All eyes this week will be on the U.S Fed & BoJ finance meetings to see what rhetoric & activity is forthcoming on managing the stimulus packages.
As far as the Euro is concerend, traders will be watching closely for any signs that the Central Bank intend to drop rates further (& introduce quantitative easing) as a stimulus to forward growth measures.
Finance chiefs at the ECB have publicly stated they�re happy with the current measures they�ve put in place & would prefer to give these measures time to work before stepping up the pace, which makes sense � but we all know events can turn on a dime, so it�s worth keeping tabs on the output, especially on & around important meetings.
As is the case in financial markets, the rumor sometimes far outweighs the facts & can exert heavy influence on a currency pair, particularly if economic data is thin on the ground.
Overnight, Tokyo supported price into the 1st of Tess� highlighted zones, & those of you able to advantage themselves (with the aid of a simple set-up example much lauded on here) have got an early leg into the dominant flows today.
It�s pushed thru last weeks (& Friday�s) high & will be no doubt gunning for those upper ceiling levels highlighted in the above post. Looks like we�ll get to see the strength of the orders laying in wait if the momentum attracts fresh legs.
This won�t be such a bad area to watch for any hesitation (false breaks) in the price action, & keep close tabs for support on pullbacks to this recent breakout.
We get to see the color of the German economic consensus appetite (ZEW) tomorrow, which is anticipated to have deteriorated, & that about heads the Euro output for the week regards top tier interest.
Quite an eventful day for (Euro) bulls keying in off these visible s&r levels huh?
The early bird certainly got the juicy worm into initial Tokyo trade, but it once again obliged the breakout/pullback crowd (circled) thru last weeks high, in early London activity before moving away in line with the recent momentum.
It�s testing this 1st upside resistance zone at the big figure (1.30) sniffing out the continuation potential, however the lower markers which Tess highlighted on Sunday should continue to offer realistic fulcrums on any slip from current highs on this leg up.
It�s certainly worth keeping one eye on the stock markets for a gauge to risk tolerance. Markets continue to remain on the front foot & ultra sensitive to the slightest chink of bad news & it won�t take much to spook this bullish leg & bounce it into reversal mode.
Mutual funds have a fair share of available funding seeking a home since their year end balancing during 4th quarter 08, & when they finally get their (stock) buying boots back on, the $US could catch a cold.
Whether this is the first step in reversal of fortunes for the buck remains to be seen, there�s still a lot of fear out there & uncertainty as to whether the worst of this credit crisis is behind us, but shrewd & bold speculators could well make hay whilst the sun shines as long as they continue to adhere to their risk/value rules & execute safely in line with the dominant momentum.
So far so good if you�re following this thing up the ladder!
Thanks to Ray who let me know about the thread I’ve came across it. First of all hello to Tess (thread author) and other senior and junior members.
I’ve recently gone through “trading transformation” thanks to the understanding the meaning of price action and I’m trying to cut down on my indicators and/or “wonderful-making-you-rich-in-a-month-time-systems” intake
I’m juts going through the zipped files with notes and this is another important learning experience for me. Hope you don’t mind. I will sit down and listen and read first.
I was wondering if you guys and gals keep an eye on fib levels or just the big levels you’ve described in earlier posts(4-hr horizontal s/r, daily/weekly high/lows)?
Here are my trades from tonight. The first was a long on the break of the round number 1.4500. I unfortunately missed the entry lower on a bounce of the 50% 4-hr fib at 1.4443.
The second was a cheeky entry on a short off an inverted hammer on the 5-min chart when price rallied and failed to break the previous days high at 1.4597, also falling short of the round number 1.4600. My feeling was there would be profit taking before the weekend after having such a huge run up over the last couple of days. As it is, at the time of this post, it looks as though I exited too early. It’s tough to tell sometimes just how far price will run.
I can see the lines of S&R previous day highs and lows, and i can see the HL HH etc, and can spot the IB, but then still not sure whether to go long or short
Here in this example i was able to grab some pips on the way up to previous day high were i closed the position. Then i was practising, well implementing what i have been learning. An IB formed and in my mind i was thinking this could be an opportunity to go long and that price would go through yesterdays high. So i waited,…then the next bar after the IB opened and then i remember reading at the start of James thread you wait for the pip to move 2 pips in the direction of trade before entering. Pip went up one and sown one and up and down 2 or 3. I entered SHORT at 137.85 and place a stop at 138.15 2 pips above that high about 10/15 minutes ago…And well and behold price shot down and to about 137.6 and then back up to 138…to cut this long story short i decided to place a take profit limit at 1:1 at 137.50 profit just 30 odd pips as i was feeling shakey that price was really going to go up. Anyway as i right now price had hit the take profit, so i made some 30 odd pips…
My thing is that despite the preparation i feel that the decision long or short was nearly 50/50 (for me anyway_…and i often have that same query at around this high action levels you talk about…i know it is there, i know what to look for…but i dont know which way to go…
is there something i should be looking for to help me decide that…the stoch? when the IB forms or if it goes through should i wait for it to come back for retest…many variables,…i guess it comes down to experience
If you�re having trouble deciding which way to bet when you�ve deduced all your usual analysis, then that ought to be enough of a signal to step aside & either wait for more confirmatory information, or leave that particular pair alone for the time being & go take a look at another pair.
If you zoom out a little on the 4 hour chart, you�ll see that we got an upside resistance barrier at 141.50 from back on 7 January, that price has rejected 3times of late.
We got last weeks high no more than a heartbeat below that upper ceiling level, so this 200 pip zone contains reasonable 2 way activity potential yeah?
I�ve boxed out the last months worth of price activity on this chart view & to me, it just appears messy. There�s a slight upside bias, but no discernable trend in there. The first real test for any upside potential on this pair looks like it�s going to transact on & around that dual resistance ceiling.
That�s the zone which would interest me (for 2 way bets) as & when it begins playing out.
Looking at the shorter timeframe view, again it�s awful messy & bitty don�t you think? Personally it�s not very appealing at all from a trading viewpoint. It�s vibrating around yesterdays high, not really displaying any directional bias & it simply looks tired.
As Jack say�s in the previous post, we�ve had a lot of excitement this week with the Fed dropping bombs on the price action. Traders will have pared back on their positions & will be hanging fire to take a little stock of the current scenario.
The bottom line though trav is, that if you can�t easily distinguish a tradeable opportunity after conducting your usual daily analysis studies, then it just might be telling you there�s no business to be done on the pair at that this particular time.
Thanks alot for those reponses. Giving me plenty to think about - take stock of. I suppose a:) is to not force it, and if it is not clear than i shouldnt be jumping in. It should be obviuos which way to go - whether that is a continuation of higher low kind of setup or a reversal - otherwise stand aside.
and B:) i should take my blinkers off to thinking only about gpy/jpy. There are other pairs to play with. Especially how you have all noted - and pretty much how i have been feeling about this pair - that price action has been all around the place of late making it not too clear.
would you say it is important to keep the focus/analysis on only one pair at a time be that one night/one week a month (only been trading 1 year) and to not look at any other pair during that time. i think i will focus on the gbp/usd next week.
ok thanks again - you’ve cleared that lingering doubt with some nice answers again.
cheers
I�m going to turn that question around on you trav & then ask another one.
How do [B]you[/B] feel about mixing it up?
If you don�t feel comfortable or ready at this stage of your journey about swapping thru different pairings, then it might impact on your confidence. It doesn�t matter what anyone else thinks or suggests, only you can answer & implement that particular situation.
My follow on question is this:
If you possess a standard set-up/trigger such as the IB/Stochs observation you�ve alluded to, & you�re looking at adopting this execution deal in-line with the types of support & resistance references common on this thread, then would it not follow that as long as you can identify suitable candidates, your trades should be quite similar in their inception, management & outcome, regardless of the pairings?
I�m not one of those people who really agree with restricting oneself to a particular pairing or currency.
I know folks encourage this practice so that novices can familiarize themselves with a currencies behavior traits etc, but if you�re analysing your trades based around principles such as s&r & buy-sell pressure zones, then these templates can very easily be transferred back & forth amongst most of the well supported major pairs & popular cross instruments.
At the end of the day it comes down to how comfortable & confident [B]you [/B]feel about researching & plotting your preferred technical information.
Why not experiment with a couple pairs & see how it plays out?
The EURUSD is the heaviest traded pair out there & it tends to stack up quite well to the more popular technical models. It’s one reason we highlight it so often on here. It also carries the tightest spread on the retail platforms & you won’t experience too many problems with fills or orders up & down the ladder.
It might not attract the aggressive intraday range extremes of some pairings out there, but that’s not always such a bad thing when you’re attempting to develop your strategy & acclimatize yourself to this environment
this was a nice clear tip off posted at the start of last week for what to look for in the week that just was. just that i am realising it only now in hindsight. Bet you guys had the finger on the trigger.
just been doing my analysis on a couple of other pairs, and the aussie caught my eye with a setup.
As it is price has stopped for the weekend right at a long opportunity. Despite it being the weekend and whatever effect that will have on the outcome - i was curious as to your thoughts on this being a good to go opportunity.
long here @6860 with a stop at 6835 and take profit at 6900 (RR approx. 1:1 and a bit) …then looking for price to test last weeks high and then possibly shoot onto 70cents.
By travpip at 2009-03-21
the other side of the coin being price will head back down to 6750, and i suppose this is the 50/50 bit i was talking about. With that in mind - it might be better for price to show me where it is going to go - maybe i will wait for HH HL or LL LW on 5min to pull the trigger - to add a little more cetainty…Am i on the right track
It was very much a mixed bag for us last week trav.
Our profit stops fired off on mid-range EURUSD shorts (thru the 1.30 handle) & USDJPY longs (thru 95.50) as the buck got mugged on the back of the quantitative easing rhetoric.
And on the flip side some of the guys speculative feeder stakes from a couple weeks back, primarily in long EURUSD & AUDUSD trades, benefited from the same scenario, as they caught that additional pump up.
Depending on the type of accounts we’re trading at the time, once our fundamental & technical observations leg us into the positions, the risk management takes over.
After the initial entry, it�s all about controlling & managing the risk
Ray-
Can you please elaborate on the “James IB Trigger” for me. I obviously see the IB after the head fake long. But I am more interested in how you utilize this trigger and your rules of it. Because although their was an IB, there was still downside movement. So do you set a “buy stop” or “buy limit” on the break of the high of the IB or something else.
This is how I approached the trade. I spotted the IB setup at my interest level. First thing, I will consider is will this level hold or break and what are my longer timeframe like the hourly telling me, in addition do I prefer a long or short setup. How do I determine a level will hold is by looking at past price action around this level. If you look at the hourly, price has broken the level on Wednesday. Now price is coming back to retest the level. In addition at the close of the hourly candle, the candle failed to close below the level. A short setup will only interest me if price close below that level. So I stick to going long. In addition it is also around the time when this pair will start to move. As for how I play the IB is like what James had stated in his thread, wait for price to go 2 pips above the IB for a long (refer to James�s thread for more info). To me, IB is just a form of trigger for me to enter a trade. The location of the trigger is more important as I had learnt to operate my trade trigger around interest zones as TJM and Tony had taught me in this thread. Hope I do not confuse anyone with my explanation.
Just sharing my thoughts for tomorrow. GU sits right between 2 key daily levels having printed an inside bar on the daily. Near term flows are clearly up. A break above resistance or below support with a retest would have me looking for an entry
Novice here, chipping in with his ten cents worth. Looking for feedback and constructive criticism. :eek:
I’ve attached two charts for EY. On the daily and weekly, we seem to be in an area of activity dating back to 2005 (!). On the 15 minute chart I’ve marked an area immediately below current price (130.30-130.50) and above (132.00) that I’m guessing might be worth watching for a break and restest entry.
Any thoughts? Any views on the reference back to 2005? After so long, do these areas on interest lose their importance?
Well, your upper level has already reacted into the early Tokyo action (vibrating off 132.0), so yes these previous zones of 2 way action do commonly harbour pretty consistent reactionary trade.
When we mark out the longer range support & resistance markers, such as you�ve highlighted from 2005, we prefer to compliment them with close quarter confluence markers, such as previous day/week high-low levels or some recent fulcrum activity before grading it as an area worthy of consideration.
Because the fundamental flavors that drive the price action are invariably very different from past years trading activity, you really need a back-up reason to add substance to it.
We always identify & mark them up on our technical charts, but still prefer to witness complimentary price action from the very recent action to add clout to those past references.
If you mark up last weeks high (130.47) & last weeks low (126.02) & dial out on your weekly chart you�ll see what I mean about matching up long range markers with close quarter observation zones.
I am no expert just sharing my thoughts. Your 130.50 region is previous week high and has been taken out. You can wait for a pullback (if it happens) to the region and take a long if price signals for a long. 132.00 to 132.45 is a possible region to look at as on the H4 I saw some possible resistance around that region, plus 132.00 is a round number.
Jocelyn, is it fair to say that once a significant old (say 2005) level has been bypassed recently on a reasonably regular basis that it becomes redundant altogether, or do you see old zones that are apparently irrelevant reassert themselves after being dormant?
