Psiholog's EUR/USD trading style

2HRS TIME FRAME CHART. Same view here .some sign of weekness..but recultant due to the news event that tend to rally equities ( the stimulus)

if it breaks down now... I'd wait until 1.2860 to see what happens

1.2870 for me now...closed my position and will sit on the sidelines most likely until euro session. Glad that first trade was a 50pip winner, even though it was 1/3rd position size...the logic was simple and the risk well worth it considering i placed that trade 2 seconds after ibfx opened haha.

What intrigues me right now is the fact that us stock market futures gapped lower and remain lower while eur/usd gapped up and just came back down (correlation kind of messed up right now). Clearly something big is going on fundamentally and the best we can all do right now is pick trades that should have profit level reached within a few hours at the most. Im starting to believe the stimulus debate is just the surface of a much larger problem/bomb shell to be revealed...to be seen.

Even though the trend of EU is generally down, I noticed that lately when equities rally during the U.S. session, the EU is more likely to rally, mainly during that session.

after further pa development this sunday it has come to my attention just how crucial an area we are in. Since the market opened...there is a possibility (as much as i dont like it) that we are currently in a bull flag that has developed over the past 8 hours. If that is the case and this flag does break to the upside...it does seem to have accumulated enough momentum to break hard to the upside and out of the trend weve been in since 1.47. As all triangles go...a break of the walls is what truly will tell us future direction. To the downside...the first strong support is around 1.2865/75 area...we break that...the shorts are back. Careful pipping all...we could go either way here now.

Sure does look like a bull flag pattern, i am out till either side breaks as there seems to be so much resistance at 1.3000.

Good work with the thread!

thank you


i too am flat until at least this hourly candle closes. for now 1.2875 does seem to act as strong support so im very curious if we manage to close below that level or if we close within the triangle walls (1.2900 and above or so). I will list at that time next possible entries, at least according to my strategy, time to turn on the news as well... (helps develop bias)

looking at the 15min chart the criteria for breakout has developed. candlestick that closed outside the triangle, a second one that did not reenter the triangle and this third one that is testing the lower wall which also coincides with yet another psychological level..1.2900. oh how tempting a short is here but i am controlling my impulses haha...1.2875 is too crucial at this time

so..we closed the hourly candle within the previous triangle wall. because of that temporary spike down..the lower wall has been extended. now while this is not a triangle anymore and instead a downwards channel (pennant i believe is correct name)...it still suggests indecision and we can go anywhere from here. no trades...no entries...not until further volatility and a break of a strong support (1.2875 at this time) or strong resistance (1.3000 at this time). This is not good scalping territory either as a break out of this range can come at any time, bias is hard to determine as well with the recent break in correlations and stimulus plan on our doorstep.

while waiting for the market to provide entries...i have done what i usually do in times of indecision. I look at the longer term picture. Currently the 1hour charts zoomed out caught my attention. (Recall the W and M patterns)....well once again we are presented with a potential W. For it to be valid we would have to break 1.3060 which acted as strong resistance last week and is the possible neckline but the idea is if that happens...a return to 1.34 is more then likely. Also note that the 1.2870-1.2900 is pretty much the middle point for last weeks pa which shows just how crucial an area we are in and being flat is best at this time. The main question is, does the stimulus plan debate/approval/senate bickering have enough power to push us out of the bigger trend started at 1.47 as a move above 1.3 would do (the W) or will that stimulus debate/approval/senate bickering will push us only lower with new lows in sight. My bias is still short but its anyones guess right now

this has turned into a waste of time for me...going to sleep...be back us session...maybe...careful pipping all

W

where are u ?

the W didn't breakout to the upside. and it was rejected very fast in one of the craziest days of the year.... Did you survive? I got some losses.... I'm short now from 1.30. target 1.2550

did i survive. of course i did...i knew the stimulus plan would be voted on by the senate. i knew bernanke would talk and the usual questions that follow. not only that but the bombshell plan announced by that guy (whatever his name is) where up to 1trillion will be given to banks to improve lending to the consumer. today was no day to trade therefore my forex platform was closed. sometimes the best trade is no trade. now that we are done with all that...things should be clear (at least i hope).

current technical analysis.
while the W to the upside did not develop, an M to the downside developed. because the channel to the downside since 1.47 was broken one too many times...i have erased those lines for now (at least until new low is made at which new walls would be redrawn. Currently, we are trending between 1.3100 and 1.2800, a break of one of those values will further confirm direction. for now...heres how the M looks...



Sidenote: note that the range i mentioned is 300 pips. THat is all scalp territory, no real channels, no idea when the low or high will be broken. AS all ranging markets go, buying at the low and selling at the high is ideal, stop loss of course in case of breakout. Still, I choose not to do that, pa has moved too fast and my main weapon (channels), have not clearly developed in a way that i feel the walls are solid so a break of the range will provide next entries. For example...we break lets say 1.2815 to the downside...id wait for a pullback to retest it to prove it has become resistance and also check any possible channel that developed to confirm entry even more. I will post entries as they develop.

heres the trendline at the low that i mentioned in my previous post. I truly feel that if we break that we are going to break south HARD. My bias is very short right now and all signs point to it...pa has to confirm it though.

GBP/JPY has just broken 130.00 support and also the bottom of upward channel on daily chart. Does that mean EUR/USD is heading north?

i stopped paying attention to correlations between pairs a long time ago. It's hard to say what one pair will do based on the actions of another. take for example usd/jpy. Its been making new lows all day while eur/usd has been going higher, partial retracement for now if not the start of a bull run. the geppy is even worse to understand, its as i like to refer to it ..."bi-polar" going from the very lows to the very highs in an instant then right back to the lows again. So to answer your question, follow your observations and instincts, possibly find a thread that talks about correlations or just use such correlations for a general idea of the longer term, not for on the spot decisions. Play safe, these days, hard to say what down is up and up is down

You've got some crazy necklines there

I think it toward to bearish.

i must agree.
its hard to make sense of what patterns may develop given the current pa one thing is clear though, double tops and double bottoms before price reverses is what weve seen for quite some time now. It's just pa moves now...first attempt to break a resistance is followed by another. If that attempt fails too, a possible M may develop which takes price further down. However, once the point considered neckline is reached...end of the road buddy, this is the new low...so price pulls back and then retests that low later on followed by yet another bounce that may turn into a W that pushes things again higher. Once that resistance which can be considered neckline is reached again...bounce off that level again..twice.

All this has led me to a conclusion. Lower highs, higher lows, price action is getting narrower and narrower by the day. Even now note that we are hanging around the open of this weeks market. Which made me come to a radical conclusion, this pa is common of a triangle. Analysis on the 4h charts has revealed it to me. Whats better yet, it explains why we broke the downtrend channel from 1.47 without going much higher and any attempts to go lower have been stopped violently.



zoom out a bit further, whats the even bigger pattern. only the pole and bear flag on the 4h charts. flagpole is 1.47 to current low..triangle as shown before...if this is as i think it is...whats to come south is crazy to think about.



the pole and bear flag is a bit of a stretch of the imagination and only a break down will confirm it. for now...looking at the triangle walls is crucial, for me at least, with a very short bias