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Hourly Fibonacci Method (Day Trading)

  • #421
  • Dec 20, 2009 7:49pm Dec 20, 2009 7:49pm
Quoting Hgnr
I am still confuse with your trading technique...because it is very different with fibo technique that I know....
Hi Hgnr,

You’re probably judging by the daily analyses. This trading technique involves analyses on higher time frames (H4 chart, Daily, etc.) to understand the bigger picture.
The fibo technique is only employed on the Hourly chart when it’s supported by the H4 chart and above. There are a number of previous posts on this thread where you’ll find the application of the Hourly fibo technique. Please check them out.
  • #422
  • Dec 21, 2009 2:31am Dec 21, 2009 2:31am
Hi Tunji,

I think you must have been trading for many years! You method is clear and efficient! This can not from a guy who only trade for several years.

Keep posting and have a nice trading day!
  • #423
  • Dec 21, 2009 3:56am Dec 21, 2009 3:56am
Time of Posting – Mon. Dec. 21, 2009. 09:55 GMT

On the Daily chart (attached), we would observe price has been forming new lower highs and lower lows: a formation that fully supports a bearish bias. Last week Thursday, price broke below, at that time, a critical support level @ 1.6165 (that we’ve highlighted using the upper blue broken line), which created an opportunity for the bears to resume their activities. Please NOTE the broken 1.6165 level has since then turned to a good resistance level – preventing upward price movement.
As a result of the broken former support level, we concluded last week our bearish bias had been sustained and we would expect the next critical support at a potential support-confluence of a Weekly swing low @ 1.5982 (which we’ve highlighted on the Daily chart using the lower blue broken line) and the lower edge of the “minor” downward or bearish channel (the red channel) that we’ve been discussing for a while. Today, our bearish bias remains intact. While seeking opportunities to sell, let’s bear in mind the bears might meet certain hurdles around Friday’s low @ 1.6051 (not highlighted). Although price is currently about 50 pips away from it – giving room for potential selling opportunities – more conservative traders might prefer to wait for price-break below it to be more convinced of the bears’ resolve.

On the H4 chart (attached), price broke, at that time, the most recent swing low @ 1.6109 (which we’ve highlighted using the upper blue broken line) downward. That automatically sustained our bias in favor of a downward price move. The Friday’s low – also the most recent swing low @ 1.6051 (that we’ve highlighted using the lower blue broken line), which we discussed on the Daily chart as a support level to keep in mind is seen on the H4 chart.
The white horizontal line @ 1.6248 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
Attached Images
  • #424
  • Dec 21, 2009 4:13am Dec 21, 2009 4:13am
Quoting jon 1982
Hi Tunji,

I think you must have been trading for many years! You method is clear and efficient! This can not from a guy who only trade for several years.

Keep posting and have a nice trading day!
Thanks for your kind and encouraging words Jon.
  • #425
  • Dec 22, 2009 3:08am Dec 22, 2009 3:08am
Time of Posting – Tue. Dec. 22, 2009. 09:07 GMT

On the Daily chart (attached), yesterday, as anticipated, price continued its downward move. It broke Friday’s low @ 1.6051 and then moved further downward toward the critical support area – the potential support-confluence of a Weekly swing low @ 1.5982 (which we’ve highlighted on the Daily chart using the lower blue broken line) and the lower edge of the “minor” downward or bearish channel (the red channel). However, the bears’ momentum seems to be waning as price, after breaking the 1.6051 level, traveled down only about 20 pips to 1.6027 before moving back upward to close @ 1.6048 – almost the same level with 1.6051. The fact that the above price action occurred at an area very close to the support-confluence of Weekly swing low and channel’s lower edge suggests the bears are already in a bullish zone.
Although, our bias remains bearish from a day-trade perspective, current price actions described above are telling us to take extra caution while seeking Short trade opportunities. Price-break below the previous day’s low @ 1.6027 (not highlighted) would have been a good sign telling us about the bears’ readiness to continue their move, but, due to price’s current proximity to the support-confluence, we are, most likely, already in the bulls’ zone.
In all, our bearish bias remains but current signs tell us to exercise a great deal of caution as we seek to sell this pair.

On the H4 chart (attached), price has broken the most recent swing low @ 1.6051 (which we’ve highlighted using the blue broken line) downward. That automatically sustains our bias in favor of a downward price move. However, buttressing the observations on the Daily chart, we would observe price is yet to break decisively below the 1.6051 level. That again tells us the bears are most likely within the bulls’ zone – especially when seen in light of price’s proximity to the critical support-confluence of the Weekly swing low @ 1.5982 and the lower edge bearish channel
The white horizontal line @ 1.6248 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, for more aggressive traders, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
Attached Images
  • #426
  • Dec 23, 2009 3:46am Dec 23, 2009 3:46am
Time of Posting – Wed. Dec. 23, 2009. 09:45 GMT

On the Daily chart (attached), we would observe price is currently around a possible bull-zone: In the past days, we’ve been discussing the possibility of the bears’ move being stalled around a critical support area – the support-confluence of a Weekly swing low @ 1.5982 (which we’ve highlighted on the Daily chart using the blue broken line) and the lower edge of the “minor” downward or bearish channel (the faint gray channel).
However, yesterday, price breached the 1.5982 level and closed below the “minor” bearish channel – a sign that the bears are probably resolved to keep their momentum and disregard the support-confluence. To be more convinced of a continued downward price move, we would prefer to see price break below yesterday’s low @ 1.5920 (not highlighted). If eventually price breaks decisively below the support confluence, our focus will then be on the lower edge of the “major” bearish channel (the red channel), which we would expect to be the next major support area. In all, our bias remains bearish and with clearer coast, we would be seeking Hourly Short trade setups – with the support of the H4 chart.

On the H4 chart (attached), price broke, at that time, the most recent swing low @ 1.6027 (which we’ve highlighted using the upper blue broken line) downward. That automatically sustained our bias in favor of a downward price move. However, as discussed on the Daily chart, we would like to see price break below yesterday’s low – also the most recent swing low @ 1.5920 (which we’ve highlighted using the lower blue broken line) to be more convinced that price is ready to move further downward today.
The white horizontal line @ 1.6099 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
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Click to Enlarge Name: GBPUSD - Daily 231209.gif Size: 31 KB
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  • #427
  • Jan 4, 2010 1:48am Jan 4, 2010 1:48am
Happy New Year to everyone! ...wishing all of us the BEST of 2010.
  • #428
  • Jan 4, 2010 2:19am Jan 4, 2010 2:19am
Time of Posting – Mon. Jan. 04, 2010. 08:17 GMT

On the Daily chart (attached), starting around the beginning of the last month in 2009, December, the EURUSD pair got caught in a very strong wave of a downward price movement which, most likely, was partly triggered by a negative MACD divergence observed on the Daily chart. The pair later had a shallow bullish retracement which met strong resistance about 20 pips away from a critical resistance level – a previous Weekly swing low @ 1.4480 (which we’ve highlighted on the Daily chart using the upper blue broken line).
Observing current price movement, the bears seem set to continue their movement, however, there’s a critical support level – the most recent Daily swing low @ 1.4216 (that we’ve highlighted using the lower blue broken line), which we would like to see price break below to be further convinced of the bears’ resolve. In all, our bias is bearish. Conservative traders would probably wait for the break of the 1.4216 level before seeking any Hourly Short trade setup – supported by the H4 chart.

On the H4 chart (attached), price has breached the most recent swing low @ 1.4272 (which we’ve highlighted using the upper blue broken line) downward. That automatically sustains our bias in favor of a downward price move. However, we would notice price is struggling to stay below the 1.4272 level – a sign that the bears might currently be facing some hurdles; and that buttresses the suggestion discussed on the Daily chart that we would prefer price to break below a critical support level – the most recent Daily swing low @ 1.4216 (that we’ve highlighted on the H4 chart using the lower blue broken line) to be convinced of the bears’ readiness to keep moving.
Price is currently about a 100 pips away from the 1.4216 level, hence, more aggressive traders might attempt to seek an Hourly Short trade setup while keeping in mind that the EURUSD pair is possibly, currently within the bulls’ zone.
The white horizontal line @ 1.4439 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
Attached Images
  • #429
  • Jan 5, 2010 4:00am Jan 5, 2010 4:00am
Time of Posting – Tue. Jan. 05, 2010. 10:01 GMT

On the Daily chart (attached), since late last year we’ve been monitoring price behavior within two downward or bearish channels: a “minor” channel (the red channel) which is seen within a “major” channel (the faint gray channel). The minor bearish channel, for quite a while now, has been doing a very good job of guiding price’s upward and downward moves. Yesterday, price hit the upper edge of the “minor” bearish channel, reversed rather sharply and consequently closed as a reversal candle formation. That price action signaled a strong possibility of the bears resuming their action in an overall or longer term bearish trend. Further buttressing the bears resolve is earlier price action today, which resulted in price breaking below the previous day’s low @ 1.6056 (not highlighted). From a day-trade perspective, our bias is now in favor of the bears. The coast seems clear enough for us to seek Hourly Short trade setups – supported by the H4 chart.
We expect the next important support level to be the lower edge of the “minor” bearish channel.

On the H4 chart (attached), price has broken the most recent swing low @ 1.6056 (which we’ve highlighted using the blue broken line) downward. That automatically sustains our bias in favor of a downward price move.
The white horizontal line @ 1.6240 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
Attached Images
  • #430
  • Jan 6, 2010 4:15am Jan 6, 2010 4:15am
Time of Posting – Wed. Jan. 06, 2010. 10:16 GMT

On the Daily chart (attached), in line with our expectation yesterday, price continued its bearish move and closed as a bear-bodied candle which, to an extent, signifies the strength of the bears. Earlier today, price collapsed further to break below the previous day’s low @ 1.5964 (not highlighted): another good sign confirming the downward price movement, most likely, still has momentum. However, currently, from a day-trade point of view, price seems to be in a bullish retracement; hence we might have to wait for a clearer coast before placing our Short trades on this currency pair.
The Hourly lower-high, lower-low price formation, which is a condition that must be met before seeking Short trades – based on the primary method discussed on this thread – would be a good way of determining the appropriate time to start seeking today’s Short trades.
As previously mentioned, once the bears resume their actions, we expect the next important support level to be the lower edge of the “minor” bearish channel.

On the H4 chart (attached), yesterday, price broke the most recent swing low @ 1.6056 (which we’ve highlighted using the blue broken line) downward. That automatically sustained our bias in favor of a downward price move. As discussed on the Daily chart, analyzing from a day-trade perspective, we would observe price is currently having a bullish retracement; hence, a clearer coast (as discussed above) should be helpful before seeking Short trades today.
The white horizontal line @ 1.6152 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
Attached Images
  • #431
  • Jan 7, 2010 3:47am Jan 7, 2010 3:47am
Time of Posting – Thur. Jan. 07, 2010. 09:48 GMT

On the Daily chart (attached), again in line with our expectation yesterday, price had its bullish retracement, and then subsequently resumed its bearish move toward the lower edge of the “minor” downward or bearish channel. Although, yesterday’s candle closed as a “doji” – signaling the possibility of a deeper bullish retracement – price disregarded the sign and went ahead to break the previous day’s low @ 1.5936 (not highlighted). Now that the coast seems much clearer, the bearish channel’s lower edge – as the next important support level – is back in focus. Another critical support level we should keep in mind is the most recent Daily swing low @ 1.5831 (that we’ve highlighted using the blue broken line), which is currently some pips above the channel’s lower edge. We should consider the area between the 1.5831 level and the channel’s lower edge as a possible bulls’ zone as price moves further downward toward the area.

On the H4 chart (attached), price has broken the most recent swing low @ 1.5936 (which we’ve highlighted using the upper blue broken line) downward. That automatically sustains our bias in favor of a downward price move. We could observe on the H4 chart the important 1.5831 support level (which we’ve highlighted using the lower blue broken line) that we discussed on the Daily chart. Price is currently about a 100 pips away from the support level; hence, we seem to have enough room to go short on the currency pair based on the Hourly setups.
The white horizontal line @ 1.6057 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
Attached Images
  • #432
  • Jan 8, 2010 3:57am Jan 8, 2010 3:57am
Time of Posting – Fri. Jan. 08, 2010. 09:57 GMT

Pls NOTE: As always, if there’s one particular day in every month that trending method/pattern traders should be wary of trading most, it has to be the first Fridays of every month when the Non-Farm Payroll (NFP) report is usually released.
While I’ll go ahead to give my personal analysis on the USDJPY pair, please, let’s bear in mind that, regardless of any technical analyses, NFP usually rules today.

On the Daily chart (attached), we would observe a steep upward movement in price, which is captured within a relatively narrow upward or bullish channel. In line with the longer term upward trend, the bulls were fully in charge yesterday. However, early price action today is showing the possibility of, at least, a shallow bearish retracement as price couldn’t break above previous day’s high @ 93.76 (not highlighted). Also, though barely noticeable, we would observe a waving negative MACD divergence if we look closely. That is a sign supporting the possibility of a bearish retracement.
Pls NOTE: A waving MACD divergence is yet to be a valid divergence; hence it’s a relatively weak indicator.

On the H4 chart (attached), price broke, at that time, the most recent swing high @ 92.73 (which we’ve highlighted using the blue broken line) upward. That automatically sustained our bias in favor of an upward price move. However, to buttress our “bearish retracement” observation on the Daily chart, the waving negative MACD Divergence is more noticeable on the H4. Again, in line with the longer term upward trend, our bias remains bullish, but current price action is telling us to exercise patience in seeking long trade setups on the this currency pair as it seems the bears are resolved to fight back – even if it’s only for a while.
The green horizontal line @ 92.09 highlights the most recent swing low, and as long as price stays above it – in the absence of any new and higher swing low – our bullish or upward bias remains intact; but, again, today is “NFP Day”, please let’s keep that in mind.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: USDJPY - Daily 080110.gif Size: 27 KB
Click to Enlarge Name: USDJPY - H4 080110.gif Size: 26 KB
  • #433
  • Edited 3:57am Jan 11, 2010 3:38am | Edited 3:57am
Time of Posting – Mon. Jan. 11, 2010. 09:39 GMT

On the Daily chart (attached), since November, last year, the GBPUSD pair has been in a bearish mode – forming new lower highs and lower lows. However, current price action, which started on Friday, last week, is giving indications the bears might be losing their grip – at least for a while: Price was unable to move down close to – let alone break below – the most recent Daily swing low @ 1.5831 (which we’ve highlighted using the lower blue broken line). A break below the 1.5831 level would have suggested the bears were ready to push further downward. Also, price is yet to break above the most recent Daily swing high @ 1.6240 (which we’ve highlighted using the upper blue broken line). A break above the 1.6240 level would give a strong sign the bears have lost momentum.
As a result of the situation analyzed above, it’s reasonable to conclude that the GBPUSD is currently in a state of indecision. This indecisive mode is well captured in the current symmetrical triangle formation observed on the Daily chart.
Although, from a day-trade perspective, current price action is supporting a bullish bias more than a bearish one, we have enough reasons to be cautious of seeking Long trade setups. Moreover, the “gap” created as a result of the difference between Friday’s close @ 1.6020 and Monday’s open @ 1.6057 is expected to be closed-up – and that would necessitate a bearish move. Hence, more conservative traders might prefer to wait for a clearer coast before placing trades today.

On the H4 chart (attached), price has broken the most recent swing high @ 1.6109 (which we've highlighted using the blue broken line) upward. That shifts our bias in favor of an upward price move. However, we would also observe in closer proximity price’s action around the upper edge of the symmetrical triangle mentioned on the Daily chart. Again, we have enough reasons to be cautious of seeking Long trade setups for now, and more conservative traders might prefer to wait for a clearer coast before placing trades today.
The green horizontal line @ 1.5895 highlights the most recent swing low, and as long as price stays above it - in the absence of any new and higher swing low - our bullish or upward bias remains intact.

However, for more aggressive traders, we still need our Hourly charts – using Fibonacci retracement levels and important support levels – to seek promising areas to take our Long positions. Price pattern on the Hourly must also be forming higher highs and higher lows.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
Attached Images
  • #434
  • Jan 12, 2010 4:14am Jan 12, 2010 4:14am
Time of Posting – Tue. Jan. 12, 2010. 10:13 GMT

On the Daily chart (attached), last week Friday, we discussed the possibility of a bearish retracement based on certain signals – one of which was a waving negative MACD Divergence. Although, as earlier said, a waving MACD Divergence is relatively not a very strong indicator of future price movement, it was however good enough to caution us.
With recent events, it turned out the bearish signals were helpful as price has been in a bearish mode for a couple of days now. From a medium term perspective, our bullish bias remains intact until price breaks below a critical support level – the most recent Daily swing low @ 91.24 (which we’ve highlighted using the blue broken line). Contrastingly, from a day-trade perspective, which is our focus on this thread, our bias has shifted in favor of the bears. However, price’s downward move is getting close to the critical support level @ 91.24, and the bears might experience difficulties breaking below it. Due to this proximity of current price position to the support level, more conservative traders might prefer to wait and see price break below it before seeking Hourly Short trade setups – supported by the H4 chart.

On the H4 chart (attached), price has breached the most recent swing low @ 91.80 (which we’ve highlighted using the upper blue broken line) downward. That automatically sustains our bias in favor of a downward price move.
We could observe, more clearly, the now valid negative MACD Divergence: that gives additional support to the current downward movement. We could also observe on the H4 chart the important 91.24 support level (which we’ve highlighted using the lower blue broken line) that we discussed on the Daily chart. Price is currently about 60 pips away from the support level; hence, for more aggressive traders, there seems to be enough room to go short on this currency pair based on the Hourly setups.
The white horizontal line @ 92.65 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
Attached Image (click to enlarge)
Click to Enlarge Name: USDJPY - H4 120110.gif Size: 25 KB
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  • #435
  • Jan 13, 2010 3:41am Jan 13, 2010 3:41am
Time of Posting – Wed. Jan. 13, 2010. 09:40 GMT

On the Daily chart (attached), before the close of yesterday’s candle, price broke below the critical support level – the most recent Daily swing low @ 91.24 (that we’ve highlighted using the blue broken line), which we discussed yesterday. Consequently, our day-trade bias remains bearish, and now the medium term bias has followed suit. However, to further confirm the 91.24 level has been decisively broken, we would like to see price move below yesterday’s low @ 90.71 (not highlighted).
Price is probably, at the moment, in a bullish retracement on higher time frames i.e. time frame charts higher than the Hourly chart, hence, based on the method discussed on this thread, we might need to exercise patience before seeking Short trade setups on our Hourly charts – supported by the H4 chart.

On the H4 chart (attached), price broke, at that time, the most recent swing low @ 91.80 (which we’ve highlighted using the upper blue broken line) downward. That automatically sustained our bias in favor of a downward price move.
However, as discussed on the Daily chart, price, at the moment, seems to be in a bullish retracement and we would like to see price break below a new support level – yesterday’s low as well as the most recent H4 swing low @ 90.71 for us to be more convinced of the bears readiness to push further downward.
The white horizontal line @ 92.65 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, once we have a clearer coast, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
Attached Image (click to enlarge)
Click to Enlarge Name: USDJPY - H4 130110.gif Size: 26 KB
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  • #436
  • Edited 4:49am Jan 14, 2010 4:34am | Edited 4:49am
Time of Posting – Thur. Jan. 14, 2010. 10:33 GMT

On the Daily chart (attached), recent price actions have reversed the bearish trend that we’ve been familiar with for the past two months: yesterday, price broke above an important resistance level – the most recent Daily swing high @ 1.6240 (which we’ve highlighted using the blue broken line), and, as a result, we are beginning to see price pattern having a higher-high, higher-low formation, which is a very strong sign of a bullish scenario. At least for the time being, we expect price to continue moving northward, hence, our bias from a day-trade perspective has further strengthened in favor of the bulls. Furthermore, price has broken above yesterday’s high @ 1.6306 (not highlighted): a further confirmation of the bulls’ resolve.
Based on the overall scenario, the coast seems clear enough for us to seek Long trade setups on our Hourly charts – supported by the H4 chart.

On the H4 chart (attached), price has broken the most recent swing high @ 1.6193 (which we've highlighted using the blue broken line) upward. That sustains our bias in favor of an upward price move.
The green horizontal line @ 1.6135 highlights the most recent swing low, and as long as price stays above it - in the absence of any new and higher swing low - our bullish or upward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important support levels – to seek promising areas to take our Long positions. Price pattern on the Hourly must also be forming higher highs and higher lows. Please note that our aim is to buy a dip in today's up-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
Attached Images
  • #437
  • Jan 15, 2010 4:21am Jan 15, 2010 4:21am
Time of Posting – Fri. Jan. 15, 2010. 10:20 GMT

On the Daily chart (attached), the bears seem set to continue their “campaign” with price breaching the most recent swing low @ 90.71 (which we’ve highlighted using the blue broken line) downward. The whole downward move that was probably triggered, partly, by a not too visible negative MACD divergence could possibly be the end of the bulls’ reign that started around late November, last year. Based on the big picture (please refer to your Monthly charts), this current bearish move could as well be the resumption of a very long term downward trend that the USDJPY currency pair has been experiencing for years.
However, from a day-trade perspective, although price has breached the 90.71 support, which signifies the possibility of price’s downward movement continuing, it (price) is yet to break below it (90.71 support) decisively; hence, more conservative traders might prefer to see today’s candle close below the support level before seeking Hourly Short trade setups – supported by the H4 chart. Unfortunately, that means keeping off this pair for today.

On the H4 chart (attached), price has broken the most recent swing low @ 90.83 (which we’ve highlighted using the upper blue broken line) downward. That automatically sustains our bias in favor of a downward price move. The 90.71 support level (that we’ve highlighted using the lower blue broken line), which we discussed on the Daily chart is also seen on the H4 chart. We could observe the 90.83 and 90.71 support levels are rather close; that strengthens the notion that the bears are currently around a very strong support area and it would be preferable to see price break below the area decisively to be more convinced of the bears resolve – as alluded to on the Daily chart,.
The white horizontal line @ 92.03 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
Attached Images
  • #438
  • Jan 15, 2010 10:03am Jan 15, 2010 10:03am
Hi Tunji, I attached the 1 hr chart. Trouble you to take a look and let me know if my concept is correct. Thanks

I drew the 1 hr major wave retracement and out a sell entry at 38.2. Sl will be 61.8 (First Chart)

The take profit will be at 100% OP. (2nd Chart)

Thank you Tunji.
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  • #439
  • Jan 16, 2010 5:30pm Jan 16, 2010 5:30pm
Quoting freedomsg
Hi Tunji, I attached the 1 hr chart. Trouble you to take a look and let me know if my concept is correct. Thanks

I drew the 1 hr major wave retracement and out a sell entry at 38.2. Sl will be 61.8 (First Chart)

The take profit will be at 100% OP. (2nd Chart)

Thank you Tunji.
Freedomsg, sorry for the very late reply, but I guess it might still be helpful to everybody.

Your entry and SL seem ok, but I’m not sure if there were other reasons apart from the fibo levels (like previous swing high/lows, pivots, etc.) why you chose to enter and set SL at those points. The same goes for the profit target.
Then, I hope you considered the reward to risk ratio when determining those SL, entry, and profit levels? It’s very important.

I hope my answer is satisfactory. Enjoy your weekend.
  • #440
  • Jan 18, 2010 4:43am Jan 18, 2010 4:43am
Time of Posting – Mon. Jan. 18, 2010. 10:43 GMT

On the Daily chart (attached), on Wednesday, last week, price broke above a former important resistance level - the most recent Daily swing high @ 1.6240 (which we’ve highlighted using the blue broken line), and as a result, our bullish bias was reinforced. As usual, when a resistance level is broken, it turns to a potential support level, and that is exactly the situation that occurred in the case of the broken 1.6240 resistance (now former resistance): we would observe that, after the Wednesday-break, price moved further upward on Thursday, but retraced on Friday to test the 1.6240 level, which then acted, expectedly, as a support level. The 1.6240 proved to be a strong support as price hit it and bounced back upward to break the previous trading day’s high – Friday’s high @ 1.6355 (not highlighted). Consequently, our bullish bias remains on this currency pair.
Based on the overall scenario, the coast seems clear enough for us to seek Long trade setups on our Hourly charts – supported by the H4 chart.

On the H4 chart (attached), price has broken the most recent swing high @ 1.6355 (which we've highlighted using the blue broken line) upward. That sustains our bias in favor of an upward price move.
The green horizontal line @ 1.6209 highlights the most recent swing low, and as long as price stays above it - in the absence of any new and higher swing low - our bullish or upward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important support levels – to seek promising areas to take our Long positions. Price pattern on the Hourly must also be forming higher highs and higher lows. Please note that our aim is to buy a dip in today's up-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
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