/2 to the 1.3187 high and the C point of the Fib-exp at 1.3115 on 2/3 gives a target of 1.3115. We hit the 1.3183 and are getting a pull back to the M5 Tunnel at 1.3150 before hitting he 1.3215 target.

In the mean while, the last 1.3115 low was followed by a high of 1.3150. The Fib-exp on those 2 points with the retrace line brought down to the low at 1.31388 gives a target (100%) at 1.3179.

Now the 61.8% retrace of this is the Tunnel on the m5.

Another approach that often shows good result is a fib retrace from the 1.3115 low to the first high @ 1.3150 AND then another fib retrace from the 1.3115 low to the second high at 1.3182. Then we look for a place where the two retraces have lines on top of each other or very close (confluence) as you see at the 1.3149.

We also see a bunch of candles had lows along that line. This adds a bit of confidence.

 
Ned W.

John, Thank you for the chart and the book reference, both are very helpful.

 
kitsap1

And thank you Ned for the solid encouragement.

The current structure changed a bit. We did not reach the 1.3215 but got to the 1.3203 and we have new AO peaks on the m5 and m15 below zero. The M15 being the most interesting. Using the Fib-exp off the low at 1.3065 to the next high at 1.3132, we usually see a 50% retrace that would draw price back to about 1.3092 and then move up in a 3 wave correction to about the Tunnel ( EMA 144 and 169 pair). The Tunnel is at 1.3145 and our typical 100% target is at 1.3155. Often there is overshoot so hitting our normal target would not surprise me.

This market behavior happens repeatedly, and we will get callus seeing it.

In reality, you're not becoming callus -- you are becoming keen to the fact that the market makes extremes and then corrects after the impulsive moves. And you are becoming keen to those correction being in the three waves. And that you can use the fib-exp tool on them and get a pretty good idea of how the market respects those relationships.

Remember, the basis of Technical analysis is the market respects its history. It certainly applies to this UTAH fig. 15 study we are doing here.

As said above, the M5 has same issues. And we know from looking at an analog watch that the second hand resolves before the minutes and hours. You will see the same dynamics on the different time frames we use for our studies.

Our minds are remarkable in that once we stretch them beyond the originally boundary, the will never fit in that boundary again.

Also, Thanks to ProdigalPops, Chad and Matthew Smith programming work on a method or evaluating market dynamics. (Programming Help topic). I will have that up on the testrun strategy test this weekend making a study of the information.

2012.02.03 m15 1530 gmt.gif
 
Matthew Smith

John, what are the channel MA's that you are using?

 
kitsap1

The attached file reflect one vendor's view of the Wave structure. Showing the b of B completing on the bullish side of the A wave terminal. You can use the data and the fib-exp tool and see how this can be proved out. But it will be academic and only open your mind to one possibility.

In the Frost and Prechter book you see that most of the book is about corrections. Primarily because, as you noticed, the EURUSD took 13 days completing an impulsive A wave up and will take about 26 days in a correction-- hence what the market does more than half the time. The second reason is the corrections can take so many different shapes; triangles, pennants, flags, flats, regulars, irregulars -- most we don't really care about other than to trade effectively.

eur-usd442_44-4(1).gif
 
kitsap1

The EMA 144 and EMA 169 are known as the Vegas Tunnel. We find them very effective and a high probability target for wave fours and other corrections.

There are traders who watch the M1 AO for extremes and then target a pull back to the Tunnel. I'll blame Curtis Cooper for this. It seems to be an invocation of his leash law. Whereas these MA act as a leash and drag price back when it gets too far away.

 
kitsap1

Continuing the notes on the EurUSd Currency and on the M15, as noted above we were looking for reversal in the 1.3155 region. The CCI-14 has produced a nice divergence and we have a secondary proform pivot on the M15 with major Proform pivot on the higher lower frames.

Additionally, you notice that the market has retraced better than 61.8 and less than 78.6% of the move down with the Non-Farm Payroll Report. This region between 61.8% to 78.6% is often referred to as the "death zone" because of the large number of trends that die in this region. And one person calls it the birth zone because new trends have a propensity to start here. You can go with either term and we'll know what you mean.

 
kitsap1

an attempt to hit attach and caught save . . . (continuing)

now that the market has hit the region where we are looking for reversal, the question of what is next.

You notice that the M15 has a lower extreme low on the Awesome Oscillator after making a high at the 1.3203 price high and came down to 1.3065. Fig 15 of UTAH suggests that the AO would go below zero - -it did and created a new peak low. Now we look for positive divergence to resolve this new low peak. Hence, we now need a lower low with a higher negative AO value to give get price to a higher value on the and give divergence there.

Again the Fib-exp comes in handy to resolve targets for 3 wave moves. Starting a fib-exp at the 1.3203 high down to the 1.3065 low and pulling the retrace line to the most recent 1.3155 high, we will look for our next target and reversal at the 100% (1.3028) region. This will provide a lower low with a higher Awesome oscillator and should drive the market back to a higher high.

It becomes apparent soon enough that Fig 15 of the UTAH applies more often than not such that nearly every move will end with a divergence. It really does unless it is a 5 wave move in a triangle or it is a terminal diagonal. There will not be a divergence in those two cases. The rest of the time you have this incredible working reality.

2012.02.03 m15 1930 gmt.gif
 
kitsap1

and attached the wrong file. this one shows the expansion levels

2012.02.03 m15 2000 gmt.gif
 
kitsap1

Here's a curios one. Compare Friday's market and look what usually happens midday Monday -- You'll notice more often than not it is the exact opposite.

We have noted in our studies that a long candle usually gives back about half. That info also gives us reason to be very careful on Monday.

That said, I am looking for reversal signal around 1.3190 on he 30M / H1 bar.

 
Matthew Smith

Hmm what to expect from Sunday/Monday's open in Asia. A few things for thought. John brings up a good point that very often the market corrects itself from Friday's moves. Lost in the huge NFP and ISM numbers from Friday was that the CFTC also released its traders commitments report (terrible format but you can see it here: http://www.cftc.gov/dea/futures/deacmelf.htm). It basically shows that there are still 157,000 open contracts (of 125,000 EUR) net to the short side (down from 171,000 contracts). From a fundamental perspective, this would support John's theory of an even larger "squeeze" to the upside to the 1.35 area (traders closing shorts by buying longs) if the Greeks come up with some sort of deal. However I wouldn't expect these contracts to come to parity anytime soon. We all know that the Euro governments talk more than they act and I am looking for a screaming rally to the upside when the rumors start flying. However more times than not, we get a buy the rumor, sell the fact out of Europe. They talk the talk and when implementation comes around, they always fall short, prompting a sell off across the board in Euro's. We also know that we have tested above 1.32 a number of times and the sellers are BIG! A medium move to the upside could produce a large move back to the downside. Good luck out there!!

 
kitsap1

Its about 1650 Sunday Afternoon in New York. My Apiary Fund shows the Friday close at 1.3154. Checking the Market feed from New Zealand, it appears the Market opened about three hours ago and EURUSD printed 1.3159 and now prints 1.3113 as last.

For some charting platforms that start printing data at 1700 Eastern, some newbie traders will be looking to fade a gap on open. And the gap may be even more astonishing with the platforms that start printing at 1800 Eastern.

We know that if there is a gap at the New Zealand open it will be respected. And brokers lapse in printing price is why we see these gaps in our charts that stand for weeks.

 
Matthew Smith

So we just tested (within 2 pips) the low from February 1 (1.3025) and we have since bounced sharply. There has been no Greek deal (which isn't surprising) but look to the next area of resistance (1.3081 is a 50% retracement of todays move). Rumors are now swirling about Portugal looking at their restructuring options which would be very bearish for the Euro.

 
Matthew Smith

Like clockwork we posted 1.30808 and then stalled. I am staying cautious the rest of the day while the Greeks are still in talks. Another consideration is with a weak Euro, the pressure will heat up in Eur/Chf. We are trading at 1.2067 right now but if we drift lower expect the SNB to be forceful in the buying of Euro's to maintain the "peg" @ 1.20. Now with the market beginning to price in a possible ECB rate cut, action seems close to inevitable.

 
Matthew Smith

Greek deal reached? Nothing on the wires as of yet but we've blown through old resistance at 1.3081 and as I write we just completed the 100% on today's move lower by rebounding back to 1.3122. Next resistance is 1.3167 H1 Bar and then 1.3187 also on the H1 Bar. I wouldn't be surprised to see a wild move to the upside if in fact a deal has been reached. Keep your eyes on the news wires and make sure you have that stop placed! Good luck!

 
kitsap1

The 100 and 200 MA s converge at the 1.3122 and orders show sellers camped out at the 1.3130.

The Hour bar still has an Awesome Oscillator peak with a low at 1.30256 that has not been taken out with a higher Awesome Oscillator.

I have the market still in the B wave and marking out the Y of a WXY with the 'a' terminal of Y at 1.30265, the 'b' terminable, where the market is nearly at now, 1.3125 and the 'c' leg about to start and take the market to 1.2960 and Complete the Y.

As Matthew Notes above, Other than PIIGS debt resolution, there is nothing to give EURO any pop.

The Dow 30 posted a double top and suggests unsustainable levels. The Treasuries are aimed higher and that does not bode well for the EURO.

Some traders look for confluence between the Cable and Fiber. Here we see the Cable in a Flat Correction that has appeared to have reached its terminal at the target we concluded last week (1.5826). Cable has broken trend line and we Still need to see an impulsive move. Mentioning Cable here may be off topic, but please forbear in than the focus is still EURUSD. Since the two are correlated about 70% of the time, I beg your understanding. Noting behavior of correlated market is a good thing to do.

As we go forward, please keep in mind this is a B wave and will move half as far as the A in twice the time. It took 13 days to get from 1.26 to 1.32 The B wave target is around 1.29 in about 26 days.

Picture the classic ZigZag where the market advances and retraces half wavy and advances again with the same resolution as it did in the first. This is often found in text books as the "ABCD" pattern. As we look at this on intra-day levels we see all these other patters unfolding.

We'll keep our eye on the big picture and manage the risk. We've completed the AB leg now working the BC. We know what is coming next. We'll protect our capital so we may participate in that move from around 1.29 (or lower) to the 1.35.

Lastly the first pull back of a bear market move will usually show a deep retracement. So though it is logical to see the 1.2960 level as the extent of this pullback on the EURUSD, it is not unusual to see it come back to the 1.2840 level. (But not today).

 
Matthew Smith

An interesting observation I just made that John will appreciate. I attached the Eur/Usd 1HR chart and using the Fibo expansion you will see the 161.8% of the current move falls almost directly on the 1.3250 level that sellers are rumored to be sitting on (and that we thought we would see possibly on Friday with the Economic Data).

euro.gif
 
kitsap1

We hope the low at 1.3028 is enough to give the market a push to the 1.3250 area. The Murphy book Technical Analysis for the Financial Market would refer to the 1.3027 / 1.3025 lows as a double bottom and "class B divergence." That would be a basis for buyers to come into the market.

These buyers are the one who participated in some or even none of the move from 1.26 to 1.32 and want to get part of the momentum now. A pull back much below the 1.3000 level will ruin that attitude.

If there is not a lot of sellers parked at the 1.3250, there are certainly a lot of sellers stops and we would hope that the market makers will go after them.

My attention is focused on the downside and the 1.3004 level until the 1.3167 level is taken out. I have exited my long position with respect for the bar divergence on the M5 bar.

The five Minute bar has posted a new extreme on the Awesome Oscillator and bar divergence. The usual market dynamics has price coming back to the Tunnel @ 1.3081 and then returning to yet a higher high.

Back at the Parthenon, the Greeks have accepted demands to cut 15,000 public sector jobs.

 
kitsap1

A fib-exp off the 1.3027 low to the 1.3142 high drops the retrace line back to the 1.3083 level where we find the tunnel. The 100% target for this fib-exp is at 1.3203

My high low lines on the EURUSD is at 1.3052 and at 1.3192. We have 86% success at reversals within 30 pips of these values. With that in mind, I will be looking for reversal signals in that region.

in the last week
anticipated high actual anticipated low actual
1.3142 1.3229 1.3063 1.3028
1.3206 1.3220 1.3062 1.3067
1.3096 1.3234 1.3063 1.3087
1.3218 1.3161 1.3008 1.3027
1.3213 1.3221 1.3065 1.3043

it's not perfect, but it is better than the weather forecast and gives us a good idea of where to start looking for support and resistance.

 
kitsap1

EURUSD has occurrence of a major Proform Pivot on all time frame of H1 and lower at the 1.3167. This peak gave proper divergence (AO retrace to the water line and going up to make a lower high while price went to a new extreme) on the M15 and M5, but M1 still has not shown divergence.

Hence, I would not be surprised to see a slightly higher high before price returns to erase the tall H4 candle from yesterday. This is not an easy task, and stops exist at the midpoint of that candle as well as just below the 1.3027 low at its open. Merely gum drops for the market makers to pick up.

The NFP report provided a peak at 1.3203 and the low from yesterday at 1.3027 with retrace back to the 1.3167 now provides a fib-exp downside target of 1.2987.

The EURUSD weekly pivot is 1.3138. Until the market sees a daily close above that level the context for trading is bearish. This is reflected on the intra-day chart's MACD.

The last Major Proform Pivot on the H4 bar is at the 1.32335 high No Proform Pivot has been posted low on the H4 bar to give confidence that a swing low has been established.

This is why I see selling rallies as the best approach at present.

Finally I would like to post the bottom line of lesson Shawn Lucas gave. "Currencies has a propensity to stay near their average." A currency whose value is all over the board is not good for business, jobs, government or citizens. Thus when you look at a list of highs, you see that about 80% of them are within 50 pips or so of the surrounding values. That is why it is important to us to know where yesterday's high and low were.

One more thing I would want to add to this forum. I keep track of the median range. On anticipated highs and low I give the difference. But I know that the median move for the EURUSD is 108 pips. When price moves 108 pips off its high or low, there is a good chance we are within pips of seeing a major Proform pivot posted on the chart.

You can apply this philosophy as a watch point for the H4 bar too.

 
kitsap1

LONDON, Feb 7 (IFR) - Cable's rise to test 1.5840 offers has been fuelled by EUR/USD gains following the news that the "Greek government is drafting agreement on bailout deal to be put to political leaders for approval later today - Greek government official" (Reuters), with EUR/GBP simultaneously rising to a four-day high a couple of pips shy of 0.8333 (1.20 in GBP/EUR). A US hedge fund has been among the buyers of EUR/USD.

 
kitsap1

Good call, Matthew, on the Fib-exp to above 1.3230!

 
kitsap1

Quite a lot happened this morning. The new AO peak high on the EURUSD M5 suggests that the AO will come back to the waterline soon and the proceed to make a new high. Because this is also the case for the M15, it is reasonably to watch for the price to reach the M5 tunnel.

Because the nature of waves within waves, it is possible to see new highs on price with lower AO without having the AO return to zero.

All time frames M30 and above have negative divergence so the pressure is down.

 
kitsap1

Price has reached 1.3269 and established a major proform Pivot. Now I wait for divergence and the CCI to cut back below 100 on several time frame. The AO may yet show a bar divergence with a higher high and lower AO -- and then return to zero.

 
kitsap1

Forex Live prints:
Tue, Feb 07 2012, 22:56 GMT | Forex Live
By: Adam Button

These numbers have been bouncing around for a few minutes but I was finally able to nail down a credible link. Revenues -7% y/y Target was +8.9% VAT revenues -18.7% y/y Finance Ministry officials attribute the slump in VAT receipt figures to the major cash flow problems that enterprises are facing. Some of the latter are choosing not to pay for their VAT in order to plug other holes caused by liquidity problems. Austerity, leads to slower growth, leads to slower revenue, leads to bailouts, leads to more austerity... etc. On top of that, it's abundantly clear that Greece doesn't have a functioning tax collection system. As this story gains more traction, I expect to see EUR slide. There are damning numbers.

[the verbiage presented from the website unaltered]

 
Matthew Smith

I love ForexLive, it's the first site I go to every single day! (www.forexlive.com)

 
kitsap1

A major proform pivot exists on all time frames up to the Daily bar. The Tunnel on the Daily bar is at 1.3416 and is working its way down.

The hour bar and half hour bar AO has not returned to zero and it working down. It is possible that we may yet see bar divergence before these oscillators come to zero.

We know by the Fig 15 of the UTAH that these oscillators will come to zero and will go to make a higher high with a bearish divergence. We know that when we get the first retrace that we can use the fib-exp to see how deep it will go. We know that is usually around the region of the tunnel.

We know that we can watch for the Proform Pivots and CCI to hint at the completion of the move and signal our entry.

 
kitsap1

the analogy for cooking frogs fits best for position sizing.

The frogs go in the pot of cold water and the head is turned up. The frogs get so comfortable and feel so safe they don't even realize its hot.

Here the position size gets bigger and bigger and a 25000 account is being traded with the same soberness and caution as a 500 account.

We know that a business will find a repeating pattern and manage the risk. We do the same. When we finish the discourse on Fibs - we will have about ten good patterns we can use to trade that happen all the time.

After we get the pattern, then we create a shopping list. At the top of the list is the balance. and just below that is 5% of the balance. That is all I want. If I get more, that is fine, but I want the 5%. The next number on top of my list is the 2% of balance. That is my max risk. And last is the number that I quit - max loss -- I will quit and go test the demo account.

With the parameters of my trading laid out and a mental review of my process for trading the patterns, I go to work - taking trades that match patterns in my play book. When I have my 5% I am done.

So what would happen to the account when I get 5% each day? In about 3 weeks -it has doubled.

the snippet below is a $500 account with 5% growth per day.
day start 5% End total risk
1 $500.00 25.00 525.00 25.00 $10.00
2 $525.00 26.25 551.25 26.25 $10.50
3 $551.25 27.56 578.81 27.56 $11.03
4 $578.81 28.94 607.75 28.94 $11.58
5 $607.75 30.39 638.14 30.39 $12.16
6 $638.14 31.91 670.05 31.91 $12.76
7 $670.05 33.50 703.55 33.50 $13.40
8 $703.55 35.18 738.73 35.18 $14.07
9 $738.73 36.94 775.66 36.94 $14.77
10 $775.66 38.78 814.45 38.78 $15.51
11 $814.45 40.72 855.17 40.72 $16.29
12 $855.17 42.76 897.93 42.76 $17.10
13 $897.93 44.90 942.82 44.90 $17.96
14 $942.82 47.14 989.97 47.14 $18.86
15 $989.97 49.50 1,039.46 49.50 $19.80
16 $1,039.46 51.97 1,091.44 51.97 $20.79
17 $1,091.44 54.57 1,146.01 54.57 $21.83
18 $1,146.01 57.30 1,203.31 57.30 $22.92
19 $1,203.31 60.17 1,263.48 60.17 $24.07
20 $1,263.48 63.17 1,326.65 63.17 $25.27
21 $1,326.65 66.33 1,392.98 66.33 $26.53
22 $1,392.98 69.65 1,462.63 69.65 $27.86
23 $1,462.63 73.13 1,535.76 73.13 $29.25
24 $1,535.76 76.79 1,612.55 76.79 $30.72
25 $1,612.55 80.63 1,693.18 80.63 $32.25
26 $1,693.18 84.66 1,777.84 84.66 $33.86
27 $1,777.84 88.89 1,866.73 88.89 $35.56
28 $1,866.73 93.34 1,960.06 93.34 $37.33
29 $1,960.06 98.00 2,058.07 98.00 $39.20
30 $2,058.07 102.90 2,160.97 102.90 $41.16
31 $2,160.97 108.05 2,269.02 108.05 $43.22
32 $2,269.02 113.45 2,382.47 113.45 $45.38
33 $2,382.47 119.12 2,501.59 119.12 $47.65
34 $2,501.59 125.08 2,626.67 125.08 $50.03
35 $2,626.67 131.33 2,758.01 131.33 $52.53
36 $2,758.01 137.90 2,895.91 137.90 $55.16
37 $2,895.91 144.80 3,040.70 144.80 $57.92
38 $3,040.70 152.04 3,192.74 152.04 $60.81
39 $3,192.74 159.64 3,352.38 159.64 $63.85
40 $3,352.38 167.62 3,519.99 167.62 $67.05
41 $3,519.99 176.00 3,695.99 176.00 $70.40
42 $3,695.99 184.80 3,880.79 184.80 $73.92
43 $3,880.79 194.04 4,074.83 194.04 $77.62
44 $4,074.83 203.74 4,278.58 203.74 $81.50
45 $4,278.58 213.93 4,492.50 213.93 $85.57

You will notice that at about 3 months the profit is about equal to the original bank roll.

Is this realistic -- VERY!

 
Matthew Smith

So this morning in European trade we have posted a new high of 1.3288 and we have touched the horizontal line 6 times, making me wonder if a 1.33 DNT barrier is in play. DNT barriers are when big players purchase an option that a price DNT (do not touch). These barriers are usually magnetizing and we tend to gravitate to them (although we rarely can get conformation that they exist). We are currently consolidating some of today's early gains will need a clean break of 1.3230 to suggest more downside in my opinion. Most importantly today, the Greeks are still in talks and working on a debt restructuring plan and details of this plan would cause a spike upwards if a definitive decision is made (and downwards if the plan falls apart again). Good luck out there!