CatFx50 - page 787

nina
2768
nina  

Hi!

On cable, we have some clear levels to the upside:

2.0350 - 2.0380- 2.0422 - 2.0445 - 2.0480 - 2.0500 - 2.0525.

For me, cable is set to go to downtown while below 2.0422. But the main resistance here now is 2.0525.

This week we have some UK data. If that data shows inflation pressure, GBPUSD will keep going up. If it does not, cable will resume its way to 2.0087 - 2.0044 and the important one: 2.0000.

You have seen on Friday what happened to USDCAD. Bank of Canada delivered a cut on Tuesday. The pair kept rocketing till Friday. At the very second we knew strong job figures, USDCAD went down more than 100 pips in 2 minutes. Hit parity again and bounced up to close at 1,0049.

So, now, we'll need to see if CAD economy is out of inflationary pressures to think about another rate cut, the same in UK.

nina
2768
nina  

Hi!

Just a quick update:

EURUSD has made a high at 1.4737.

GBPUSD has made a high at 2.0486.

nina
2768
nina  

Hi!

BTW, there are a lot of pals that use Heikin Ashi "candlesticks". I do not know why, but they do.

OK, no problem. We are free to use wht we think could give us more money.

But I think we all should read this:

http://www.ensignsoftware.com/tips/tradingtips57.htm

nina
2768
nina  

Hi!

It is mandatory now that EU breaks 1,4780, cause if it does not, it could go down hard.

EURUSD has made a low so far at 1.4417. Is this hard enough?

nina
2768
nina  

Hi!

Investopedia:

Head and Shoulders pattern:

A technical analysis term used to describe a chart formation in which a stock's price:

1. Rises to a peak and subsequently declines.

2. Then, the price rises above the former peak and again declines.

3. And finally, rises again, but not to the second peak, and declines once more.

The first and third peaks are shoulders, and the second peak forms the head.

The "head-and-shoulders" pattern is believed to be one of the most reliable trend-reversal patterns.

However, the security will not always just continue in the direction suggested by the pattern after the breakout. For this reason it's important to be aware of what is known as a "throwback" move. This situation occurs when the price breaks through the neckline, setting a new high or low (depending on the pattern), followed by a retreat back to the neckline.

This move back to the neckline is considered to be a test of the pattern and the newly reversed support or resistance. Remember that when a trend shifts (or a reversal pattern is confirmed), what was once support now become resistance, and vice versa.

While it can be alarming to see a security move in the opposite direction of the trend suggested by the pattern, it isn't all that bad. The reason being that the successful test of this new level of support or resistance helps to strengthen the pattern and its suggested new direction. So, it's important to wait for the pattern to test out and not sell out too quickly - before the pattern makes its bigger moves.

Volume

In technical analysis and chart-pattern analysis, volume plays an important role as it is used as a secondary indicator. Volume indicates activity and money movement. When volume is high, there is a lot of activity and money changing hands - making it an important indicator to follow.

For the head-and-shoulders pattern, volume is used mainly at the point of breakout to help confirm the pattern. At this point, it's important that the breakout happens on a large-volume move. For a head-and-shoulders top, when the price breaks below the neckline (in a downward direction), it's best when this occurs during a large volume increase, which signals heavy selling. This strongly indicates that the underlying supply and demand in the market is moving in the same direction the chart pattern is predicting.

Volume can also be used as a secondary indicator during the formation of the pattern, well before the breakout, to gain an idea of the pattern's strength.

For a head-and-shoulders top, the left shoulder should show heavy volume as it hits its new peak. Low volume should take the left shoulder down to the neckline. The run towards the peak in the head should be on lighter volume compared to the peak formed in the left shoulder.

This should be a warning, as volume should move with trends - not against them. The peak formed in the right shoulder should be seen with even lighter volume than in either the head or the left shoulder. And again, the volume should be high when the neckline is broken, which is by far the most important area to watch in terms of volume. If the volume is lighter on the neckline break, the chances of the price moving back to the neckline after breaking is greater than if the neckline break was accompanied by large volume.

This interaction of volume and price movement in forming the reversal signal is not set in stone. However, it is the general tendency in the chart pattern.

In FOREX, we do not know the right volume!!

Price Objective

An important, but often overlooked, factor in technical analysis and chart patterns is the calculation of price objectives. This is a measure of where the price is considered to be headed, based on a confirmed pattern.

While the price's direction is already known, based on the signal, what needs to be calculated is the projected price movement. This is done so that targets can be set, protective stops can be instituted and the worth of a trade can be evaluated.

This is measured based on the height of the chart pattern, which is essentially the distance in price between the peak of the head and the neckline. For example, let's say that in a head-and-shoulders top, the peak of the head is formed at $50 and the neckline was established at $40 - a difference of $10.

The price objective is calculated by subtracting the price at which the pattern breaks the neckline ($40) by the difference between the head and the neckline ($10). Based on this example, the price objective is $30 ($40-$10).

This price objective is not an absolute and is used as a guideline to the attractiveness of a trade. The larger the difference between the objective and the price at the neckline, the more worth the trade has, as it will yield greater returns.

.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.

Well, well, well. Look at picture attached. We have a regular H&S pattern on our beloved EURUSD. According to the standard rules, EURUSD is set right now to go to 1.40xx. That's a move, pals!!

Back to standard rules again: a "throwback" is expected. That throwback should test the neckline (resistance now) @ 1.4521.

Problem with that is that pattern is world known. Things are not as easy as we think. Cause, we could sell now with a stop at 1.4550 and target at 1.4090. So, you risk 125 pips to make 350. Not bad, isn't it. Or you wait for a pullback. Anyway, the right place to sell EURUSD was at 1.4520. Had you done this and you'd be right now @ + 100 without any pain at all.

What will happen next week? Wish I knew that!!

All I can say is that while below 1.4589, EURUSD is set to go to 1.4384 - 1.4373 - 1.4341. It needs to break then 1.4298 and hold below that level to think about 1.4093 and 1.4055.

In case EURUSD makes a pullback to neckline at 1.4521, we should look at it to spot another sell entry ( @ 1.4550) or the end of the H&S pattern.

I think Central Banks are in now. That Central Bank meeting has secret agreements and one of them could be to help BCE to stop EURUSD to keep going to the moon.

We'll see, cause money has no friends.

Files:
hamps.jpg 93 kb
eurusd.jpg 125 kb
wr.jpg 112 kb
nina
2768
nina  

Hi!

H&S pattern is still on. EURUSD has made a weekly low at 1.4309, just 11 pips shy of my 1.4298 level.

EURUSD is trading below neck line at 1.4521. Its weekly close is 1.4380.

Watch 1.4521 - 1.4309 - 1.4298.

Market is on holydays right now.

Marry Christmas and Happy New Year to all.

Files:
eurusd_1.jpg 96 kb
catfx50.jpg 143 kb
wr.jpg 111 kb
nina
2768
nina  

Hi!

Watch 1.4521 - 1.4309 - 1.4298.

Saw what happened when EURUSD broke 1.4521?

EURUSD has made a high so far @ 1.4638.

Files:
eurusd_2.jpg 125 kb
yesican88
39
yesican88  

Dear Nina,

In CatFX50 rule level 3, it's said : "For instance, we are in bullish mode: price above EMA 50 and Hist_StepMA_Stoch in green. Suddenly, price goes down crossing or without crossing EMA 50 and obviously without opening below it. Hist_StepMA_Stoch changes to red. We buy when price goes up again always validated by Hist_StepMA_Stoch that should change to green again"

But if I watch the chart, many times I found in bullish mode, when prices went down without crossing EMA 50 and obviously opened above EMA 50, Hist_StepMA_Stoch didn't change to red, it's still in green. After that, price went up again. So, should we take this long signal? It's a valid signal too?

Thanks for your attention and answer.

Regards,

Pierre

nina
2768
nina  
yesican88:
Dear Nina,

In CatFX50 rule level 3, it's said : "For instance, we are in bullish mode: price above EMA 50 and Hist_StepMA_Stoch in green. Suddenly, price goes down crossing or without crossing EMA 50 and obviously without opening below it. Hist_StepMA_Stoch changes to red. We buy when price goes up again always validated by Hist_StepMA_Stoch that should change to green again"

But if I watch the chart, many times I found in bullish mode, when prices went down without crossing EMA 50 and obviously opened above EMA 50, Hist_StepMA_Stoch didn't change to red, it's still in green. After that, price went up again. So, should we take this long signal? It's a valid signal too?

Thanks for your attention and answer.

Regards,

Pierre

Hi. Pierre!

Happy New Year and sorry for the delay.

You could do it, of course. You only need momentum and you should know before doing so where you should place the right stop loss.

Take into account that almost all brokers in Forex world want your money. They trade against you and they are not your friends. If you use a fixed stop loss, you'll be hit hard for those bastards.