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发表于 2009-4-7 20:17
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Posted on August 21, 2008 at 5:09 in Analysis by James Chen2 Comments »
 (Please click on the accompanying chart to enlarge.)
As shown on the accompanying EUR/USD hourly chart, price has tentatively poked out above the gradually-sloped downward consolidation channel that the pair has been entrenched in for more than a week now. This current break/poke is as of Wednesday evening, New York time.
Could this finally be a sign of a potential impending bullish correction? Possibly. But further evidence of follow-through on the breakout is needed to avoid a false breakout play. If price happens to break strongly through the 1.4800 horizontal resistance barrier to the upside, we could potentially be looking at a long-awaited correction in the strong down-move of the last several weeks.
- James
James Chen is the Chief Technical Analyst at FX Solutions,
a leading Forex broker. He is also a registered Commodity Trading
Advisor (CTA) and a Chartered Market Technician (CMT) Level 3
candidate. At FX Solutions, Mr. Chen writes daily currency analysis,
conducts forex trading seminars, and has authored numerous articles on
currency trading and technical analysis for major financial
publications. His upcoming book, Essentials of Foreign Exchange Trading
(John Wiley & Sons), will be released in early 2009.
The Triple Screen
Posted on August 20, 2008 at 15:57 in Education by James Chen3 Comments »
While the market is still essentially in consolidation mode, I thought I would bring up what I consider to be one of the highest-probability technical approaches to Forex trading. Many of you may be familiar with it. First originated by Dr. Alexander Elder in his book, Trading for a Living (John Wiley & Sons, 1993), the Triple Screen is a simple but ingenious multiple timeframe approach.
To trade the Triple Screen, you would begin with your favorite timeframe, and call it the intermediate chart. Multiply that timeframe by 4-to-6 times to get the long-term chart, and divide it by 4-to-6 to get the short-term chart. So for example, if you usually trade the 4-hour as your intermediate, you may choose the daily as your long-term and the 1-hour as your short-term.
On the long-term chart, which is your first screen, you would use trend-following indicators like moving averages, MACD, trendlines, etc., to decide whether to go long, sell short, or stay out of trading altogether due to a lack of trend.
On the intermediate chart, which is your second screen, you would use oscillators (Stochastics, RSI, etc.) to identify a likely pullback entry zone.
And on the short-term chart, which is the third screen, you might look for support/resistance breakouts in the direction of your planned trade to actually pinpoint the trade entry.
In sum, the Triple Screen is a classic technical methodology that, with practice and experience, can potentially contribute significantly to your trading approach.
- James
James Chen is the Chief Technical Analyst at FX Solutions, a leading Forex broker. He is also a registered Commodity Trading Advisor (CTA) and a Chartered Market Technician (CMT) Level 3 candidate. At FX Solutions, Mr. Chen writes daily currency analysis, conducts forex trading seminars, and has authored numerous articles on currency trading and technical analysis for major financial publications. His upcoming book, Essentials of Foreign Exchange Trading (John Wiley & Sons), will be released in early 2009.
GBP/USD Update
Posted on August 20, 2008 at 5:33 in Analysis by James Chen5 Comments »
 (Please click on the accompanying chart to enlarge.)
As shown on the accompanying GBP/USD daily chart, after flirting with the long-term uptrend support line for almost a week now, price is still consolidating right around this major support line as of Tuesday evening in New York. Neither a discernible breakdown below the trendline or bounce up off the trendline has yet occurred. Soon, higher volatility should move price out of this tight horizontal trading range.
At this point, of course, momentum on the daily chart is still well in extremely oversold territory and pointing up. If Wednesday sees a true bounce up off trendline support, the 1.8830 region serves as resistance to the upside.
To the downside, major support continues to reside around the strong 1.8500 area.
- James
James Chen is the Chief Technical Analyst at FX Solutions,
a leading Forex broker. He is also a registered Commodity Trading
Advisor (CTA) and a Chartered Market Technician (CMT) Level 3
candidate. At FX Solutions, Mr. Chen writes daily currency analysis,
conducts forex trading seminars, and has authored numerous articles on
currency trading and technical analysis for major financial
publications. His upcoming book, Essentials of Foreign Exchange Trading
(John Wiley & Sons), will be released in early 2009.
Continued Consolidation
Posted on August 19, 2008 at 15:57 in Analysis by James ChenNo Comments »
The majors are continuing to move within a relatively tight, virtually directionless consolidation range as of Tuesday morning, New York session. This is where the violent moves of the past several weeks finally take a breather. But as most traders are aware, periods of high volatility generally follow periods of low volatility (and vice versa). The real trick now, during a period of low volatility in preparation for impending high volatility, is finding the right breakout levels as well as avoiding false breaks and whipsaws when the next big move occurs.
- James
James Chen is the Chief Technical Analyst at FX Solutions, a leading Forex broker. He is also a registered Commodity Trading Advisor (CTA) and a Chartered Market Technician (CMT) Level 3 candidate. At FX Solutions, Mr. Chen writes daily currency analysis, conducts forex trading seminars, and has authored numerous articles on currency trading and technical analysis for major financial publications. His upcoming book, Essentials of Foreign Exchange Trading (John Wiley & Sons), will be released in early 2009.
GBP/JPY Update
Posted on August 19, 2008 at 3:09 in Analysis by James ChenNo Comments »
 (Please click on the accompanying chart to enlarge.)
As of Monday evening in New York (early Tuesday, Asian session), price on the GBP/JPY daily chart, as shown, has made a tentative break of the inverted pennant that was highlighted in my blog post earlier in the day.
At this point, caution should be exercised, as the break (or poke) has been relatively slow and weak thus far. Whether this breakdown has any follow-through, or if it is merely a false break, remains to be seen.
In the event that it is real, GBP/JPY tends to move quickly, and major support to the downside resides around the 202.50 region.
Update: As of early morning New York session on Tuesday, price has made a bonafide break of the inverted pennant. The 202.50 region remains as the next major support to the downside.
Update 2: As of mid-session in New York, this pair has retraced much of the pennant break that occurred earlier. The technical bias, however, should still be to the downside after this up-run exhausts itself.
- James
James Chen is the Chief Technical Analyst at FX Solutions, a leading Forex broker. He is also a registered Commodity Trading Advisor (CTA) and a Chartered Market Technician (CMT) Level 3 candidate. At FX Solutions, Mr. Chen writes daily currency analysis, conducts forex trading seminars, and has authored numerous articles on currency trading and technical analysis for major financial publications. His upcoming book, Essentials of Foreign Exchange Trading (John Wiley & Sons), will be released in early 2009.
GBP/JPY Alert
Posted on August 18, 2008 at 20:28 in Analysis by James Chen2 Comments »
 (Please click on the accompanying chart to enlarge.)
As shown on the accompanying GBP/JPY daily chart, price has just formed a rather well-defined inverted pennant pattern, which could potentially become a downward continuation formation. Therefore, watch for any strong break below the bottom border of the pennant.
- James
James Chen is the Chief Technical Analyst at FX Solutions, a leading Forex broker. He is also a registered Commodity Trading Advisor (CTA) and a Chartered Market Technician (CMT) Level 3 candidate. At FX Solutions, Mr. Chen writes daily currency analysis, conducts forex trading seminars, and has authored numerous articles on currency trading and technical analysis for major financial publications. His upcoming book, Essentials of Foreign Exchange Trading (John Wiley & Sons), will be released in early 2009.
Sideways Action
Posted on August 18, 2008 at 16:08 in Analysis by James ChenNo Comments »
As of this writing during early New York session on Monday, we’re seeing a lot of slow-moving, sideways action on the majors. Perhaps this is a pause before a correction for the U.S. dollar. Or, maybe it is a consolidation before a continuation in the dollar rally. Either way, take cues from potential fast breaks to either side. More updates to come as price action develops.
Update: As of noon (New York session) on Monday, there has been some minor movement towards the general direction of dollar-weakening. However, price action on the majors is currently still mired within a low-volatility sideways range that is not conducive to trading.
- James
James Chen is the Chief Technical Analyst at FX Solutions, a leading Forex broker. He is also a registered Commodity Trading Advisor (CTA) and a Chartered Market Technician (CMT) Level 3 candidate. At FX Solutions, Mr. Chen writes daily currency analysis, conducts forex trading seminars, and has authored numerous articles on currency trading and technical analysis for major financial publications. His upcoming book, Essentials of Foreign Exchange Trading (John Wiley & Sons), will be released in early 2009.
EUR/USD Update
Posted on August 18, 2008 at 2:28 in Analysis by James ChenNo Comments »
 (Please click on the accompanying chart to enlarge.)
As noted on Friday’s Chart of the Day, price on the EUR/USD (a daily chart of which is shown) has approached to within just around 300 pips from the long-term uptrend support line that has been in effect since at least early 2006. Currently, this dynamic support resides around the 1.4400 level.
Even if this pair continues its almost historically extreme drop on Monday morning, the long-term uptrend line should continue to hold as strong support moving forward. If not, and there is an eventual breakdown, the long-standing uptrend in the pair will have been definitively reversed.
More likely, however, we should be seeing some kind of a correction soon, well before price actually reaches the uptrend support line. Monday morning should help set the tone for the new week’s prevailing direction. More updates to come as price action on this pair develops further.
- James
James Chen is the Chief Technical Analyst at FX Solutions,
a leading Forex broker. He is also a registered Commodity Trading
Advisor (CTA) and a Chartered Market Technician (CMT) Level 3
candidate. At FX Solutions, Mr. Chen writes daily currency analysis,
conducts forex trading seminars, and has authored numerous articles on
currency trading and technical analysis for major financial
publications. His upcoming book, Essentials of Foreign Exchange Trading
(John Wiley & Sons), will be released in early 2009.
Wishing and Hoping
Posted on August 15, 2008 at 14:56 in Education by James Chen6 Comments »
Many forex traders often find themselves in the unenviable position of wishing, hoping (and sometimes praying) that a particular trade will go their way. Usually, this occurs when a position has gone horribly wrong and the trader refuses to let go. Needless to say, more often than not, wishing and hoping just doesn’t work.
The one thing wishing/hoping does accomplish, however, is to make the act of trading unnecessarily stressful and frustrating. As forex traders, we must remind ourselves that the market is full of unknowns and we just cannot control price direction, however much we may wish to. Each currency will go where it needs to go, and there’s not one thing we can do about it, except for react in an intelligent manner.
The most significant way in which we can react intelligently is simply to work tirelessly on our risk/money management approach. A big part of this is admitting early on when we are wrong, and then moving swiftly on to the next opportunity. There is absolutely no room for inflated egos in successful forex trading. Nor will wishing and hoping ever accomplish anything better than merely adding splashes of gray to our heads.
- James
James Chen is the Chief Technical Analyst at FX Solutions, a leading Forex broker. He is also a registered Commodity Trading Advisor (CTA) and a Chartered Market Technician (CMT) Level 3 candidate. At FX Solutions, Mr. Chen writes daily currency analysis, conducts forex trading seminars, and has authored numerous articles on currency trading and technical analysis for major financial publications. His upcoming book, Essentials of Foreign Exchange Trading (John Wiley & Sons), will be released in early 2009.
EUR/USD Update
Posted on August 15, 2008 at 4:30 in Analysis by James ChenNo Comments »
 (Please click on the accompanying chart to enlarge.)
As of this writing on Thursday evening, EUR/USD (a daily chart of which is shown) has reached the aforementioned 1.4750 support level. The 1.4900 consolidation zone has clearly been broken and left behind, and price is well within the previous trading range below the 1.4960 level. Although oscillators are displaying extremely oversold conditions, downward price momentum still appears significant. Resistance to the upside remains around the 1.4960 support/resistance region, while further support to the downside resides around the 1.4600 region.
- James
James Chen is the Chief Technical Analyst at FX Solutions,
a leading Forex broker. He is also a registered Commodity Trading
Advisor (CTA) and a Chartered Market Technician (CMT) Level 3
candidate. At FX Solutions, Mr. Chen writes daily currency analysis,
conducts forex trading seminars, and has authored numerous articles on
currency trading and technical analysis for major financial
publications. His upcoming book, Essentials of Foreign Exchange Trading
(John Wiley & Sons), will be released in early 2009.
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