[U][B]The Spur That Drives to Riches[/B][/U]
"A long while ago, a great warrior faced a situation which made it necessary for him to make a decision which insured his success on the battlefield. He was about to send his armies against a powerful foe, whose men outnumbered his own. He loaded his soldiers into boats, sailed to the enemy’s country, unloaded soldiers and equipment, then gave the order to burn the ships that had carried them. Addressing his men before the first battle, he said “You see the boats going up in smoke. That means that we cannot leave these shores alive unless we win! We now have no choice-we win-or we perish!”
Reserved…
Nice bro! 
Wow I never thought the correlation between USDX and USDCHF was so powerful! I’m looking forward to this thread 
Good stuff shaun. I appreciate the insight regarding USDX & Swissie. Sub’d - Good Luck.
[B]Yesterdays fog…[/B]
Picture taken by somebody yesterday from their office/apartment window. How is that for an office view!
Looks like we we are seeing a bear flag unfolding on the 1 hour. The measured moved on the dollar is down at roughly 79.40 which would close the gap.
I like 1.30 to 1.3020 on EURUSD, stops on Tuesdays high, 70.8% and 78.6% Fib levels. ADR at 1.3017, R2 Daily pivot in the same area. Mondays asian range high and weekly open also around there.
GBPUSD testing the lows 6065, I would like to see price work its way into 6080. I think it was in Sundays PTC ICT said look for 6080 in Cable this week.
Take a look at the 15min and look how price ran stops on both sides of the asian range which also gave you your bullish divergence this morning at London open.
Bullish divergence on the lows at London Open. Notice how in both EUR pairs, they made higher lows and in both GBP pairs they made lower lows. Market Structure on the daily chart was broken for GBP and not EUR which tells you the GBP is the weaker market at the moment. The EURGBP ran into key support at 0.7928 with confluence of the 61.8% Fib level and the 78.6% Fib level on the 27th of Sept which should tell you EUR should of been the stronger pair from then on upwards. We have just hit 80.80 with confluence of the 78.6% Fib level so if this holds we should see GBP outperform EUR in terms of strength or EUR could then become the weaker of the two.
I don’t have anything to add at this point, this post is a shameless subscription to this thread. It’s a nice start, I for one will be watching with interest and chipping in where I can.
Great photo of the Dubai fog by the way, amazing!
ST
And thank you for prompting me to spend 9 minutes 57 seconds of my life watching that Will Smith video, great stuff.
Hi Simon. I would be glad to have your input into this thread. I am always eager to read your well constructed posts. Nice to have a change of scenery in Dubai. We see far too much sun over here. It really does feel like this far too often.
Nice thread. I also use the Meta COT indicators although it is a bit annoying to update it manually every week. In addition to the normal index I also like their spread movement index.
[B]Week 1[/B]
[U]Monday[/U]
Divergence on the highs during London open
USDX Swissy
[U]Tuesday[/U]
79.50 level on the USDX looks to clean.
USDCHF
102.80 looks like it is in the works.
EURJPY
Waiting for highs on the 1.0290 area.
AUDUSD
More to come
Beautiful picture of Dubai.
Shaunfx,
You’ve just inspired me with that one great post on the ICT’s thread. I am quite fresh in this game but it’s just ridiculous how quick I forgot how important the basics are. I thought I learnt more during last 2 months but while that’s true for sure I just lost sight of the important stuff. From now on I will keep my trading as simple as I should have in the first place. Cheers!
[B]USDCAD[/B]
[U]CAD FUTURES VS FOREX USDCAD[/U]
Below I have detailed the journey of USDCAD throughout this year. Before we get started, I would like to make a very important point about the COT report and the futures market. In the futures market, the CAD Futures chart is a mirror image of the USDCAD chart. In the futures market when [U]price goes up[/U], CAD is appreciating against the dollar. In the forex market the dollar is quoted first and therefore when [U]price goes up[/U], CAD is depreciating against the dollar. Please make sure you understand this. When you load the COT indicator onto your MT4 chart and you are looking at a pair where the dollar is quoted first (for example: USDCAD, USDJPY, USDCHF etc), you then need to set “reverse mode to true” in the indicator settings window. Please beware of this going forward when following my COT charts. Now onto the good stuff.
[B]Fundamental Setup[/B]
I do not use COT as a timing tool. If I knew how I would! There are certain instance that you have already been made aware of, such as a drastic drop off in OI, however we are not going into that here. The COT report alerts us to a [U]fundamental setup[/U]. It tells you “Hey! Smart Money are selling or buying, you need to be paying attention here!”. You need to be paying attention when the COT Index is at a 4 year extreme long or short position. Larry Williams also described in his notes “when Open Interest (OI) is at low levels, you need to look for a long term low to form in the market. When OI is at high levels you need to beware of a potential long term high forming in the market place”. Is this always a given? No. However it is a good rule of thumb that I work to. Chris Lori tweeted this past Friday “I’ve been selling CAD. Housing centered economic deterioration looming in the months ahead”. I found this interesting because while I am aware of fundamentals, I find it hard to pinpoint one particular economic report from another. This is something I am however constantly working on by taking notes etc. As ICT has said in past videos, the commercial traders are the market. These are guys that transact in the market for real business needs. They have extremely proficient research teams, they employ smart people. These corporations know “their” market and hence by following the commercial traders, we are in essence following their analysis. On the first 2 charts below, we take a look at the COT Index and the Net Traders Position.
[U]Important points[/U]
[ul]
[li]COT Index is coming off of a 4 year (208 week) extreme [U]SHORT[/U] position
[/li][li]Open Interest is coming off an extremely high level.
[/li][/ul]
USDCAD COT Weekly Chart 208
USDCAD COT Weekly Chart 52
[B]Price Action[/B]
In the charts below I have gone through USDCAD price action since April this year. I have tried to make the charts self explanatory so I will just list a few important points here.
[ul]
[li]Price is coming off of the weekly/daily 78.6% Fibonacci Retracement level (0.9650)
[/li][li]I would like to see price run up above the 0.9950 resistance area and pullback where I would look to go long USDCAD (short CAD)
[/li][/ul]
USDCAD PA Weekly Chart
USDCAD PA Daily Chart April/May
USDCAD PA Daily Chart June/July
USDCAD PA Daily Chart September
USDCAD PA Daily Chart October
Howzit bro - just gotta say, I’m seeing a lot of value in the USDX vs USDCHF correlation, I will certainly be using that from now on if you do not mind 
I have been quiet on the posting front due to a severe case of “delly belly”. Change of season bugs! All is well now so we should be back on track this week. I have been trying to edit and update the first and second post of this thread but no such luck! I want to make it clear in what direction I want to steer this thread. I have sent a message to Pipstradamus so hopefully we can get this sorted.
I have an affinity towards higher timeframe charts and I feel there are more than enough threads/journals focusing on 1 or 2 pairs and trading the smaller timeframes. I am sure you have noticed most of my charts posted are higher timeframe charts. Let’s look at end of day setups/ 4hour setups, possibly the odd weekly setup. Let’s take a higher timeframe approach here. We will look at multiple pairs, the majors, minors and crosses. Please feel free to post your own charts and potential setups. I don’t want this thread to be limited to my own personal charts and trades. I do realise that this thread is posted in the “Journal” section of the forum but I don’t want this to be a personal journal but rather a community journal. I feel I could learn more looking at the chart of another, deciding if I would take the trade or not based on my own approach and then analysing the result. I think others will feel the same.
[B]EURAUD[/B]
[I]Please click on the link below the image for a better quality image[/I]
[U]Reasons for trade[/U]
Support at 1.2440-1.2450
78.6% Fibonacci Retracement level overlaps 1.2440 (Fib pulled from the swing low formed on the 27/09/2012 @ 1.2328 to the swing high formed on the 05/10/2012 @ 1.2823)
In sync with the daily trend
Price is oversold on a daily basis
I would like to see a test of the 1.2440 support level with confirmation before entry.
shaunfx, like always i appreciate what you do…also your analysis is wonderful to watch and follow a long with. I will be watching and taking notes, I hope you keep this up because what you are doing i think is great and will really help me out.
Will talk with you soon…
GLGT!!!
I told you i would talk with you soon…lol
Question about your EURAUD trade…
We never got down to the 2440 level and have since bounced higher. Did you enter this? If so where? Are you still holding out for the 2440 level?
Did you wait for market structure to break out bullish and then get in on the pull back, i mean is this what you are looking / waiting for before you enter? I assume your not just entering right off 2440…
One thing i would like to have some light shined on is how to enter once the move has already taken off…I notice Monday made the low, Tuesday was an OTE long, Wednesday was OTE long using Tuesday’s range, now where would the next possible entry be?
Would you look for a pull back from Monday’s low to Recent high?
Would you look for possible break below this weeks low into 2440? Would this one not be possible because it would then turn the market structure bearish again which the market makers don’t want to happen?
When is to late to enter? As you can see if you didn’t get in until Today’s low then all of your profits would be pretty much cleaned out…They could still run for today’s low for stops which would also get your stop if you entered today. For a long term trade would the only correct entry be on tuesday’s OTE long?
Sorry for the rambling, just writing down the things that come to mind when i look at this trade setup…
Thanks for any help you can provide…
Hi Hanger
Thanks for the words, I appreciate it. No I did not enter and I am not holding out for 1.2440. I [U]think[/U] we could be seeing a bear flag in here with targets down at 1.2350±, I could be wrong but either way my attention has been turned from this pair. I never saw the low test down into 1.2440 and price has sinced failed to get above resistance at 1.2510. This was not a great “trend setup” since we broke the swing low at 1.2510. Market flow has since been against us. This was more of a trade the bounce type scenario being that we were oversold on the daily running into support and my favourite fib level. The fact that I said this trade was in sync with the daily trend is not incorrect but I should of stated the swing low at 1.2510 had been broken and I was looking for more of bounce as opposed to a long term trend trade.
You have detailed there how you could of traded this bounce on the smaller timeframes. There is nothing wrong with what you have said there should you be anticipating a bounce at a level you expect a reaction. Your profit taking would be more aggressive and you trail your stop aggressivley.
With regards to how I would enter… Sometimes I will enter right into a level if I feel the level is good enough and we are making higher lows (market flow and market structure are all up) I will simply enter off the EOD chart with a wider stop for more passive type trading. As an example I would have just set a limit order at the 78.6% retracement level. Other times I will wait for confirmation on the daily chart as is the case on the above setup and then set a limit order which will often get triggered during the Asian session. Sometimes I will look for a smaller timeframe retracement as you have explained above.