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GU, GJ and EU Analysis Thread

  • #1,041
  • Apr 28, 2011 1:37pm Apr 28, 2011 1:37pm
Quoting NoahEffect
Just out of curiousity, why must they be trailed? They are, but not using any moving average or similar "derivative of price" equations. We use hard S/R levels as our trailing mechanism and these are obtained from pure price action charts (i.e. no time component) to ensure the correct definition of support and resistance zones.
Right, I thought I might get an answer like that. I am asking because I seem to be getting better at entries but managing trades has become trickier for me. At the moment I am basically using ma type trailing stops and trying to jump up time frames as these trades mature. Unfortunately, as you must know, these usually get stopped after a day or two. No bad thing to take profit but frustrating, nevertheless. I keep looking at the recent NZD/USD run, wistfully. My basic mode is to take a trade at the Europe/London break of the Asia range, if it is small, on any pair willing to have me, except ones which move differently, for example SGD/USD
Gone to a better place
  • #1,042
  • Apr 28, 2011 7:33pm Apr 28, 2011 7:33pm
Quoting smikester
Right, I thought I might get an answer like that. I am asking because I seem to be getting better at entries but managing trades has become trickier for me. At the moment I am basically using ma type trailing stops and trying to jump up time frames as these trades mature. Unfortunately, as you must know, these usually get stopped after a day or two. No bad thing to take profit but frustrating, nevertheless. I keep looking at the recent NZD/USD run, wistfully. My basic mode is to take a trade at the Europe/London break of the Asia range, if it is...
Hi smikester, I will show you what I meant. Let's go back to school for a minute. You probably know this (I just threw it together in paint):

Attached Image


But the problem with the above, in my eyes personally, was always the time factor involved. A swing high could develop on the daily/weekly/monthly chart, but it would not be a true swing high because time was the main factor which caused the next bar to form, rather than a price reversal.

So we are simply looking for the same pattern to trail our stops under/over, using a price only chart. For example, let's take a look at the JPY index over at stockcharts, since they provide a good Kagi adaptation which can handle the highs/low range (like a point and figure chart) and we will run it in 1% increments, so each swing will be 1% or more of the underlying:

Attached Image (click to enlarge)
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Here you can see the sort of price action which I use to trail our longer term stops against.
  • #1,043
  • Apr 29, 2011 5:45am Apr 29, 2011 5:45am
I'm hoping Stocky won't mind me hogging the thread. Thank you for taking the time to explain more fully. Looks like I'm in for some work. I'm going to ask for more information on the subject of price action M5 entries which you mentioned in an earlier post when I've digested this, if you don't mind. In the meantime I leave the thread open for month end analysis. Anyone?
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  • #1,044
  • May 1, 2011 10:46am May 1, 2011 10:46am
No doubt we have all seen Gold pop through the $1500 barrier, USD/CHF / USINDX take a dive, and the EU move into Greece this weekend in order to prepare for a default on the repayment schedule. With this, many are speculating as to the fall of Spain, and we have probably all read the BS from Tricky Trichet regarding interest rate rises, playing down of inflation and need for further rises. We also have the speculation that with the recent UK GDP figure, interest rates will need to go up in the UK. Hmm, if they do, Cable may well rocket.

I am interested in what will happen with EUR/CHF in the next few weeks, as I think many a pundit will be heading for Gold (aka, Swiss banks) and the hope of reaching what some state to be a true nominal value up in the $2400 mark. Pff, this won’t help the Euro or Dollar, I feel, and if at the end of his tenure, Trichet just gets out prior to Actual UK GDP requiring an interest rate hike, and Spain going under – I’m thinking October – Sterling may well ascend to the heights not seen since 2007.

Japan has a fair old war chest with which to intervene, and I’ll be watching Geppy closely as I would like to get in on any ride north.

Overall I am bullish Sterling above for the coming months.
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  • #1,045
  • May 2, 2011 4:03am May 2, 2011 4:03am
Hi Smikester, just to let you know, I've finally completed that wall I was discussing over several months last year.

Right, now onto the the other one...
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  • #1,046
  • May 4, 2011 3:27am May 4, 2011 3:27am
Good evening folks.

Anyone watching the USDJPY?

A few people have noticed that as of yesterday we have run a 50% retracement of the BoJ intervention from 76.5-85.5.

I can't say that the chart is looking especially promising here for USDJPY bulls, but I also noticed on a few sites that the BoJ has started their own heavy money printing regime in response to the disaster (both human and economic) which is unfolding.

This instinctively leads me to the hypothesis: QE (or the markets perception of it - in all likelihood the Fed will continue to "manage" things in the background) will end, and the JPY may very well finally reverse its trend. I like to look at the monthly and it is a tad confusing, but that is one strong pin bar printed there and I'm sure most traders are wary of stepping in front of another G7 train.

The DXY itself, looks ready for a small bounce here.

I've already taken a long from the break of the M5 80.97 outside bar just prior to London opening and derisked the position above 81.06. No guarantees this one will live to run, but will probably spend a few weeks trying to build a sizable position using this technique if the market lets me and allocated 3% of the account to this task.

Attached a chart for visualisation purposes:
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  • #1,047
  • May 4, 2011 4:19am May 4, 2011 4:19am
Good morning. Interesting trading, Noah, and I too have been looking for signs of life here but intervention rumours always leave me running for cover so I will probably wait for the daily trend to reverse before I try to do anything. I do like the entry method you are using and it reminds me of sinner's? Gone are the days when I would endure drawdown to any extent. I much prefer a string of low risk failed or derisked trades than a margin eating punt on the daily that ends up ranging.

Fundamentally we should see this turn, if the last large earthquake disaster (Kobe) is anything to go by, where the pair fell for a few weeks then started a sustained bull run.

What I am wondering, though, is why you would choose USD over a stronger currency?
Gone to a better place
  • #1,048
  • May 4, 2011 4:27am May 4, 2011 4:27am
Quoting 45Condor
Hi Smikester, just to let you know, I've finally completed that wall I was discussing over several months last year.

Right, now onto the the other one...
Must be a big wall! Thanks for posting those charts. I'm going to give them a proper looking at when I get the time. Bad news for cable today and NFP week? Hmm. Window shopping only for me.
Gone to a better place
  • #1,049
  • May 4, 2011 4:55am May 4, 2011 4:55am
Quoting smikester
Good morning. Interesting trading, Noah, and I too have been looking for signs of life here but intervention rumours always leave me running for cover so I will probably wait for the daily trend to reverse before I try to do anything.
Not discussing rumours of intervention specifically smikester, rather data released by the BoJ themselves regarding monetary aggregates and similar.

Regarding the daily trend reversing, I guess that is a matter of interpretation

Quote
I do like the entry method you are using and it reminds me of sinner's? Gone are the days when I would endure drawdown to any extent. I much prefer a string of low risk failed or derisked trades than a margin eating punt on the daily that ends up ranging.

The entry method is not sinners, his precision was much higher than my own because he was happy to take trades I don't have the guts for. A rifle compared to a machinegun. But anyway, the concept follows from the principles which he taught me.

Quote
Fundamentally we should see this turn, if the last large earthquake disaster (Kobe) is anything to go by, where the pair fell for a few weeks then started a sustained bull run.

What I am wondering, though, is why you would choose USD over a stronger currency?

Specifically because price structures which discourage participation are the ones that have the best payoff if/when they pay. Remember a little while ago we discussed sinners cowboy trade call in the EURJPY, this is a perfect example. He knew that eventually this ugly price structure which had ranged for months, that most other spec/momo traders had stopped participating in, would eventually give up and pay him the entire swing with a 10 pip stoploss and all he had to do was be there when it happened.

In this case, you yourself don't want to participate, which is exactly why I'm in there

Tonights efforts looking good so far
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  • #1,050
  • May 4, 2011 8:11am May 4, 2011 8:11am
Gradually I am seeing more in your charts, Condor.

Formidable support indeed at the January 2010 weekly high and your fib expansions conflue (is that a word?) with it. I'm still learning about fibs...

You know those little price action candles near the Asian close/London open area will take you for miles with a small stop loss, just as Noah has explained. Don't miss them please, especially if they come off a confluence like Noah explained above. I'm doing my bit here, currently on travels with my laptop, typing from an underground car park. It's too sunny to work outside.
Gone to a better place
  • #1,051
  • May 4, 2011 10:37am May 4, 2011 10:37am
Hi Smikester - at least you are... I was thrown a bit on a short with Geppy. Ah well, never mind.

Right, attached a chart of UJ. I read Noah's submission, and noted the points. Howerver, for me, the Guppy Profile is pointing down, and so I took a short last night. This was stopped out, but with the push North today prior to US news, I thought I would load another short under the PA.

Price has dropped, I am in, and would like to see 76.29 - the 88.6 FE level. I'm actually trying for 76.50.

I suppose the question is does price want to claw back that pin from March? And with an almost certain push by the FED to reduce debt to China by devaluing the Dollar, what may be in store once down there?
Attached Image (click to enlarge)
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  • #1,052
  • May 4, 2011 11:05am May 4, 2011 11:05am
The low of November 1st I think would provide a level of support -80.30- and although it has not reached there yet, I'm wondering ===> the monthly pin bar, BOJ pronouncement, previous disaster movements, 50 fib level and, well, the dollar is due a retracement of some sort.
Gone to a better place
  • #1,053
  • May 4, 2011 11:22am May 4, 2011 11:22am
Hopefully this can run for a day or two to give me some pointers... I am cautious of NFP on Friday.
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  • #1,054
  • May 5, 2011 12:38am May 5, 2011 12:38am
Thought I would pop two charts up to show where I think price is heading, well, at least until Friday's NFP.

The monthly shows a potential kiss back onto the green standard 100 fib mark at 79.75, and which also corresponds - more or less - with the descending 76.4 fan.

I would not rule out a touch of the 79.75 today if the US news assists, and then of course we have Bernanke speaking later today; whom has not been that bullish about the Dollar as of late.

Stops now at BE, partial profit to be taken at 79.75 - just in case we turn there, and not at the 88.6 FE as mentioned yesterday - with the rest of my positions being left to run to target, or stop out.
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  • #1,055
  • May 5, 2011 2:27am May 5, 2011 2:27am
...what if EG has now topped out at the 23.6 green standard fib, and GU, having made a retrace to the 61.8 green standard fib/FE level after breeching the 1.64 level, is now preparing for some surprise news this morning.

I'm certainly watching.
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  • #1,056
  • May 5, 2011 5:16am May 5, 2011 5:16am
Okay, so bottled a little and took partials at 79.86.

Edit: Was spooked at drop along with EU on release bad German data.

Quoting 45Condor
Thought I would pop two charts up to show where I think price is heading, well, at least until Friday's NFP.

The monthly shows a potential kiss back onto the green standard 100 fib mark at 79.75, and which also corresponds - more or less - with the descending 76.4 fan.

I would not rule out a touch of the 79.75 today if the US news assists, and then of course we have Bernanke speaking later today; whom has not been that bullish about the Dollar as of late.

Stops now at BE, partial profit to be taken at 79.75 - just in case we turn there,...
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  • #1,057
  • May 5, 2011 7:03am May 5, 2011 7:03am
I am watching the Aussie Dollar, and will be interested to see what happens around the speech from Bernanke/NFP and RBA announcement over the course of the next two days.

Of course, we also have Tricky Trichet today, and Merv the monetary perv tommorow; both of whom will be having little chats with their selected audiences.

May be just what we need to see runs on those currencies that we all enjoy.
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  • #1,058
  • May 5, 2011 4:17pm May 5, 2011 4:17pm
Quoting smikester
The low of November 1st I think would provide a level of support -80.30- and although it has not reached there yet, I'm wondering ===> the monthly pin bar, BOJ pronouncement, previous disaster movements, 50 fib level and, well, the dollar is due a retracement of some sort.
And so I posted a chart with some levels here: http://www.forexfactory.com/showpost...postcount=4555
Gone to a better place
  • #1,059
  • May 6, 2011 2:20am May 6, 2011 2:20am
Good morning Smikester.

Yep, you did. Good eyes...

Me, happy to have took partials on that fib, and so as planned, have locked in profit and can enjoy what is shaping up to be a rather beautiful weekend down here in France.

Will be interested to see the NFP numbers today. If bad, I expect a run on the Dollar as many drop equities and position for possible QE from Bernanke.

Still hopeful of a fall on the Aussie. Position taken yesterday stopped at BE overnight.

Rights, off for a few hours down the stables.

EDIT: And just what were you doing in a car in an underground carpark the other day? In fact, don't answer that, you may be one of those psycho stalkers or something... or maybe on a stake out - Oh no, we've got the Sweeney in town!
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  • #1,060
  • May 6, 2011 3:29am May 6, 2011 3:29am
Evening folks!

With all eyes on the JPY crosses tonight especially GBPJPY, the anniversary of last years flash crash, BoE blather, talk of the BoJs interest in the 80 handle, NFP and I notice a few key liquidity indicators are flashing red too.

Haven't managed to get a runner on the USDJPY just yet but no net losses recorded either. Happy to see 45Condor managed to grab some of the downside there.

Not sure if I will attempt to open new positions on the book tonight. May well just keep to managing open positions as a few of my dollar shorts on both longer and shorter term models have been taken out in the last few days of action and if I feel others will be stopped out for break even during London I would prefer to just exit them at a small profit. Looking for a break of intraday major swing lows being the trigger.

Eager to view the posted charts when I get the chance, loving having a place to discuss the pitch and shoot the shit.
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