A-B-C-D Trade - page 103
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Negative U.K. GDP at 09:30, worse than projected. This means Euro rises, at least temporarily, which would have been against our position with last trade.
The EUR/JPY has a larger spread. One way to get around that is to trade EUR/USD, which moves in tandem most of the time. Attached is an indicator that plots pairs on the same chart for comparison, etc. Change input parameters for desired pairs.
Jan 25th
AUD/USD 30-min 2nd dip 16:00 candle (.9906 low), along with rising RSI, denoting bullish divergence. From the set-up fib plot (blue) of Jan 24th high 1.0020 and Jan 25th low .9926, we saw the 2nd dip candle hit the regular 138.2 extension of .9990.
The 15-min EFT crossover to thin histogram bar did not occur until the open of the 17:30 candle, at entry BUY price of .9929.
Note distance from bottom and time of day, as Australia also on holiday 26th. Alternate fractal entry gets us in 1 candle earlier at 17:15 price of .9916, a bit more palatable.
Plotting the more immediate price action (red), we take it from the Asian High .9968 to the 2nd dip low .9889. By 20:30, pair hit the 78.6% retrace fib .9969 and the set-up plot’s 50% fib .9973. Gain based on system’s EFT entry, at this time, is about 40 net pips.
Jan 25th EUR/JPY
As per our live posts, we were able to “look around to corner” as this pair made a 2nd peak at end Asian. The peaks on the 30-min did not align so we switched to the 1-hour to get a better look. The 01:00 and 07:00 was confirmed as divergence.
This was also a breakout of the Asian Low. Fib plot from Asian high to low produced our TP level(s). We played it safe and exited the entire sell position at the 138.2 extension, ahead of upcoming 09:30 U.K. GDP.
Sure, in hindsight the pair made bigger gains to the downside. That’s O.K., we don’t let that affect us as we wanted to be conservative and it could have gone the other way and wiped out our gains. Some traders will exit a portion, pull S/L to break-even or small gain, and place an automatic trailing stop or EA on the balance of position.
There’s always the next trades, as witnessed by the AUD/USD bullish divergence signal per last post, and USD/CHF below. EUR/JPY did pivot after data around 10:00 and conducted a FE 127, probing nearly back to the Asian High.
*****
USD/CHF had bullish divergence on 1-hour with dips during 09:00 and 13:00 candles. The low price was .9423.
The 15-min trigger BUY entry was at 15:15 open .9455. Pair immediately dropped to low and probed slightly below to .9419, before marking a modest gain to the 50% retrace fib of .9471.
A conservative trader would have had a worse-case exit at the fractal lock-in after close of 17:15 candle, price of .9440.
The distance from entry to low was higher than ideal, even considering that we scale number of lots. It was about a 36-pip risk, which means that to retain a minimum of 1 to 1 risk/reward, target must be about .9491.
That was not improbable, especially since we had a pivot high at 13:00 of .9493. The real enemy was time of day. Volume declined significantly after European closed. Trailing the stop tighter would be one solution.
As it turned out, pair hit the 50%, which is about the location of the trend line plotted from the 09:00 and 13:00 peaks on the 15-min chart.
*****
Australia on holiday today. World Economic Forum in Davos may have market-moving debt issues comments. The FED started its 2-day FMOC meeting, and President Obama has a State of the Union address.
Lurking bounce traders sold EUR/USD at round number 1.3700. Pair now at 23.6 retrace for + 19 gross pips.
Further comment on divergence. Other interpretations had EUR/USD with divergence during same period as our EUR/JPY example.
The technique determines declining RSI at 2nd peak "cluster" of candles based on something like the MACD indicator, histogram version.
We applied the RSI(4) to view the peaks and dips in a more exact fashion, in alignment with candles. This gives a trader, particularly a new(er) trader, a precise rule. Having a set of precise rules takes away any uncertainty. We feel this is of utmost importance for entry.
Jan 26th
The sale of Euro bonds was successful, with Asian investing heavily. Some or all of the 44.5 B Euro European Financial Stability Facility (EFSF) Bonds will be used for the bailouts.
Juxtaposed against the bond sale and the World Economic Forum in Davos was Bloomberg’s poll. 75% think that Greece will default, and 53% think Ireland will default. 59% believe that at least one country will drop out of the EU by 2016.
An interview with one “expert” in Davos resulted in the view that a troubled nation will not default, but would restructure its debt.
********
USD strengthened, with a couple of exceptions. GBP crosses gained on BOE minutes. EUR/USD and USD/CHF ended up neutral after swings in both directions during the European session.
Rode nice short AUD/USD at double top bounce near 1.0000 Attached is 15-min chart, with MurreyMath1.0 indicator. Yesterday’s U.S. session low is basically 0/8th, and today’s high is ⅞ (.9996).
Applying retrace fib from plot Asian low/high gave good exit levels. The 38.2% fib captured 40 pips. Pair is now trading below Asian Low, after making a FE 161.8.
EUR/USD traded in tight range during Asian with no desire to exceed 1.3700, and only managed a meek regular 138.2 extension for about 15 pips during European. The 5-min swing was small and thus its FE was a FE 200 to same area as the 138.2
Obviously, both Davos and President Obama’s State of the Union had many traders using caution or trading on verbiage. We can see with EUR/USD, it was a “wicky” session. Candles had longer wicks than normal.
Breaking news that the CFTC has targeted 14 firms for being unregistered while soliciting the public to trade Forex.
Market had one quick whipsaw period after FOMC concluded its 2-day meeting with interest rate decision and verbiage. No changes.
Attached is a split EUR/USD daily chart with trend lines and counts by Demark indicators (rouge versions).
Wide plot: High = Nov 22nd 2010 to Low = Jan 9th 2010 (yellow fibs).
Tighter plot: Low = Jan 9th to High = Jan 4th.
- this produced 138.2 = 1.3649 (hit Jan 23rd)
- 161.8 = 1.3785, same as wide plot's high price level.
Mr. Demark made a T.V. appearance today on CNBC Closing Bell. The host had the S&P 500 Weekly chart up with Demark's Sequential indicator that plots 9s and 13s.
Demark's technique trades pullbacks and reversals. The 9s and 13s indicate impending pullback or reversal. Conduct an internet search and you'll find material.
Mr. Demark projects a pullback coming up on the S&P 500 as the current sequential count is at 13.
Jan 26th 03:00 GMT
AUD/USD once again was thwarted near the 1.0000 parity level. The divergence signal on the 30-min shortly after Asian open, and subsequent disciplined trigger, produced entry price of .9980. Drop was quick, perhaps due to proposed new tax for flood rebuilding, stopping just short of U.S. session low and closing above the 50% fib (.9943) from the same plot.
If this pullback at 03:00 pivots, potential for further gains would be measured by FE levels. A 61.8% pullback to .9975 would create FE 127 near wide fib plot low of Jan 25th 16:30 .9889. Next fib support below that are .9873/69
Monitoring 30-Min GOLD as its threatening to make higher high while RSI may be lower than 1st peak. Chart is GMT +2. There was a divergence signal at 08:30 GMT, with entry at 09:30 price of 1337.10. The SELL move bottomed out at 1326.00 at 16:00.
EUR/USD in tight range thus far, having trouble staying above 1.3700.
USD/JPY looks to be pivoting again in another attempt to test 81.96 support. We’ll watch 30-min for possible divergence.
GBP/USD racheted back to the 61.8 retrace fib from Jan 25th high/low spike. If a sudden rise above 1.5937 occurs, it may develop into a divergence.signal on the 30-M or 1-Hour.
.
Gold SELL entry was 04:15 at 1347.00. If take partial profit (example 60%) option just above pivot 1343.50, move S/L to break-even, result was gain about 1% on 2% risk as 2nd portion stopped out.
Meanwhile pullback has pivoted back down and testing low again. If it dips slightly below and bounces up, it can be a bullish divergence signal.
As with EUR/USD, this technique's record with Gold in Jan is ridiculous. I won't repeat this again, nor ask you to do your homework (spreadsheet back testing). I won't share my spreadsheet, as the beneficiaries would be better off earning the subsequent success this technique brings. Good luck and thanks for understanding.
EUR/USD 4-Hour chart with ##Gann_SQ9 has 360-degree (price 1.3707) acting as resistance.