Ray's Euro Trades

I've been trading Forex for over eight years, basically self-taught through lots of reading, and help from this forum. With that in mind, I decided to start this thread to discuss and journal my euro trades.

These trades are based on a combination of Fib, Elliott and Gann analysis. It is my intention to post the levels on a nightly baisis at about 9:30 pm Eastern US Time, to reflect the levels at which my analysis revelas that the Euro/USD will be within the next 24 to 48 hours.

Of course, please use all of the analysis on this thread (and probably every other thread, too) with a grain of salt and definately follow it at your own risk - I'm posting for informational purposes only as to my personal analysis and in no way is this trading advice.

With that said, for Sunday June 24, 2007 to Monday June 25, 2007:

We'll see a high of about 1.3487 and low of 1.3431 on the Euro.

First line of support is at 1. 3458, just a little lower than Friday's close, so may see it get touched, then up to resistance at 1.3483/87, needing a rest down to 1.3430, which if it gets too sluggish will break to 1.3413.

Hello Ray

I am beginning the daunting task of teaching myself both of these theories and have found that there is volumes of info on them. My question to you is...Was there any book/books or instructor that stood out in your research as one that you could suggest? Just as some background I have been trading forex for about 4 years and commodities about 7. I am familiar with Fibs and use them daily. I have witnessed some traders who use Elliot & Gann with deadly accuracy and have decided that it is worth some investigation. Any advice you can offer would be greatly appreciated. Look forward to reading your journal entries.

Hello Ray

I must say, not bad of an analysis for a daily prediction.
EUR/USD did drop to upper 1.3450's initially, then went back up.
And though it found a resistance at around 1.3472, unable to break any higher, it did drop down to upper 1.3430's.
And the day isn't over yet.

At any rate, your predictions were very close, good enough to have been used profitably. Please keep this thread up. I want to know how consistent you are.

And also, if you could, please post some of the major things you consider when trying to predict a daily trend. That is, what technical and/or fundamental parameters you use, how do you analyze previous price action and translate it to possible future movements.

I fully understand that you can't put in words 8 years of experience and vast amounts of info you sifted through. Sometimes it's a matter of just having seen a similar pattern before, which is acquired through experience only.

But if you could just highlight major points of your analytical approach, it'd be much appreciated.

Thanks, and GL. I hope I can learn from your experience.

Regards

Hi Everyone,

Hope everyone is doing well. Thank You Earret and Oguretz for your kind and encouraging words - I will address your comments and questions after posting todays results and the forecast for 06-26-07.

Results for 06-25-07
The general direction was correct, "First line of support is at 1.3458...so may see it get touched, then up to resistance at 1.3483/87, needing a rest down to 1.3430" - so we did see a low of 1.3455 about an hour after the opening on Sunday evening, then up to a high of 1.3475 about 6 hours after the 1.3455 initial low. After the high of 1.3475, the Euro did need a rest, going down to 1.3436. Then of course, doing it all over again, making it a range trading day.
I was looking for a high of 1.3483/87, and the actual high was at 1.3475 with a low of 1.3431 with the actual low at 1.3436.

Forecast for 06-26-07 (valid through 06-26-07, 9:00 pm EDST)
My preferable scenerio (what I would prefer/like to see, and what will actually happen are two different things!) is that we'll see the area of 1.3439 touched before reaching 1.3474/75 from the present rate. If 1.3439 gets touched before reaching 1.3474/75, then we'll see the Euro propel to 1.3520.
However, with the Euro at 1.3460 right now, it looks like it is trying to go up, but it won't have enough strength to go much past 1.3475 without returning to 1.3439 area, then it will probably have a nice shot at going to 1.3520.
Specifically, I call a trading low of 1.3446 and a trading high of 1.3499 for 06-26-07.

Earret & Oguretz, thanks again for your interest!

I am completely self taught and keep learning everyday. Sometimes I'm really good and sometimes I miscalculate, get the direction all wrong, or something just plain weird happens in the market that I have no clue where it came from. Fortunately, I've been right just a little more than wrong, and it has enabled me to stay in the game.

Day to day, I have absolutely no clue where the market is going and I really don't worry about it. Instead, I completely rely on Elliott, Gann and Fib principles to determine that - with attention to risk/reward. Decent money management, based on the strength of the three combined principles, keep making a profit.

The books that stand in my mind, and that I often refer back to are "Trading Advantage" by Joseph Duffy, "Definitive Guide to Forecasting Using Square of Nine" by Patrick Mikula and Constance Brown's "Technical Analysis for the Trading Professional." I've also read dozens of others by Pring, Luca, Bollinger, etc. I haven't come accross any really good Forex specific books that go into the depth and detail that is really useful for me, i.e. Forex books that kind of let you do it on your own - so if you do, please let me know...

I've also tried dozens of computer programs that promised a lot - but in the end, I found that I couldn't afford them because they simply did not work for me - perhaps there is something that does all of the right calculations and stuff out there, but for my day to day trading, I haven't found it.

As to Oguretz's question regarding technique, I look at the Daily charts once a week on Sundays to give me a sense of overall direction and possible changes, then I look at the 60 minute, 30 and 15 minute charts on a daily basis. I do Elliott counts, almost always coming up with two or three different possible scenerios within the same time frame (looking at different pivots) and then look for consistency within those different possibilities/counts. Once I see the possibilities on the the different time frames from Elliott, I look at fib levels to see if there is flow with the waves, finally refining with Gann Square of Nine to validate which wave scenerio is likely.

If I keep up with the charts on a daily basis, it takes no longer than 20 minutes to half an hour - if I don't keep up, then it takes proportionally longer to catch up.

I hope this helps - it's what works for me right now - and I sincerely hope that you find - if you haven't done so already - what works for you!

Ray

Thanks!

Results for 06-26-07
Last night around this time I wrote: "...Euro at 1.3460 right now, it looks like it is trying to go up, but it won't have enough strength to go much past 1.3475 without returning to 1.3439 area, then it will probably have a nice shot at going to 1.3520" Well, it went down to 1.3429 as a low and a close of 1.3438 on the same half hour bar, then it went up pretty nicely to a high of 1.3479 and now, tonight, of course a return to the 1.3439 area. Last night I hoped for the touching of the 1.3439 area, sending the Euro to 1.3520, but instead it stayed at 1.3479, repeating yesterday all over again...it is what it is, and I think patience will pay off.
I went long on the trading low of 1.3446 and have moved up my TP point from 1.3499 to 1.3505.

Forecast for 06-27-07
Basically the same as last night - if I wasn't already in, I'd get in long around 1.3430's or at market right now if I could live with the r/r ratio...if the 1.3430's break, we have support all the way through 1.3394 - some past that, would be looking to get out from the long.
See a really bullish wave in my 60 minute chart all the way to 1.3585, which is a possible target in a couple of days...will stay tuned..
My trading high is at 1.3505 and my trading low is 1.3435 for 06-27-07.

Thank for your journal rdearmas, nice to see another eurusd trader.
I've been trade eurusd only for 2 years now, less volatile than cable and it's trending pair.

Could you please tell me more about Gann Square of Nine analysis or some source that I can read more? Never heard before.

I trade only EURUSD, and I have a short trade open from Monday at 1.3464.
I was a daily trader, but I have changed my way of trade to Long term Trader.
I read very careful your posts, and about to go long at this stage I think it is wrong decision. Well only if you trade daily, of course you can go long.
In my opinion if until end of July the cross do not reach 1.35 again, this value will be not reachable again this Year.
I know that a lot of traders still bullish at EURUSD, but I am Bearish.
I think next 6 months USD will recover at least until 1.26.

That's my opinion.

Keep your posts, I appreciate.
Thanks

Hi Tony & Bored,

Tony, as to the Square of Nine, the manner in which I use it, is in conjunction with Elliott Wave and Fib levels. I find that when Elliott, Fib and Gann are in harmony - i.e. the analysis forecasts the same price levels/objectives for each of the techniques - then an extremely robust signal is produced.

Like I mentioned in an earlier post, I really have read many books and am always learning. The major books that worked for me are the following:
"...and that I often refer back to are "Trading Advantage" by Joseph Duffy, "Definitive Guide to Forecasting Using Square of Nine" by Patrick Mikula and Constance Brown's "Technical Analysis for the Trading Professional." I've also read dozens of others by Pring, Luca, Bollinger, etc. I haven't come accross any really good Forex specific books that go into the depth and detail that is really useful for me, i.e. Forex books that kind of let you do it on your own - so if you do, please let me know."

Bored, I respect and appreciate your opinion, and for all I know, you may be right. But personally, I haven't a clue as to what will happen with the Euro in six months.

Long term trading is an elegant way to trade, but I find that I don't have the resources in my account to withstand possible long drawdowns, or the overnight position holding margin fees, and I certainly don't have the "intestinal fortitude" to go beyond a 50 -80 pip stop, which long term trading often requires. If I blow 50, 80 or 100 pips, I find that I can recover rather quickly, while if I blow 300+pips, that could take several weeks just to break even again.

Except for looking at a daily chart once per week for overall trend direction, I really try to keep my focus on a daily basis - and I'm concerned that if I try to look ahead, it will cloud my judgement as to what is happening right in front of me, for the next day or two.

The other factor that makes me flinch as to long term trading with an account of less than $100k, (way less in my case) - is that volatile world events could create a wild swing at anytime, and odds would have it that I would be on the wrong side of the trade...

Now with all of that being said, I think that there is a possiblity that you might be right because of one, completely unscientific, unproven, only my opinion reason: In the last eight years, I have found/think that when the market is very biased in one direction, as it is now with all of the long positions, either the "operators", market makers, someone with a lot more money than all of us put together, etc. has to shift the market in the opposite direction, because with Forex being a zero sum game, money has to come in from somewhere to keep the market moving, and to pay those who got out early enough (another reason why I take it day by day..)...and now that I probably destroyed any and all chances for any possible credibility, by telling you about my paranoia with the market, I'll be posting tomorrow's forecast in an hour or two...

Wishing You Much Health and Prosperity,
Ray

Results for 06-27-07
Last night I wrote: "...if I wasn't already in, I'd get in long around 1.3430's or at market right now if I could live with the r/r ratio...if the 1.3430's break, we have support all the way through 1.3394 - some past that, would be looking to get out from the long."
Euro tried to dive down by going to a low of 1.3412 then closing the same half hour bar at 1.3422, which at least is not a loss, but a profit of about 20 some pips if followed the trend and went long in the 1.3430's holding to tonights 1.3455/60 - what else, that's what the market is giving right now...
The high was totally off by about 43 pips from the forecasted 1.3405, but I'd still hold since the charts still reflect a bullish sentiment...

Forecast for 06-28-07
Same thing again..there's a magnet at 1.3445/50 that the Euro will probably keep going back to, until, perhaps even later than, tomorrows FOMC rate announcement.
Conservative trading range is to start taking profit at 1.3473 spreading to the low 1.3500's and with a low of 1.3430 again.

Hi Ray,

First of all I want to say that my English it is very Basic, Because I am a Portuguese Speaker.

I agree with all your explanation, and my Bearish Bias at this Point, maybe it is irrational, but this is a Game, and I am playing it.

I am "Strong Vigilant" and at the time I am writing the price is at 1.3461, so it means that I am BE.

I keep my "Bet" that the price is coming Down, but it is getting a lot of resistance to break the 1.3430/80 range and Cable it is not helping!
Now, all We can do it is wait and see.
Even if price break 1.3480 I will keep my bet, but of course that my Downside bias, will tremble!

See you and good luck
Mike

Good work, Ray
I was able to scalp good pips today. Range-bound pairs are perfect for that.
Again, your call defined the range fairly closely. It provided more confidence in my scalping endeavors.

Question: do you take into consideration major news anouncements?
Because when news doesn't deviate much from expectations, the price action ignores it. But a serious deviation can catapult the pair by a good 100 pips up or down, regardless of technical indicators at the time. Say, if USD rate got hiked, it would have shocked the market, to be sure.

Thanks.
May we harvest many a pip.

Hi Oguretz,

Glad that you were able to harvest some pips!

My thought on announcements is kind of in the middle - there's an analogy that says that you shouldn't "try to catch a knife" or "get in front of a freight train" when a news announcement causes a swift market move, no matter what the chart says, and I very much agree on many occasions. Again, being a relatively short term trader, it can take many days to make up the loss.

Others say that announcements are already factored into technical analysis - and I take advantage of that school of thought when, once the market making news is made, and the "knife" or "freight train" is headed in the direction of my analysis, to hop on board - these are probably the best trades, ideal for letting things run with a trailing stop to determine when to get off.

Yet another thought is to be on the look-out for market moving news and go play outside, instead of trading on that day - most likely the smartest thing to do in the long term, but not always the most profitable in the short term. I follow this when I can't be by the computer at the time of the announcement, or when the charts are too whippy.

I think that the most important thing during an announcement is to run with trailing stops, because as I'm sure that you have seen on several occasions, the market is also known to head 40-60 pips on the initial reaction, only to reverse right on the next bar - making stops handy - and the worst that can happen is no pips are gained - but none are lost, ether.

It all really depends on your trading style and temperment - there's also trading styles where some folks will run with rather tight stops and close on 20-60 pips within one to five minutes of the announcement (again, I would look at the potential long term results of this type of trading becasue of the R/R ratio on those trades).

Wishing Everyone Health & Wealth (and raising a glass to "May We Harvest Many a Pip"),
Ray

Hope things are going well with everyone.

We got hit with some severe thunderstorms that caused a power outage in parts of rural eastern PA (big 'ol NY had one too, so I don't feel so bad) on Thursday night, making it impossible to post.

No matter, since Friday was a great day, with a cummulation of the posts for the entire week - finally a break-out of the sideways market that we saw during the week!

Results for the Week of June 24, 2007 to June 29, 2007

I entered on Tuesday at 1.3446 and took profit at 1.3505 Friday - if the overnight costs of carrying this trade would have made it possible for me, and while I'm grateful for what I received, I would have loved to have carried several lots, and scaled down to the 1.3530's instead of just closing at 3505.
Patience paid for this trade - key was that the charts remaind bullish.

Profit for the week at 59 pips. Not holding any positions at the present time.

Forecast for July 01-02, 2007
The charts are showing a tight trading range for at least Sunday night into Monday. I don't see it going more than 1.3551, and we might not even see that point, until a very short term correction down to at least 1.3505/1.3499.

Further, if you look at the 60 minute chart, and the angle that it rose Thursday into Friday, it is way too steep, so a move down of 40-60 points is pretty much inevitable.

Most importantly, Wednesday is the July 4th Holiday in the US, probably making for very thin market conditions. Thin market conditions also give way for all kinds of unexpected things to happen in the market, especially when it's the middle of the week for most of the world - so there is the possibility that money loaded speculators will run their course, without regard to technical indicators. Use stops if you will be in...

Trading range for this Sunday (July 01, 07) into Monday (July 02, 07) is
1.3541 to 1.3499 - short at market in the 1.3540's Sunday night.
Going against the present overall trend on this one, so will need patience and a stop around 1.3582, just in case of unexpected take off on an uptrend continuation..

Results for July 02, 2007
The euro got me by surprise today - stop came in handy at minus 41 pips. The fact is that "Going against the present overall trend on this one.." wasn't a smart move. But the pathetic part is that instead of learning from this, other than following the trend, I can't seem to find a reason why the Euro isn't going to crumble at least 60-100 pips by Friday.
So we'll see - it's my charts - and I either trust them or I don't. And I'm not going to ramble on or try to talk myself into a fundamentally wrong trade other than to say it's because it's in my charts!

Forecast for July 03, 2007
Don't follow this if your account or temperment can't sustain more uncertainity than what's usual for the market - the smartest thing to do this week is to stay out.
However, I shorted with two lots at 1.3623 with a stop at 1.3703 and an initial target of 1.3550, looking to follow it with a trailing stop to around 1.3530. Looking to close by Friday.

Despite the trend, I didn't expect such rapid ascent to above 1.3600.
That one caught me with my "shorts down", so to speak.
I hope it does retrace by Friday, so's I can square away my shorts.
At least it's interest-positive...

Incidentally, Ray, it'll be interesting to see what happens on Wednesday, it being the major US holiday and all. Like last Thanksgiving, when this pair moved like 150 pips or something, despite thin trading (or because of it )

Regards

Hi Oguretz!

"" does say it all for Monday - LOL!

I'm in at 1.3623 short with two lots - yikes!

I'm so tempted not to play because of the thin market - and the stuff that happens - like what you mentioned around last Thanksgiving.

But one of the things that I really do know is that I am not smart enough to decide when my charts are right or wrong -i.e. I'm not smart enough to pick and choose what signals to take or not to take with my own system - so when they are strong enough, I let them play out - and right now those charts are screaming short term correction.

As you know, I trade off very short term waves, with Fib & Gann to verify. I have a potential reversal for Friday, so maybe that short is not so crazy after all. It usually happens within three/four days before or after the date itself, if not on the date itself. Fridays tend to be tricky because of the weekend.

Ideally, I'd love to see Euro go down to the 1.3550 area before Friday, then start shooting up on Friday itself, because of market reaction to some fundamental news - this would make it a tremendously strong signal to follow (load up on lots and trailing stops) because:
1. a small wave reversal would happen as forecasted (down wave from present levels to around 1.3550 fib level, reversed shooting up)
2. and the up-wave and reversal coincides with the overall larger time frame
bullish trend and
3. it finally "cracks" the crazy, almost straight angle that all of the time frames from 4Hr on down, show on the Euro charts - incredible that it hasn't cracked yet...

Wishing You Loads of Health and Wealth,
Ray

Hope everyone had a great 4th of July!

About two hours to finish the day (it's about 10:15 pm EDST here) and no unexpected/expected moves with a thin holiday market...hmm, thanks, I guess.

Results for July 04, 2007
Still short at 1.3623 with two lots from the day before with an initial target of 1.3550, then running a trailing stop to at least the low 1.3500's.

Forecast for July 05, 2007
Trading range is expected around 1.3613 to 1.3627 as the high for July 5th and 1.3587 as the low.
Since I'm in with two lots, will remain vigilant if 1.3635 and above start to print, for a stop and reverse of position or hedge, if needed.

EUR/USD showing some promising weakness...
NFP will be out in 5 hours...
Will it profitably bail me out of my shorts?
Or will it fuel the pair to run mercilessly through my SL like it wasn't even there?

Keeping my fingers crossed...