Going long EURAUD today

[saigonfx]

My trading system has issued a buy signal for EURAUD. Here are the trade specs:

Entry 1 at the current price of 1.1940.
Limit: 1.2310
Stop: 1.1746

I'm prepared to add leverage at 1.881 for 1.5 times that used in the first trade and again at 1.1813 using leverage equal to that in the first two trades.

This pair has been in a long decline from October 2008 and from a momentum perspective is now appearing oversold on all but the 8-hour chart. This suggests one or two more bottoms may still be in store; however, I am expecting a rise of at least 2% based on current momentum readings.

The price action of January to October 2011 looks indicative of a fourth wave, leading me to interpret the action since October as a terminal fifth wave. Zooming in on the past 10 months, the market has traced out a textbook 5-wave down sequence since October 5, 2011. Standard wave relationships lead me to estimate this decline ending somewhere between the current price and 1.1852. As the ensuing correction should carry to at least 1.3000, given that the trading system has already issued a buy signal, I'm not inclined to wait to enter this trade.

Longer-term, I believe the entire decline from 2008 will see at least a 38% correction, bringing price into the 1.5400-1.6500 range.

[saigonfx]

Here is a close-up view of what I am expecting in EURAUD

[saigonfx]

Price has zoomed up in Wave 1 of A rather quickly in this pair and I'm now anticipating a wave 2 correction to the 1.1996-1.2011 area before heading higher in Wave 3. Depending on how the waves subdivide, what we saw over the past 24 hours may simply be wave i of 1 of A, meaning we are now in a wave ii of 1 correction.

In chart form, here is our status in this trade:



Based on wave ratios obtained in yesterday's advance, I estimate the top of wave v at around 1.2190. Depending on wave structure and momentum readings as we approach our limit of 1.2310, I may move my limit downward to the 1.2150-1.2200 area.

[saigonfx]

The wave 2 correction in this pair was quite deep, which is typical of the early stages of a new trend. Because wave 2 was quite deep, wave 4 should be shallow, probably retracing only 24 to 38% of wave 3. My tentative wave 3 target is 1.2161 (161.8% of wave 1), though this pair seems primed to advance quickly so a move as high as 1.2290 (approx. 261.8% of wave 1) is not out of the question.

[SammyW]

Nice analysis. I got in at 1.19819, the last peak (boy is my timing off!). Anyways my stop is about 55 pips south. I'm not sure if that is to tight or not? Your comments would be appreciated. I can adjust the stop a little further south since I only have 1% risk on the trade...

I plan on taking half my trade off at 1.20377 and letting the rest run. I too thought that this pair is ready for a rebound/trend change or at least going to head north up around 1.212 or the 61.8 fib from July 4th. The only problem is that I'm literally afraid to let it run (total newbie here). Again any comments welcome!

Good luck!

[saigonfx]

Welcome to forex trading, SammyW! You might want to join some of us in the Chat room (see the upper menu bar) for real-time market analysis and general banter.

I think that in the long run, your entry point will look good, however, I won't be surprised if price falls back near to the 1.1924 low we saw yesterday. When a currency pair "wakes up" and starts heading higher after a long decline such as we've seen in EURAUD, it normally starts by making a couple of big jumps which are totally or almost totally retraced. Then, and only then, do the fireworks happen and we blast higher. The velocity of which which the market moves at that point often really surprises traders... it's like someone has been stretching a rubber band nearly to the breaking point, then lets it go.

This pair has Fibonacci support at 1.1953 and 1.1961 so if we hit that area, I think the turnaround will be near.

In this trade, I wouldn't be too concerned about time. It could complete in 5 hours or in 5 weeks... though if your initial target is 1.2038 then I think we'll probably reach that within a couple of days. I'm in this trade for the long-haul, targeting 1.2310 initially and then 1.2500. In order to set myself up for the long-term play, however, I've also allowed a generous stop way down at 1.1746.

Risking just 1% of your capital is a great way to start. I'm sure you've heard the horror stories of the traders who bet 10% or more of capital on each trade and get a margin call within a few months. A big advantage of risking only small amounts of capital is that you don't feel pressured to set extremely tight stops (such as 10 pips). You can let the market noise do its thing while you concentrate on the big picture.

Please let us know when you identify a good trade set-up! We are here to help each other.

[binufrancis]

Way to go, Guys. Keeping the details highlighted will add some glory.

[alex22]

hi

In H4 Time frame, As we can see there is two Harmonic patterns. Bat & alt Bat. Based on negative divergence in PRZ we expect to see dropping the price in the pair if everything goes well.

[alex22]

hi

In H4 Time frame, As we can see there is two Harmonic patterns. Bat & alt Bat. Based on negative divergence in PRZ we expect to see dropping the price in the pair if everything goes well.

result :

[alex22]

As you can see in the following chart in H1 time frame the price is in an uptrend and currently we can see there is a correction between two retrecement level 61.8 &78.6. According to reciprocla ab=cd pattern till Jan. 4th the time will be fulfilled , we are expecting to see the price climbed in the pair if +HD happens and bulls step in and show their power.