Friday, October 15, 2010
Thursday, October 14, 2010
AUDUSD—almost there
With the high of .9994 it's almost at parity. As I wrote yesterday, I believe it can get to 1.0060 to 1.0100 and perhaps further. A pullback would make a lovely buying opportunity. I'll post a chart later, once it breaks parity.
© 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.
USDJPY—still dropping
The pair failed to base in the 81.38/81 area and has reached a low of 80.89. The highest probability is that it is heading for at least the nearest channel downtrend line at 79.92. This is near the 1995 low of .7970 so it's likely this would spark a rally as bottom fishers bought. How far that rally would go—well, it will depend on if the dollar can get a rally going something that, at the moment, looks unlikely. But you know the markets often turn when you least expect them to. There is positive divergence on the daily, three- and one-hour charts. On the hourly chart (not shown) a hammer formed with the low of 80.89 so that's the nearest support level. Below that invalidates the hammer.
The way I'm planning to trade this is to short rallies once a bottom seems to have been reached. I may take a short-term long if this morning's low holds but I'm doubtful a long could get much further than the 83.00 area and, more likely, 81.38/81. A .50 retracement from the 85.93 high would be 83.41. The 20 daily SMA is at 83.39.
Here's the daily chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
The way I'm planning to trade this is to short rallies once a bottom seems to have been reached. I may take a short-term long if this morning's low holds but I'm doubtful a long could get much further than the 83.00 area and, more likely, 81.38/81. A .50 retracement from the 85.93 high would be 83.41. The 20 daily SMA is at 83.39.
Here's the daily chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
EURUSD—Broke to 1.4122
Euro touched a high of 1.4122 this morning before falling back and with the nice daily bullish candle from yesterday everything looks set for more highs. It wouldn't be unreasonable to expect a correction to at least 1.3950 (the trend line it broke above) but barring that then one could attempt a small long at 1.4064 or, better, 1.4004. There is a place for wider stops—this isn't one of them.
As I wrote last week, the pair could get into the 1.40s before a correction. Look again at some of the numbers that show how far into them it could get. The .618 correction of the entire move down from 1.6041 is at 1.4450. A downtrend line drawn from that 1.6041 high comes in at 1.4557. The high this past January 13th was 1.4579. That's a clustering of potential prices. It could also go higher. For example, last week I showed how this could be a potential bat pattern and the high would be 1.4771. If you look at this as an Elliott wave C, then C will be 1.618 times A at 1.4998. Finally, as I mentioned awhile back, it broke above a speed line drawn off the Nov. '09 highs which hints it could return to that level.
All that said, the pair is overbought, the angle of ascent is steep, and there's negative divergence on the three-hour chart below as well as in other time frames. A correction, greater than the small one to 1.3775, is overdue. It would be great to see a dip to 1.3335 or at least 1.3637.
Here's the three hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
As I wrote last week, the pair could get into the 1.40s before a correction. Look again at some of the numbers that show how far into them it could get. The .618 correction of the entire move down from 1.6041 is at 1.4450. A downtrend line drawn from that 1.6041 high comes in at 1.4557. The high this past January 13th was 1.4579. That's a clustering of potential prices. It could also go higher. For example, last week I showed how this could be a potential bat pattern and the high would be 1.4771. If you look at this as an Elliott wave C, then C will be 1.618 times A at 1.4998. Finally, as I mentioned awhile back, it broke above a speed line drawn off the Nov. '09 highs which hints it could return to that level.
All that said, the pair is overbought, the angle of ascent is steep, and there's negative divergence on the three-hour chart below as well as in other time frames. A correction, greater than the small one to 1.3775, is overdue. It would be great to see a dip to 1.3335 or at least 1.3637.
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, October 13, 2010
EURGBP—moving towards resistance
The pair is marching towards .8889 which is .618 of the move down from the October .9412 high and of course near the psychological 9000. The pair will probably falter here so a short may be in order with targets back to support at .8850, .8800 and then the key .8531 which should serve as support and would be an attractive long.
© 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.
AUDUSD—at resistance
My long from .9782 profit-stopped in the dip for +54 pips. My stop was a little too close for such labored price behavior. I didn't bother to get back in because I expected a bigger correction than we've seen. At this point, though, one would have to say the pair is on track for parity with its high of .9928 today, a few pips higher than the previous high. On the three-hour chart it was a very bullish candle that got it to that high. The pullbacks are weak and parity is such a juicy target. Possible targets for the pair are 1.0060 to 1.0100. It still has to get through this resistance level. It's not just the recent high but in Jan. '83 the high was .9905 and in 8/82 the high was .9965. So the pair may dither about a bit before it gets there. If the pair should pull back to something such as .9542 or .9406, it will be an attractive long position.
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.
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—no real movement
After finding support yesterday at 1.3775, Euro did try another move up only to stall at 1.4001. My long from yesterday stopped at break even. Frankly I was surprised it got that high—it was just shy of the October 10th high. I took another short this morning at 1.3971. If this one stops out then I'm stepping aside for now. There's no real movement and this isn't a range that's easy to trade.
I believe this pair should be going down in price but it doesn't matter what I believe until there's some firm evidence from the chart that it's doing so. As I've blogged several times in the past couple of weeks, one can make a case for the mid 1.40s rather easily. The thing is that I'm not comfortable taking a long right now. The pair also isn't really dropping. Could it be I don't understand what the market is doing? It could be. That only means I can't trade this pair right now. Understanding will return at some point. Certainly below 1.3335 one could expect it to continue down but I'm sure there will be evidence before that price is reached.
No chart—I'd be drawing the same old, same old.
© 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 believe this pair should be going down in price but it doesn't matter what I believe until there's some firm evidence from the chart that it's doing so. As I've blogged several times in the past couple of weeks, one can make a case for the mid 1.40s rather easily. The thing is that I'm not comfortable taking a long right now. The pair also isn't really dropping. Could it be I don't understand what the market is doing? It could be. That only means I can't trade this pair right now. Understanding will return at some point. Certainly below 1.3335 one could expect it to continue down but I'm sure there will be evidence before that price is reached.
No chart—I'd be drawing the same old, same old.
© 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—correcting
Cable seems to be correcting. With a low today of 1.5755, it's perilously close to last week's low of 1.5749. However that doesn't concern me as much as a break of 1.5730 (below the short-term uptrend line). Next support after that is 1.5670, the Sept. 30th low and then 1.5627. I'd expect that to hold as it's on a former speed line and an uptrend line. A close below that would signal additional lows. Until that point I'm still somewhat biased long for this pair for all the reasons I've been blogging about. I think this may be an EW C wave and if it is .618 of A then the target is 1.6391. The January high was 1.6461 which was near my daily bull flag target. I have point and figure chart targets even higher around the 1.66 area. The pair will run into strong price resistance at from early this year of 1.6244/98.
Cable has negative divergence on the three-hour chart below. I'll probably look for longs as it approaches the small channel long depending on RSI behavior on the shorter term charts.
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.
Cable has negative divergence on the three-hour chart below. I'll probably look for longs as it approaches the small channel long depending on RSI behavior on the shorter term charts.
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.
Tuesday, October 12, 2010
EURUSD—consolidating
After the profit-taking caused a drop, the Euro looks as though it's consolidating for now.
I have appointments the next couple of hours so won't be blogging until later but I went long the Euro at 1.3808 this morning looking for another test in the 1.39 range. I've already moved the stop to breakeven. If it continues to drop the 1.3335 price could be hit which would be attractive for a long position.
I have appointments the next couple of hours so won't be blogging until later but I went long the Euro at 1.3808 this morning looking for another test in the 1.39 range. I've already moved the stop to breakeven. If it continues to drop the 1.3335 price could be hit which would be attractive for a long position.
USDJPY—basing for now
I haven't looked at this pair in a while and thought I'd check into it to see if it was showing any signs of basing. The low so far has been .8138. It looks as though it's trying to base at .8181. There is positive divergence on the daily chart.
The pair has had three robust down weeks from the high at .8593. A .382 retracement from here would be .8312; the 50% level is .8366. Since the downtrend line from May is at .8371 and the 20 daily SMA is at .8382, this is probably a reasonable price at which short sellers would descend unless it looked as though the dollar was rallying strongly. If the pair exceeded .8450, there might be higher prices in store as short covering would come into play. Beyond that is .8593 as a target. Monday's candle was bullish although a candle alone doesn't mean much and the pair needs to start showing some strength soon.
If the pair should continue dropping, .8008 is the downward daily channel line. Given that this is near a psychological round number and that .7970 was the low in 1995, one would probably see a rally. Only the most aggressive trader would risk a long at this point and a tight stop (around .8130) is mandatory unless one wants to risk a couple of hundred pips. If it retests .8130 and begins to rally then it's more attractive as a long.
Here's the daily chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
The pair has had three robust down weeks from the high at .8593. A .382 retracement from here would be .8312; the 50% level is .8366. Since the downtrend line from May is at .8371 and the 20 daily SMA is at .8382, this is probably a reasonable price at which short sellers would descend unless it looked as though the dollar was rallying strongly. If the pair exceeded .8450, there might be higher prices in store as short covering would come into play. Beyond that is .8593 as a target. Monday's candle was bullish although a candle alone doesn't mean much and the pair needs to start showing some strength soon.
If the pair should continue dropping, .8008 is the downward daily channel line. Given that this is near a psychological round number and that .7970 was the low in 1995, one would probably see a rally. Only the most aggressive trader would risk a long at this point and a tight stop (around .8130) is mandatory unless one wants to risk a couple of hundred pips. If it retests .8130 and begins to rally then it's more attractive as a long.
Here's the daily chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
Monday, October 11, 2010
AUDUSD—outside week
I'm still long from .9782. Last week was the 7th up week from the low of .8070 but last week's low at .9542 was lower than the week before that. It was also an outside week with the high higher and the low lower than the week before. Most likely it was because of profit-taking but that could signal there will be more dips. On the weekly chart you can see negative divergence. It really needs to stay above .9542 (and a dip to there would be a buying opportunity). The hanging man on the daily chart (not shown) from Friday has a low of 9702 so dips below this would suggest prices will drop.
Here's the weekly chart. I use a different charting package for weekly and monthly charts so my trades don't show.
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
Here's the weekly chart. I use a different charting package for weekly and monthly charts so my trades don't show.
© 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 couple of people have emailed me to ask me to resume posting my monthly results. I think it takes the focus off what makes a good trade and have been easing away from it. However I'll calculate September later today. If readers could leave a comment or email me about whether they find this worthwhile, I'd appreciate it. Thanks.
GBPUSD—stalling
The weekly close was below 1.60 at 1.5963 which is discouraging since last week's high was 1.6018. While I still believe the pair has more upside potential it's definitely stalling. You can see negative divergence on the daily chart. There's a small triangle forming on the three-hour chart which may provide a buying opportunity at 1.5839. Recent lows are 1.5827. Only if the pair dips below last week's 1.5749 would it hint the rally is failing and the larger downtrend is resuming.
I'm looking at this as a C wave in a correction. If C is .618 of A then the target is 1.6391. If it is to equal A then the target is 1.7067 but I'm not sure this is possible. There's strong price resistance from early in the year of 1.6244/98. The January high was 1.6461 which is near my daily bull flag target. I also have point and figure chart targets around the 1.66 area.
Here's the daily chart.
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
I'm looking at this as a C wave in a correction. If C is .618 of A then the target is 1.6391. If it is to equal A then the target is 1.7067 but I'm not sure this is possible. There's strong price resistance from early in the year of 1.6244/98. The January high was 1.6461 which is near my daily bull flag target. I also have point and figure chart targets around the 1.66 area.
Here's the daily chart.
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
EURJPY—weak
My short from 115.30 profit-stopped out at a spike to 114.99 in the beginning of Sunday's trading for +31 pips. Or maybe my broker was just running stops. Regardless, the question is whether I get back in. I most likely will. I'd like an entry point above 115 but this may not happen. I still believe the pair is going to break down. The small candles on the weekly chart show weakness or, at best, indecision. It's also interesting that even with the recent rally, RSI can't get above 50. This looks bearish. If the pair doesn't reach 114.74 or 115 then I'll probably sell based on shorter term charts but I hope I can at least get in at 114.50.
Should the pair rally sharply and break above last week's high of 115.67, there's potential for a move into the 116 area and possibly 119.65 which would be very strong resistance.
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
Should the pair rally sharply and break above last week's high of 115.67, there's potential for a move into the 116 area and possibly 119.65 which would be very strong resistance.
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
EURUSD—overextended
The Euro is clearly overextended and it seems everyone is looking for a correction. However it's not happening yet. I wrote a couple of weeks ago about how the pair could get into the 1.40s before a correction. How far into them could it go?
The .618 correction of the entire move down from 1.6041 is at 1.4450. A downtrend line drawn from that 1.6041 high comes in at 1.4557. The high this past January 13th was 1.4579. So that's quite a bit more room for movement. It could go even higher. For example, if you believe in those harmonic patterns and you liked the potential bat I illustrated last week we're talking 1.4771. If you believe, as I do, that this is an Elliott wave C it equals A at 1.4030. However 1.618 times A would take it to 1.4998.
Even if those moves are possible, this move looks tired and there will most likely be some sort of correction. There were two doji days in a row, the angle of ascent is impossibly steep and the pair is very overbought. A dip to 1.3335 would be ideal to try another long but if it didn't get that far look for support at 1.3637.
I'm still thinking a short entry is nearby but we'll see. A look at the weekly chart shows that the overall move looks corrective. Here's that 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 .618 correction of the entire move down from 1.6041 is at 1.4450. A downtrend line drawn from that 1.6041 high comes in at 1.4557. The high this past January 13th was 1.4579. So that's quite a bit more room for movement. It could go even higher. For example, if you believe in those harmonic patterns and you liked the potential bat I illustrated last week we're talking 1.4771. If you believe, as I do, that this is an Elliott wave C it equals A at 1.4030. However 1.618 times A would take it to 1.4998.
Even if those moves are possible, this move looks tired and there will most likely be some sort of correction. There were two doji days in a row, the angle of ascent is impossibly steep and the pair is very overbought. A dip to 1.3335 would be ideal to try another long but if it didn't get that far look for support at 1.3637.
I'm still thinking a short entry is nearby but we'll see. A look at the weekly chart shows that the overall move looks corrective. Here's that 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.
USD Index--Monthly
It has been a while since I've blogged about the USD Index. You can see on the monthly chart below that it's moving towards its uptrend line. This is around 76. The concerns about the Fed increasing its quantitative easing as well as the many dollar bears out there may hasten this move down. At that point there will most likely be a bounce.
It's difficult to not notice the large symmetrical triangle on the chart. Often these are continuation moves. If so, there will be significantly lower lows for the USD. If you look at the triangle from an Elliott Wave perspective, then it can also be expected to break downward. However from that perspective it hasn't yet touched the "D" point so one can expect a move up to E before it broke down completely. Given that so many of the USD pairs are over-extended in their moves it's another piece of evidence that one will want to be short Euro and long the dollar at some point, probably sooner rather than later.
Here's a 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.
It's difficult to not notice the large symmetrical triangle on the chart. Often these are continuation moves. If so, there will be significantly lower lows for the USD. If you look at the triangle from an Elliott Wave perspective, then it can also be expected to break downward. However from that perspective it hasn't yet touched the "D" point so one can expect a move up to E before it broke down completely. Given that so many of the USD pairs are over-extended in their moves it's another piece of evidence that one will want to be short Euro and long the dollar at some point, probably sooner rather than later.
Here's a 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.
Subscribe to:
Posts (Atom)