Written by Adam Rosen, FX PowerCourse Instructor
The FX-market will develop distinctive trends from time to time, as a result of the underlying fundamental factors which make up each currency within the pair traded. Often times these trends occur as one currency offers a significant higher interest rate, which continues to draw investment capital out of another other currency with significantly lower rates. In the midst of these long term trends, the market may establish a number of consolidation patterns. During these range bound market conditions, it is important to keep in mind, the direction of the prevailing trend, as the market has the tendency to break out of these ranges, in the same direction as the overall trend. We can see the following (daily) chart, the NZDJPY recently broke above an ascending triangle pattern, to continue it’s long term trend; to the upside. Therefore, when a clear trend (to the upside) exists, and the market establishes a range bound condition, traders may choose to ‘go long’ just above support with protective stops placed below support. Short term traders may choose to take profits inside this range, as long term traders may hold on to their position with the anticipation the market will eventually breakout to higher highs. In a down trending market, traders may opt to sell short just below resistance with the same long term outlook in mind. Best of luck in all your trades!!!
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Written by Adam Rosen, FX PowerCourse Instructor
It can be quite easy to fall into the common trap of chasing the market as it continues to oscillate between recent high and low prices, with sometimes very little logic behind these moves. However taking a step back to look at the big picture, our next trade becomes very clear. The GBPJY has established and maintained an up trending channel over the course of many years; the 7- most recent years can be seen below. Logically we should try our best to ‘go long’ as close to support as possible. Unfortunately our trade would not have been filled in the past year and a half. However within this long term channel, we are presented with the chance to participate in smaller trends (green trend lines), always keeping the big picture in focus. If the short term price action leaves you somewhat bewildered and with an excessive amount of trading losses, perhaps it’s time to take a step back, and enjoy the view.
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Written by Adam Rosen, FX PowerCourse Instructor
The (FX) market follows a steady cycle of oscillating between a range bound and trending environment, on a long and short term basis. During range bound markets, the buying and selling forces remain more or less equal, and therefore compress the market into a sideways trading pattern such as the triangle consolidation pattern shown below. Once the market reaches a critical point, either the buyers or sellers overtake the opposing side, and force the market into a new trend; to the upside or downside. However detecting these breakouts can be quite tricky as the market has the tendency to trade to slightly new high or low prices, only to return inside its previous trading range. Therefore we must employ a filter that will hopefully help us avoid these false breakouts, and preserve our trading capital for only those ‘true’ breaks in the range. With that said, we can see as the market eventually broke out of it’s trading range, the break was marked by the first candlestick to close below the lower Bollinger Band as well as below it’s current support level. Once this occurred the market quickly began a new trend to the downside. For this reason, we should always consider the market’s activity more relevant when studying the ‘closing’ prices, and not simply the highs and lows.
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Written by Adam Rosen, FX Power Course Instructor
When the basic applications of technical indicator fail to explain the current market climate, we can experiment with a new and fresh look at the charts. The following (1-hour) chart shows a steady downtrend, with its expected support and resistance levels. Since the trend is to the downside, we should place more emphasize on our current resistance level; which is drawn by connecting the two most significant high prices. Our anticipated support line may emerge as a parallel line (or our resistance line) dragged down to our most significant low price on the chart. Notice the red line measuring the entire length of the trend can be duplicated, and does a fine job at projecting our new potential support level, which may be an opportune time (and price) to take profits. This phenomenon may be explained in the fact that the ratio or discrepancy of net buyers to sellers may not change very often as the market continues to take 2.8 steps forward, and 1.3 steps back, just as an example…
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Written by Adam Rosen, FX PowerCourse Instructor
As the market approaches what we believe may represent our next support or resistance level, the charts may provide us with a number of subtle clues as to the next probable direction or trend. We can see the market tested its recent high prices three successive instances, each time creating a long candlestick wick, before retreating back to the downside. These long wicks indicate that although the buying power was able to force the market price to similar high price levels, the sellers regained control, and did not allow the market to close near its respective high’s. If on the other hand, a candlestick was able to ‘close’ its respective trading period near or at the high, those (traders) following that particular pair may gain a greater sense of confidence in their bullish outlook. Furthermore, as each top of the triple top pattern emerged, the MACD (histogram) continued to decline to a greater extent showing a level of ‘divergence’ or disagreement between the actual market price and the relationship between the moving averages that make up the MACD indicator. Traders who believe the market will reverse back to the downside may choose to sell short, with protective stops placed above the highs, and perhaps holding the (short) trade open unless the market actually ‘closed’ a candle at a new high price. Although we should always keep the ‘big picture’ in mind when analyzing the charts, we should also note the subtle clues that are sometimes allowed to us.
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Written by Adam Rosen, FX Power Course Instructor
From time to time, the FX-market will create a trending market environment, perhaps as the result of a disparity in interest rates among the two currencies within the pair traded. When this trend occurs, it may be in our best interest to simply align our own trading account in the same direction, and take advantage of this trend for as long as it takes us. So the next logical question may be where (or when) may be the best place to enter the market. To answer this question, we may call upon the use of a common technical indicator, such as a simple moving average. The following 4-hour chart shows the steady uptrend the EURJPY demonstrates, as it continues to reach loftier levels on quite a regular basis. Our up trending support level is drawn by connecting the most significant low prices achieved over the past few weeks. Furthermore we can see the market also tested these levels when it traded below its 50-SMA; Simple Moving Average. This particular moving average may differ, however serves our purposes in identifying the most relatively oversold areas. If we limit our trades to only those periods when the market did indeed test its support line while trading below the 50-SMA, each one of our trades assumes a relatively small amount of risk, while providing us with the greatest potential reward if proven correct.
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[ 本帖最后由 hefeiddd 于 2008-4-16 17:52 编辑 ]
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http://www.learncurrencytrading.com/fxforum/images/misc/navbits_start.gif DailyFX Forum > Currency Pairs > EUR/USD http://www.learncurrencytrading.com/fxforum/images/misc/navbits_finallink_ltr.gif Discuss EUR/USD News with a DailyFX Analyst User NameRemember Me?Password RegisterFAQMembers ListCalendarToday's PostsSearch
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http://www.learncurrencytrading.com/fxforum/images/statusicon/post_old.gif 04-23-2007, 08:24 PM
The EURUSD will likely play out in one of two ways, both of which are near term bearish but one is more bearish than the other in the intermediate term. One scenario is that a triangle is unfolding from yesterday's low at 1.3541. In this case, the next move is down towards the 100% extension of 1.3637-1.3541 / 1.3585 at 1.3489. A rally to new highs would be likely then since there would only be 3 waves down from 1.3637. A break above 1.3585 negates the triangle interpretation and suggests that a flat is unfloding from the 1.3541 low. Resistance would shift to fibo resistance (61.8% of 1.3637-1.3541 at 1.3600) but the longer term implications are more bearish as a 3rd wave down would follow and leave open the possibility of a full 5 wave decline from 1.3637. Watch potential trendline resistance near 1.3470.
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[ 本帖最后由 hefeiddd 于 2008-5-11 18:39 编辑 ]
Hello everyone. This is my first post here. Let me thank all those, who created this great community and this site, and who actively participate! You are great!!
In my opinion EUR/USD is now in undecided condition. Look at the chart. We have resistance level from the 2004.12.26 at 1.3670-80. So if that level is strong enough – price will go down. Look at 1H chart – price has moved down already… I am going to wait for breakout of 1.3580 level – and then enter short. Just my 2 cents.
Alex
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Checking the COT reports for last week it seems the EUR is very overbought and I doubt it will hit above 1.3700 at this time. Two lots short with a stop at 1.3715. If it actually starts to go down as I expect it to, I will add to the position.
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After the 1st level is clearly unrecoverable, and the trade is moving against me.
I close out the 1st level at a specific pivot level (at loss) - Reload lower, and hedge at the same time.
Its all explained in live example on the attached charts.
On Charts:-
Grey level = Pivot Zone
Blue level = moving average daily fluctuation high & low.
Green zone = Breakout zone.(signals meduim trend is set)Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=6528&stc=1&d=1178209108 http://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=6529&stc=1&d=1178209127
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* If you have a positive view towards what you are reading. Don’t take that to mean that you should follow it. It could PROVE ALL WRONG. If you have a negative view towards it, then CERTAINLY you won’t bother with it. If you have no idea what its talking about, then please DON’T EXPERIMENT with it !! ! …In SHORT, what THIS disclaimer is telling you IS :-
TRADERS TRADE AT THEIR OWN PERIL – PERIOD
EURUSD
This pair seems to be heading lower as of now...
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http://www.learncurrencytrading.com/fxforum/images/statusicon/post_old.gif 04-23-2007, 08:24 PM
[ 本帖最后由 hefeiddd 于 2008-5-11 18:41 编辑 ]
This week we should be attempting break out upwards from the diagonal (Wedge) shown. (See chart below).Target 3750 is shown on the upper diagonal line, for traders longing sub 3500 & lower 3500 levels today & tommorrow. If 4050-4100 targets are to be contested the upper diagonal line must be broken. Else its best to close all @ 3750.
It is possible to see 3000, it the wedge (diagonal) breaks down wards. Though personally I don't see it as its not consitent with my wave count - or momentum. But very possible on a strong correction wave. Though it would be best in this case to short from 3770-3800
Chart Attached
Profitable Trading
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* If you have a positive view towards what you are reading. Don’t take that to mean that you should follow it. It could PROVE ALL WRONG. If you have a negative view towards it, then CERTAINLY you won’t bother with it. If you have no idea what its talking about, then please DON’T EXPERIMENT with it !! ! …In SHORT, what THIS disclaimer is telling you IS :-
TRADERS TRADE AT THEIR OWN PERIL – PERIOD
Here's how the cycles have worked out so far this week as displayed on the 30 minute chart. The cycle graph has been sized to fit the chart so the time of day lines up with the chart time. Now moving to the 9 high.
http://i19.tinypic.com/6h3wqvt.jpg
If price does move below 1.3287, I'd look at 1.3254 (3/26) as the next foreseeable price floor. Likely stops below 1.3250 suggest that a break below eyes a further move to 1.3200. Speculative interest is very marginally bearish, with 55% of open orders long the EURUSD at the moment. Given that the SSI is a contrarian indicator, this implies that the EURUSD may dip before it heads higher. Of course, 55% is hardly a strong bias. I'd ideally like to see the %long climb above 60% before going short the EURUSD.Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=6769&stc=1&d=1181719327
DECEMBER Libor futures have been a good "leading" indicator for the EURUSD in the last month Check out the graph. In RED you can see LIBOR DEC futures and in GRAY the EURUSD. The best example happened on Jun 04. Initially, the correlation broke but then the EURUSD corrected in the LIBOR direction.
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