Some of my thoughts + Trading System

Good Morning Guys,

For the moment the bears are still in control of the price.
London hasn’t opened yet, so we may see some buying / selling when that happens.

Under 9610 may push us down to 9588 > 9545
Over 9640 may push us up to test 9695

H4 Has gone consolidative for now, so we may see a break up or down, it depends on what the bias proves to be. At the moment i am more inclined towards a test of the Lows rather than the Highs.

Good trading

Regards,
E. Lang




I will be happy to communicate with all and any of you on a daily basis.

I use Yahoo Messenger: [email protected]

You may download it from here: Yahoo! Messenger - Chat, Instant message, SMS, PC Calls and More

Regards,
E. Lang
PS: Check the post before this for new chart updates.

My Limit order was hit for my Short .9624 @ .9564 for 60 Pips profit

For now i am going to wait and see how the market reacts to .9547.
I will most likely short again after i see some more comfirmatory bearish action.

I will be looking to short on a retracement spike.

Regards,
E. Lang


[B]GBP/USD[/B]

[B]Daily Pivots: (S1) 1.9583; § 1.9638; (R1) 1.9682; [/B]
Cable is also bounded in tight range today. Rebound from 1.9547 lacked decisive momentum and was limited at 1.9695. Nevertheless, with 4 hours MACD pushed back above signal line, a short term top could be formed at 1.9547 low and hence, further rebound is still in favor to come as long as cable stays above this low. On the upside, Break of 1.9735 resistance will encourage a retest of 1.9913 high. Meanwhile, break of 1.9547 low will indicate fall from 1.9913 has resumed for rising trend line support (1.8517 to 1.8834, now at 1.9480).

In the bigger picture, a strong break above 1.9679 resistance will save the case that rally from 1.9261 is still in progress. In such case, further rise could be seen to retest 1.9913 high and break will confirm whole rally from 1.8517 has resumed. But still, close attention will be paid to sign of loss of upside momentum and reversal pattern formation as cable approaches key 2.0106 cluster resistance (1992 high, 100% projection of 17047 to 1.9024 from 1.8090 at 2.0067) as the whole medium term up trend from 1.7047 could complete at or below this level.

Right now, we already have bearish divergence conditions in weekly RSI, daily MACD and RSI. Sustained break of 1.9588 cluster support will be the a warning that whole rise from 1.8517 has completed earlier than we thought. Break of mentioned rising trend line support will confirm such case and bring much deeper decline towards 1.9237/61 cluster support (23.6% retracement of 1.7047 to 1.9913 at 1.9237). Decisive break of this 1.9237/61 cluster support will add much weight to the case that whole medium term up trend from 1.7047 has already completed and much deeper decline should be seen towards next cluster support at 1.8834 (38.2% retracement of 1.7047 to 1.9913 at 1.8818).

[B]Markets Look Forward to US GDP and FOMC Statement [/B]

Dollar remains bounded in tight range ahead of FOMC announcement and a handful of economic data today. Markets will likely remain quiet before US Q4 GDP data where volatility should jump up. A solid 2.9% growth is expected in the Q4 GDP and if that’s confirmed, dollar will likely be boosted as expectation will then be built up for a more upbeat FOMC statement that reflect recent improvements of growth outlook.

Fed is widely expected to keep its target rate unchanged at 5.25% today. Once again the focus will be on the accompanying statement. There were three major developments since last meeting in Dec. Economic indicators has be resilient and showed that the US economy grew near potential in the fourth quarter. Inflation eased moderately but the pace certainly slow. More importantly, Fed members has shifted to a more hawkish stance in their speeches, saying that growth outside housing sector remains firm and inflation pressure may moderate slower than they would like to see. Hence, the statement’s wordings on inflation is not expected to change but the wordings about “recent indicators have been mixed” could be modified to reflect the current growth outlook, leaving the statement a slightly more hawkish statement than the prior one.

A series of better than expected key economic data, in particular the retails sales and trade balance, pointed to a stronger growth in the US economy in the last quarter of 2006. Consensus expects that US GDP has grown at a quicker pace of 2.9% in Q4, comparing to prior quarter’s 2.0%. GDP price index growth is expected to drop from 1.9% to 1.7% while core PCE rise is expected to stay at 2.2%, suggesting that price pressure continues to moderate slowly. Chicago PMI is expected to rise slightly from 51.6 to 52.0 in Jan while construction spending is expected to rebound from Nov’s -0.2% to 0.1% rise in Dec. ADP employment data, which is used as preview to Non-farm payroll, is expected to 122k job growths in Jan.

Euro was steady after yesterday’s Germany CPI data which saw a surprised drop of -0.1% mom in Jan. Just released, Germany retail sales rose much more than expected by 2.4% in Dec, comparing to prior - 0.7% and expectation of 1.3%. More data from the Eurozone will be featured today including Germany and Eurozone unemployment, Eurozone consumer confidence. HICP inflation is expected to accelerate from Dec’s 1.9% to Jan’s 2.1%.

Swiss franc remains pressured on carry trade and is pressing record low against euro with EUR/CHF at 1.6253. KOF Leading indicator, which serves as a predictor of further economic activities, is expected to continues it’s downtrend that started last Jul and fell further from 1.6 to 1.56 in Jan. UK Gfk consumer confidence is expected to drop further from -8 to -9 in Jan.

Since the trend is bearish we accept that we must have:

  1. Lower Lows
  2. Lower Highs
  3. All movements in the opposite direction of the trend are corrections as long as the level of correction does not exceed critical levels of its wave eg. 61.8% - 75%

As i mentioned before, i had my Limit order set above S of .9547 as i didn’t want to loose pips in a possible whiplashing bounce.

There are only two ways i consider R or S broken:

  1. The price violates the level then retraces to confirm it before continuing with the trend.
  2. The price breaks through so decisively that the earliest or first level of correction is far below that of the R / S level broken.

In this case what happened is #1, the price broke…
At this point i was waiting for a retrace, preferable a test of the S so i could buy on the tip of the correction.

Considering that the trend is bearish i assume that the correction should start latest around the 75% level. However seeing as 50% - 61.8% was also R/S of .9547 it was logical to accept that as a good retracement entry point.

My second short for today was made at .9542 on the M1 chart so i could surgically pin point the entry.

I am hoping for a break of.9524 now, then 61.8% on H4 @ .9509 > .9452 > 75% @ .9424 > .9315 etc.

On the upside we will need a break of .9550 > .9696 to confirm a resumption of the uptrend.

Regards,
E. Lang






hello elang,
this is a great thread and i loved reading it ,your outlook on life is very mature and your information really helped me, looking forward to reading more
cheers and good luck

langAs per my post today:

“I am hoping for a break of .9524 B[/B] now, then 61.8% on H4 @ .9509 B[/B] > .9452 (To Come) > 75% @ .9424 (To Come) > .9315 (To Come)etc.”

From here onwards its pretty clean.
Redraw your Fibonaccis on every retrace and move your stop loss.

Regards,
E. Lang

Your comments are much appreciated Pipsareaus,

I am happy i’ve been able to help you with anything.
Stick around.
Regards,
E. Lang


I’ve got to go to work again so i’ll see you guys tomorrow.
Over all today we’ve had two trades, all documented.

You’ll notice i only used MA crosses and short term trend lines for Entry, Exit and Stop Loss determination.

Trades for today:

TRADE 1

Entry: .9624
Limit: .9564
Stop Loss: .9655

Status: CLOSED
Profit: +60

TRADE 2

Entry: .9542
Limit: .9457
Stop Loss: .9561

Status: LIVE
Profit: +27

Todays reports start from Post #185 onwards.
Looking at them in order you will be able to introduce yourself to my decision making process and specullative theory.

Regards,
E. Lang


man ,if i did not know get to meet you personaly, i would never have believed that this thread is written by someone who just turned 20 years of age.
well done ,for your age you thoughts flow like a naturaly gifted person,keep writting and helping all of us we appriciate it

Good morning guys,

My second short trade yesterday was stopped out:

TRADE 2

Entry: .9542
Limit: .9457
Stop Loss: .9561

Status: CLOSED
P/L: B[/B]

I’m not sure if it was GDP that came out, frankly i have no idea, but i didn’t care much since i had set my stop loss, which was very reasonable at 19 pips, with a possible profit of much larger proportions.

For some reason my Daily Trendlines on my chart had dissappeared and i totaly forgot and couldn’t see the ascending trend line, which i was going on about the other day, hence why i was bold and in this case deluded enough to place an ambitious Target of .9457 a whole 20+ pips under the trend line…

I admit that was my bad, but these things happen, if my trend line hadn’t dissappeared on me i would have logically set my Target a few pips above it and i’d be in profit on the second trade now.

Overall yesterday was a very profitable day.

Let’s see how things are looking today.

The fall from .9913 took us as far as .9480, where it met the Daily Ascending Trendline and bounced off taking us back as far as .9668, respecting the previously existent short term trend line which you will notice on the chart i’ve attached.

Our General Bias is long, so we will only be looking for long trades today.
We will consider bearish price action from .9913 to .9480 as a correction of the rally started at .9260 with a High of .9913. Since it is a correction, it is in the opposite direction of the trend, hence… BULLISH.

Trend Determination D1:

*Stochastics are around the 20 area and they seem to be reversing
*RSI is > 50
Rating: Bullish

Trend Determination H4:
*We have a perfect morning star candlestick formation off .9480
*Bullish MA crossover is visible
Rating: Bullish

Targets / R on the Upside In Order of Violation:

  • .9668 > 9696 > .9734 > .9913 > 2.000

Targets / S on the Downside In Order of Violation:

  • .9625 > 9598 > .9574 > .9480 > .9455 > .9315 > .9260

Play it safe and set your Stop Losses!

I will update more throughout the day

Regards,
E. Lang


GDP
Consider the potentially damaging events of the past six months: a government induced housing market collapse, $4.00 a gallon gasoline prices, the effect on businesses of almost two years of Federal Reserve rate increases, an unresolved and unpopular foreign war and a dramatic and divisive national election. In an economy as heavily dependent on consumer spending as the American, any one of these developments could have seriously undermined consumer sentiment. If consumer sentiment and consequently spending had fallen last fall it is possible that we would today be drifting toward recession. In retrospect, it is understandable why speculative interest turned against the dollar in the last quarter of 2006. With the initial reading on 3rd quarter growth 1.6%, the USD looked set to follow the economy down. Beginning in the week after Christmas, reports on the American housing market, consumer confidence and purchasing managers scored solid and, to many observers, surprising gains. The improvement in US statistics was capped this week by the 4th quarter GDP number which outstripped even the optimistic expectation of 3.1% with a reading of 3.5%. Historically the trend level American economic growth is between 3% and 3.5%. Can the US economy sustain its historical trend in today’s difficult economic and political environment and if so what will that bode for the Dollar?

NFP
In the 4th quarter of 2006 the US economy created an average of 136,000 new jobs per month. The January Non-Farm Payrolls (NFP) due at 8:30 am Friday is anticipated to have added 160,000 jobs. The December the reading was +167,000. January’s estimate is almost two thirds higher than the expectation had been for December, +100,000. The NFP statistic has consistently surprised the market with better than predicted outcomes. Baseline revisions added over 800,000 total jobs in 2006. Last year economists speculated that as the housing market fell it would drag down consumer spending, maybe tipping the US in recession. Consumer spending, however remained strong, supported, I would argue by a buoyant job market. Does the NFP report bear more directly on consumer spending than the housing market and what does that mean for the Dollar?


In Red i will highlight targets that have been violated and in Blue those that haven’t.

BULLS -In Order of Violation:
* .9668
* .9696
* .9734
* .9913
* 2.000

BEARS - In Order of Violation:
* .9625 - This is a good bearish signal, however it looks best to consider shorts only under .9598
* .9598
* .9574
* .9480
* .9455
* .9315
* .9260

Regards,
E. Lang

GBP/USD

Cable rebounded strongly after the fall from 1.9913 was supported by mentioned rising trend line support (1.8517 to 1.8834, now at 1.9490) and reached 1.9480 only. At this point, intraday bias remains on the upside as long as cable stays above 1.9597 minor support and further rally might still follow. Focus remains on 1.9695 cluster resistance (50% retracement of 1.9913 to 1.9480 at 1.9697) and mentioned trend line support.

As long as 1.9695 resistance holds, the fall from 1.9913 is still in favor to extend further. And sustained break of the trend line support will confirm that whole rise from 1.8517 has completed at 1.9913 and deeper decline is expected to follow towards 1.9237/61 cluster support (23.6% retracement of 1.7047 to 1.9913 at 1.9237). However, decisive break of 1.9695 resistance will indicate the fall from 1.9913 has completed after failing to break through mentioned trend line support. In such case further really should be seen to retest 1.9913 high.

In the bigger picture, we already have bearish divergence conditions in weekly RSI, daily MACD and RSI. Decisive break of 1.9237/61 cluster support will add much weight to the case that whole medium term up trend from 1.7047 has already completed earlier than we thought and much deeper decline should be seen towards next cluster support at 1.8834 (38.2% retracement of 1.7047 to 1.9913 at 1.8818).

And in case of further rise, close attention will be paid to sign of loss of upside momentum and reversal pattern formation as cable approaches key 2.0106 cluster resistance (1992 high, 100% projection of 17047 to 1.9024 from 1.8090 at 2.0067) as the whole medium term
up trend from 1.7047 should complete at or below this level.

Forex Elliott Wave Analysis - GBP/USD

65% confidence - First leg of major correction from 1.9917 has ended at 1.9483 and consolidation would be seen but upside should be capped at 1.9772, bring another selloff.
Despite yesterday’s selloff to 1.9483, lack of downside follow through and subsequent reversal indicate the first leg of major correction from 1.9917 top has indeed ended at 1.9483 and consolidation in minor wave b would be seen for few days. Above 1.9697 resistance would add credence to this view and extend gain to 1.9734 and possibly 1.9750 but reckon 1.9772/75 would limit upside.

On the bigger picture, wave v from 1.8517 is labelled as (1): 1.8859, (2): 1.8674, (i) : 1.9180, (ii): 1.8835 and (iii): 1.9849 and wave (iv) has ended at 1.9260 and wave (v)has either ended at 1.9917 or would extend marginally to 1.9950 but 2.0000 would cap upside.

On the downside, pullback should be limited to 1.9577 (50% of 1.9483-1.9671) and 1.9548/55 would hold and bring another strong rebound later.




Keep your eyes on GBP/JPY - it is looking very juicy right now.

Regards,
E. Lang


Just to re-cap on the Elliot Waves for those of you who use them as a guide:

  1. .9177
  2. .8835
  3. .9846
  4. .9263 (Correction: abc X abc) with X @ .9747
  5. .9913

There are 2 scenarios from here onwards.

  1. The decline from .9913 is Corrective wave A in the forming

OR

  1. The decline from .9913 is a small correction after which wave 5 will resume for a possible break of .9913 with a target of 2.000 (AFTER WHICH, we will have a logical correction take place in the form of ABC or another variation.

If you are following this thread and you are trading with me i recommend you set up your charts.

  • EMA 6

  • SMA 13

  • EMA 50/55

  • MACD 12,26,9

  • RSI 14

  • Stochastics 10,3,3

  • RVI 14

You may also add EMAs 5 and 10 if you wish for further optimization.
I trade mainly E/S MA crosses, Fibonaccis and Trend Lines

I’ve been getting a lot of great feedback from users who implemented the system i had detailed in Post 1 of this thread, i’m very happy people have been getting such great results. Keep up the good work guys, you know who you are.

Regards,

E. Lang

PS: even though the bias is/was Bullish, the bears seem to be taking over things.

So far they are the first to score a point by taking out * .9625, If they want to continue dominating they need to take out their next target of * .9598. So far the Bears are in the lead.

BULLS -In Order of Violation:
* .9668
* .9696
* .9734
* .9913
* 2.000

BEARS - In Order of Violation:
* .9625 - This is a good bearish signal, however it looks best to consider shorts only under .9598
* .9598
* .9574
* .9480
* .9455
* .9315
* .9260


The game score is tied 1 to 1 at the moment with the Bulls taking out their first target of .9668

You can long after a whole candle closes above .9668 on M5, targets are below in blue.

BULLS -In Order of Violation:
* .9668
* .9696
* .9734
* .9913
* 2.000

BEARS - In Order of Violation:
* .9625 - This is a good bearish signal, however it looks best to consider shorts only under .9598

* .9598
* .9574
* .9480
* .9455
* .9315
* .9260

Regards,
E. Lang



I’ve been waiting here for the past 40 minutes with this message just to hit Submit Reply, lol.

The game score is 2 to 1 at the moment with the Bulls taking out their second target of * .9696

Even though the price had quite a battle at this R, being rejected a solid 3 times, the bulls overwhealmed for a while and more buyers came in. Frankly i was expecting a clean break here rather than the sloppy cabbage throwing contest it turned out to be.

You can long after we see good bulish play and a whole candle close above * .9696 on M5, targets are below in blue.

Keep your eyes and ears open for the next set of news in about 46 minutes (Current time: 16:14 GMT+2)

US ISM Man. - Forecast: 51.9 | Previous: 51.4

BULLS -In Order of Violation:

* .9668
* .9696
* .9734
* .9913
* 2.000

BEARS - In Order of Violation:

* .9625
* .9598
* .9574
* .9480
* .9455
* .9315
* .9260

Regards,
E. Lang



The statement below could have been the reason for the break we just had, but the bears are showing no sympathy here:

“Rumours flowing in that ISM Numbers will be coming in weaker than expected”

Regards,
E. Lang


As long as we have higher highs and higher lows everything is ok.

Don’t exepect the difference to be too large now from H to L as we are pre news, but things are looking bullish for now.

Please, don’t forget to set your Stop Losses, use M30, H1, H4 to determine the best previous Lows on the chart for a Stop Loss execution.

I’m off to work. See you guys tomorrow.

Regards,
E. Lang


Ok my taxi hasnt arrived yet, so i couldnt help it.

The rumours were right and ISM came in weaker at 49.3 at an expected 51.9

The Bulls are leading 3 to 1 having taken out their third target * .9734, some people have taken profit there as you can see it wasn’t a clean and continuous break. My sentiment is that the mass is still bullish though and i am sure that those who took 50% of their profits of all of their profits at .9734 will buy back for another long when they see some confirmatory bullish action above the newly tested ground.

It is a little troubling though that even on new 9734 wasn’t concretely taken out.

Anywho…This is my bias, things could go upside down so keep your heads up and set your SL.

[I]US ISM Man. - Forecast: 51.9 | Previous: 51.4

[/I]BULLS -In Order of Violation:

* .9668
* .9696
* .9734
* .9913
* 2.000

BEARS - In Order of Violation:

* .9625
* .9598
* .9574
* .9480
* .9455
* .9315
* .9260

Regards,
E. Lang



Hello Elang,

I’m fairly new here and just found your trading place here. To say I like this would be an understatement!! Will be looking forward to testing this and trying it out. So far, looks like your previous posts have been good. Others say the same.

Thanks for sharing this!!

M’thanx ye have for ye kind Comments mtdavs! - they be like wind for m’sails and onwards sail i will Arrr!!!

Now…
Lets see what is happening to GBP/USD, yes ?

BULLS -In Order of Violation:

* .9668
* .9696
* .9734
* .9913
* 2.000

I’ve set my stop for this long at .9600, i want to give it enough breathing space as i know there is a correction coming in on H4 that will take more time and space.

As long as the price remains above 9600/18/20 we can expect a resumption of the rally towards .9913

I have attached something i created to this chart to show why you shouldn’t be chickening out of the trade - it is all based on Higher Highs, Lower Lows and Lower Lows and Higher Lows. I hope that what you will read there will help you perceive the market in another way.

It’s all just a battle between the bears and the bulls.

They each have their goals and the one that scores the most wins at the end.

Think of it this way.
In Football - your aim is to get the ball accross the other teams goal line to score and earn a point, which places you in the lead. Thats the aim.

Inbetween there are rules as well - Fouls, Offsides, Red Cards, Yellow Cards etc.
When rules are NOT breached in an FX Uptrend we have HH and HL, if we have a LH in an uptrend the Bulls get a yellow card…

If in an uptrend the Bears register a LL after that LH then thats a red card and the player is out of the game… the bulls loose power and the bears start gaining on points… in fact they may even win at the end if the Bulls don’t recover.

Same goes for a downtrend… we have LL and LH… but if we have a HH registered… thats a yellow card right there… things get troublesome… will the bears recover ? will they make a LL or will the bulls confirm their superiority by a HH after the bear violating HL…

Nobody knows, but this is what is expected.

Right now my knowledge tells me i should be holding my long still and waiting for a Higher High between 61.8 and 75% or AT 75% and then perhaps another LL before we reach .9913

I have considered todays low at .9642 a LL to the bullish uptrend on H4 started at .9480, so i am looking for a HH now, it is logical… it is the way the market works.

Try and keep things simple guys, the worst thing u can do is complicate things and always remember things are always on a scale and can tilt from one side to the other in a moment, more so during a news day like friday.

This is a radio i like to listen to while i trade: StreamingSoundtracks.com - Listen

It is called streamingsoundtracks, its got a mix of calming, classical and modern video game, movie music. Very Nice and relaxing

Regards,
E. Lang
PS: PLEASE SEE THE ATTACHED CHART!
PSS: THE NEWS: Easy-Forex: The Financial Calendar

GBP/USD PRE NFP Sentiment

The Cable has been making erratic intraday movements for the past 3 days. Notice the long spikes on the past 3 daily candles.
Stochastics on the daily chart are trending up but the 4hr stochastics are in overbought territory and have crossed down.

Like the Euro, the technicals are pretty much showing a standstill for the pair. Tomorrows NFP will play a key role in the future direction of the Cable. If NFP is good, the pair may drop back down to its 61% Fib line and if NFP is bad, then we could see the Cable get as high as 9800.

GBP/USD

Cable’s rebound from 1.9480 has reached as high as 1.9747, breaking marginally above 1.9695 cluster resistance (50% retracement of 1.9913 to 1.9480 at 1.9697) before retreating mildly. As discussed before, break of 1.9659 cluster resistance suggest that fall from 1.9913 has already completed at 1.9480 after failing to break through mentioned trend line support rising trend line support (1.8517 to 1.8834). Hence, at this point, as long as cable stays above 1.9618 support, short term outlook will remain bullish and further rally is expected to be seen towards 1.9913 high. Below 1.9618 will turn short term outlook mixed again.

In the bigger picture, with mentioned trend line support remains intact, further rally could still be seen that brings cable above 1.9913 high. However, close attention will be paid to sign of loss of upside momentum and reversal pattern formation as cable approaches key 2.0106 cluster resistance (1992 high, 100% projection of 17047 to 1.9024 from 1.8090 at 2.0067) as the whole medium term up trend from 1.7047 should complete at or below this level.

Meanwhile, we already have bearish divergence conditions in weekly RSI, daily MACD and RSI. Sustained break of the trend line support will confirm that whole rise from 1.8517 has completed and bring decline towards 1.9237/61 cluster support (23.6% retracement of 1.7047 to 1.9913 at 1.9237).

Decisive break of 1.9237/61 cluster support will add much weight to the case that whole medium term up trend from 1.7047 has already completed earlier than we thought and much deeper decline should be seen towards next cluster support at 1.8834 (38.2% retracement of 1.7047 to 1.9913 at 1.8818).

Just to re-cap on the Elliot Waves for those of you who use them as a guide:

  1. .9177
  2. .8835
  3. .9846
  4. .9263 (Correction: abc X abc) with X @ .9747
  5. .9913

There are 2 scenarios from here onwards.

  1. The decline from .9913 is Corrective wave A in the forming

OR

  1. The decline from .9913 is a small correction after which wave 5 will resume for a possible break of .9913 with a target of 2.000 (AFTER WHICH, we will have a logical correction take place in the form of ABC or another variation.

If you are following this thread and you are trading with me i recommend you set up your charts.

  • EMA 6

  • SMA 13

  • EMA 50/55

  • MACD 12,26,9

  • RSI 14

  • Stochastics 10,3,3

  • RVI 14

You may also add EMAs 5 and 10 if you wish for further optimization.
I trade mainly E/S MA crosses, Fibonaccis and Trend Lines



GBP/JPY is just correcting off intraday R of 238.27

It may be a good idea to long on the correctional dip with upside targets:

61.8% @ 238.61 > 238.90 > 75% @ 239.10 > H of 240.02

Regards,
E. Lang