DRT's Trading Room

Weekly View - Currently at weekly range top. Setting shorts at current levels into 4801 or better.

http://www.morrisfunds.com/storage/f...01-29-2008.PNG

Good morning everyone. Here's what I am seeing this morning.

4801 is a key level. See above longer term charts. I would look to set short here for a move down to 4697 -4685 area. Risk should be fairly tight on a move up as I suspect we will move up fairly rapidly if the supply at this level is overcome.

If we move up then target 4863 area or better to 4685. I would exit or pare back heavily at this level and let value develop before moving on.



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I am long up to around 112 into the end of data week

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Good morning everyone. Here is what I am seeing at this time.

The 106.87 area is a key and we are there right now. I am short term bullish on the USDJPY (see above) so I would look to set longs on a push through this level. Target is ADV (Adaptive Dynamic Value) at 107.91 or better. Exit here and wait for value to build before setting up again. Risk should be fairly tight here, as any move down will target the 105.91 area. If you short into this level, exit here.

Good luck today. I think we have ADP and GDP at 8:15 and 8:30, then the FOMC this afternoon. It may be a whacky day, but then again all days are whacky anymore. When I trade the Yen, I feel like I am trading US Equity indexes lately.


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Here is another trade that is setting up.

The USDCHF is trading near the bottom of its value range. This is obviously a contertrend trade so not for the weak of heart or those with high anxiety.

Referencing the 60M chart...

Look to set up long if the swiss holds above 0920. Risk should be aggressive below this level since a move through here could trade down near the 0878 level. Target 1029 or better for the near term.

Good luck and remember the best trades make you want to throw up.


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1. I do not believe in indcators. I believe that both my mind and your mind are much more powerful and forward thinking than a squiggly line on a chart.
2. Everything in trading is a reflection of only one thing. Only one thing matters all the time and that is "PRICE". It is all we know.
3. I make decisions based on current value based on the distribution of price around a mean or most actively traded value area.
4. The lines on the chart represent levels of supply and demand that I determine are critical based on a longer term distribution of price.
5. I believe in simplicity. Trading should be made easier not more complex.
6. We try to build too much "stuff" into our trading. Calm your mind, clear your charts of anything except price and trade based on your intuition.
7. Determine your sizing and risk. Take your position. Don't second guess yourself. Take your profit or your loss happily.
8. Some will, some won't, so what, next.
9. I believe markets are emotional and not predictable, but they are tradable.
10. I do not use fixed stops, rather I wait for price to violate an area of value I determine would prove me wrong. Once price moves out of this area, then I exit for a loss because I am wrong.
11. I am wrong very often.
12. I believe that I am right where I should be as a trader all the time, every trading day. I am not looking for some magical moment in the future that I will arrive at and be happier or whole.
13. I believe being an individual trader is the best profession on Earth.
14. I believe in treating folks with kindness and respect
15. I believe I am done know.

I also like simplicity.. I'll let the usdjpy prove that it wants higher prices for now.. Best with it and may it pop up for ya...

Well, looks like I was way off on those trades. I will let value build at these new levels and see if they hold. I'll take another look early tommorrow morning and see where we are.

Good morning everyone. Here's what I am working on today. All countertrend.

EURUSD - Continuing to look for opportunities to set shorts near the 4891 area. Targeting 4716 on a daily basis.


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USDJPY - Look for longs out of the range bottom approaching 105.60. Target is 107.71 on a daily basis.

http://www.morrisfunds.com/storage/f...y1-31-2008.PNG

USDCHF - Looking to set longs on a move back above 1.0823 for today.

http://www.morrisfunds.com/storage/f...f1-31-2008.PNG

EURO into sell zone. Setting shorts.

Yen into buy zone. Setting longs.


I just realized I confused even myself on the Yen comment. Should have read.

EURUSD into sell zone. Setting shorts.
USDJPY into buy zone. Setting longs.

Dollar Index at a key bottom area.

http://www.morrisfunds.com/storage/f...01-31-2008.PNG

I wanted to clarify something. SammyJ got me thinking about something that I want to point out.

It may appear that I trade against the trend alot and I am sure that makes many of you uneasy. I guess he is right, I do. I do not always think of it the same way however. In most cases, I am positioning on range extremes. Not always, but many times. The basis of my methodology is the following which I have studied over the years and you may be able to find other documented evidence of as well.

 

1. Markets spend most of their trading time in ranges, not in trending.
2. Only 6% of all trading days are trend days.
3. 94% of trading days are normal days, or normal variation days. (Range Trading).
4. I have spent the better part of my trading career developing strategies to trade what the market does over 80% of the time, which is Range Trade. The trick of course is to identify the range.

The ADV on my charts stands for Adaptive Dynamic Value. In laymans terms, it really means were is fair value for the day. It may change every day and I actually recalcualte it every trading hour but it is not possible to communicate this in a forum environment. When I take trades near fair value, I am trading with the trend as identified by me.

So I just wanted to clarify things a little.

Not much changed today when all was said and done. I had nice gains in EUR shorts and JPY longs of about 100 points each , I am still holding these trades with good profit but alot was given back to the dollar bears.


Here are the levels for 2-1-2008.

EURUSD -(Close at 1.4860, +30 ticks) I am continuing to hold shorts out of yesterday's 4891 range top. If you are short, stay short. Traders can set new shorts or add ahead of 4891. Today's targets come in at 4715, then 4613.

http://www.morrisfunds.com/storage/f...202-1-2008.PNG

USDJPY - (Close at 106.44, +70 ticks) The USDJPY gave us a perfect entry long tright at yesterday's range bottom of 105.70. Price moved up 100 points from here.If you are long, stay long. New longs can be set ahead of this level if it gives the opportunity. Today's targets come in at 107.78, then 109.18.

http://www.morrisfunds.com/storage/f...202-8-2008.PNG

USDCHF - (Close at 1.0812, -13 ticks) I set longs today on the move above yesterday's range bottom at 1.0823. (Long at 1.0825). If you are long, stay long. New longs can be set now or ahead of 1.0785 if the market moves back down. Today's targets are 1.0967, then 1.1072.

http://www.morrisfunds.com/storage/f...202-1-2008.PNG

NFP tommorrow, oh boy. Monitors may explode. Good luck.

Once again, the NFP report proves worthless. What good is a report about jobs that is always revised substantially. The unemployment number is what to focus on. Makes for some sore necks when watching price though

In any case, price returned to range tops for entries if desired or should I say if not too scared of ye old dollar longs.

There was some big selling of the YEN today after the announcement. (Selling of YEN futures @ 9478). If the ISM comes in reasonable, you never know what might happen.

Short Term Analysis
Date: Monday, 2/4/2008

EURUSD (Close 1.4802)
If you have been following our progress on the Euro, we are short from last week’s 4891 range top. Currently up 106 ticks. If you are short, stay short and follow today’s analysis.

For Monday, I expect the EURUSD to trade down to the 4780 in Asia. This area has the potential to hold the range bottom and reverse price back to 4850. If this materializes, short term traders can look to set new shorts on a push up into the 4850 level. Target for the trade would be 4718. Ideally, risk should be above the 4895 level.

If the 4780 level gives way, then continue to hold short into 4718. Cover all shorts at this level. This is a very important level and will establish our directional trend for the week. If this level holds and price moves up, look to set longs on a return to 4718. Current target is 4850.

If price were to move down and settle below 4718 before my next update, then I would look to set shorts on a push back up near this level. Current target comes in at 4572.

NA UPDATE: The EURUSD reached 4850 and was quickly rejected. You should be short out of this level with a target of 4718. In order to reach this target, we will have to move down through 4780.

USDJPY (Close 106.48)

If you have been following our progress on the Yen, we are long from last week’s range bottom at 105.70. Currently up 78 ticks. If you are long, stay long and follow today’s analysis.

For Monday, I expect the USDJPY to test the 106.30 level in Asia. This is a key level and my bias is for it to hold. Traders can look to set new longs at 106.30. Target 107.24, if price moves through this area then target 107.75. Exit all longs at this level and wait.

If 106.30 does not hold and price settles below this level, then I would exit current longs and set shorts near this level at 106.30 for a move down to 105.40. Cover shorts here and wait for value to build for the next directional move.

NA UPDATE: Continue to hold long. Watch the 107.24 level. This level has the potential to reverse direction for the session. My bias is for this level to give way, if it does target 107.75.

GBPUSD(Close 1.9683)

No prior analysis to follow.

For Monday, I expect the GBPUSD to move down to 9624 in Asia/Europe, if this level holds price should reverse for a re-test of 1.9682 in London. Short term aggressive traders can set longs out of 9624 and target 9682. If price continues upward through the 9682 level, then target 9735 and exit all longs at 9735. Wait for value to build. If 9735 holds, then traders should look to set shorts for a move back down.

If price moves down through 9624 in Asia/Europe and holds below, then traders can set shorts for a move down to 9509. Cover all shorts here. A move below this level is very significant.

NA UPDATE: This worked out perfectly. The pair made a low of 9625. You should have set longs and held through 9682 and exited at 9735. We are currently trading at 9764. My bias is down from but I would like to see value build and the pair move back below 9735 before setting up shorts. I would recommend being flat at this point.


USDCHF (Close 1.0892)

If you have been following our progress on the Franc, we are long at 1.0825 from last week’s range bottom. Currently up 25 ticks. If you are long stay long and follow today’s analysis.

For Monday, I expect the Franc to trade up to 1.0926 in Asia/Europe. This level has the potential to reverse price action; however my bias is for price to continue up to 1.0964. Exit all longs at this level and wait for value to build for further directional information.

If price moves down in Asia/Europe, look for 1.0819 to hold. Traders can set new longs out of this level for a move up to 1.0964. Risk on this trade should be below the 1.0780 area.

The key for the Swissy is the open in Asia, I am looking for price to move up but it is not completely clear to me.

NA UPDATE: We did trade up but have not reached 1.0925 (High of 1.0919). I continue to hold long into 1.0925. Watch this level carefully, if we move through here target 1.0964 and exit. If we move down, 1.0819 is a valid target for this session. My current bias is up.

North American Session Updates posted in blue above