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Technical Analysis; S/R, Trendlines, MA's, Useful Indicators and Price-patterns

  • #41
  • Sep 8, 2008 4:07am Sep 8, 2008 4:07am
Quoting jupiter_peak
Hi there folks,

I see EJ inside a broadening triangle on weekly. Looks to me that the uptrend line/channel was broken. Well, price is rechecking the broken TL.

Also, this broadening triangle looks as if it's about to break.

Lets see what happens...

Looks like this one is headed down too.

Cheers.

JP.
Hi JP. Yes the TL is broken. So if you had/have any long position, it would be a good time to bank profits, since a break of a TL is usually a sign of weakening trend. Now, according to the book, we need three successive closing bars below the most significant low on the way up (153.00 area) to "approve" this to be trend reversal. I posted an example of how the three closing days below the last significant low rule exclude the option to make any hasty conclusion that the trend have reversed;
Attached Image (click to enlarge)
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Measure twice, cut once
  • #42
  • Sep 8, 2008 4:24am Sep 8, 2008 4:24am
Quoting jupiter_peak
Hi there Aediaz,

Although I see the USD stregthening (OIL and USDx), I also observe a double tops on daily for USDCAD.

Maybe it will go down a little before it heads up?

I also see a treandline that wasn't broken on monthly.

Check this out.

JP.
I'm watching this potential double top, too. A close below your lowest red line on daily chart would confirm it. A close above, and we have double top continuation and same target-measuring as for double top can be applied.

Remember that TL need to be drawn like you don't see the whole chart (neutral). By starting from the absolute highest/lowest point and draw them to first peak/rally point is essential. Notice that on monthly chart, trend doesn't "reverse" until LH is taken out, 1200 pips away. Different story on daily chart;
Attached Image(s) (click to enlarge)
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Measure twice, cut once
  • #43
  • Sep 8, 2008 4:26am Sep 8, 2008 4:26am
Thanks Sanchezz and Mark
Measure twice, cut once
  • #44
  • Sep 8, 2008 4:39am Sep 8, 2008 4:39am
On request from CIORIMAU, a daily and 4h chart on eur/usd.

The middle blue line on 4h chart, is just a parallel from the lowest line. On daily it seems like we're close to a trend reversal.
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Measure twice, cut once
  • #45
  • Edited 8:32am Sep 8, 2008 8:01am | Edited 8:32am
Hello eadiaz, how your doing buddy? Just came accross one question about your trendlines drawn. You use oldschool line chart now only for your lines as I see, correct? Also what minimum timeframe you work with?
  • #46
  • Sep 8, 2008 11:43am Sep 8, 2008 11:43am
Hi, yes I draw them from closing-price. Before I've said that the difference in many occasions can be minimal (I still stand by that statement. The difference presented from time to time will not matter for me) and the reason I, after including shadows for a long time, choice to use closing-price, is that I find it more objective and almost easier. If you want to include shadows, I find Igroks method for applying TL to be very good, too.

Daily chart where red dotted lines are drawn from whole candles and blue from closing-price
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Measure twice, cut once
  • #47
  • Sep 8, 2008 12:45pm Sep 8, 2008 12:45pm
Quoting aediaz1
Hi, yes I draw them from closing-price. Before I've said that the difference in many occasions can be minimal (I still stand by that statement. The difference presented from time to time will not matter for me) and the reason I, after including shadows for a long time, choice to use closing-price, is that I find it more objective and almost easier. If you want to include shadows, I find Igroks method for applying TL to be very good, too.

Daily chart where red dotted lines are drawn from whole candles and blue from closing-price
So what do you do now??because you not draw more lines on eurusd.do you will only waiting the signals on other timeframes?
Sorry about my english...
  • #48
  • Sep 8, 2008 12:58pm Sep 8, 2008 12:58pm
Quoting aediaz1
Hi, yes I draw them from closing-price. Before I've said that the difference in many occasions can be minimal (I still stand by that statement. The difference presented from time to time will not matter for me) and the reason I, after including shadows for a long time, choice to use closing-price, is that I find it more objective and almost easier. If you want to include shadows, I find Igroks method for applying TL to be very good, too.

Daily chart where red dotted lines are drawn from whole candles and blue from closing-price
Thank you for youranswer eadiaz. Im still curious what minimal timeframe your using?
  • #49
  • Sep 8, 2008 3:05pm Sep 8, 2008 3:05pm
Well i myself have been using closed prices to draw the trend lines myself. To share my thoughts, using closed prices are more objective given that that was THE settled price, the price everybody has given in to at that very moment.

To draw with closed prices then compare it against the wicks should provide a better picture. What is important is that the pattern must make sense, adjusting it after analyzing with both comparisons will be more objective.

Instances where using the closed price may be that a point touched with the closed price, but 3 other wicks falls nicely into the trend line, to me at least it still makes a pattern.

In a casual observation, I noticed following prices struggles just as much at closed prices as they do in extremes, as do comparing successful breakouts with closed price vs extremes , thus using closed prices actually allow a better entry ? No ? You decide
  • #50
  • Sep 8, 2008 3:09pm Sep 8, 2008 3:09pm
Looks like price is channeling down on monthly.

Also inside a triangle that looks as if it's ready to break. Remember that these formations usually break anywhere from 2/3 to 3/4 its actual life time.

With cable going down and swissy going up, I guess we should be in for a break shortly.

Happy trading.

JP.
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  • #51
  • Sep 9, 2008 11:17am Sep 9, 2008 11:17am
Hi Aediaz,

I spotted this broadening formation on EJ weekly.

It seems to me that we need a close below the 1% value that would be the 151.48 level.

However we have the low of 2007 that could somehow work as a support. That level would be 149.26.

We could work at the 151.48 break and have 222 pips down until this level and wait for another break (0.5%) below this support?

How would you play this one out?

Oh, an by the way, I see support @ the 151.23 area.

I guess I am being very cautious here.

Cheers,
JP.
Attached Image (click to enlarge)
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  • #52
  • Sep 9, 2008 11:37am Sep 9, 2008 11:37am
Quoting CIORIMAU--
So what do you do now??because you not draw more lines on eurusd.do you will only waiting the signals on other timeframes?
I will wait for any clear signal like break-out, price-pattern etc yes. Patience is always a good thing, great trades doesn't happen every day, not for me at least.

Quoting belekas
Thank you for youranswer eadiaz. Im still curious what minimal timeframe your using?
4h is normally my lowest TF. In very few occasions will I look lower, but (most likely) only to find a suiteable place for intradays stops.

Quoting aiyahmarklah
Well i myself have been using closed prices to draw the trend lines myself. To share my thoughts, using closed prices are more objective given that that was THE settled price, the price everybody has given in to at that very moment.

To draw with closed prices then compare it against the wicks should provide a better picture. What is important is that the pattern must make sense, adjusting it after analyzing with both comparisons will be more objective.

Instances where using the closed price may be that a point touched with the closed price, but 3 other wicks falls nicely into the trend line, to me at least it still makes a pattern.

That's how I see it.

Quoting jupiter_peak
Looks like price is channeling down on monthly.

Also inside a triangle that looks as if it's ready to break. Remember that these formations usually break anywhere from 2/3 to 3/4 its actual life time.

With cable going down and swissy going up, I guess we should be in for a break shortly.

Happy trading.

JP.
Nice and clean chart. Lovely. Double top on 4h chart. Although the upward movement haven't been of any significant character, this pair have been bearish for the last 20 days. And maybe we can see the gap get filled too.
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Measure twice, cut once
  • #53
  • Sep 9, 2008 12:19pm Sep 9, 2008 12:19pm
Quoting jupiter_peak
Hi Aediaz,

I spotted this broadening formation on EJ weekly.

It seems to me that we need a close below the 1% value that would be the 151.48 level.

However we have the low of 2007 that could somehow work as a support. That level would be 149.26.

We could work at the 151.48 break and have 222 pips down until this level and wait for another break (0.5%) below this support?

How would you play this one out?


Oh, an by the way, I see support @ the 151.23 area.

I guess I am being very cautious here.

Cheers,
JP.
Hi. There is three things that would favour more downside if weekly-bar closes below currently support viewable on posted chart;

  1. Divergence on MACD
  2. TL break
  3. Previous HL (4-time tested support now) broken.

Ask you can see, we are at breakout-level from support right now. Just remains to see if price will stay at/below this price. If price closes higher, this chart tells another story.

Broadening tops/bottoms isn't a pattern I have strong confidence with. But I remember from Igroks book that he talks about them, so there got to be something valuable about this formation, although I haven't found it yet.

Attached Image (click to enlarge)
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Measure twice, cut once
  • #54
  • Sep 9, 2008 2:21pm Sep 9, 2008 2:21pm
Quoting aediaz1
Hi. There is three things that would favour more downside if weekly-bar closes below currently support viewable on posted chart;

  1. Divergence on MACD
  2. TL break
  3. Previous HL (4-time tested support now) broken.

Ask you can see, we are at breakout-level from support right now. Just remains to see if price will stay at/below this price. If price closes higher, this chart tells another story.

Broadening tops/bottoms isn't a pattern I have strong confidence with. But I remember from Igroks book that he talks about them, so there got to be something valuable about this formation, although I haven't found it yet.


Yes, Igrok refers to them in his book as a formation he really dislikes.

Also, by measuring the double tops we can have a potential target of ~138.75. And if so, if we indeed reach that level, I would risk and say we could go lower reaching a 100% correction.

Now, of course that all this depends on EJs proxys, mainly cable. As we expect, cable should go all the way down to ~1.70 area.

Looks as it still has room to go down.

Cheers.
JP.
Attached Image (click to enlarge)
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  • #55
  • Sep 9, 2008 2:28pm Sep 9, 2008 2:28pm
Hi Aediaz,

Here's another clean one:

GJ is inside a desc. Channel from 1978... wow, I was just a little kid, actually a baby!!

Now, we also have a triangle that looks to me is ready to break down.

I don't have the space on my chart to draw the parallel line that would make the channel thus proposing the potential target.

This should be a HUGE fall!!!

JP
Attached Image (click to enlarge)
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  • #56
  • Sep 9, 2008 2:49pm Sep 9, 2008 2:49pm
Quoting jupiter_peak
Yes, Igrok refers to them in his book as a formation he really dislikes.

Also, by measuring the double tops we can have a potential target of ~138.75. And if so, if we indeed reach that level, I would risk and say we could go lower reaching a 100% correction.

Now, of course that all this depends on EJs proxys, mainly cable. As we expect, cable should go all the way down to ~1.70 area.

Looks as it still has room to go down.

Cheers.
JP.
Careful measuring weekly E/J as any double top. Double tops/bottoms perform best when they are small and sweet, just like your Brazilian girls are

Although, I agree that this pair reveal big potential.

Do I smell a correlation-theory here, JP Correlation haven't provide anybody with any edge, unless in hindsight of course.

100% correction ? You could most likely see a trend-change.
Measure twice, cut once
  • #57
  • Sep 9, 2008 2:52pm Sep 9, 2008 2:52pm
I am starting to like this...

We could be observing a HUGE diamond on Aussie.


Looks like price is headed down for good.

Check it out...

JP.
Attached Image (click to enlarge)
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  • #58
  • Sep 9, 2008 3:09pm Sep 9, 2008 3:09pm
Quoting jupiter_peak
Hi Aediaz,

Here's another clean one:

GJ is inside a desc. Channel from 1978... wow, I was just a little kid, actually a baby!!

Now, we also have a triangle that looks to me is ready to break down.

I don't have the space on my chart to draw the parallel line that would make the channel thus proposing the potential target.

This should be a HUGE fall!!!

JP
I've no experience trading triangles on monthly basis, as I can recall right now. There is no data before 1978 so can't tell how they have performed in the past either. Remember that triangles are created when sellers accept lower levels and buyers accept higher levels. In other terms, price is undecided.
Measure twice, cut once
  • #59
  • Sep 9, 2008 3:16pm Sep 9, 2008 3:16pm
I have plenty of reasons to believe cable will fall even more...

Perhaps towards the mid 1.5s to 1.6.

Therefore, at least GJ should go down as expected too. I would say cable will be going down too.

See the chart below...


JP.
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  • #60
  • Sep 9, 2008 3:35pm Sep 9, 2008 3:35pm
Quoting aediaz1
I've no experience trading triangles on monthly basis, as I can recall right now. There is no data before 1978 so can't tell how they have performed in the past either. Remember that triangles are created when sellers accept lower levels and buyers accept higher levels. In other terms, price is undecided.
Formations like triangles usually break 2/3 - 3/4 of its total life time.

I say this because JJ Murphys book states it and Igrok agrees with this idea.

http://www.forexfactory.com/showpost...postcount=1443

So looking at this triangle, it looks to me it's about to head down.

Also price did not fail to bounce from the LTL of the "recently" formed channel. One instace where trends reverse while inside a channel, is when price fails to reach one of the sides of the channel. (as stated by JJ Murphy). Therefore, I believe price is headed down.

JP.
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