Circular Trendlines

Dont forget that all important sell level at 4375 to 4400 area. I will alert when I see weakness in the pair. Unless you want me to stop posting my stuff in here just say the word, I will not be offended.

Instantaneous bearish trend continued until 4240 with a line rate support of Fibo 50
After the bounce will happen, God willing, until the price of 4480 and if it can break the resistance price will go to 4920

Fib Fans and levels, Circular Interpolation. Pitchforks......its all going on. I think we can help each other. I got great vibes in here and I also think I can spot the strengths and weaknesses with Volume Spread Analysis on the 1hr and lend a hand. Right now looking for a short trigger on chart #1. Overall Daily on Chart#2. Looking at Chart #3 you can see the old UTL there and the possible test of the underside of it on the 4 Hr.

I am never against posting.

Anybody can post whatever they want about the trend and how they interpret it, and add to the knowledge

After all we are all learners

Signs of weakness showing No Demand twice within this Hourly Flag on low volume. Getting tired and may miss this move. Gonna set my trendline alerts to try to catch this baby. With No Demands in place this tells me the professional traders are not interested in any up moves. I am looking for a Trap up move or an up thrust to sucker people into longs. That being said, I am seeing traps and upthrusts down on the 15 but that is not good enough for me. Would love to see this flag play out to this DTL but we shall see. BTW, my stop on this long counter is at B/E so I am in a free trade.

Hi TraderFitz,
Sorry to answer a bit late, but I missed your post, and I caught it now,

Your question is a very good one, as always.

In a nut shell I would say that its a difficult task to catch these false breaks and recognize them all the time. Some of them will have the tendency to fool you no matter to what extent you go, it is at such times that you should avoid trading, but over all you can employ these observations:


1. Make sure that you have exhausted all other possible circular paths that could catch the false break of that particular circle. If you cant see anymore circles in that area that would touch the false break, then you have to check it with straight lines:

2. When circles give you a false break, make sure that you use the pitchfork tool or trendlines to see whether its landing on a trendline underneath the pole of the circle. To do this, basically you draw a line that has the most amount of points on it, and then take that slope and create a channel from it. if the motion catches the trendline and bounces back, then you know its a false break.

Overall it was a tough situation to catch, and the question of your false break is something that requires different techniques.

I was so endulged in the circles, that I forgot to catch this with straight lines, and its only now that I am going back and reveiwing some of the mistakes that I made, and what could I have done to made it better.

Your question is extremely interesting and I have had situations that neither of the two tools (circles and straight lines) would give a clear perspective on the matter, and its best to avoid trading in such environments.

If you have to trade then pending orders around a range would be the better choice.

I am including some straight trendlins here along with the circles in trying to show how the 2 can work together and give a better analysis. There was also a question asked by TraderFitz in the following post in regards to this:

http://www.forexfactory.com/showthre...75#post4756175

In the diagram below the 2 solid black lines represent the main boundaries where the entire drop is channeled.

The 2 blue straight trendlines are acting as the median line. In this case the median line is a "median zone" rather than just a straight line.
Below the south pole of the dotted blue circle we are continuing to be bearish, but also note that we are at the end of the lower red straight trendline, so we could also be switching upwards when the south pole of the blue circle is hit. That means at 4270-4280 we could be going up again.

So to trade this settings, its best to put a entry order for a sell at around 4258 and put a entry order for a buy at 4327.

H4
On this time frame we are still short. The diameter of the red circle has been a resistance spot and the perimeter of the same circle is missing a third touch to 4080 region. The lower black straight line will have a false break, and motion will find support on the dotted black circle

M5
2 Sell spots on this time frame, one is around 4300-4310 and the other is at 4340 level.

Time to start looking for signs of weakness. We are at the 1hr DTL now and this thing has a lot of momentum. Lets see if this 1 hr bar closes in the middle of the bar

This coinsides with your areas, Kam.

I am afraid that if this is the thrust out of a contracting triangle, it wont rest till 4450-4500 area.

It has broken too many circles with quite a powerfull force, and I cashed out of my short positions with a small loss to see what happens.

I think EUR/USD upwards force is enormous and I won't be surprise if it hits 1.4500 plus..I will short at 1.4545..

If this is what I think it is, which is a thrust out of a triangle. Then its gonna go fast and far before slowing down. Right now Its too dangerous to get in and this pair has wipsawed too many times to be considered safe at the moment.

Could be just momentum though. Time will tell. I got a sign of weakness on the 15 which is an up bar closing in the middle on high volume, very suspect, so this tells me that we could be starting to slow down. I need to see an upthrust bar like that on the 1 hr and we are at the hourly DTL right now. Still got 7 minutes on this bar before signal appears.

No sign of weakness here yet. But the early signal on the 15 may be valid. Our 1 hr upthrusts may very well be the engine that takes us up thru the 4450-4500 areas.

1st chart shows the test bars on low volume. I had been waiting for this short off of the Bearish Flag pattern we were looking at last night. Got my break and lost a few back to the market when that move ran into a news release this morning. LOL, I woke up about 835 and reversed my trade, but not before losing about 30 of my pips.

Chart #1 shows the test bars on low volume and Chart #2 shows the downthrust or Stopping volume bar, also on low volume, that triggered this long we are in now. Now in contrast, we are looking for a similar signal arrangement to get back in short. I also added another DTL depicting the areas you are talking about now and I have no doubt it could be going to those areas.

On the lighter side, I will be very upset if this thing shorts off this narrow spread bar at this trendline...LOL

Here is another look at the same situation

There is nothing like confirmation from fellow traders.....Love it.

Other possibilities being examined...