Friday, May 28, 2010
Liquidity decreasing
Liquidity is decreasing as the long (USA) Memorial Day weekend gets ready to begin. Monday will be light as it's a national holiday.
Charts don't move markets
One of the things I heard Larry Williams say at the MTA syposium last week is that it's important to remember that charts don't move markets. This is true. Charts do many things—provide a visual price history, reflect patterns, diplay volatility—but they aren't the reason that prices go up or down. Things such as central bank policy (i.e. the Swiss central bank intervention we've seen in the EURCHF), international trade, and sentiment (is there anyone anymore who loves the Euro?) are just some of the factors that influence FOREX.
What the charts do, though, is provide a straightforward way (usually) for the trader to determine entries and exits. They provide clues as to market direction even though there are no guarantees the market will move in that direction. However, as you see if you read my blog regularly, trading these clues can be profitable. If you enter when the probability is greater that the market will move a certain way and if you use tight stops, charts are wonderful things.
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
What the charts do, though, is provide a straightforward way (usually) for the trader to determine entries and exits. They provide clues as to market direction even though there are no guarantees the market will move in that direction. However, as you see if you read my blog regularly, trading these clues can be profitable. If you enter when the probability is greater that the market will move a certain way and if you use tight stops, charts are wonderful things.
© 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—resistance
The pair reached a high of .8551 before stumbling. This is close to 50% of the slide from .9078 to .8067 so it's not surprising the pair would fall back a bit as buyers take profits off the table. I still have four long positions—the original from .8093 and .8390, .8436, and .8443. Only three show on the three-hour chart since the triangle for .8443 covers the .8436. All, of course are profit-stopped at this point.
I still believe it's possible the pair can get to.8640 but momentum is the key. RSI showed the pair becoming overbought and dropping out of that on the hourly chart but, so far, price hasn't aggressively followed. Adding to longs if the price retreats to the uptrend lines is probably OK as long as tight stops are used.
Resistance is at . 8551, .8578, .8610, .8640 and .8700. Support is at .8463, .8375/62, .8310, .8285, .8163, .8067, .8000, .7932 and .7830.
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 still believe it's possible the pair can get to.8640 but momentum is the key. RSI showed the pair becoming overbought and dropping out of that on the hourly chart but, so far, price hasn't aggressively followed. Adding to longs if the price retreats to the uptrend lines is probably OK as long as tight stops are used.
Resistance is at . 8551, .8578, .8610, .8640 and .8700. Support is at .8463, .8375/62, .8310, .8285, .8163, .8067, .8000, .7932 and .7830.
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—rally continues for now
As of yesterday afternoon I had six long positions since I kept adding (or pyramiding) on the way up. These were from from 1.2165, 1.2208, 1.2254, 1.2283, 1.2296, and 1.2309. As of this morning, only the first three are left, the others having profit-stopped out at +34, +30, and +14 pips respectively. I also took partial profits on the position from 1.2165 for +216 pips.
Now what? After touching 1.2453, the pair is running into a bit of resistance and has fallen back to the breakout line (drawn on the hourly chart below). If it begins to have a series of closes inside the the ascending triangle, then Euro's little rally may be finished. However, false breakouts are common with these patterns so it's difficult to trade on this one pattern alone. More interesting is the prior resistance at 1.2383 which is where the pair currently is (as of 8:26Am EST) and the uptrend line, currently at 1.2275 which might be a good place to add another long. Momentum continues to look good as reflected in RSI and as long as that uptrend line doesn't break then the Euro might get to additional highs.If it can definitively scale 1.2453 (the level of the downtrend line from May 10 highs) then one could expect to see 1.2574. Should the pair start to fall again, it's possible one might see new lows today.
Resistance is at 1.2453, 1.2574/99, 1.2673/99, 1.2740 and 1.2803. Support is at 1.2383, 1.2204, 1.2132 (50% of Euro's lifetime high/low or 1.6038/.8225), 1.20000 (psychological), 1.1826, 1.1641 and 1.1432.
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.
Now what? After touching 1.2453, the pair is running into a bit of resistance and has fallen back to the breakout line (drawn on the hourly chart below). If it begins to have a series of closes inside the the ascending triangle, then Euro's little rally may be finished. However, false breakouts are common with these patterns so it's difficult to trade on this one pattern alone. More interesting is the prior resistance at 1.2383 which is where the pair currently is (as of 8:26Am EST) and the uptrend line, currently at 1.2275 which might be a good place to add another long. Momentum continues to look good as reflected in RSI and as long as that uptrend line doesn't break then the Euro might get to additional highs.If it can definitively scale 1.2453 (the level of the downtrend line from May 10 highs) then one could expect to see 1.2574. Should the pair start to fall again, it's possible one might see new lows today.
Resistance is at 1.2453, 1.2574/99, 1.2673/99, 1.2740 and 1.2803. Support is at 1.2383, 1.2204, 1.2132 (50% of Euro's lifetime high/low or 1.6038/.8225), 1.20000 (psychological), 1.1826, 1.1641 and 1.1432.
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.
Thursday, May 27, 2010
AUDUSD—update
I just took partial profits on my position from .8093 at +402 pips. I have three other long positions as well from .8390, .8436, and .8443. The pair touched .8507 a few minutes ago an is faltering which is to be expected. It's also overbought on the hourly chart and I suspect there may be a bit of a pullback from here. However, I'm more confident that the pair can reach .8640 before getting into real trouble so may add to longs on another pullback, especially to the short-term uptrend line.
Here's a 15-minute 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 a 15-minute 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—update
Here's a 15-minute chart that shows how I'm adding to position as the market continues up. I don't follow this approach a lot but it can be profitable in the right market conditions. Right market conditions are when a market is reversing, even if only in a corrective rally. My positions are long from 1.2165, 1.2208, 1.2254, 1.2283, 1.2296, and 1.2309. On each buy I move stop as quickly as possible to breakeven. These all now have their stop set at various levels of profit.
At this point the market may retreat back to the short-term downtrend line at 1.2333 where I'll study price action and possibly add another position. The rate of ascent is very steep so a pullback is likely.
If the pair breaks 1.2388, one might want to consider going long although momentum will be key.
Here's the 15-minute 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.
At this point the market may retreat back to the short-term downtrend line at 1.2333 where I'll study price action and possibly add another position. The rate of ascent is very steep so a pullback is likely.
If the pair breaks 1.2388, one might want to consider going long although momentum will be key.
Here's the 15-minute 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—corrective rally may be starting
I had an error in my blog yesterday in that I said I shorted at 1.2387. That was incorrect; I shorted at 1.2345. The chart showed the correct price. In any case, that short profit-stopped out at 1.2244 for +101 pips.
While I still believe the Euro is weak, I tried a long at 1.2165 late yesterday afternoon. I took partial profits at +70 pip. I went long because momentum didn't seem to be building for further drops. In addition, it looked like the pair was basing. Finally, it was time for some kind of rally after all and I could have a tight stop. The Euro advanced to 1.2343 before falling back to 1.2204. That's a stiff retracement and would seem to indicate the up trend is not too strong. However, momentum looks good and the overall move from May 25th looks corrective. On the hourly chart it looks as though the pair has completed an ABC correction. As a result, I just added a long position at 1.2208. Believe me, this is where the ability to have tight stops helps you enter a trade. I've just moved that stop to breakeven and I am more than happy to reverse and go short if need be.
Resistance is at 1.2343, 1.2388, 1.2416, 1.2574/99, 1.2673/99, 1.2740 and 1.2803. Support is at 1.2204, 1.2132 (50% of Euro's lifetime high/low or 1.6038/.8225), 1.20000 (psychological), 1.1826, 1.1641 and 1.1432.
Here is 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.
While I still believe the Euro is weak, I tried a long at 1.2165 late yesterday afternoon. I took partial profits at +70 pip. I went long because momentum didn't seem to be building for further drops. In addition, it looked like the pair was basing. Finally, it was time for some kind of rally after all and I could have a tight stop. The Euro advanced to 1.2343 before falling back to 1.2204. That's a stiff retracement and would seem to indicate the up trend is not too strong. However, momentum looks good and the overall move from May 25th looks corrective. On the hourly chart it looks as though the pair has completed an ABC correction. As a result, I just added a long position at 1.2208. Believe me, this is where the ability to have tight stops helps you enter a trade. I've just moved that stop to breakeven and I am more than happy to reverse and go short if need be.
Resistance is at 1.2343, 1.2388, 1.2416, 1.2574/99, 1.2673/99, 1.2740 and 1.2803. Support is at 1.2204, 1.2132 (50% of Euro's lifetime high/low or 1.6038/.8225), 1.20000 (psychological), 1.1826, 1.1641 and 1.1432.
Here is 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.
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