Friday, July 9, 2010
Summer Fridays
I'm not trading or blogging on Fridays during the summer. You usually see less liquidity. This can lead to strange moves so if you do trade, be careful. See you Monday.
Thursday, July 8, 2010
GBPUSD—trying to rally
My position from 1.4918 profit stopped at +194 pips. I bought again at 1.5131 and have moved the stop to breakeven.
Today saw quite a steep pullback for cable from a high of 1.5241 this morning down to a low of 1.5103. It's not quite as low as yesterday's 1.5081 that barely confirmed the double top of 1.5230/27 but it causes one to question just how strong this uptrend is. Below 1.5081 would most likely be interpreted as the end of it. The logical price target would be 1.4932. The pair is still barely above the 20 EMA on the weekly chart that capped the pair the weeks of 4/16, 4/30 and 6/25. What a cliff hanger!
Resistance is at 1.5241, 1.5374, 1.5523 and 1.5816. Support is at 1.5081, 1.5037, 1.4932, 1.4874, 1.4710, 1.4696, 1.4590 and 1.4550.
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.
Today saw quite a steep pullback for cable from a high of 1.5241 this morning down to a low of 1.5103. It's not quite as low as yesterday's 1.5081 that barely confirmed the double top of 1.5230/27 but it causes one to question just how strong this uptrend is. Below 1.5081 would most likely be interpreted as the end of it. The logical price target would be 1.4932. The pair is still barely above the 20 EMA on the weekly chart that capped the pair the weeks of 4/16, 4/30 and 6/25. What a cliff hanger!
Resistance is at 1.5241, 1.5374, 1.5523 and 1.5816. Support is at 1.5081, 1.5037, 1.4932, 1.4874, 1.4710, 1.4696, 1.4590 and 1.4550.
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.
EURGBP—a tantalizing level
EURGBP has now laboriously climbed to a high of .8380. It's a tantalizing level to go short—it's good resistance, one could have a tight stop, etc. The pair is hesitating, no doubt because sellers are piling in. I'm considering shorting but will base a decision on how momentum acts over the next hour or so. If EURGBP does clear .8400/20 then there's not much stopping it until .8500 or so where it bumps into a downward trend line on the weekly chart.
It's difficult to believe that such a robust downtrend can end so easily. In fact, a look at the daily chart shows it's not likely—the ascent of the uptrend since the low is too steep to be maintained. This is more than likely corrective and the pair will probably reverse soon. But I'm not trading it until I see more evidence that this has happened.
Resistance is at.8382/.8420, .8519 and .8594.
Support is at .8320/10, .8265, .8218, .8180, .8107/00, .8068, .8000 and .7900.
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.
It's difficult to believe that such a robust downtrend can end so easily. In fact, a look at the daily chart shows it's not likely—the ascent of the uptrend since the low is too steep to be maintained. This is more than likely corrective and the pair will probably reverse soon. But I'm not trading it until I see more evidence that this has happened.
Resistance is at.8382/.8420, .8519 and .8594.
Support is at .8320/10, .8265, .8218, .8180, .8107/00, .8068, .8000 and .7900.
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—bulls have their fingers crossed
I have one long position open from 1.2413.
The pair has climbed nicely but is struggling at 1.2688 (it touched it last evening and again this morning). There are some headwinds here but there's no real reason (yet) to think it won't get through it with a little back and fill. If so, a C wave corresponding in length to wave A would take the pair to 1.2743. Besides the collective wish of the Euro bulls, is there any other evidence for a target near here? Yes, a weekly trend line is coming at around 1.2755. In addition, 50% of the move down from 1.3692 to 1.1892 is 1.2792.
There's also an ending diagonal in the larger upward correction on the three-hour chart which implies caution from an Elliott Wave perspective. Or you could see it as a wedge (both trend lines heading in the same direction). Wedges can be consolidation patterns within the trend which means higher prices but they can also be topping patterns. As usual, one pattern does not a conclusion make.
However, if Euro gets into the 1.27 area (as it's is now), begins faltering and RSI should move and then fall from over seventy on the hourly chart one can think about shorting. RSI still has a ways to go on the hourly chart to climb above 70 so it may continue up. Should Euro easily clear the 1.27 range, then I'll be adding to longs.
Resistance is at 1.2688, 1.2743/55, and 1.2800. Support is at 1.2558, 1.2480, 1.2435, 1.2409, and 1.2350.
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 pair has climbed nicely but is struggling at 1.2688 (it touched it last evening and again this morning). There are some headwinds here but there's no real reason (yet) to think it won't get through it with a little back and fill. If so, a C wave corresponding in length to wave A would take the pair to 1.2743. Besides the collective wish of the Euro bulls, is there any other evidence for a target near here? Yes, a weekly trend line is coming at around 1.2755. In addition, 50% of the move down from 1.3692 to 1.1892 is 1.2792.
There's also an ending diagonal in the larger upward correction on the three-hour chart which implies caution from an Elliott Wave perspective. Or you could see it as a wedge (both trend lines heading in the same direction). Wedges can be consolidation patterns within the trend which means higher prices but they can also be topping patterns. As usual, one pattern does not a conclusion make.
However, if Euro gets into the 1.27 area (as it's is now), begins faltering and RSI should move and then fall from over seventy on the hourly chart one can think about shorting. RSI still has a ways to go on the hourly chart to climb above 70 so it may continue up. Should Euro easily clear the 1.27 range, then I'll be adding to longs.
Resistance is at 1.2688, 1.2743/55, and 1.2800. Support is at 1.2558, 1.2480, 1.2435, 1.2409, and 1.2350.
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.
AUDUSD—good rally
Tuesday, after I was stopped out of my short, I wrote that I was studying the pair as to whether to go long. Yesterday I finally did so at .8593. The pair is up 157 pips as I write at 5:55AM EST.
This was a tough trade for me as I am biased short on this pair (as well as some other pairs that have been rising lately such as EURGBP, EURCHF, etc). I was also seeing some negative divergence on some time frames and I love, absolutely love, divergence as a piece of evidence. But bias and what was only one piece of evidence had to give way to the charts. It did. Not that it's easy.
This, to me, is the key challenge of trading. Anyone can read a chart. However once you've read it and formed an opinion that you're willing to place a trade on, the opinion itself can get in the way by becoming a mind set. You can get caught up in taking trades that conform to that mind set and find yourself getting stopped out over and over. This is the market's not so kind way of saying, "You're wrong." Most of us hate being wrong. But to survive and make money trading you want to embrace it. "I'm wrong and thank you so much for telling me that—I've learned something." This attitude would probably improve our lives immeasurably if we would consistently practice it but regardless of that overreaching thought, we must practice it when trading.
OK, enough of the mind stuff. I went long because it was clear, on the chart, that the pair wanted to go up. It had confirmed the double bottom (.8616/17) when it exceeded .8510. Yesterday, after a low of .8450, it began to move up with some strong candles. More important was that momentum (as represented by RSI) was strong. I had good price targets on my P&F charts that didn't look as though they were being compromised in any way. The mealy-mouth RBA statement earlier this week had been well-received. Risk sentiment seemed to be improving overall. So I bought at .8593.
I am not abandoning my opinion that this may be a corrective C wave. But let's look at that opinion at the time I placed my trade. If it was to be .618 of A's length then .8597 was the target. So why didn't I short with a tight stop? Because the pair wasn't faltering. In fact you could, if you put your ear to the chart, almost hear the engines roaring. Other pair's had roared past their .618 of A moves so why not this pair? I'd blogged yesterday morning that .8640 was possible resistance. C equal to A would be .8688. What if C became 1.618 of A? The decision rested on whether I could set a tight stop. The prior hourly candle had a low of .8560 with a drop just below the 70 RSI on the hourly chart. Bam, I was in, as they say. I did draw a breath of relief when I moved the stop to breakeven on the close of the trading candle. My short bias hasn't fled.
OK, now what? The pair is currently hovering just below this morning's high of .8761 which is polarity and just above the 50% retracement of .9364 to .8067. It bears watching and I may take some profits off the table. The next target range is .8835 to .8860. (.8835 is 1.618 of the A wave; .8868 is .618 of the .9364 to .8067 move; .8859 is a June 21 high and polarity).
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.
This was a tough trade for me as I am biased short on this pair (as well as some other pairs that have been rising lately such as EURGBP, EURCHF, etc). I was also seeing some negative divergence on some time frames and I love, absolutely love, divergence as a piece of evidence. But bias and what was only one piece of evidence had to give way to the charts. It did. Not that it's easy.
This, to me, is the key challenge of trading. Anyone can read a chart. However once you've read it and formed an opinion that you're willing to place a trade on, the opinion itself can get in the way by becoming a mind set. You can get caught up in taking trades that conform to that mind set and find yourself getting stopped out over and over. This is the market's not so kind way of saying, "You're wrong." Most of us hate being wrong. But to survive and make money trading you want to embrace it. "I'm wrong and thank you so much for telling me that—I've learned something." This attitude would probably improve our lives immeasurably if we would consistently practice it but regardless of that overreaching thought, we must practice it when trading.
OK, enough of the mind stuff. I went long because it was clear, on the chart, that the pair wanted to go up. It had confirmed the double bottom (.8616/17) when it exceeded .8510. Yesterday, after a low of .8450, it began to move up with some strong candles. More important was that momentum (as represented by RSI) was strong. I had good price targets on my P&F charts that didn't look as though they were being compromised in any way. The mealy-mouth RBA statement earlier this week had been well-received. Risk sentiment seemed to be improving overall. So I bought at .8593.
I am not abandoning my opinion that this may be a corrective C wave. But let's look at that opinion at the time I placed my trade. If it was to be .618 of A's length then .8597 was the target. So why didn't I short with a tight stop? Because the pair wasn't faltering. In fact you could, if you put your ear to the chart, almost hear the engines roaring. Other pair's had roared past their .618 of A moves so why not this pair? I'd blogged yesterday morning that .8640 was possible resistance. C equal to A would be .8688. What if C became 1.618 of A? The decision rested on whether I could set a tight stop. The prior hourly candle had a low of .8560 with a drop just below the 70 RSI on the hourly chart. Bam, I was in, as they say. I did draw a breath of relief when I moved the stop to breakeven on the close of the trading candle. My short bias hasn't fled.
OK, now what? The pair is currently hovering just below this morning's high of .8761 which is polarity and just above the 50% retracement of .9364 to .8067. It bears watching and I may take some profits off the table. The next target range is .8835 to .8860. (.8835 is 1.618 of the A wave; .8868 is .618 of the .9364 to .8067 move; .8859 is a June 21 high and polarity).
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.
Wednesday, July 7, 2010
EURUSD—update
I closed one of my positions for +202 pips.
© 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.
GBPUSD—update
I closed out my second position at +98 pips, mostly because 1.5230 is coming up and the pair began struggling at 1.5215. This would be a third touch if it could get there and it seems sellers are coming in. I still have one position long from 1.4918. If the pair moves past 1.5230, I may take another position.
© 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.
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