Friday, May 21, 2010

No Blogging Friday

I'm at the MTA conference in NY and won't be posting today. See you Monday.

EURCHF -- Hit Profit Target

EURCHF hit profit target for +439 pips. Now it will probably stay in a narrow range again.

Thursday, May 20, 2010

EURCHF—repelled at resistance

Now that EURCHF got a little boost out of the incredibly small range in the low 1.40’s, it has been repelled by resistance at 1.4309. Looking at the hourly chart one can see the pair has made four attempts to scale this price. After the last overnight try it has sulked back to 1.4188 (so far). My suspicion is there will be another attempt. Often, after several attempts, a pair will make it through. If it does so, then there is additional resistance at 1.4365 and 1.4466. However, given the sentiment against the Euro, even intervention may not be able to keep this pair up.

Yesterday shows what intervention looks like. EURCHF went from 1.4006 to 1.4207 within an hour and within two hours of that gained another 102 pips to 1.4309. This is why you want tight stops.

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.

Wednesday, May 19, 2010

One last note--EURCHF

Finally! I just took partial profits at +177 pips.

Traveling today

No more posts because I'm traveling to the MTA symposium in NYC.

EURUSD—rap stars and supermodels don’t want Euros now

Less than two years ago the rap stars and the supermodels were bleating that they wanted to be paid in Euros. Let’s hope they got their wish. Yesterday’s rally was another good short as I blogged and the pair made a new low at 1.2144. This is almost on the 50% retracement of the all-time low of .8225 in 10/2000 to the all-time high of 1.6041 in 7/2008. This is if you look at the Euro alone and don’t go back to the German DM (which Euro obviously still is with help from the Vichy French—notice how anxious they were to help fellow members of the Eurozone which should be a minimum level of support for a shared currency. Just because USA states and counties hover on bankruptcy doesn’t mean we don’t bail them out. Or our banks for that matter—all for one and one for naught and all that, haha. But I digress). I’m back to having only one short in play from 1.2996. This is a small position as I’ve been taking profits.

Looking at the weekly chart (as opposed to the daily) suggests we’re in a wave three. If so, the Euro will fall below 1.1432. This is true because wave three can’t be the shortest wave. Wave one was from 1.6041 to the 1.2329 low for 3,712 pips. Wave two ended at the November high of 1.5144. Therefore, 1.5144 minus 3,712 pips is 1.1432 and it would go beyond that point. Of course, this is only viable if you believe in the Elliott Wave approach and it’s far from proven. Still, it’s one way of looking at it.

While shorting rallies continues to make sense, be careful, really careful. This is a volatile time and wide swings are possible. Also, I doubt very much the Euro will go straight down to 1.14. There will be a rally somewhere along the way. Everyone but everyone has jumped on this bandwagon so who is left to sell? There is positive divergence on the shorter-term charts.

Support is at 1.2144, 1.2127, 1.1826 (the Feb. ’06 low) and 1.1641. After that would be the 1.1432 mentioned above and lower. Who doesn’t believe parity is at least possible? Resistance is at 1.2229, 1.2373, 1.2444, 1.2536, 1.2574, 1.2739/60, 1.2803, 1.2880, 1.2963 (Fib confluence), 1.3038 and 1.3094 (Monday's high). Right. I don’t think we’ll see that level today and sellers will be coming out on rallies.

Here's the weekly chart (my trade doesn’t show because I use a different charting package for weekly and monthly charts):

















© 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.

EURCHF—still in narrow range

The remainder of my trade stopped at breakeven. I shorted as it approached the high of this narrow range at 1.4040 and set my profit target at 1.4008 which was hit overnight for +32 pips. I have just taken a small long position at 1.4007.

If the SNB does intervene then the pair will break upward of this narrow range of 1.4000 to 1.4007. If they don’t then it should eventually break below. There is no nearby support if it does break below so you want your stop tight if you’re long. Shorting rallies is probably safer but with low profit potential if it's in this range. However you'd still want tight stops as intevention will cause a big spike.

© 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, May 18, 2010

March/April Trade Results—up 8,507 pips

A reader reminded me that I hadn’t posted trade results for March or April so here they are. It turned out that March has been my best month since I’ve been posting results with +6,141 pips. April was weak by comparison but still good at +2,366 pips. The results by month since October have been:

Apr 2010—up 2,366 pips
Mar 2010—up 6,141 pips
Feb 2010—up 5,915 pips
Jan 2010—up 3,116 pips
Dec 2009—up 2,092 pips
Nov 2009—up 2,054pips
Oct 2009—up 1,994 pips

The market has provided many opportunities in recent months. In February and March, the market fit my particular trading style. April did not—I found myself constantly frustrated with the ups and downs and apparent lack of movement. I was still profitable but it was discipline more than anything else and I missed a lot of opportunities. But obviously the market was gearing up for what has been a productive May to date. My trades are not the result of any deep secret technique passed down from Chaldean times. They are the result of hard work, using common technical analysis, and discipline. In many of my trades I take partial profits. I’m still not sure of the best way to report these so I just report them as I take them. If I take partial profits at 50 pips and close the trade at 100 pips, I count it as a total of 150 pips.

Here are the details of the trades for first March and then April. Each was blogged about as I was ready to take it or shortly thereafter. You could see them on the charts I posted because they show up as triangles or inverted triangles depending on whether I’m long or short. I list the details in the order in which they occurred during the month. For example, in AUDUSD, you see detail of the first trade in March at +37 pips. That means it was the first trade in that month (that did other than go out at breakeven). So you can go back into the blog and find them in order from the beginning of the month.

Here’s the detail for March which resulted in a total of +6,141 pips:

AUDUSD: +537 pips total; +37, +100, +58, +70, +140, +132
EURGBP: +633 pips total; +323, +50, +255, +5
EURJPY: +173 pips total; +85, +80
EURUSD: +1,412 pips total; +5, +5, +101, +56, +60, +52, -65, +80, +50, +9, +85, +180, +80, +250, +365, +99
GBPCHF: +61 pips total; +61
GBPJPY: +2,835 pips total; +300, +40, +157, +201, +300, +220, +186, +30, +161, +70, +54, +10, +92, +47, +28, +76, +104, +90, +309, +170, +72, +52, +50, +16
GBPUSD: +466 pips total; +70, +170, +88, +129, +48, -39
USDCAD: +24 pips total; +60, +10, -66, +20

Here’s the detail for April which resulted in a total of +2,366 pips.

AUDUSD: +247 pips total; +71, +70, +136, +10, -40
EURGBP: +54 pips total; -28, +32, +50
EURJPY: +342 pips total; +75, +183, +20, +64
EURUSD: +714 pips total; -36, +307, +193, +70, +76, +104
GBPUSD: +699 pips total; -39, +70, +10, +2, +53, +135, +300, +168
USDCHF: +310 pips total; +46, +80, +118, +66

EURCHF—update

As the pair approaches yesterday’s high, I took partial profit at +34 pips and moved my stop to breakeven. If you’re not long, a short with a very tight stop (who knows if the SNB will intervene?) is possible but profit potential is low as that 1.40 area is strong support right now.

GBPUSD—monthly chart

The evening star formation that looked possible yesterday morning on the three-hour chart never completed and my short from 1.4387 stopped at -73 pips. The pair reached a high of 1.4520 this morning where it’s hesitating as traders try to decide upon a direction.

Taking a look at the monthly chart, one can see that in breaking below a long-term uptrend line from 1985 (but only two touches prior to this), that the line could now serve as resistance at 1.5523. This was the April 14 high and within a general price zone that has been something of a magnet zone for many years. This strengthens it as resistance. If I redraw the uptrend line so that the 2009 low was the second touch, the line comes in at 1.3826. Of course once it got there there’s nothing to prevent it from dropping back to that 2009 1.35 low. Support is at 1.4389 (50% of long daily bars on 1/30 and 3/19/09), 1.4363, 1.4251, 1.4110, 1.3826, 1.3654, and 1.3503.

The pair will most likely struggle up to around 1.4476. A short there with tight stops could be profitable. If it breaks above that, then a long is possible with, of course, a tight stop. Resistance is at 1.4420/76, (today’s high and the 5/7 Friday doji low), 1.4640, 1.4703, 1.4851, 1.4889, 1.4918, 1.5055, 1.5173 (strong), 1.5391, 1.5499 and 1.5523 (April 14 high).

Here’s the monthly 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—near tough resistance

The pair has rallied from its low of 1.2234 yesterday to 1.2433 this morning. That’s not great but it’s better than continuing to drop, right? Alas, now it is approaching the formidable 1.25 resistance zone. And there is still all the nattering about the pair heading for 1.2127 which would be 50% of the .8225 (10/2000) low to 1.6040 (July 2008 high). There it would also run into Elliott Wave projections since 1.2188 would be 1.618 of an Elliott wave one. We’re just going to have to wait and see.

One of my shorts (the one fom 1.2482) profit-stopped out at +70 pips. The other, at least what is left of it since I have taken the majority in profits, is from 1.2996.

One could try a small short around 1.25 with tight stops. However, just as the USD has had a steep rise, the Euro has had a steep fall and a further correction is not unlikely. There is positive divergence on the three-hour chart.

Support is at 1.2373, 1.2298, 1.2234, 1.2188, 1.2127, 1.1826 (the Feb. ’06 low) and then 1.1641. Resistance is at 1.2536, 1.2574, 1.2739/60, 1.2803, 1.2880, 1.2963 (Fib confluence), 1.3038 and 1.3094 (Monday's high). I imagine the sellers will come out in droves before any of those latter levels are achieved.

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.

EURCHF—still hanging about

This pair is still doing nothing since I bought at 1.4008. There’s no reason to post a new chart—look at the one from yesterday. Perhaps the SNB has given up on it.

USD Index—Weekly

When I blogged on May 6th that the USD could extend up to resistance on the weekly chart at 88.70, I’m sure some thought I was deranged. However it looks more and more realistic, doesn’t it, now that the high was 87.06 yesterday? If it overcomes that resistance it’s possible the Mar. ’09 high of 89.71 is accessible.

Despite those lofty thoughts, though, it’s important to note that the run since the 4/17 low has been almost straight up. This is unsustainable. It reflects the emotion that’s driving the market. The most prudent course is to not jump on board if you’re not already long. There is a Gann angle line that is coming in about where price is now so this serves as a bit of downward pressure as well. Yesterday’s candle was a doji, which after an uptrend can be a good reversal signal. One can reasonably expect a pullback to either of the less steep uptrend lines—either 82 or 75. At 82 people will start trashing the USD and at 75 they’ll be consigning it to the graveyard again. Either would be a desirable long trade.

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, May 17, 2010

GBPUSD—weak

My long from 1.4572 stopped at breakeven.

The pair then proceeded to a low of 1.4251 where it bounced to 1.4455. It has now began faltering from this price with an evening star formation in process on the three-hour chart. In order for this three-candle formation to complete, the current (third) candle must close deeply into the first one. If it does, one could expect more lows. Note that unlike the Euro it has not plunged below the early 2009 lows.

I am now short from 1.4387 with a tight stop. Support is at 1.4298, 1.4110, 1.3654, and 1.3503. Resistance is at 1.4455/76 (today’s high and the 5/7 Friday doji low), 1.4633, 1.4703, 1.4851, and 1.4918.

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.

EURCHF—will SNB intervene?

Since I went long last week at 1.4008 the pair has done absolutely nothing. Will the Swiss National Bank step in or will it not? Traders are apparently paralyzed waiting for the answer.

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.

Monthly results

A reader emailed me that I hadn't posted monthly results for March or April! That was an oversight--I've been busy and the markets have been active. I will calculate them and post within the next day.

EURUSD—Who loves you baby?

Apparently nobody as the pair continues to fall. The finance ministers are meeting today and perhaps they can find a way to help the French Finance Minister put some bite behind the fighting words of over a week ago that "We will defend our currency and we won't let it be attacked by anyone."

The pair touched a low of 1.2234 after opening for the week. 1.2350 was considered a line in the sand since it was near the Oct. 2008 low. There is much chatter about it heading for 1.2127 which would be 50% of the .8225 (10/2000) low to 1.6040 (July 2008 high). 1.2188 would be 1.618 of an Elliott wave one so that would cause the level to be stronger support. Below that is 1.1826 (the Feb. ’06 low) and then 1.1641.

I have two shorts in play: one is from 1.2996 which is at 698 pips profit as I write at 6:00 AM EST; the other is from 1.2482 at 183 pips. I took another small amount off the table of the first one for +690 pips.

Is there any chance for jumping on this falling knife? There is positive diverence on the one- and three-hour charts. On the three-hour chart a harami candlestick pattern has formed. Both are signals of a trend reversal (this would only be short term) but both are operating in an environment of extreme fear so you can’t exactly bet the farm on them. The safest thing to do, if you’re not already short, is to wait for the dust to settle or at least wait for some type of rally. The pair has reached a high of 1.2329 this morning. It needs to at least clear that and if it starts to falter one could try a small short there with a tight stop. Next resistance levels are 1.2373, 1.2536 and 1.2574. Remember that 1.25 is good resistance now so it would be a “safe” (if there is such a thing) shorting level. If you try to get in, you must use tight stops. Fear made this stampede and when the market is being driven by strong emotion it can have wide and volatile swings.

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.