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Islander and Medici trade the European open

  • #1,701
  • Jun 2, 2010 3:07am Jun 2, 2010 3:07am
Quoting Islander
I'm starting to think that cable's rolling over.....the high was ~ the R1 level with tweezers on the 15 min chart and if € cant get higher either, it will probably continue its move south.....what do you guys think?

I've already taken an initial sell and banked, but I'm looking for the "main" move.....
Agree. Could go as far as 4610, I think. And, surpisingly, ditto, banked a few and waiting for the 'big one'.

EDIT: 4603 is 50% of the move up, 4565 61.8%.

EDIT 2: The big reversal often happen around 9.30. So let's see what happens today...
  • #1,702
  • Jun 2, 2010 3:12am Jun 2, 2010 3:12am
Thanks - I just noticed this on ForexLive

Life is seldom easy

Cable sits at 1.4722 at writing, holding up pretty well so far. Earlier I mentioned talk of decent-sized stops above 1.4750 (as Sean had reported overnight.) I’m now getting reports of sell orders at 1.4755/65 and again at 1.4790/00.
Trading Levels with WRBs
  • #1,703
  • Jun 2, 2010 3:13am Jun 2, 2010 3:13am
Quoting medici
Agree. Could go as far as 4610, I think. And, surpisingly, ditto, banked a few and waiting for the 'big one'.

EDIT: 4603 is 50% of the move up, 4565 61.8%.

EDIT 2: The big reversal often happen around 9.30. So let's see what happens today...

UK time I assume......
Trading Levels with WRBs
  • #1,704
  • Jun 2, 2010 3:14am Jun 2, 2010 3:14am
Quoting Islander
Thanks - I just noticed this on ForexLive

Life is seldom easy

Cable sits at 1.4722 at writing, holding up pretty well so far. Earlier I mentioned talk of decent-sized stops above 1.4750 (as Sean had reported overnight.) I’m now getting reports of sell orders at 1.4755/65 and again at 1.4790/00.
Saw that one too. Added confidence to the sell.
  • #1,705
  • Jun 2, 2010 3:14am Jun 2, 2010 3:14am
Quoting Islander
UK time I assume......
Of course!
  • #1,706
  • Jun 2, 2010 3:17am Jun 2, 2010 3:17am
Quoting medici
Of course!
LOL - well I do have "regular" swing points around both 8:30 and 9.30 your time.....http://cdn.forexfactory.com/images/icons/icon12.gif
Trading Levels with WRBs
  • #1,707
  • Jun 2, 2010 3:20am Jun 2, 2010 3:20am
Quoting Islander
LOL - well I do have "regular" swing points around both 8:30 and 9.30 your time.....http://cdn.forexfactory.com/images/icons/icon12.gif
It is the time - Heard about Greenwich?
  • #1,708
  • Jun 2, 2010 3:22am Jun 2, 2010 3:22am
MArket Profile for today from the US close has its Point Of Control level at 4719 with its next large volume level ~ the MR1 level of 4680.....so as long as price remains under the 4725 area - the slow ema and yesterdays high are both there too - I'll be selling... for now, 4700's holding...

Edit: well it was.....
Trading Levels with WRBs
  • #1,709
  • Edited 3:39am Jun 2, 2010 3:28am | Edited 3:39am
Quoting medici
It is the time - Heard about Greenwich?
well I have navigated accross "The Pond" to the Caribbean - without GPS - so I guess that I might have heard of Greenwich.....but the UKs not on GMT as I think they call it Summer there......the season for rain and stuff....
Trading Levels with WRBs
  • #1,710
  • Jun 2, 2010 3:34am Jun 2, 2010 3:34am
Quoting medici
Agree. Could go as far as 4610, I think. And, surpisingly, ditto, banked a few and waiting for the 'big one'.

EDIT: 4603 is 50% of the move up, 4565 61.8%.

EDIT 2: The big reversal often happen around 9.30. So let's see what happens today...
See...nice entry at 9.30.
  • #1,711
  • Edited 5:57pm Jun 2, 2010 5:00am | Edited 5:57pm
Bat pattern reveals that the Euro bulls are getting exhausted.

EDIT: Butterfly pattern.
Attached Image (click to enlarge)
Click to Enlarge Name: euro bat 2 june.gif Size: 31 KB
  • #1,712
  • Jun 2, 2010 5:25am Jun 2, 2010 5:25am
Quoting medici
Bat pattern reveals that the Euro bulls are getting exhausted.
agreed - the high is in a 15m shooting star - almost a graveyard doji - ~the 50% retrace of the last swing and its looking like a LH has now been put in on the 5 min chart....a move under the still rising 30 ema would - for me - help to confirm - I sold the LH....
Trading Levels with WRBs
  • #1,713
  • Jun 2, 2010 5:28am Jun 2, 2010 5:28am
Quoting Islander
agreed - the high is in a 15m shooting star - almost a graveyard doji - ~the 50% retrace of the last swing and its looking like a LH has now been put in on the 5 min chart....a move under the still rising 30 ema would - for me - help to confirm - I sold the LH....
Note that the lower high was, exactly to the pip, at the predicted reversal level. You don't get that with ZUP etc.
  • #1,714
  • Jun 2, 2010 5:42am Jun 2, 2010 5:42am
Quoting medici
Note that the lower high was, exactly to the pip, at the predicted reversal level. You don't get that with ZUP etc.

that was a good catch - I hadnt pulled that fib http://cdn.forexfactory.com/images/icons/icon9.gif - just sold off the LH - which was also closer to a time line than the high....
Trading Levels with WRBs
  • #1,715
  • Jun 2, 2010 11:52am Jun 2, 2010 11:52am
Hi medici
I am waiting for your Harmonic patterns posts to be able to learn about them by checking the ratios.
So when you post the Bat I realized that probably I have found a previous one in the chart (Bat #1). The ratios look to me ok (no perfect patterns) , and this Bat failed or , you may say it was good for up to 45 pips .
Regarding your Bat #2 ... it was good for about 100 pips ..so it was a great call. I personally can not say that I can idenify it as a Bat :
- point B is at almost at 0.886 (0.382-0.50)
- point D is above X (0.886)
- point D should be 1.618-2.618 of BD and it looks to me it's actual around 1.30-1.40
That's the difference between the theory on books and practical winning trades ...
So I am confused a little bit ...If I choose the ratios so I can find many reason to say it's not a Bat (Bat#2) ...but your practical experience shows that regadless of the name , it has worked perfect ...
So what should be my approach when I come to check if there is or not a valid Harmonic Pattern ?
My only tool is the ratios in the books (atm).
I may assume your target was 1.27 XA ? In that case , when did u close your trade ?
Tks for sharing
David
Attached Image(s) (click to enlarge)
Click to Enlarge Name: jun2 bat1.png Size: 37 KB
Click to Enlarge Name: jun2 bat2.png Size: 28 KB
Click to Enlarge Name: bat sch.png Size: 161 KB
  • #1,716
  • Edited 5:17pm Jun 2, 2010 1:37pm | Edited 5:17pm
Quoting david4u
Hi medici
I am waiting for your Harmonic patterns posts to be able to learn about them by checking the ratios.
So when you post the Bat I realized that probably I have found a previous one in the chart (Bat #1). The ratios look to me ok (no perfect patterns) , and this Bat failed or , you may say it was good for up to 45 pips .
Regarding your Bat #2 ... it was good for about 100 pips ..so it was a great call. I personally can not say that I can idenify it as a Bat :
- point B is at almost at 0.886 (0.382-0.50)
- point D is above X (0.886)
-...
Hi David,

and thanks for giving me the opportunity to clarify things, not least to myself...

First, let's clarify the market psychology of these patterns, and let's stick to bearish patterns for simplicity.

Bearish patterns are top formations, so the thrust down from X to A is the first sign that the market is out of buyers, But apparently there are, as always, some buyers left and they take price from A to B in a forceful fashion, and experience a retracement from B to C.

Now, why couldn't this be a market bottom happening at A? Because at a market bottom there are no sellers left - you don't get the sizeable retracement from B to C. So this is not the bottom but potentially a top, which means that the bulls pushing the CD leg are mistaken.

Seller strength is measured by the XA leg, and buyer strength is measured by the AB leg. Market participants draw Fibonacci levels of each market swing, and the size of your balls is measured by the size of move you can make in the market.

So in order to measure seller and buyer strength we draw the Fibonacci retracement and extension levels for XA and AB. These are the potential reversal levels, and depending on the proportions of the XABC pattern the prime candidates may differ.

To write an essay about all possible proportions and their relation to projected D levels is beyond what I can muster tonight, but Suri Duddella's book is a good guide. You will also notice that different writers use different proportions and so on. So who do you trust? Yourself of course!

Draw the fibs and consider the psychology behind the moves. That's how you learn. For example, cable had a nice run from the 61.8% level of the move up from yesterday's bottom to today's top. That it stopped short of the 61.8% retracement of the move from the top to today's bottom is a sign of potential weakness, and if there's a another day of Euro selling and equity market instability cable may retest the May lows, and a harmonic pattern may form if the bulls have another go at it.

As for your Bat#1, the AB leg is simply market noise around the European open which wouldn't qualify by the psychological criteria stated above.

And when it comes to the Euro short today, I had to go out to attend to other things so I set the TP to 1.22 and SL to breakeven. And I may have got the name wrong - maybe it should be a buttefly rather than a bat. But as you can tell from the description above, I don't go by the books.
  • #1,717
  • Jun 2, 2010 1:52pm Jun 2, 2010 1:52pm
Thanks medici

Quoting medici
Hi David,

and thanks for giving me the opportunity to clarify things, not least to myself...
  • #1,718
  • Jun 2, 2010 1:59pm Jun 2, 2010 1:59pm
Quoting david4u
Thanks medici
You're welcome. and here's an illustration of the psychological aspects of top formation - also posted as a 1 minute chart earlier.
Attached Image (click to enlarge)
Click to Enlarge Name: cable top formation 1 june.gif Size: 18 KB
  • #1,719
  • Jun 2, 2010 2:13pm Jun 2, 2010 2:13pm
Quoting medici
Draw the fibs and consider the psychology behind the moves. That's how you learn. For example, cable had a nice run from the 61.8% level of the move up from yesterday's bottom to today's top. That it stopped short of the 61.8% retracement of the move from the top to today's bottom is a sign of potential weakness, and if there's a another day of Euro selling and equity market instability cable may retest the May lows, and a harmonic pattern may form if the bulls have another go at it.
I should add that for this to be a cable weakness, there would have to be a sizeable retracement from the top of the move up today. That doesn't seem to be happening so the outlook for cable is still bullish.
  • #1,720
  • Jun 2, 2010 2:22pm Jun 2, 2010 2:22pm
GU H1

Quoting medici
I should add that for this to be a cable weakness, there would have to be a sizeable retracement from the top of the move up today. That doesn't seem to be happening so the outlook for cable is still bullish.
Attached Image (click to enlarge)
Click to Enlarge Name: 2jun gu h1.jpg Size: 128 KB
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