No trading today as it's Friday.
If you do trade be careful. The market is not very liquid anyway in August and Fridays are the worst day. Moves can be extreme and unpredictable.
See you Monday.
Friday, August 13, 2010
Thursday, August 12, 2010
USDJPY—bounce
There's been a bit of a bounce off yesterday's low of 84.73 which shouldn't have been a huge surprise. I went long this morning at 85.45 and took partial profits at +45 pips this morning. The pair's future direction is somewhat questionable in the short term. It was just a bit of a probe below the 84.82 low from Nov. '09. As I wrote yesterday, there was quite a bit of positive divergence in several time frames. What the pair does as it approaches resistance at 86.24/45 will be interesting.
Remember, though, that the downtrend is solidly in place and while one can trade a bounce one has to keep that in mind. A clear break below 84.73 would signal it's ready to scoot on down to newer, deeper, hand wringing lows.
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.
Remember, though, that the downtrend is solidly in place and while one can trade a bounce one has to keep that in mind. A clear break below 84.73 would signal it's ready to scoot on down to newer, deeper, hand wringing lows.
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—big drop
So far, Euro unfolded down from the Friday 1.3350 high to a low of 1.2780 today. This drops it below the daily 100 SMA, currently at 1.2805. I'd expect a bit of a bounce here as it corrects this big move and begins to work out some of the positive divergence with RSI on the three- and one-hour chart. The pair has clawed its way back to 1.2861. Certainly, part of the reason for this big move is the lack of liquidity in August trading markets.
You could have bought with a tight stop as it bounced off the low or you can wait until it retraces some of this drop and sell. I'll be on this pair closely.
Support is at 1.2805, 1.2780 and 1.2683/75 and 1.2620. Resistance is at 1.2870, 1.3000, 1.3050, 1.3125, 1.3226, and 1.3335.
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.
You could have bought with a tight stop as it bounced off the low or you can wait until it retraces some of this drop and sell. I'll be on this pair closely.
Support is at 1.2805, 1.2780 and 1.2683/75 and 1.2620. Resistance is at 1.2870, 1.3000, 1.3050, 1.3125, 1.3226, and 1.3335.
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.
© 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—big drop
So far, Euro unfolded down from the Friday 1.3350 high to a low of 1.2780 today. This drops it below the daily 100 SMA, currently at 1.2805. I'd expect a bit of a bounce here as it corrects this big move and begins to work out some of the positive divergence with RSI on the three- and one-hour chart. The pair has clawed its way back to 1.2861. Certainly, part of the reason for this big move is the lack of liquidity in August trading markets.
You could have bought with a tight stop as it bounced off the low or you can wait until it retraces some of this drop and sell. I'll be on this pair closely.
Support is at 1.2805, 1.2780 and 1.2683/75 and 1.2620. Resistance is at 1.2870, 1.3000, 1.3050, 1.3125, 1.3226, and 1.3335.
Here's the three-hour chart:
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—big drop
So far, Euro unfolded down from the Friday 1.3350 high to a low of 1.2780 today. This drops it below the daily 100 SMA, currently at 1.2805. I'd expect a bit of a bounce here as it corrects this big move and begins to work out some of the positive divergence with RSI on the three- and one-hour chart. The pair has clawed its way back to 1.2861. Certainly, part of the reason for this big move is the lack of liquidity in August trading markets.
You could have bought with a tight stop as it bounced off the low or you can wait until it retraces some of this drop and sell. I'll be on this pair closely.
Support is at 1.2805, 1.2780 and 1.2683/75 and 1.2620. Resistance is at 1.2870, 1.3000, 1.3050, 1.3125, 1.3226, and 1.3335.
Here's the three-hour chart:
USDCHF—drop
My long from 1.0528 stopped out at breakeven as it encountered the tough 1.06 to 1.0675 resistance zone. I took partial profits at +60 pips as it climbed to its high of 1.0627 yesterday. In pulling back it has pierced its short-term uptrend line and RSI has also dropped below its uptrend line. The low so far has been 1.0499. I will probably attempt another long depending on momentum. What this means is that if it drops into oversold (below 30 RSI) on the hourly chart, I want to study its behavior there and as it rises above 30. If it looks as though its basing around the 30 RSI it will begin to look attractive to buyers.
Support is at 1.0486, 1.0461, 1.0376 and 1.0322. Resistance is at 1.0627, 1.0661/75, 1.0757, 1.0856 and 1.1138.
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.
Support is at 1.0486, 1.0461, 1.0376 and 1.0322. Resistance is at 1.0627, 1.0661/75, 1.0757, 1.0856 and 1.1138.
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.
USDCAD—sideways at resistance
I'm still long from 1.0258 although the pair has largely been going sideways since I took some partial profits yesterday.
Price achieved 1.0494 before falling back where it is now hovering in an area of Fib confluence of 1.0464. This means it faltered near the top of the triangle at 1.0499 (1.05 also significant as a round number and is intertwined with polarity and Fib confluence). Ahead is the entire strong resistance zone of 1.05 to 1.0677. What it does with this resistance is going to most likely tell a very interesting story.
A pullback is more than likely given the overbought status of RSI (over 70) on the three- and one-hour charts. There's negative divergence on the one-hour chart (not shown). Ideally, this pullback would be contained by 1.04 which is roughly the 200 daily Simple Moving Average (SMA), Fib confluence, polarity, and the short-term uptrend line. Additional support is at 1.0298, 1.0274, 1.0205, 1.0146, and 1.0108.
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.
Price achieved 1.0494 before falling back where it is now hovering in an area of Fib confluence of 1.0464. This means it faltered near the top of the triangle at 1.0499 (1.05 also significant as a round number and is intertwined with polarity and Fib confluence). Ahead is the entire strong resistance zone of 1.05 to 1.0677. What it does with this resistance is going to most likely tell a very interesting story.
A pullback is more than likely given the overbought status of RSI (over 70) on the three- and one-hour charts. There's negative divergence on the one-hour chart (not shown). Ideally, this pullback would be contained by 1.04 which is roughly the 200 daily Simple Moving Average (SMA), Fib confluence, polarity, and the short-term uptrend line. Additional support is at 1.0298, 1.0274, 1.0205, 1.0146, and 1.0108.
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.
Wednesday, August 11, 2010
USDCHF—near resistance
As I wrote yesterday, my plan was to buy into this pair on pullbacks and when it pulled back to the short-term uptrend line I went long at 1.0528.
With that bounce the Swissy finds itself near the strong 1.06 to 1.0675 resistance zone. The high so far has been 1.0574. There's nothing particularly remarkable on the charts except this resistance so let's see how it does. If it successfully clears 1.0675 then resistance is at 1.0757, 1.0856 and 1.1138. Support is at 1.0600, 1.0582, 1.0525, Support is at 1.0500, 1.0461 and 1.0447.
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.
With that bounce the Swissy finds itself near the strong 1.06 to 1.0675 resistance zone. The high so far has been 1.0574. There's nothing particularly remarkable on the charts except this resistance so let's see how it does. If it successfully clears 1.0675 then resistance is at 1.0757, 1.0856 and 1.1138. Support is at 1.0600, 1.0582, 1.0525, Support is at 1.0500, 1.0461 and 1.0447.
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.
USDCAD—still rallying
My long from 1.0258 is still on although it came uncomfortably close to being taken out yesterday in the dip to 1.0298. However the pair rallied nicely.
The price so far has reached 1.0439, higher than the prior 1.0385. With this the pair has exceeded the 200 daily Simple Moving Average (SMA) of 1.0395. Around that level was also Fib confluence and polarity so it's a nice achievement. Still ahead, though, is the 1.05 to 1.0677 area of resistance. The angle of the line upwards is also very steep and it's difficult to see how the pair can maintain it.
Support is at 1.0298, 1.0274, 1.0205, 1.0146, and 1.0108.
Be cautious getting into trades. Markets are less liquid and there are lots of conflicting signals.
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 price so far has reached 1.0439, higher than the prior 1.0385. With this the pair has exceeded the 200 daily Simple Moving Average (SMA) of 1.0395. Around that level was also Fib confluence and polarity so it's a nice achievement. Still ahead, though, is the 1.05 to 1.0677 area of resistance. The angle of the line upwards is also very steep and it's difficult to see how the pair can maintain it.
Support is at 1.0298, 1.0274, 1.0205, 1.0146, and 1.0108.
Be cautious getting into trades. Markets are less liquid and there are lots of conflicting signals.
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—Getting down there
After the bullish divergence I wrote about yesterday I went long at 1.3096, took some partial profits at +116 pips and the remainder profit-stopped out at +20 pips.
With the drop to 1.2989 this morning, Euro is getting uncomfortably close to the 1.2952 area below which will bring out even more sellers. Note that on the three-hour chart below, RSI isn't plunging into oversold (nor has it been) meaning that even though its bullish momentum has abated it there isn't a rush to sell. The pair is currently at a support level. Be careful with the lack of liquidity in August markets.
Still, as I wrote yesterday, Friday's spike up to 1.3335 may have been it for the Euro, completing the wave C correction. The bounce yesterday to 1.3226 was close to the 7/13 uptrend line and so it may have served as a retest of resistance before heading lower. Definitely a pair that deserves watching.
Support is at 1.2989, 1.2950, 1.2898/78 and 1.2811(100 daily SMA). Resistance is 1.3000, 1.3050, 1.3125, 1.3226, 1.3335, 1.3433 and 1.3525 (50% retracement of wave one down from November 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.
With the drop to 1.2989 this morning, Euro is getting uncomfortably close to the 1.2952 area below which will bring out even more sellers. Note that on the three-hour chart below, RSI isn't plunging into oversold (nor has it been) meaning that even though its bullish momentum has abated it there isn't a rush to sell. The pair is currently at a support level. Be careful with the lack of liquidity in August markets.
Still, as I wrote yesterday, Friday's spike up to 1.3335 may have been it for the Euro, completing the wave C correction. The bounce yesterday to 1.3226 was close to the 7/13 uptrend line and so it may have served as a retest of resistance before heading lower. Definitely a pair that deserves watching.
Support is at 1.2989, 1.2950, 1.2898/78 and 1.2811(100 daily SMA). Resistance is 1.3000, 1.3050, 1.3125, 1.3226, 1.3335, 1.3433 and 1.3525 (50% retracement of wave one down from November 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.
USDJPY—treacherous waters
Lots of chattering about how the Yen has reached a 15-year high against the USD with the spike down to 84.73. To say the sentiment is bearish would be the understatement of the day.
Looking at the monthly chart below one can see several things of interest. First, note the steady trend down from the Aug. '98 high of 147.63. Yep, it's a downtrend with consistent lower highs and lower lows. In fact, this has been generally true since the 1982 high of 277.65.
Second, note the wedge pattern we're currently trading within. There could be a rally as it bounces off this bottom line but the new low of 87.73 is lower than the prior low of 84.82 from Nov. '09. Below here there isn't a lot of support as I wrote August 3 and the low of 79.70 from Apr. '95 is a steep drop.
Third, and most interesting, is RSI behavior. You have positive divergence between price and the oscillator which is normally bullish. You can also go broke trading divergence by itself which is why you need at least one other confirming signal. With this kind of downtrend I'd prefer more than one if I was thinking of going long. The other thing to note about divergence is that it is often most useful within the context of the larger trend, i.e. positive divergence after a severe drop in an overall uptrend. Finally, the positive divergence on this pair extends down into the lower time frames—check out the three-hour chart. The other interesting thing is the "failure swing" in RSI which I've highlighted with the two arrows. According to Wells Wilder a failure swing (in a downtrend) is when the indicator drops below 30, rises, and then drops below 30 again but not as deeply as it did the first time. One has a buy signal when it exceeds the first higher point in the RSI. I've placed another red arrow where that appears. There are some other intriguing things about RSI as well as the price behavior but that's enough for now.
So where am I going with this? If you're not already short (and I'm not) the safest approach is to sell a rally. One could also risk small longs from this level but as I wrote earlier this month you want multiple confirming signals on shorter-term charts as well as an extremely tight stop. Anything below 84.50 is ludicrous at this point. If you are short I'd light up and take some profits and add to the position with a clear break below 84.50. But be careful—we're in treacherous waters here.
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.
Looking at the monthly chart below one can see several things of interest. First, note the steady trend down from the Aug. '98 high of 147.63. Yep, it's a downtrend with consistent lower highs and lower lows. In fact, this has been generally true since the 1982 high of 277.65.
Second, note the wedge pattern we're currently trading within. There could be a rally as it bounces off this bottom line but the new low of 87.73 is lower than the prior low of 84.82 from Nov. '09. Below here there isn't a lot of support as I wrote August 3 and the low of 79.70 from Apr. '95 is a steep drop.
Third, and most interesting, is RSI behavior. You have positive divergence between price and the oscillator which is normally bullish. You can also go broke trading divergence by itself which is why you need at least one other confirming signal. With this kind of downtrend I'd prefer more than one if I was thinking of going long. The other thing to note about divergence is that it is often most useful within the context of the larger trend, i.e. positive divergence after a severe drop in an overall uptrend. Finally, the positive divergence on this pair extends down into the lower time frames—check out the three-hour chart. The other interesting thing is the "failure swing" in RSI which I've highlighted with the two arrows. According to Wells Wilder a failure swing (in a downtrend) is when the indicator drops below 30, rises, and then drops below 30 again but not as deeply as it did the first time. One has a buy signal when it exceeds the first higher point in the RSI. I've placed another red arrow where that appears. There are some other intriguing things about RSI as well as the price behavior but that's enough for now.
So where am I going with this? If you're not already short (and I'm not) the safest approach is to sell a rally. One could also risk small longs from this level but as I wrote earlier this month you want multiple confirming signals on shorter-term charts as well as an extremely tight stop. Anything below 84.50 is ludicrous at this point. If you are short I'd light up and take some profits and add to the position with a clear break below 84.50. But be careful—we're in treacherous waters here.
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.
Tuesday, August 10, 2010
EURUSD—Positive divergence on hourly chart
There is positive divergence developing on the hourly chart as EURUSD attempts basing at 1.0375. The same is true on the 15-minute. A bounce is possible. However anyone inclined to go long must keep a tight stop that might be taken out in the brouhaha over the Fed policy statement this afternoon. See the prior post for support and resistance. 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.
© 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.
USDCHF—monthly chart
You can see on the monthly chart that this month is showing a lower low than last month. The Swissy is also coiling. This is often the sign of continuation of the prevailing trend but there's enough uncertainty out there that it's not a given. In any case, even if the coil suggests continuation down, it could rise within the triangle to above 1.15. At that point it would encounter strong resistance from downtrend lines coming in with touches in 2003, 2006 and 2008 of which the triangle downtrend line is a part. Note that momentum, as represented by RSI, is good with it staying above oversold levels that accompanied prior drops.
In the short term, however, it has reached a high of 1.0618. This puts it smack into formidable resistance that has proven troublesome for it in the last five weeks. The resistance zone extends up to 1.0675. If it successfully clears that then additional gains may be in the cards with resistance at 1.0757, 1.0856 and 1.1138. Support is at 1.0600, 1.0582, 1.0525, 1.0487 and 1.0447. My plan is to buy into this pair on pullbacks.
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.
In the short term, however, it has reached a high of 1.0618. This puts it smack into formidable resistance that has proven troublesome for it in the last five weeks. The resistance zone extends up to 1.0675. If it successfully clears that then additional gains may be in the cards with resistance at 1.0757, 1.0856 and 1.1138. Support is at 1.0600, 1.0582, 1.0525, 1.0487 and 1.0447. My plan is to buy into this pair on pullbacks.
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—dropping
Friday's little spike up to 1.3335 may have been it for the Euro, completing the wave C correction that has had everyone so fascinated. The low so far has been 1.3110 where it looks as though it's trying to base. This is near the 1.3125 price which is the .382 retracement from the drop from November. Any bounce, though, may be held back by the 7/13 uptrend line which is at 1.3186.
Support is at 1.3108/00, 1.3050, 1.3000, 1.2981/50, 1.2877 and 1.2845/14 (June uptrend line and 100 daily SMA). Resistance is 1.3125, 1.3186, 1.3236, 1.3335, 1.3433 and 1.3525 (50% retracement of wave one down from November 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 is at 1.3108/00, 1.3050, 1.3000, 1.2981/50, 1.2877 and 1.2845/14 (June uptrend line and 100 daily SMA). Resistance is 1.3125, 1.3186, 1.3236, 1.3335, 1.3433 and 1.3525 (50% retracement of wave one down from November 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.
USDCAD—rally
My long from 1.0258 is still on and I just took partial profits at +104 pips.
All currency pairs can be tricky especially in illiquid market times which the August market tends to be. However I used classical technical analysis which is freely available to learn—techniques such as support and resistance, patterns, and candle behavior.—things in other words that don't rely on the mystical and "sacred" techniques others put forward with little evidence. This combined with risk management is what results in successful trading.
The price high so far has been 1.0385. This is well above the 100 day Simple Moving Average (SMA) now at 1.0311. The pair is also back inside its triangle that has been so apparent lately. However, this pair is still not on a roll until it overcomes some dreaded resistance ahead. The 200 SMA is at 1.0397 and at the same price level is Fib confluence, and polarity. So it has to make it through that. Then there is the 1.05 to 1.0677 area of resistance. If the pair should head down again, support is at 1.0311/300, 1.0274, 1.0205, 1.0146, and 1.0108. Below that there's support just above parity from the longer term uptrend line on the weekly chart.
How could you get into this trade if you're not already in? Today might be tricky with the Fed policy statement coming up but you could wait for a pullback, perhaps to the 100 SMA. With the pair oversold according to RSI on the shorter-term charts, this is possible. Or you could wait for a breakout of the 1.0397 area. If you go long you want to watch the trade around the 1.05 mark and perhaps lighten up or take profits. If one is bearish, you could short at 1.0397 with a tight stop. I'd watch momentum carefully before shorting. Regardless, caution is in order. I can't say it enough. Markets are less liquid and there are lots of conflicting signals.
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.
All currency pairs can be tricky especially in illiquid market times which the August market tends to be. However I used classical technical analysis which is freely available to learn—techniques such as support and resistance, patterns, and candle behavior.—things in other words that don't rely on the mystical and "sacred" techniques others put forward with little evidence. This combined with risk management is what results in successful trading.
The price high so far has been 1.0385. This is well above the 100 day Simple Moving Average (SMA) now at 1.0311. The pair is also back inside its triangle that has been so apparent lately. However, this pair is still not on a roll until it overcomes some dreaded resistance ahead. The 200 SMA is at 1.0397 and at the same price level is Fib confluence, and polarity. So it has to make it through that. Then there is the 1.05 to 1.0677 area of resistance. If the pair should head down again, support is at 1.0311/300, 1.0274, 1.0205, 1.0146, and 1.0108. Below that there's support just above parity from the longer term uptrend line on the weekly chart.
How could you get into this trade if you're not already in? Today might be tricky with the Fed policy statement coming up but you could wait for a pullback, perhaps to the 100 SMA. With the pair oversold according to RSI on the shorter-term charts, this is possible. Or you could wait for a breakout of the 1.0397 area. If you go long you want to watch the trade around the 1.05 mark and perhaps lighten up or take profits. If one is bearish, you could short at 1.0397 with a tight stop. I'd watch momentum carefully before shorting. Regardless, caution is in order. I can't say it enough. Markets are less liquid and there are lots of conflicting signals.
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—dropping
Cable took out my long for +27 pips during its drop. The low so far this morning has been 1.5714. The pair may be setting up for some sideways movement at best. At worst, further drops could be ahead, particularly if price drops below the short-term uptrend line. RSI has already penetrated its uptrend line.
There's risk aversion in the air with the BOJ decision, concerns about China growth and the upcoming Fed policy statement today.
Support is at 1.5696, 1.5552, 1.5530, 1.5493 (the uptrend line on the three-hour chart), and 1.5443.
Resistance is at 1.5800, 1.5828, 1.5928, 1.5958, 1.6000, 1.6070 (Feb. 2010 high), and 1.6276 (Jan. 2010 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.
There's risk aversion in the air with the BOJ decision, concerns about China growth and the upcoming Fed policy statement today.
Support is at 1.5696, 1.5552, 1.5530, 1.5493 (the uptrend line on the three-hour chart), and 1.5443.
Resistance is at 1.5800, 1.5828, 1.5928, 1.5958, 1.6000, 1.6070 (Feb. 2010 high), and 1.6276 (Jan. 2010 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.
Monday, August 9, 2010
Stupid analysis
Would you follow the trading advice of someone who writes things such as the following?
" [do] what FEELS RIGHT, so follow your intuition "
" Just reverse your logic"
" I was completely delusional and stupid for following this path."
" I feel sorry for those who do not know of or can't even conceptualize the existence of a sacred science of cycles."
I thought I'd critique an "analysis" from the person who made these comments. He posts in a forum where they're strong on right wing conspiracies and magical, mystical trading methods. This leads to the lack of rigor and inability to explain his methods based on the "sacred science of cycles."
On 7/29 this so-called trader posted that USDCAD's price should be " a high and it looks like it may come up just shy, although there is the small chance or this orb'ing over to 7-30 and making the high there. On a daily chart I'd take this recent congestion in price at 1.0380's a high in a backtest." This guy then went on to say 8/3 could be a low and 8/10 could be a high.
Let's ignore the fact the pair was in a downtrend and was at fib confluence resistance on 7/29. He didn't know to mention this. But no way was 8/3 a low nor was 8/4. And who knows what "orb'ing" means in this context or the congestion language about a "backtest"? Are we back testing or forecasting here? Who knows.
On 7/30 this person wrote, "7-29 High is confirming now...." and later in the day he posted that the "Next pivot should be around 8-3 and appears to be coming in as a low....." Really? Is he now elaborating upon or defending what he already said the day before?
He goes on to say, " The price action will tell us what to expect come the next
pivot around 8-10." Wow! Price action. Yes, there will certainly be some hints there.
Then he writes, " I have not checked for inversions... But a couple cycles are working simultaneously… and this is just my first brush stroke….Learning to read the price action as you go, is part of figuring out how these cycles play out in real life." Not a hint as to how to read price action but lots of mumbo-jumbo about inversions and simultaneous cycles. First brush-stroke. Oh sure.
His last sentence was " Applying elliot (sic) wave, ratios of price, and other traditional/classic methods help you zero in on the price levels to work with when the pivots come due." Absolutely, Brainiac. And why don’t you do some of that?
Presumably our guy realized 8/3 wasn't going to be a low so he skipped posting. But on 8/4 he was back. " The 8-3 low appears to have come in a little early (current actual low was on 8-2 at 1.0203." Was it his cycles that showed him this? It wasn't true in any case as the low came in 8/5.
But then he writes he's "going to navigate this trade, live." Whoo-hoo. At last.
Now he leaves his cycle theory to discuss " global market thoughts" which includes that the Dow is " pausing around the 10700 level" and " last time I looked, this appeared to be near a target level for an ABC retracement of an elliot wave down from 11260 high. " Who knows when the last time he looked was? He doesn't deem that relevant. And what is he basing his Elliott interpretation on? He does include a picture but it's clear from the labeling that he doesn't understand EW. He shows the pair nearing the end of an ABC correction so why in heaven's name is he considering going long? He doesn't bother sharing this and I can only assume he's confused about how to count, label and interpret waves.
Next he states, " the USD "generally" gets stronger when the DOW declines and vice versus (sic)…[this is] correlation cycles." Correlations are now cycles?
Now he assigns a weight to all his "evidence" of +1 to a possible long trade in USDCAD. But wait! He has " some reservation" and the Dow may go higher.
Enthusiastically he now looks at the big picture. Daily? Weekly? No. The four-hour chart. It's the first indication we have that he's trading in small time frames. If he really trades that is.
He writes that what he sees is a " large elliot (sic) wave triangle." He insists the low was made 8/2 even though now it's 8/4 and it's clear that isn't true. He's back to saying you must cross correlate markets (this isn't untrue but the only one he's mentioned is the Dow which probably isn't the most significant for USDCAD).
However he writes, " this method of cross correlating markets can really help you remove some orb and confirm your trade setups." Hmm. Orb? OK.
Now he brings in the mystical having exhausted his ability to explain the normal. He writes, " There are additional astro and traditional methods I use to further zoom in but cannot go into at this time." Right. They never can. You'll probably have to pay for this worthless mumble jumble to get at these "proprietary" methods. But you'll want to of course because he writes, " I can usually work through all 3 or 4 charts, check correlations, and upcoming news, in about 20 minutes or less per currency pair, seeing if my cycle forecast fits any of the technical setups. " Yep. But now he adds up all his weightings. He can't tell us what they are but he arrives at " a weighted average of probability" and make a decision. Hmm. Does he know the definition of probability? The definition of weighted average? Probably not. But no matter. He trades based on " Gann, that I have adapted and modified to my liking." He buys a call option writing enthusiastically, "Options are great for ANYONE." Forget risk and how you need a certain amount of technical knowledge. That's just not relevant to this bippy.
On 8/5 he writes again. Yes, the USDCAD has moved lower. Hmm. But he writes he sort of said it could have. Didn't he? He's still looking for his trade, though, zooming in on the five-minute chart. Well nothing else has worked for him. Maybe this will.
Eureka. He bought long at the price indicated by the red arrow on his little chart. Thing is, this chart displays neither price nor time. So who knows what he entered at? And why? As he writes, " The methods used to pin point that buy are not shown, you have to devise your own that work." Mystical to the end. Secret. And perhaps valuable if you only pony up the money?
As best as I can figure he bought about 1.0212. Let's hope he had a nice tight stop as the pair drifted on down to 1.0108. But he wrote later, "I don't believe the trade setup is optimal any more(sic)." Whew. That's good.
The problem with all this is that:
1) There's no real explanation of his methods
2) He tosses around Elliott Wave, correlation, and the mysterious cycles, making mistakes all the while in discussing at least the first two and not explaining anything significant about the latter.
This can fool people who don't know what they're doing either. The purpose of something like the CMT exams administered by the Market Technician's Association is to give the designation to those who have at least studied technical analysis. But there are way too many people out there who don't know what they're doing but put out their "analysis" anyway. I would bet this guy doesn't have people (yet) who actually pay him but he's certainly setting that possibility up among a very gullible and mis-informed audience. Oh, and what was his explanation for the trade not working? In his words, " this turn due on the 3rd might have inverted or come in weak." On the 7th he wrote "something" else must have pushed the price down. He concludes by writing, " That hunch I have about the 10th being a H on usd.cad, might just have some foundation." At last the truth! It's a hunch, pure and simple.
Why would anyone listen to people that are uneducated in technical analysis and put this mumbo-jumbo and hunches out there?
" [do] what FEELS RIGHT, so follow your intuition "
" Just reverse your logic"
" I was completely delusional and stupid for following this path."
" I feel sorry for those who do not know of or can't even conceptualize the existence of a sacred science of cycles."
I thought I'd critique an "analysis" from the person who made these comments. He posts in a forum where they're strong on right wing conspiracies and magical, mystical trading methods. This leads to the lack of rigor and inability to explain his methods based on the "sacred science of cycles."
On 7/29 this so-called trader posted that USDCAD's price should be " a high and it looks like it may come up just shy, although there is the small chance or this orb'ing over to 7-30 and making the high there. On a daily chart I'd take this recent congestion in price at 1.0380's a high in a backtest." This guy then went on to say 8/3 could be a low and 8/10 could be a high.
Let's ignore the fact the pair was in a downtrend and was at fib confluence resistance on 7/29. He didn't know to mention this. But no way was 8/3 a low nor was 8/4. And who knows what "orb'ing" means in this context or the congestion language about a "backtest"? Are we back testing or forecasting here? Who knows.
On 7/30 this person wrote, "7-29 High is confirming now...." and later in the day he posted that the "Next pivot should be around 8-3 and appears to be coming in as a low....." Really? Is he now elaborating upon or defending what he already said the day before?
He goes on to say, " The price action will tell us what to expect come the next
pivot around 8-10." Wow! Price action. Yes, there will certainly be some hints there.
Then he writes, " I have not checked for inversions... But a couple cycles are working simultaneously… and this is just my first brush stroke….Learning to read the price action as you go, is part of figuring out how these cycles play out in real life." Not a hint as to how to read price action but lots of mumbo-jumbo about inversions and simultaneous cycles. First brush-stroke. Oh sure.
His last sentence was " Applying elliot (sic) wave, ratios of price, and other traditional/classic methods help you zero in on the price levels to work with when the pivots come due." Absolutely, Brainiac. And why don’t you do some of that?
Presumably our guy realized 8/3 wasn't going to be a low so he skipped posting. But on 8/4 he was back. " The 8-3 low appears to have come in a little early (current actual low was on 8-2 at 1.0203." Was it his cycles that showed him this? It wasn't true in any case as the low came in 8/5.
But then he writes he's "going to navigate this trade, live." Whoo-hoo. At last.
Now he leaves his cycle theory to discuss " global market thoughts" which includes that the Dow is " pausing around the 10700 level" and " last time I looked, this appeared to be near a target level for an ABC retracement of an elliot wave down from 11260 high. " Who knows when the last time he looked was? He doesn't deem that relevant. And what is he basing his Elliott interpretation on? He does include a picture but it's clear from the labeling that he doesn't understand EW. He shows the pair nearing the end of an ABC correction so why in heaven's name is he considering going long? He doesn't bother sharing this and I can only assume he's confused about how to count, label and interpret waves.
Next he states, " the USD "generally" gets stronger when the DOW declines and vice versus (sic)…[this is] correlation cycles." Correlations are now cycles?
Now he assigns a weight to all his "evidence" of +1 to a possible long trade in USDCAD. But wait! He has " some reservation" and the Dow may go higher.
Enthusiastically he now looks at the big picture. Daily? Weekly? No. The four-hour chart. It's the first indication we have that he's trading in small time frames. If he really trades that is.
He writes that what he sees is a " large elliot (sic) wave triangle." He insists the low was made 8/2 even though now it's 8/4 and it's clear that isn't true. He's back to saying you must cross correlate markets (this isn't untrue but the only one he's mentioned is the Dow which probably isn't the most significant for USDCAD).
However he writes, " this method of cross correlating markets can really help you remove some orb and confirm your trade setups." Hmm. Orb? OK.
Now he brings in the mystical having exhausted his ability to explain the normal. He writes, " There are additional astro and traditional methods I use to further zoom in but cannot go into at this time." Right. They never can. You'll probably have to pay for this worthless mumble jumble to get at these "proprietary" methods. But you'll want to of course because he writes, " I can usually work through all 3 or 4 charts, check correlations, and upcoming news, in about 20 minutes or less per currency pair, seeing if my cycle forecast fits any of the technical setups. " Yep. But now he adds up all his weightings. He can't tell us what they are but he arrives at " a weighted average of probability" and make a decision. Hmm. Does he know the definition of probability? The definition of weighted average? Probably not. But no matter. He trades based on " Gann, that I have adapted and modified to my liking." He buys a call option writing enthusiastically, "Options are great for ANYONE." Forget risk and how you need a certain amount of technical knowledge. That's just not relevant to this bippy.
On 8/5 he writes again. Yes, the USDCAD has moved lower. Hmm. But he writes he sort of said it could have. Didn't he? He's still looking for his trade, though, zooming in on the five-minute chart. Well nothing else has worked for him. Maybe this will.
Eureka. He bought long at the price indicated by the red arrow on his little chart. Thing is, this chart displays neither price nor time. So who knows what he entered at? And why? As he writes, " The methods used to pin point that buy are not shown, you have to devise your own that work." Mystical to the end. Secret. And perhaps valuable if you only pony up the money?
As best as I can figure he bought about 1.0212. Let's hope he had a nice tight stop as the pair drifted on down to 1.0108. But he wrote later, "I don't believe the trade setup is optimal any more(sic)." Whew. That's good.
The problem with all this is that:
1) There's no real explanation of his methods
2) He tosses around Elliott Wave, correlation, and the mysterious cycles, making mistakes all the while in discussing at least the first two and not explaining anything significant about the latter.
This can fool people who don't know what they're doing either. The purpose of something like the CMT exams administered by the Market Technician's Association is to give the designation to those who have at least studied technical analysis. But there are way too many people out there who don't know what they're doing but put out their "analysis" anyway. I would bet this guy doesn't have people (yet) who actually pay him but he's certainly setting that possibility up among a very gullible and mis-informed audience. Oh, and what was his explanation for the trade not working? In his words, " this turn due on the 3rd might have inverted or come in weak." On the 7th he wrote "something" else must have pushed the price down. He concludes by writing, " That hunch I have about the 10th being a H on usd.cad, might just have some foundation." At last the truth! It's a hunch, pure and simple.
Why would anyone listen to people that are uneducated in technical analysis and put this mumbo-jumbo and hunches out there?
GBPUSD—update
Took partial profits at +70 pips which I'm glad I did as the pair is close to taking out my stop.
USDCAD—short-term long
I've just gone long at 1.0258 based on the hourly chart. My reasons for doing so are:
1) The drop from overbought (over 70 on RSI) hasn't appeared to cause a large drop in price
2) It's at the bottom of a small range (1.0262 to 1.0306)
3) There's a bull flag on the hourly chart (I've traced it in blue)
4) Ability to have a tight stop (below 1.0250)
Somewhat of concern of course is the testing of the breakout point I wrote about on the last post. So one needs to be ready to bail out or possibly reverse.
My price target is 1.0500 which is the top of the triangle I wrote about in the last post. Resistance before then is at 1.0397/400 which is 100 DMA, a fib confluence zone and near polarity. If the pair heads down then support is at 1.0205, 1.0146, and 1.0108. Below that there's support just above parity from the longer term uptrend line on the weekly chart.
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.
1) The drop from overbought (over 70 on RSI) hasn't appeared to cause a large drop in price
2) It's at the bottom of a small range (1.0262 to 1.0306)
3) There's a bull flag on the hourly chart (I've traced it in blue)
4) Ability to have a tight stop (below 1.0250)
Somewhat of concern of course is the testing of the breakout point I wrote about on the last post. So one needs to be ready to bail out or possibly reverse.
My price target is 1.0500 which is the top of the triangle I wrote about in the last post. Resistance before then is at 1.0397/400 which is 100 DMA, a fib confluence zone and near polarity. If the pair heads down then support is at 1.0205, 1.0146, and 1.0108. Below that there's support just above parity from the longer term uptrend line on the weekly chart.
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.
USDCAD—testing breakout point
Even with the push up to 1.0306 on Friday, we've had five days with a close beneath the breakout point. It appears to be retesting it at the 1.03 level. It's definitely hesitating. The pair has also closed below its RSI uptrend line on its daily chart. One could try a small short here with a tight stop above the price line.
On the weekly chart, the pair formed a doji with last week's low. That low (1.0108) has to hold for there to be continued upward price movement. A dip (or close) below it will invalidate it. The triangle on the weekly chart, after a downtrend, suggests there could be continuation. However, the longer term uptrend line from the low of 2007 (in green on the chart below) is coming in just above parity. From an Elliott Wave perspective, wave two could be ending as well which implies longer term positive price movement. Certainly a lows near parity would be a buy signal for me.
The August doldrums may mean sluggish price action could continue for a few weeks with largely sideways movement. If the pair makes it back into the triangle and moves upward, 1.05 will probably contain it.
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.
On the weekly chart, the pair formed a doji with last week's low. That low (1.0108) has to hold for there to be continued upward price movement. A dip (or close) below it will invalidate it. The triangle on the weekly chart, after a downtrend, suggests there could be continuation. However, the longer term uptrend line from the low of 2007 (in green on the chart below) is coming in just above parity. From an Elliott Wave perspective, wave two could be ending as well which implies longer term positive price movement. Certainly a lows near parity would be a buy signal for me.
The August doldrums may mean sluggish price action could continue for a few weeks with largely sideways movement. If the pair makes it back into the triangle and moves upward, 1.05 will probably contain it.
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.
EURUSD—slowly moving upward
My short from 1.3169 stopped at breakeven.
Euro touched 1.3335 Friday but has fallen back a bit, no doubt breathless at the height. Still, if it has made it this far it could make it to a 50% retracement of the move down from November which would be 1.3525, thus encompassing the inverted head and shoulders target as well. The point is the pair keeps pushing upward and while this may have more to do with the low liquidity of August than it has to do with any real direction of the Euro, one has to stay aware of it and trade accordingly.
I'm not particularly interested in this pair right now (it's either going to have to have a good retracement and show some signs of basing or achieve more highs and show some signs of failing) but for those who are, resistance is at 1.3335, 1.3433 and 1.3525 (50% retracement of wave one down from November highs). Support is at 1.3200, 1.3125 (.382 retracement of move down from Nov high), 1.3000, 1.2981/50, and 1.2877.
Here's the weekly chart. One could make a case that this whole upward correction is a bear flag. If so, I'd expect it to go on for a while longer.
© 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.
Euro touched 1.3335 Friday but has fallen back a bit, no doubt breathless at the height. Still, if it has made it this far it could make it to a 50% retracement of the move down from November which would be 1.3525, thus encompassing the inverted head and shoulders target as well. The point is the pair keeps pushing upward and while this may have more to do with the low liquidity of August than it has to do with any real direction of the Euro, one has to stay aware of it and trade accordingly.
I'm not particularly interested in this pair right now (it's either going to have to have a good retracement and show some signs of basing or achieve more highs and show some signs of failing) but for those who are, resistance is at 1.3335, 1.3433 and 1.3525 (50% retracement of wave one down from November highs). Support is at 1.3200, 1.3125 (.382 retracement of move down from Nov high), 1.3000, 1.2981/50, and 1.2877.
Here's the weekly chart. One could make a case that this whole upward correction is a bear flag. If so, I'd expect it to go on for a while longer.
© 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—hovering
Cable has finally exceeded the .618 retracement attaining a high of 1.5998 Friday. Since then price has been contained in the fairly narrow range of the three-hour candle that achieved that high from 1.5916 to 1.5998. It's near the middle of that range now, current offered about 1.5958.
I had a buy order that was executed at 1.5869 early Friday and I'm still in the position. However the pair must successfully overtake 1.60 and also stay above the psychological round number of 1.59 to make upward moves likely. It's possible that the pair could get to the
Resistance is at 1.5958, 1.6000, 1.6070 (Feb. 2010 high), and 1.6276 (Jan. 2010 high). Support is at 1.5958 (roughly where it is now), 1.5900, 1.5820, 1.5696 and 1.5530.
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 had a buy order that was executed at 1.5869 early Friday and I'm still in the position. However the pair must successfully overtake 1.60 and also stay above the psychological round number of 1.59 to make upward moves likely. It's possible that the pair could get to the
Resistance is at 1.5958, 1.6000, 1.6070 (Feb. 2010 high), and 1.6276 (Jan. 2010 high). Support is at 1.5958 (roughly where it is now), 1.5900, 1.5820, 1.5696 and 1.5530.
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.
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