Friday, August 6, 2010
Thursday, August 5, 2010
USDCAD—new low
My short from 1.0239 stopped out at +10 pips. Which is too bad because while price action is overall sluggish, the pair has a new low of 1.0108 which is just below the May 13th low of 1.0110. It has bounced a bit.
We've now had three days with a close below the triangle line. I'd be more impressed with this fact if we were in a normal trading environment, i.e. not the doldrums of August. However it is what it is. In addition, the pair has broken below both price and RSI uptrend line. Yet the pair is oversold and price action is so sluggish that I'm staying out for now. If today's low holds, there will probably be a rally and shorts can be re-established. It's possible we're going into sideways movement.
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.
We've now had three days with a close below the triangle line. I'd be more impressed with this fact if we were in a normal trading environment, i.e. not the doldrums of August. However it is what it is. In addition, the pair has broken below both price and RSI uptrend line. Yet the pair is oversold and price action is so sluggish that I'm staying out for now. If today's low holds, there will probably be a rally and shorts can be re-established. It's possible we're going into sideways movement.
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.
One of those days
It's going to be one of those days. This is often what trading is like in August, typically a time of lower liquidity which leads to moves that aren't particularly relevant but that can take out reasonable stops. There are lots of conflicting signals on the charts and there is also general sluggishness. It's a good time to stay out of the market.
EURUSD—little movement
My long from 1.3116 was profit-stopped at 1.3139 for +23 pips. (It's 20 pips here and there so far this month. Frustrating but it happens). I went short just now at 1.3169.
Euro reached a low of 1.3120 overnight. The pair managed to spike up to 1.3236 this morning after what appeared to be an evening star on the one-hour chart (not shown). The current candle on the three-hour chart may complete an evening star (but one has to wait until the candle completes). A Reuter's poll showed that there's consensus opinion Euro will drop to 1.2000 in 12 months. So why isn't it dropping more than it is? I'm not sure it's quite ready to give up the ghost and I won't be until it moves and stays definitively below 1.3150/25. It's troubling that the drop so far has been only to the .382 retracement of the move down from the November high. An argument could be made it's retesting support.
There is, however, slight negative divergence on the three-hour chart. It could also fail a test of support. The fact remains though that if wave C is over then there is going to have to be a five-wave decline from 1.3262. This is another pair where I may be willing to reverse.
Resistance is 1.3262, 1.3300, 1.3355 and 1.3433 and 1.3525 (50% retracement of wave one down from November highs).
Support is 1.3125 (.382 retracement of move down from Nov high), 1.3000, 1.2981/50, and 1.2877.
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.
Euro reached a low of 1.3120 overnight. The pair managed to spike up to 1.3236 this morning after what appeared to be an evening star on the one-hour chart (not shown). The current candle on the three-hour chart may complete an evening star (but one has to wait until the candle completes). A Reuter's poll showed that there's consensus opinion Euro will drop to 1.2000 in 12 months. So why isn't it dropping more than it is? I'm not sure it's quite ready to give up the ghost and I won't be until it moves and stays definitively below 1.3150/25. It's troubling that the drop so far has been only to the .382 retracement of the move down from the November high. An argument could be made it's retesting support.
There is, however, slight negative divergence on the three-hour chart. It could also fail a test of support. The fact remains though that if wave C is over then there is going to have to be a five-wave decline from 1.3262. This is another pair where I may be willing to reverse.
Resistance is 1.3262, 1.3300, 1.3355 and 1.3433 and 1.3525 (50% retracement of wave one down from November highs).
Support is 1.3125 (.382 retracement of move down from Nov high), 1.3000, 1.2981/50, and 1.2877.
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.
USDCHF—update
Stopped out for -40 pips as the pair dropped to an uptrend line. Have gone long again at 1.0446.
© 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—not giving up the fight yet
The drop to 1.5820 profit-stopped me out at +20 pips.
I shorted again this morning at 1.5910. However, with the strong uptrend this pair has been experiencing, a short is definitely bucking the trend. it's only because the .618 retracement is causing it to falter, the fact that I can have a tight stop and the reality that a corrective move down is overdue that makes me willing to risk a short position. The pair is fighting the move down which means the bulls are buying this small drop. I will be willing to reverse as there is more upside potential if the pair overtakes the 1.5958 resistance. Let's see what happens today.
Resistance is at 1.5958, 1.6000, and 1.6070. Support is at 1.5820, 1.5696 (Monday's low) 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 shorted again this morning at 1.5910. However, with the strong uptrend this pair has been experiencing, a short is definitely bucking the trend. it's only because the .618 retracement is causing it to falter, the fact that I can have a tight stop and the reality that a corrective move down is overdue that makes me willing to risk a short position. The pair is fighting the move down which means the bulls are buying this small drop. I will be willing to reverse as there is more upside potential if the pair overtakes the 1.5958 resistance. Let's see what happens today.
Resistance is at 1.5958, 1.6000, and 1.6070. Support is at 1.5820, 1.5696 (Monday's low) 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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