Technical Templates 2

i was wondering wat happen to EU juz now. it seem like an all of a sudden 100++ pips drop from 1.2760. i check out the forex factory but there is not significant news. however i manage to earn some pips form the massive move.

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it’s simply momentum driven zenocorp.

couple large Russain & Middle Eastern names led the move thru that heavy support line (which is not only last weeks low but also the months low).

when you see support zones stretching out like that in a confirmed downward trend bias, you have to expect that large collections of (continuation) stop orders will begin to gather at these fulcrum lines.

sooner or later it’ll come under pressure to test the extent of the build up - which is all that’s occured down there at c1.2700 - 1.2720.

those traders holding shorts & who have continued to (compound) sell into rallies won’t need to worry bout moves such as this. They’ll be correctly positioned & able to avail themselves of these moves.

it’s called ‘positive risk positioning’…just get a hold of a value entry & once it begins to string out in your direction simply compound into the move, thus reducing your bottom line (spreads/dealing costs etc) risk, whilst increasing your percentage value play.

I have a line at 1.2700 which was crossed to the downside this morning and it just kept going without any retracement.

Right now it’s hovering above my next line which is at 1.2550.

Based on what action price decides on here, I’d be looking to take a position.

Input on this analysis, do you agree that my lines are at relevant levels?

It’s irritating to see this wonderful movement today having gone on while I was at work. Wish I was a full time trader…

It’s quite amazing when that eternal question finally gets a high prob answer: where is price going next?

Why, to the next S/R level of course.

It’s so simple and yet it has taken me some time to really understand this. I think todays move on EUR/USD somehow made me understand that this is how it works.

The concept that there’s nothing in between these levels (usually) to stop price from going to the next one. Sometimes the most obvious things remain hidden, as we/I look for the more complicated answer.

I’m not sure I would have gotten this insight if it wasn’t for this thread, cause I haven’t seen it spelled out and explained that clearly in any book I’ve read.
Thank you Tess, Jocelyn and JimmyMac for this.

On a side note, right now it’s looking like eurodollar may be breaking back above 1.26 - only a retest will reveal if 1.26 may become a moderately strong support. Looking back at today it seems to have acted as a resistance level of subjectively moderate strength.

1.2700 could well harbour more significant interest, only because it supported price reasonably effectively for most of this month.

That area will act as a pretty decent fulcrum back into the prior range as it will now include tranches of (nervous) profit stops from the leg(s) down off the lower high @ 1.3300

So, you now got lower Daily support shelves to aim at & upper tier (potential) resistance markers to bounce off on any concerted shift back up on profit taking.

Again, the emphasis is on observing the price behavior as it probes & tests these previous breakout levels to check the strength of the participation.

The bias remains to the ‘short Euro’ side until proven otherwise, yeah? In order to offer any degree of confidence to the long side, I�d definitely want to see some very determined base building or higher low/higher high (euro) demand activity playing out.

You might be different in your selection criteria, & that�s cool � the main thing is to have a definite action plan in place to engage price as it sets up according to your triggers & trade aims.

EUR/USD seems to be testing the 1.2550 level again after breaking it about 7 hours ago.

I’m looking at 1.2450 as a possible next area for price to move towards.

Price first broke through 1.2550 and then returned above it. As I’m writing this, price has again broken to the downside. Would you consider trading on that, or would you wait for further confirmation?

If so, what sort of confirmation? A bounce that respects the now resistance level?
Probably a beginner’s difficulties, but it’s hard to know when enough is enough in the way of confirmation. One might for instance wait for a confirming bounce that never comes because price just keeps going in a straight direction? Or a large part of the move may pass before confirmation is reached.

Of course this is a matter of personal preference, but it would be valuable to me to get a view of how how you experienced traders think around these matters.

As you�ve already gathered from the material we post on here, we�ve attempted to steer folks towards technical examples that revolve around zones that attract simple, straightforward & consistent (positive) high odds windows of opportunity.

If they didn�t work, or we hadn�t already tutored this stuff previously elsewhere down the years, we wouldn�t post it here! (big clue there)

[B][I]Previous session (Tokyo range, if one exists) high-low
Previous day high-low
Previous week high-low
Key horizontal s&r zones that compliment & interact with these reaction levels[/I][/B]

We also make a big noise about [B]trading when the liquidity/volumes are at their peak or at least likely to offer acceptable & favorable odds of sustaining a potential trigger.[/B] This is even more critical if your strategy is focused primarily on [U]short-term, intraday positions[/U].

There was nothing that caught our interest yesterday that would have prompted a trade, intraday or otherwise on the EURUSD.

In fact I captured a snag of the activity as it slid into the London close yesterday for one of our clients, as a prime example of [B]when not to trade [/B]this type of price action.

The breakdown & snapback thru 2550 that you mention occurred right when players were squaring up into the fix & balancing out as the London closing prints ticked thru.

Is that really a prime, high odds opportunity window to be considering initiating a position?

Basically, price has broken thru a key month long support zone (1.2700) on strong participation & begun to cut out a consolidation step (profit taking-positional readjustment etc) before seeking further confirmation of directional bias.

It would be no real surprise to expect a little 2 way bartering to play out down here before the price action picked up steam again.

Now, if that price action had begun to kick off during the Frankfurt/London opening prints, that would be a whole different ball game.

That�s just our view, & that view has been shaped from observing & trading this type of activity consistently for years. Eventually you get to know instinctively where the more favorable odds & positive risk plays tend to emanate from.

Your view of the price grid might be very different. Just ensure you can compute your positive odds/risk ratio accordingly. If you can, then you�re good to trot.

Not posted a trade for awhile but this was nice using ATT principles. Bounce off a key H4 support driven by short term fundamentals with better than expected retail sales, oversold stoch for James fans, decent RR with it now flirting with a key daily resistance level just ahead of the NY open. H4 is ranging so no medium term trend to be too concerned about at entry. Could yet continue quite a way with key players squaring their position ahead of the weekend but need to be ready for a reverse depending on NY

And a nice reversal signal off the daily

Hi Jocelyn.

This Was a trade i took, what do you think of my res/sup. zones. I sold 20.000, and took 10.000 at Tp.1 and 10.000 at Tp.2.Do you know why it went down around 1.28(±), because the Home Sales was bad,and i thought that it would go up. The black line are zones of high volumes in euro futures, and i am glad i put the stoploss above it.
Is any thing in the chart that you would improve.

Thanks in advance (LOL)


Hi saraiva,

If plotting those short-end s&r zones offer you consistently positive outcomes saraiva then that�s great! They certainly look ok from where I�m sat. We scroll a little farther out for our references & then simply transport them down onto smaller timeframes for a closer look, but that�s just our way of operating. To each their own.

Unless an individual item of economic data actually surprises the market (to the upside or downside), I think you�ll find most of it is being priced in & aggregated before it hits the tape.

Players are more concerned with the ability of the Eurozone to weather the ongoing recessionary storm than they are with individual data releases.

The U.S Dollar is still being traded as a safe haven in current market structure, therefore it�s continuing to attract a bid as it butts off it�s support bases, which obviously equates to shorting Euro & Sterling on rallies, as we�ve been emphasizing all thru this thread.

Sure, the individual data releases add to the overall picture of ongoing health or wealth, but the main ticket still remains the strength to which each nation is able to manage the ongoing financial crisis, & traders are still laying their bets that the United States are better placed to come thru it faster & stronger than it�s main trading partners���.for now anyhow!

So given that information, you need to look at your technicals & work out [B]where the higher value lies [/B] in executing positive risk entries/add-in tranches, whether via an intraday or medium-term stance.

I�ll repeat, [I][B]we don�t pay any attention whatsoever to Futures volume data in relation to spot pricing[/B][/I]

Again, if your decisions regarding entry/management/exit suit your style & time constraints then cool.

The entry you executed was right at the crossover of NY-Tokyo traffic, which isn�t really one we�d consider, but as we constantly repeat � do what suits you, not anybody else :wink:

That area (1.2883) is last weeks high. Price briefly popped to the upside early into Monday�s Tokyo trade, but since then has fallen away, as expected, & that level which you shorted into has turned out to be yet another lower high action zone.

Keep it going & good luck to you!!

I have stuck with this so far but any failure to get through the Tokyo high on this push up will see me exit and bank my profit.

OK through at last. Might expect some pullback to test the strength of the Tokyo high, stop now tucked in below the previous trough. Next target is 4360 which is a daily level of possible significance. A classic pullback and test might present a chance to add to the original position, we will see

Profit target met for a 4R return. Although no exit signal here this trade has got to a position where I would consider looking for a short for the run back to 4150 so prefer to clear the decks at this point. Of course it could go on for 10R, 20R and sometimes I will track it for much longer. Its also 30 mins till bed time here!

I am not in this trade and wouldnt open it now during the Asian session but if you did get short from last night we have just negotiated a tricky area around 4300. My strategy at the Frankfurt open will be to see if I get an opportunity to get short again ahead of 4150 to be positioned ready to see if it breaks. Alternatively I will look for a break and retest. The current additional lower high if it stays in place adds weight (excuse the pun) to the downward pressure and some things I have heard about the UK this morning make my hair curl especially as an ex pat

Short now off the lower high at the H4 level coming up to Frankfurt open

OK my last post for awhile. This is one of the biggest things I have learnt from TJM (in this case I think it was Jocelyn) and that is to be in position ahead of a major level (non commandment 7!). I am short and can manage this trade tonight as we head towards 4150 again. If it turns on me on the way down I am not likely to lose much so this is a great position to be in. At 4150 I can sit back as everyone else is jostling for position and coping with fakeouts etc. I have a plan for whichever way we go when we get there and will need to manage this trade around tonights news releases. I hope this series of posts has shown how I as a total amateur put into effect the principles of ATT. Remember this is my way, not the right way and it may not be your way. This is my second trade this week and once its closed that will be it. If it runs as far as NY I will close it at the end of my night here (about 1430 GMT) as in the current environment too much can happen over the weekend.

and surprise, surprise where does it bounce from on this dip down :wink:

last weeks low lies a spits distance underneath this activity zone & we now got another very common reaction level that the price action has butted.

you’ve maintained complete control of this scenario all the way from the entry & you now got time & flexibility to actively manage the trade as it attracts each-way participation.

tony let me ask you a question. can you manage your trades from the H4 timeframe? Im so extremly busy now my head is spinning and it sucks coz I want to trade but I am unable to watch the markets like I want to.

I know this method relys on the H4 for critical price levels but can I use an H4 trigger as well??

thanks and btw great job on your trade examples. they really are clear and consise and they make me feel hopeful that i can excell in this method too!!!

Hi John - I had answered this but my posts have disappeared so I will try again! Yes is the short answer and be aware that the key levels are on the H4 and higher (round number, daily, weekly, monthly, quarterly, alltime). It may take a few days for your trade to play out but the professionals tend to play on these higher timeframes at least partly because the levels and signals are more reliable.
Appreciate the feedback. After one or 2 individuals indicated they would value this I thought it worth doing again as my previous examples are now pretty old and before I had a firm grasp of the principles