Friday, February 5, 2010
US NFP
NFP is coming out at 8:30 AM EST. Watch out for some bouncing around. After the air clears, perhaps there will be some trading opportunities. As though there haven’t been already this week, LOL.
USDCAD—pausing
At least I hope it’s pausing after its energetic chug up the mountain in the last couple of days. I’m still long from 1.0256, near the 1.0225 of what I consider the bottom of an Elliott wave two. I took some partial profits at 1.0702 for + 446 pips.
This morning’s high was 1.0781. It has yet to achieve the highs of early November (1.0848/53) so it’s in a tough resistance area. Given the impulsive nature of the move up, which suggests we’re in a third wave, I think it might just make it. Then there’s the September high of 1.0983 and the August high of 1.1125. Whew! The work never stops. If it clears those levels, hooah!
One can expect support at 1.0700, a short-term uptrend line, 1.0597/1.0602 (prior support and uptrend line), and 1.0547 (February low).
Here’s the three-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
This morning’s high was 1.0781. It has yet to achieve the highs of early November (1.0848/53) so it’s in a tough resistance area. Given the impulsive nature of the move up, which suggests we’re in a third wave, I think it might just make it. Then there’s the September high of 1.0983 and the August high of 1.1125. Whew! The work never stops. If it clears those levels, hooah!
One can expect support at 1.0700, a short-term uptrend line, 1.0597/1.0602 (prior support and uptrend line), and 1.0547 (February low).
Here’s the three-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
EURUSD—too much, too fast
I just closed my short position from 1.4074 for +373 pips. I also took partial profits on the position from 1.4003 (my last short) at +300 pips.
What I’d like to see is for the pair to take a breather and have some sort of decent correction. Admittedly, it doesn’t look as though it’s doing that except for the hammer that showed up on the one-hour chart. There’s also positive divergence with RSI on that chart. On the other hand, what could be construed as a descending triangle could be forming although I’d prefer more touches to each side. If there’s a definitive move below the hammer’s shadow of 1.3647, the drop may continue.
One thing to remember is that US non-farm payroll is coming out this morning at 8:30 EST so there could be some bouncing around.
Support:
1.3647 (today’s low)
1.3571 (polarity)
1.3432 (Mar and May ’09 lows)
1.3361 (Aug ’07 low)
1.3263 (June ’07 low)
If the pair exceeds the 1.3755 area, I think one can expect a larger correction.
Resistance
1.3727 (overnight high)
1.3739/55 (top of EW 1 from March low and June ’09 low)
1.3791/3800/3833 (.382 retracement from Feb 3 high, round number and July low)
1.3931 (polarity)
1.4000 (Psych)
1.4101 (50% of move down from Jan 13 low)
Here’s the one-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
What I’d like to see is for the pair to take a breather and have some sort of decent correction. Admittedly, it doesn’t look as though it’s doing that except for the hammer that showed up on the one-hour chart. There’s also positive divergence with RSI on that chart. On the other hand, what could be construed as a descending triangle could be forming although I’d prefer more touches to each side. If there’s a definitive move below the hammer’s shadow of 1.3647, the drop may continue.
One thing to remember is that US non-farm payroll is coming out this morning at 8:30 EST so there could be some bouncing around.
Support:
1.3647 (today’s low)
1.3571 (polarity)
1.3432 (Mar and May ’09 lows)
1.3361 (Aug ’07 low)
1.3263 (June ’07 low)
If the pair exceeds the 1.3755 area, I think one can expect a larger correction.
Resistance
1.3727 (overnight high)
1.3739/55 (top of EW 1 from March low and June ’09 low)
1.3791/3800/3833 (.382 retracement from Feb 3 high, round number and July low)
1.3931 (polarity)
1.4000 (Psych)
1.4101 (50% of move down from Jan 13 low)
Here’s the one-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
GBPUSD—taking a pounding
The pound is taking a pounding and it’s questionable whether it’s over. The pair touched 1.5654 this morning, after having merrily swooped past its prior low of 1.5708 in October.
I have two short positions left from the three you saw yesterday. I just closed the one from 1.6246 for +544 pips. The other shorts are from 1.5992 and 1.5871. I also took partial profits from the 1.5992 one at + 287 pips.
Is the next low 154.50 from May? I wrote yesterday that the pair had to break 1.5708 with a definitive move Even though it closed below it on the three-hour chart, I’d like to see it reach back and kiss it good-bye (definite short there for me unless the candles become intensely bullish). Why? Because the fall is too far, too fast for my taste. Unless it’s an out and out blood bath, it needs to pause. Beyond 1.5708, the pair could find resistance at 1.5800/06, 1.5886, and 1.5912. That last is the uptrend line from March lows and a fib confluence zone. Then, of course, there’s the psychological round number of 1.60, not far above the downtrend line coming in from the January 28 high.
Support levels are:
1.5654 (today’s low)
1.5609 (2003 lows)
1.5500 (psychological)
1.5450 (May low)
1.5373 (Spring ’09 resistance)
The last candle that closed on the three-hour chart was what’s known as a “high wave” candle with a small body and long upper and lower shadows. It hints that the market is losing its directional bias so be careful about shorting here. If it closes below that candle’s low—the 1.5654—expect more drops.
Here’s the three-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
I have two short positions left from the three you saw yesterday. I just closed the one from 1.6246 for +544 pips. The other shorts are from 1.5992 and 1.5871. I also took partial profits from the 1.5992 one at + 287 pips.
Is the next low 154.50 from May? I wrote yesterday that the pair had to break 1.5708 with a definitive move Even though it closed below it on the three-hour chart, I’d like to see it reach back and kiss it good-bye (definite short there for me unless the candles become intensely bullish). Why? Because the fall is too far, too fast for my taste. Unless it’s an out and out blood bath, it needs to pause. Beyond 1.5708, the pair could find resistance at 1.5800/06, 1.5886, and 1.5912. That last is the uptrend line from March lows and a fib confluence zone. Then, of course, there’s the psychological round number of 1.60, not far above the downtrend line coming in from the January 28 high.
Support levels are:
1.5654 (today’s low)
1.5609 (2003 lows)
1.5500 (psychological)
1.5450 (May low)
1.5373 (Spring ’09 resistance)
The last candle that closed on the three-hour chart was what’s known as a “high wave” candle with a small body and long upper and lower shadows. It hints that the market is losing its directional bias so be careful about shorting here. If it closes below that candle’s low—the 1.5654—expect more drops.
Here’s the three-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
GBPJPY—no pottering about for this pair
One thing you have to love about this pair (as long as you’re not on the wrong side of it) is the way it can rush headlong into the fray and get to where it’s going to go. My short position that I added yesterday at 144.52 at 7:10 AM hit its profit target by 11:26 AM (141.17 for + 335 pips). Clearly, I didn’t expect it to move quite that fast or I would have been in there moving the target. I still have some of my short position left from 144.00 and we’ll just have to see if it profit stops out in a rally or whether it remains on this wild ride down.
As to what it will do now is uncertain. What we know is that it has decisively broken its uptrend line that began in January 2009. It also broke a gentler uptrend line, drawn from the February ’09 lows to the December ’09 low. One can see that after its fall to 139.36 the pair is consolidating a bit. Is the consolidation only a pause for a slug of Buckfast—a Scottish “tonic” wine with 15% alcohol and the caffeine of eight cans of Coke in a bottle—or will there be a bounce here?
If there’s a bounce, it’s a good idea to remember that this pair’s daily average true range is 226 pips. From the low today of 139.36, one could see it reaching 141.61. Is there any resistance coming in at that level? The 38.2 retracement of the drop from the February 3 high is near here; the December low was 142.02. Yen pairs seem to like round numbers as well. The 50% retracement from the 145.31 February 3 high comes in at 142.34. That is also a fib confluence zone. One could see it nipping back here.
The other thing to remember is that the range for this pair has been 139.03 to 163.09 for most of the year. One can’t rule out that the pair is still ranging and that this might be a good place to look for long positions, depending on price action, or to at least lighten shorts.
Resistance:
141.61 to 142.62 is possible (142.62 is the redrawn uptrend line)
143.07 (the February low before this debacle)
144.00/19 (round number and the original, broken downtrend line)
If it doesn’t rally, where are the supports? The overnight low of 139.36 is obviously the first one. This is close to the November low of 139.31 and the April ’09 low of 139.04. If you look back on the chart, you see support at 139.71/74 n the fall of 2008. Breaking down through this will require a formidable effort. Other support levels are:
137.58 (served as support several times in 2009)
135.72 (March ’09 low)
131.47 (March ’09 low—yes there were two lows in that month that could be supportive)
As I wrote in January, the pair had a confirmed double top in June and August and the price target from that pattern was 130.45. One can dream.
Here’s the three-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
As to what it will do now is uncertain. What we know is that it has decisively broken its uptrend line that began in January 2009. It also broke a gentler uptrend line, drawn from the February ’09 lows to the December ’09 low. One can see that after its fall to 139.36 the pair is consolidating a bit. Is the consolidation only a pause for a slug of Buckfast—a Scottish “tonic” wine with 15% alcohol and the caffeine of eight cans of Coke in a bottle—or will there be a bounce here?
If there’s a bounce, it’s a good idea to remember that this pair’s daily average true range is 226 pips. From the low today of 139.36, one could see it reaching 141.61. Is there any resistance coming in at that level? The 38.2 retracement of the drop from the February 3 high is near here; the December low was 142.02. Yen pairs seem to like round numbers as well. The 50% retracement from the 145.31 February 3 high comes in at 142.34. That is also a fib confluence zone. One could see it nipping back here.
The other thing to remember is that the range for this pair has been 139.03 to 163.09 for most of the year. One can’t rule out that the pair is still ranging and that this might be a good place to look for long positions, depending on price action, or to at least lighten shorts.
Resistance:
141.61 to 142.62 is possible (142.62 is the redrawn uptrend line)
143.07 (the February low before this debacle)
144.00/19 (round number and the original, broken downtrend line)
If it doesn’t rally, where are the supports? The overnight low of 139.36 is obviously the first one. This is close to the November low of 139.31 and the April ’09 low of 139.04. If you look back on the chart, you see support at 139.71/74 n the fall of 2008. Breaking down through this will require a formidable effort. Other support levels are:
137.58 (served as support several times in 2009)
135.72 (March ’09 low)
131.47 (March ’09 low—yes there were two lows in that month that could be supportive)
As I wrote in January, the pair had a confirmed double top in June and August and the price target from that pattern was 130.45. One can dream.
Here’s the three-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
Thursday, February 4, 2010
GBPUSD—what a drop
I have three short positions in this pair. One is from 1.6246 where I just took partial profits at +460 pips. One is from 1.5992 and the last one is from this morning’s little rally at 1.5871. The one from 1.5992 was the result of the evening star formation I blogged about yesterday. You can see all three of them on the chart below. My trades are represented by little triangles—inverted if I’m short as I am in this pair and right side up if I’m long which I’m certainly not in most pairs this morning (except for my USDCAD which has made me great profits since I started trading the turn in October (1000 pips in January alone). Clearly, USD is strengthening. Who cares if it’s only because of short-term risk aversion if you’re a short-term trader like me? Leave the arguments about the fundamentals to those with plenty of time on their hands (and plenty of losses if they’ve been shorting the USD on fundamentals lately).
I don’t normally do Elliott Wave counts on short time frames such as the one-hour chart. For one thing, I’m only one small trader who does all my own analysis and for another I have to have some kind of life. However, this one-hour chart shows an almost classic 5-wave decline and 3-wave correction. Within the correction, you can see a classic 3-3-5 flat pattern. I’ve marked them on the one-hour chart below. Remember, though, EW is not a guarantee. I’ve seen spectacular failures with it and you can never prove it until after the fact.
What next? The eternal question. The low today was 1.5760. Based on the impulsive look of this move down it’s possible we’ll go a bit further. The 1.5708 October low is definitely within reach. If it breaks that (with a definitive move and close—not one of those namby-pamby “let me stick my toe in the water, ooh, baby, it’s so-o-o-o cold I can’t stay” moves), then there’s not a lot of support until 1.5373. I’ll blog again if we get there—that is if I haven’t gotten into a good bottle of champagne I have tucked in the fridge. However, no counting of chickens is my rule and an honest look at this pair shows it trying to establish some support here. Time will tell. A close below the doji at 1.5760 hints it won’t find support here. If it does find support here, then look for resistance at 1.5800/06 (round number and yesterday’s low), 1.5886 (yesterday’s high) and 1.5912, an uptrend line drawn from the March lows and a Fib confluence zone. 1.6000 is where it will bump its head on a downtrend line coming in from the January 28 high.
Here’s the hourly chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
I don’t normally do Elliott Wave counts on short time frames such as the one-hour chart. For one thing, I’m only one small trader who does all my own analysis and for another I have to have some kind of life. However, this one-hour chart shows an almost classic 5-wave decline and 3-wave correction. Within the correction, you can see a classic 3-3-5 flat pattern. I’ve marked them on the one-hour chart below. Remember, though, EW is not a guarantee. I’ve seen spectacular failures with it and you can never prove it until after the fact.
What next? The eternal question. The low today was 1.5760. Based on the impulsive look of this move down it’s possible we’ll go a bit further. The 1.5708 October low is definitely within reach. If it breaks that (with a definitive move and close—not one of those namby-pamby “let me stick my toe in the water, ooh, baby, it’s so-o-o-o cold I can’t stay” moves), then there’s not a lot of support until 1.5373. I’ll blog again if we get there—that is if I haven’t gotten into a good bottle of champagne I have tucked in the fridge. However, no counting of chickens is my rule and an honest look at this pair shows it trying to establish some support here. Time will tell. A close below the doji at 1.5760 hints it won’t find support here. If it does find support here, then look for resistance at 1.5800/06 (round number and yesterday’s low), 1.5886 (yesterday’s high) and 1.5912, an uptrend line drawn from the March lows and a Fib confluence zone. 1.6000 is where it will bump its head on a downtrend line coming in from the January 28 high.
Here’s the hourly chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
EURUSD—weaker and weaker
My short in the Euro (1.4003) that I blogged about yesterday has behaved nicely. As of now, 7:57 AM EST and after the ECB announcement that they weren’t raising rates, it is 154 pips in profit. The remainder of my original short from 1.0474 is 225 pips in profit. I took some more profits from that trade at +205 pips. I can’t see that anyone thought ECB would raise rates but the pair may bounce around a bit during Trichet’s speech.
I was surprised the rally wasn’t stronger than it turned out to be—those Euro bulls usually don’t let their baby go down without a fight, after all. It only reached the 50% retracement level of the move down from the January 25 high of 1.4194 before falling again. However, the pair is weak. It has broken two daily uptrend lines from March 2009, the first one in December and the second one, less steeply drawn, earlier this month. I blogged several times about that second line—it formed the bottom of what I interpreted as a bear flag. The profit target from that bear flag is 133.35 although there are no guarantees it will reach that goal. Looking at the moves down, they look impulsive, in Elliott Wave speak and the correction has been shallow. In my most recent posts with my Elliott Wave count on this pair, I interpreted that we’re in a third wave. Third waves are moneymakers, broad and strong as Prechter and Frost write.
So far, this morning it has dipped to 1.3827 where it appears to be trying to base. This is close to the 1.3855 low it reached on Monday. Watch price action. If it fails here, it could drop sharply. Depending on how it bounces around during Trichet’s speech, I may add to my shorts on a rally.
Support:
1.3827 (today’s low)
1.3800/3833 (round number and July low)
1.3739 (top of EW 1 from March low and June ’09 low)
1.3684 (March ’09 prior resistance)
Resistance:
1.3855 (Monday’s low)
1.3975/4000/4026 (.382 retracement from 1/25 high, round number, and Wednesday high)
1.40655/65 (polarity and .618 retracement from 1/25 high)
1.4150/70/94 (prior resistance and Jan 25 high)
Here’s the three-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
I was surprised the rally wasn’t stronger than it turned out to be—those Euro bulls usually don’t let their baby go down without a fight, after all. It only reached the 50% retracement level of the move down from the January 25 high of 1.4194 before falling again. However, the pair is weak. It has broken two daily uptrend lines from March 2009, the first one in December and the second one, less steeply drawn, earlier this month. I blogged several times about that second line—it formed the bottom of what I interpreted as a bear flag. The profit target from that bear flag is 133.35 although there are no guarantees it will reach that goal. Looking at the moves down, they look impulsive, in Elliott Wave speak and the correction has been shallow. In my most recent posts with my Elliott Wave count on this pair, I interpreted that we’re in a third wave. Third waves are moneymakers, broad and strong as Prechter and Frost write.
So far, this morning it has dipped to 1.3827 where it appears to be trying to base. This is close to the 1.3855 low it reached on Monday. Watch price action. If it fails here, it could drop sharply. Depending on how it bounces around during Trichet’s speech, I may add to my shorts on a rally.
Support:
1.3827 (today’s low)
1.3800/3833 (round number and July low)
1.3739 (top of EW 1 from March low and June ’09 low)
1.3684 (March ’09 prior resistance)
Resistance:
1.3855 (Monday’s low)
1.3975/4000/4026 (.382 retracement from 1/25 high, round number, and Wednesday high)
1.40655/65 (polarity and .618 retracement from 1/25 high)
1.4150/70/94 (prior resistance and Jan 25 high)
Here’s the three-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
GBPJPY—nudging trend line
On the three-hour chart, GBPJPY just closed a candle a tad below the uptrend line that began in January 2009 with a low of 118.92. It also just broke a short-term uptrend line on the three-hour chart. The pair looks weak, with the last two daily candles showing indecisiveness and uncertainty. Yesterday’s high was 145.31. On the three-hour chart, it formed an evening star formation with this high, although the first bullish candle of the pattern didn’t even look as strong as it could because of its upper shadow. I shorted at 144.52. So far this morning it has dropped to a low of 143.55. Am I profit stopped? You know I am.
There is much room for more downside. Support levels are:
143.55 (this morning’s low)
143.07 (Feb. low)
142.00/02 (Dec. low and round number)
140.80 (50% retracement of 2009’s Jan. low to Aug. high and a fib confluence zone)
139.31 (Nov. low)
If the pair should rally, I doubt very much it can get above the high set yesterday. Resistance levels are 144.74, 145.31, and then 146.34. I’ll be shorting with both hands if it sees that last level.
Here’s the three-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
There is much room for more downside. Support levels are:
143.55 (this morning’s low)
143.07 (Feb. low)
142.00/02 (Dec. low and round number)
140.80 (50% retracement of 2009’s Jan. low to Aug. high and a fib confluence zone)
139.31 (Nov. low)
If the pair should rally, I doubt very much it can get above the high set yesterday. Resistance levels are 144.74, 145.31, and then 146.34. I’ll be shorting with both hands if it sees that last level.
Here’s the three-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
USDJPY—falling back
My short from 90.95 was taken out yesterday with a stop just above breakeven. How far above? +2 pips, LOL. I thought about getting back in on the spike up to 91.28 but I’m tired of this pair. It did stay capped by the 91.00/19/25/34 resistance I identified on Monday (round number, fib retracements and polarity). This would normally be a positive sign for me for me. The problem as I see it is that while the pair looks weak, USD strength may be holding it from strong moves. I’ve put it on the back burner for now and instead turned my attention to GBPJPY which I’ll blog about in a bit.
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
Wednesday, February 3, 2010
January Trade Results—Up 3,116 pips
Since I began posting the results of the trades I actually blog about and show when I take them, the results have been:
Jan 2010—up 3116 pips
Dec 2009—up 2,092 pips
Nov 2009—up 2,054 pips
Oct 2009—up 1,994 pips
The past several months have been very good trading months because of many opportunities and market action that suits my trading style. I like sideways markets and I like faltering trends. What helps me the most, though, is my hard work and discipline. I don’t get into a pair unless it is at an entry level I deem reasonable. I know it’s a reasonable level because I spend many hours analyzing my charts. While I take partial profits on trades, I also have the discipline to let profits run. Finally, I keep my stops tight. Those are the keys—much more important than any given approach or technique. Even with this, some months are going to be duds. You’ll see them when they happen because I post about most trades as soon as I take them or in advance of them if I see a particularly promising set up. I don’t report after the fact when the results are known, an all-too-common characteristic of the so-called “gurus” and “experts.” Sometimes a trade moves too quickly to get it out—the GBPJPY is notorious for this. For the most part though, you see them as I make them.
As usual, I didn’t have an excessive number of trades and the gains are more spread out than they usually are across several pairs.However, big earners were USDCAD with 1,000 pips, most of that taken in partial profits. Next was GBPJPY with 657 pips.
In some of the trades, I took partial profits. I’m still unsure about the best way to report those so I just lump them together, e.g. if I closed out half at 50 and the rest at 100, I count 150. If anyone has a better idea for how to report these, please post a comment. I also had some trades I blogged about that stopped at breakeven. I don’t count these in the trades I list.
Here’s the detail of the January trades. Each of them was blogged about when it took place and you could see them on the charts I posted.
Currency pair, total net gain or loss in pips, and the detailed trades
AUDUSD +70 total; (1 trade at +70)
EURCHF +100 total; (1 trade at +100)
EURGBP (+50 total; (1 trade at +50)
EURJPY +284 total; (+70, +244, -30)
EURUSD +380 total; (+5, +25, +300, +50)
GBPCHF +418 total; (+223, +113, +77, +5)
GBPJPY +657 total; (+60, +25, +3. +95, +204, +70, +120, +80)
GBPUSD +157 total; (+92, +60, +5)
USDJPY (0 total; (+70, -70)
USDCAD +1000 total; (+5, +220, +400, +375)
Jan 2010—up 3116 pips
Dec 2009—up 2,092 pips
Nov 2009—up 2,054 pips
Oct 2009—up 1,994 pips
The past several months have been very good trading months because of many opportunities and market action that suits my trading style. I like sideways markets and I like faltering trends. What helps me the most, though, is my hard work and discipline. I don’t get into a pair unless it is at an entry level I deem reasonable. I know it’s a reasonable level because I spend many hours analyzing my charts. While I take partial profits on trades, I also have the discipline to let profits run. Finally, I keep my stops tight. Those are the keys—much more important than any given approach or technique. Even with this, some months are going to be duds. You’ll see them when they happen because I post about most trades as soon as I take them or in advance of them if I see a particularly promising set up. I don’t report after the fact when the results are known, an all-too-common characteristic of the so-called “gurus” and “experts.” Sometimes a trade moves too quickly to get it out—the GBPJPY is notorious for this. For the most part though, you see them as I make them.
As usual, I didn’t have an excessive number of trades and the gains are more spread out than they usually are across several pairs.However, big earners were USDCAD with 1,000 pips, most of that taken in partial profits. Next was GBPJPY with 657 pips.
In some of the trades, I took partial profits. I’m still unsure about the best way to report those so I just lump them together, e.g. if I closed out half at 50 and the rest at 100, I count 150. If anyone has a better idea for how to report these, please post a comment. I also had some trades I blogged about that stopped at breakeven. I don’t count these in the trades I list.
Here’s the detail of the January trades. Each of them was blogged about when it took place and you could see them on the charts I posted.
Currency pair, total net gain or loss in pips, and the detailed trades
AUDUSD +70 total; (1 trade at +70)
EURCHF +100 total; (1 trade at +100)
EURGBP (+50 total; (1 trade at +50)
EURJPY +284 total; (+70, +244, -30)
EURUSD +380 total; (+5, +25, +300, +50)
GBPCHF +418 total; (+223, +113, +77, +5)
GBPJPY +657 total; (+60, +25, +3. +95, +204, +70, +120, +80)
GBPUSD +157 total; (+92, +60, +5)
USDJPY (0 total; (+70, -70)
USDCAD +1000 total; (+5, +220, +400, +375)
EURUSD—can it get through resistance?
Most of the commentary out there hinges on expectations for at least some rally and Euro may in fact do that. I’m still partially in a short from 1.4074 and I’m not quite ready to close it and go long because of some conflicting signals.
There’s no doubt a bounce is in the cards and the drop down from the November high of 1.5144 has been steep. I’d welcome a deeper correction before it resumes. However, things are not as clear as they should be for a rally. It has climbed from its low 1.3859 to its high of 1.4026 today. On the hourly chart, though, one can see the momentum, as represented by RSI, has dropped out of overbought status. This is combination with an overall downtrend is bearish. In addition, the recent candle pattern evokes an evening star although I’d have preferred to see the third candle close deeper into the first bullish one. Those two things, along with the overall downtrend and the fact it is stalling at resistance (50% retracement of the drop from Jan. 25 and a round number and prior resistance), is enough to cause me to take another short position. I just did at 1.4003. If it closes above the doji (1.4026), I’m out.
Here’s the hourly chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
There’s no doubt a bounce is in the cards and the drop down from the November high of 1.5144 has been steep. I’d welcome a deeper correction before it resumes. However, things are not as clear as they should be for a rally. It has climbed from its low 1.3859 to its high of 1.4026 today. On the hourly chart, though, one can see the momentum, as represented by RSI, has dropped out of overbought status. This is combination with an overall downtrend is bearish. In addition, the recent candle pattern evokes an evening star although I’d have preferred to see the third candle close deeper into the first bullish one. Those two things, along with the overall downtrend and the fact it is stalling at resistance (50% retracement of the drop from Jan. 25 and a round number and prior resistance), is enough to cause me to take another short position. I just did at 1.4003. If it closes above the doji (1.4026), I’m out.
Here’s the hourly chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
GBPUSD—still struggling
I wrote yesterday that GBPUSD was struggling with 1.5979. It cleared that and has climbed as high as 1.6079 today where it’s encountering more resistance. The climb on the three-hour chart looks raggedy to me and the most recently completed candle is a doji after a rise so it’s a bearish. The pair needs a close above this doji. That, with the Monday hammer and the bullish candle from yesterday, might suggest more upside before another drop. I’m still short from 1.6246. I closed the other position, from 1.6132, at 1.5995 for + 137 pips.
The potential evening start forming on the three-hour chart might cause me to add a short position. It’s potential because the third candle hasn’t yet completed.
Resistance:
1.6100/06/17 (round number, up trend line from 3/09, and 20 daily EMA)
1.6225/38/50 (polarity, .382 retracement of move down from Nov.)
1.6365/69 (polarity, 50% retracement from Nov. move down)
1.6461 (Jan. high)
Support:
1.5851 (Jan. low)
1.5833 (Dec. low)
1.5708 (Oct. low)
Here’s the three-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
The potential evening start forming on the three-hour chart might cause me to add a short position. It’s potential because the third candle hasn’t yet completed.
Resistance:
1.6100/06/17 (round number, up trend line from 3/09, and 20 daily EMA)
1.6225/38/50 (polarity, .382 retracement of move down from Nov.)
1.6365/69 (polarity, 50% retracement from Nov. move down)
1.6461 (Jan. high)
Support:
1.5851 (Jan. low)
1.5833 (Dec. low)
1.5708 (Oct. low)
Here’s the three-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
USDJPY—dull and duller
This pair is acting as nervous as a long-tailed cat in a room full of rocking chairs and it makes for some very dull market action. If that is an inverted head and shoulders pattern forming on the weekly and daily charts, the pair is in no rush to complete it. This could be an Elliott Wave flat correction, taking its time to develop. With the bullish divergence and the potential H&S, I could make a case for going long but I’m still short from 90.95 with a profit stop just above breakeven. There’s still strong resistance overhead.
Here’s the daily chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
Here’s the daily chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
AUDUSD—long again
When last I was long Ozzie (last Thursday—eons ago in the short-term trader warped sense of time), it was struggling with a long-term downtrend line. I’m glad I took some partial profits at 70 pips because the rest of the trade stopped out at +9 pips. Then it had an inglorious fall, apparently because of the RBA’s decision to leave interest rates untouched.
That fall provided a buying opportunity yesterday. I went long at .8821. What was there on the chart that supported this decision after seeing the sharp drop?
First, the pair is technically still in an uptrend from March ‘09, although it broke an up trend line from July and has been ranging since October with a spike high in November to .9406. It was nearing the bottom of this range (lows had been .8735 in December and this pair bottomed yesterday at .8781). That was 50 pips away but I believed the December lows were an overreaction and, in any case, that’s not a huge stop when the potential gains are 150 or 200 pips. I don’t expect it to return to .9406, although who really knows, but I suspect there’s more upside before it gives up the ghost, if, in fact, it’s planning on doing that. In addition, the “mood” yesterday was more upbeat. The markets may indeed be only delaying the day of reckoning (I mean equities) but that’s tomorrow’s problem. I trade today. On the 3-hour chart, the pair formed a nice little doji at the bottom. There’s also positive divergence between price and RSI. All good reasons to buy and I just took +75 pips profit off the table and have the remaining position profit-stopped. It could head down again, of course. Certainly, a break of the range would be reason to step up to shorting.
Resistance:
.8930/ 57/63 (recent highs)
.8991 (.382 retracement of drop from min-January)
.9020/33/56 (former daily uptrend line from July ’09, daily 34 EMA, and 50% retracement)
.9093 (1/25 high)
Support:
.8782 (Monday low)
.8735 (Dec. ’09 low)
.8569 (Oct. low)
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
That fall provided a buying opportunity yesterday. I went long at .8821. What was there on the chart that supported this decision after seeing the sharp drop?
First, the pair is technically still in an uptrend from March ‘09, although it broke an up trend line from July and has been ranging since October with a spike high in November to .9406. It was nearing the bottom of this range (lows had been .8735 in December and this pair bottomed yesterday at .8781). That was 50 pips away but I believed the December lows were an overreaction and, in any case, that’s not a huge stop when the potential gains are 150 or 200 pips. I don’t expect it to return to .9406, although who really knows, but I suspect there’s more upside before it gives up the ghost, if, in fact, it’s planning on doing that. In addition, the “mood” yesterday was more upbeat. The markets may indeed be only delaying the day of reckoning (I mean equities) but that’s tomorrow’s problem. I trade today. On the 3-hour chart, the pair formed a nice little doji at the bottom. There’s also positive divergence between price and RSI. All good reasons to buy and I just took +75 pips profit off the table and have the remaining position profit-stopped. It could head down again, of course. Certainly, a break of the range would be reason to step up to shorting.
Resistance:
.8930/ 57/63 (recent highs)
.8991 (.382 retracement of drop from min-January)
.9020/33/56 (former daily uptrend line from July ’09, daily 34 EMA, and 50% retracement)
.9093 (1/25 high)
Support:
.8782 (Monday low)
.8735 (Dec. ’09 low)
.8569 (Oct. low)
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
Tuesday, February 2, 2010
USDJPY—capped again
My two shorts profit stopped out yesterday at +10 and +20 pips respectively. I shorted again at 90.72. The pair hasn’t done much since then, reaching a high of 90.95 and then drooping. The resistance is tough—Fib retracements, down trend line, prior highs. However, the pair is languishing and no spectacular moves, up or down, appear in the cards at the moment. Things change, though.
Support:
90.51 (uptrend line from Nov. ’09)
89.14 (January low)
88.43 (bottom of current down channel)
Resistance:
90.95 (yesterday’s high)
91.87/92.30/93.77 (January highs)
Here’s the three-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
Support:
90.51 (uptrend line from Nov. ’09)
89.14 (January low)
88.43 (bottom of current down channel)
Resistance:
90.95 (yesterday’s high)
91.87/92.30/93.77 (January highs)
Here’s the three-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
GBPUSD—struggling
I’m still short this pair in two positions—one from 16246 and one from 1.6132 and the pair is currently at 1.5945 (8:17 AM EST).
Yesterday, GBPUSD closed below its uptrend line from March 2009—very bad news indeed, especially since the bounce from there looks sickly.
The weekly chart shows GBPUSD at the bottom of its symmetrical triangle. The high of this triangle was 1.7045 in August (also the 2005 low). Another rise to this price would likely result in another rebuff. However, we’re nowhere near there. I wouldn’t rule out a rise to the top of the weekly triangle near 1.65 but currently it’s struggling with 1.5979 so that seems a long ways away. A break below the triangle positions it for another move down. The October ’09 low of 1.5708 seems within easy reach. Sexier targets are 1.5524 and 1.5460.
Support levels:
1.5851 (yesterday’s low)
1.5833 (December low)
1.5708 (Oct. ’09 low)
1.5524 (polarity)
Resistance levels:
1.5979 (Yesterday’s high)
1.6000 (round number; psychological)
1.6085/90 (uptrend line from March ’09 and major support)
1.6262/72 (Nov. ’09 lows)
Here’s the weekly chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
Yesterday, GBPUSD closed below its uptrend line from March 2009—very bad news indeed, especially since the bounce from there looks sickly.
The weekly chart shows GBPUSD at the bottom of its symmetrical triangle. The high of this triangle was 1.7045 in August (also the 2005 low). Another rise to this price would likely result in another rebuff. However, we’re nowhere near there. I wouldn’t rule out a rise to the top of the weekly triangle near 1.65 but currently it’s struggling with 1.5979 so that seems a long ways away. A break below the triangle positions it for another move down. The October ’09 low of 1.5708 seems within easy reach. Sexier targets are 1.5524 and 1.5460.
Support levels:
1.5851 (yesterday’s low)
1.5833 (December low)
1.5708 (Oct. ’09 low)
1.5524 (polarity)
Resistance levels:
1.5979 (Yesterday’s high)
1.6000 (round number; psychological)
1.6085/90 (uptrend line from March ’09 and major support)
1.6262/72 (Nov. ’09 lows)
Here’s the weekly chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
Monday, February 1, 2010
EURUSD—support and resistance levels
The Euro is bouncing a bit from last night’s low of 1.3853 and reached 1.3935 this morning. It has fallen off from that and, more important, has also fallen out of another bear flag, a pattern it has been repeating since falling out of the daily flag last week. It has since climbed back to the flag bottom, calling for another short on my part at 1.3908. I still have a short position from 1.4074.
Downward pressure is intense.
That said, there is bullish divergence on the three-hour chart between price and RSI. It could be the result of the current correction but I don’t expect to see divergence in what I believe is an overall wave three down. It’s something to keep an eye on. I have an alternative Elliott Wave count that labels the move down from 1.5144 as a correction of the prior impulse wave. It’s not my preferred count but if one used it, price cannot go below 1.3739, the top of wave one if you assume that began in March ’09.
Ideally, I’d like to see a bit better correction than has taken place so far, perhaps to 1.40 that would also bring the hourly RSI into an overbought state. That would be another place to add to shorts or go short if you’re not already in that position.
Resistance levels are:
1.3975/4000/4015 (.382 retracement from 1/25 high, round number, and prior support)
1.4028/52 (Jan 28 highs and prior resistance)
1.4150/70/94 (prior resistance)
1.4194 (Jan. 25 high)
1.4332 daily 200 SMA
Support levels are:
1.3855 (overnight low)
1.3800/3833 (round number and July ‘09 low)
1.3739/48 (top of EW 1 from March low and June ’09 low)
1.3684 (March ’09 prior resistance)
Below those prices, there are some very attractive price objectives. Let’s see what unfolds over the course of today.
GBPUSD—support and resistance
Last Thursday I wrote that I shorted GBPUSD at 1.6246. The overall move looked corrective to me in the context of the large, sideways pattern. I added to that position at 1.6132, after the pair managed to close below the daily 200 SMA on the shorter-term charts. Obviously, while I don’t believe one should give into the house money effect, I was in profit on the first trade. I also placed a very tight stop on the second trade. Both are in profit as of now (10:32 AM EST), one at 336 pips profit and one at 222 pips profit. I took partial profits from the first trade, once at 1.6134 for +112 pips and once at 1.6014 for +232 pips profit.
What next? Obviously, I’m not going to bail out of short positions that could continue to run but there could be a bounce so I’m keeping my stop relatively far away. On the three-hour chart, the last candle had a longish, lower shadow and the current candle could close above it, hinting that the pair is rejecting lower prices for now. A close below that prior shadow would be bearish. On the one-hour chart, there have been three bullish candles for a short rise. The 4th candle that just completed has a small body. If the current candle closes deep into the third bullish candle, this would be an evening star. This all bears (unfortunate choice of word in this situation, I know) watching. Most likely resistance is:
1.5979 (today’s high)
1.6000/13 (round number and .382 fib retracement from 1/28 high)
1.6058/64/71/85/90 (polarity, various fib retracements, and uptrend line from March low)
1.6135 (speed line)
1.6220 (200 SMA on daily chart)
1.6314 (downtrend from November high)
Support levels are:
1.5851 (January low)
1.5833 (December low)
1.5731 (polarity)
1.5708 (October low)
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
Downward pressure is intense.
That said, there is bullish divergence on the three-hour chart between price and RSI. It could be the result of the current correction but I don’t expect to see divergence in what I believe is an overall wave three down. It’s something to keep an eye on. I have an alternative Elliott Wave count that labels the move down from 1.5144 as a correction of the prior impulse wave. It’s not my preferred count but if one used it, price cannot go below 1.3739, the top of wave one if you assume that began in March ’09.
Ideally, I’d like to see a bit better correction than has taken place so far, perhaps to 1.40 that would also bring the hourly RSI into an overbought state. That would be another place to add to shorts or go short if you’re not already in that position.
Resistance levels are:
1.3975/4000/4015 (.382 retracement from 1/25 high, round number, and prior support)
1.4028/52 (Jan 28 highs and prior resistance)
1.4150/70/94 (prior resistance)
1.4194 (Jan. 25 high)
1.4332 daily 200 SMA
Support levels are:
1.3855 (overnight low)
1.3800/3833 (round number and July ‘09 low)
1.3739/48 (top of EW 1 from March low and June ’09 low)
1.3684 (March ’09 prior resistance)
Below those prices, there are some very attractive price objectives. Let’s see what unfolds over the course of today.
GBPUSD—support and resistance
Last Thursday I wrote that I shorted GBPUSD at 1.6246. The overall move looked corrective to me in the context of the large, sideways pattern. I added to that position at 1.6132, after the pair managed to close below the daily 200 SMA on the shorter-term charts. Obviously, while I don’t believe one should give into the house money effect, I was in profit on the first trade. I also placed a very tight stop on the second trade. Both are in profit as of now (10:32 AM EST), one at 336 pips profit and one at 222 pips profit. I took partial profits from the first trade, once at 1.6134 for +112 pips and once at 1.6014 for +232 pips profit.
What next? Obviously, I’m not going to bail out of short positions that could continue to run but there could be a bounce so I’m keeping my stop relatively far away. On the three-hour chart, the last candle had a longish, lower shadow and the current candle could close above it, hinting that the pair is rejecting lower prices for now. A close below that prior shadow would be bearish. On the one-hour chart, there have been three bullish candles for a short rise. The 4th candle that just completed has a small body. If the current candle closes deep into the third bullish candle, this would be an evening star. This all bears (unfortunate choice of word in this situation, I know) watching. Most likely resistance is:
1.5979 (today’s high)
1.6000/13 (round number and .382 fib retracement from 1/28 high)
1.6058/64/71/85/90 (polarity, various fib retracements, and uptrend line from March low)
1.6135 (speed line)
1.6220 (200 SMA on daily chart)
1.6314 (downtrend from November high)
Support levels are:
1.5851 (January low)
1.5833 (December low)
1.5731 (polarity)
1.5708 (October low)
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
GBPUSD—support and resistance
Last Thursday I wrote that I shorted GBPUSD at 1.6246. The overall move looked corrective to me in the context of the large, sideways pattern. I added to that position at 1.6132, after the pair managed to close below the daily 200 SMA on the shorter-term charts. Obviously, while I don’t believe one should give into the house money effect, I was in profit on the first trade. I also placed a very tight stop on the second trade. Both are in profit as of now (10:32 AM EST), one at 336 pips profit and one at 222 pips profit. I took partial profits from the first trade, once at 1.6134 for +112 pips and once at 1.6014 for +232 pips profit.
What next? Obviously, I’m not going to bail out of short positions that could continue to run but there could be a bounce so I’m keeping my stop relatively far away. On the three-hour chart, the last candle had a longish, lower shadow and the current candle could close above it, hinting that the pair is rejecting lower prices for now. A close below that prior shadow would be bearish. On the one-hour chart, there have been three bullish candles for a short rise. The 4th candle that just completed has a small body. If the current candle closes deep into the third bullish candle, this would be an evening star. This all bears (unfortunate choice of word in this situation, I know) watching. Most likely resistance is:
1.5979 (today’s high)
1.6000/13 (round number and .382 fib retracement from 1/28 high)
1.6058/64/71/85/90 (polarity, various fib retracements, and uptrend line from March low)
1.6135 (speed line)
1.6220 (200 SMA on daily chart)
1.6314 (downtrend from November high)
Support levels are:
1.5851 (January low)
1.5833 (December low)
1.5731 (polarity)
1.5708 (October low)
Here’s the one-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
What next? Obviously, I’m not going to bail out of short positions that could continue to run but there could be a bounce so I’m keeping my stop relatively far away. On the three-hour chart, the last candle had a longish, lower shadow and the current candle could close above it, hinting that the pair is rejecting lower prices for now. A close below that prior shadow would be bearish. On the one-hour chart, there have been three bullish candles for a short rise. The 4th candle that just completed has a small body. If the current candle closes deep into the third bullish candle, this would be an evening star. This all bears (unfortunate choice of word in this situation, I know) watching. Most likely resistance is:
1.5979 (today’s high)
1.6000/13 (round number and .382 fib retracement from 1/28 high)
1.6058/64/71/85/90 (polarity, various fib retracements, and uptrend line from March low)
1.6135 (speed line)
1.6220 (200 SMA on daily chart)
1.6314 (downtrend from November high)
Support levels are:
1.5851 (January low)
1.5833 (December low)
1.5731 (polarity)
1.5708 (October low)
Here’s the one-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
USDJPY—respected resistance
The pair respected the resistance I wrote about last week. On the three-hour chart, it bumped its head on the downtrend line coming in from January 6 as well as hitting the .618 retracement from the January 21 high. I placed two short orders—one at 90.78 and one at 90.73 (I took a second position because I took less of a position size than I wanted in the first one—in other words, trader error.)
Since then it dropped to 89.88. I took partial profits on the first position at 90.11 for + 67 pips. Obviously, both positions are profit-stopped.
This is a good time for me to mention how important it is to wait for the entry that your analysis shows is reasonable. It was Friday morning at 6:25 AM EST when I posted my chart that showed I was waiting for the entry around 90.71/75/81. The pair reached that price level by 9 AM, EST and I entered my position. Sometimes it doesn’t happen that quickly but the point is that you need to wait for your entry. Let’s face it. If the market doesn’t get to your entry, it’s already telling you there’s something off with your analysis. If it does and merrily blows past it, your good entry point has allowed you to set a stop that results in little loss. Learning to wait is mandatory in order to be a successful trader.
Resistance for USDJPY is at:
90.45 (downtrend line from January 6, ’10)
91.00/19/25/34 (round number, fib retracements and polarity)
92.32 (polarity)
93.77 ( January 7 high)
94.12 (daily downtrend line from May ’09)
Support is at:
89.51 (up trend line from November ’09)
89.00/14 (round number and January low)
88.01 (round number and support)
87.36 (December low)
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
Since then it dropped to 89.88. I took partial profits on the first position at 90.11 for + 67 pips. Obviously, both positions are profit-stopped.
This is a good time for me to mention how important it is to wait for the entry that your analysis shows is reasonable. It was Friday morning at 6:25 AM EST when I posted my chart that showed I was waiting for the entry around 90.71/75/81. The pair reached that price level by 9 AM, EST and I entered my position. Sometimes it doesn’t happen that quickly but the point is that you need to wait for your entry. Let’s face it. If the market doesn’t get to your entry, it’s already telling you there’s something off with your analysis. If it does and merrily blows past it, your good entry point has allowed you to set a stop that results in little loss. Learning to wait is mandatory in order to be a successful trader.
Resistance for USDJPY is at:
90.45 (downtrend line from January 6, ’10)
91.00/19/25/34 (round number, fib retracements and polarity)
92.32 (polarity)
93.77 ( January 7 high)
94.12 (daily downtrend line from May ’09)
Support is at:
89.51 (up trend line from November ’09)
89.00/14 (round number and January low)
88.01 (round number and support)
87.36 (December low)
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
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