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Attachments: Why did EURUSD drop right after Dec 1st?
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Why did EURUSD drop right after Dec 1st?

  • Post #1
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  • First Post: Dec 28, 2009 3:34pm Dec 28, 2009 3:34pm
Like the title says. EURUSD was gaining steadily but after 12/1-12/3 has been dropping steadily. Did something specific happen? Interest rate announcement? End of fiscal year? Someone killed Santa? What did I miss?
Quoting BF Skinner
What did I miss?
Technical analysis? EUR/USD was in overbought for too long.
fundamentally, not a clue

but technically, on a day chart we have a beautiful rejection bar that closes under that down sloping red line (see area at yellow circle), from there,
there is an 80% chance price will reach the middle red line, and then,
if it breaks that line, a 70% chance price will reach the lowest red line,
at this point if it reverses, which it has, there is a whooping 90% probability price will reach that middle red line again, which is where it is presently headed.

..........systematic trading backed up by solid statistics
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Just a silly USD rally. The same thing happened to GBPUSD, AUDUSD, etc. No real reason for it other than some retracement. I look for the dollar to start sliding again early in 2010.
Quoting BF Skinner
Like the title says. EURUSD was gaining steadily but after 12/1-12/3 has been dropping steadily. Did something specific happen? Interest rate announcement? End of fiscal year? Someone killed Santa? What did I miss?
on 12/3 there was a pinbar @ swing high, no other things involved

*sigh*
Never whishing, always trading.
Quoting BF Skinner
Like the title says. EURUSD was gaining steadily but after 12/1-12/3 has been dropping steadily. Did something specific happen? Interest rate announcement? End of fiscal year? Someone killed Santa? What did I miss?

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wow, thanks for the great responses.

PeterE, i understand your red and blue lines form a sort of "performance envelope" and when the market moves outside the envelope, this signals a change in trend. my question is, where did you get the statistics? how do you know there's an 80% chance it will hit the middle line, for example? (i'm not doubting your method, just curious about it!)

magnumfreak, that's what i was thinking too, i noticed it in GBPUSD but never looked at AUDUSD. good find.
  • Post #8
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  • Last Post: Dec 29, 2009 5:37pm Dec 29, 2009 5:37pm
hi BF, my response was based upon median lines, also known as Andrews Pitch Fork. The stats are tried-and-tested, and orginally extracted from this document http://le-blog-de-reklats.over-blog....-30572730.html

the essence of this document is summarised in the picture below


Quoting BF Skinner
wow, thanks for the great responses.

PeterE, i understand your red and blue lines form a sort of "performance envelope" and when the market moves outside the envelope, this signals a change in trend. my question is, where did you get the statistics? how do you know there's an 80% chance it will hit the middle line, for example? (i'm not doubting your method, just curious about it!)

magnumfreak, that's what i was thinking too, i noticed it in GBPUSD but never looked at AUDUSD. good find.
Attached Image (click to enlarge)
Click to Enlarge Name: ML Probs.gif Size: 67 KB
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