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EurAnalysis Kindergarten 24 replies

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  • #32,541
  • May 26, 2012 1:58pm May 26, 2012 1:58pm
Quoting Alorente
Hello PT,

I agree with your analysis. I have been bearish on the Euro for a long time now. In fact, I expect weŽll reach parity in the next year.

However, I am concerned in the very short term of the probability of a strong, temporary rebound happening, possibly in the next two weeks. My concern is technical in nature and it involves the weekly gap at 1.3080. There has been no attempt to close it since it occurred. I have looked at the weekly data all the way back to 1993 and there has not been a single instance of a gap remaining open. In...
Hey Alorente.. Glad you dropped by. Hope all is well.

You are correct. There is in fact unfinished work up above, and I am sure it will be finished eventually. However, I don't believe it is going to happen before the Greek elections. Until a pro-euro government in Greece is elected or until the polls show the PASOK or ND party in the lead, it's total risk off. Add to that the less than helpful EZ leader comments and the banking crisis in Spain, and you've got yourself a bit of a mini meltdown. Once we hit target 1 (1.2225/35 area), then if we don't get a correction before a further move down, I will be surprised. Very surprised.

Cheers
PT
Those who say it cannot be done should not interrupt those who are doing it
  • #32,542
  • May 26, 2012 2:05pm May 26, 2012 2:05pm
Quoting lumesh
Here's another chart (or another tech look). Month is about to end but it's not over yet. What that means ? If you look at the chart then i drew two trendlines from the same low but had different second connection points - a low and a candle BODY low. As can be seen, price has broken the "upper" trendline but is barely below the "lower" trendline on a monthly. Is the following scenario possible: We edge up to close the monthly candle at or above the lower trendline then squeeze further to test the upper trendline for confirmation (which also...
Hey Lumesh,

This is a case where the technical indicators are supporting my fundamental bearish outlook. No fallacy here. Remove all the technical reasoning I posted and throw it in the garbage and I would still be bearish. Anyway, my technical analysis was only used to pick a target and to show that there were no technical stumbling blocks in the way.

Yes I fully agree Tsipras is bargain hunting via a whole lot of rhetoric which in the end will probably get him nowhere. I don't believe Greece will leave but it is obvious the market sees it in a different light. They are simply not taking any chances, and in the meantime the Euro is coming under heavy pressure. It went through the same thing in 2008 and 2010. 2012 is no exception. Once we hit bottom, we will bounce back up as if nothing happened. In the meantime I am riding this turd of a pair to hell and back and grabbing all the pips I can along the way.
Those who say it cannot be done should not interrupt those who are doing it
  • #32,543
  • May 26, 2012 2:10pm May 26, 2012 2:10pm
Quoting Wulfgar
damn,

that IS me being positive....

have a good weekend bud... i got my hands full this weekend with this group of 11 college chicks all memorial day weekend here in California

I suppose it could be worse...
Enjoy Wulf.
Those who say it cannot be done should not interrupt those who are doing it
  • #32,544
  • May 26, 2012 2:12pm May 26, 2012 2:12pm
This thread is turning into the best thread on here. Good solid theoretical analysis (both technical and fundamental) supported by good, persuasive, reasoned argument. Finally, a thread where you can actually learn something. Good job and keep it up.

p.s. pip-trapper would you buy silver right now with the dollar index being as bullish as it is? (why or why not?) thanks in advance.
  • #32,545
  • May 26, 2012 2:26pm May 26, 2012 2:26pm
Quoting quidproquo
This thread is turning into the best thread on here. Good solid theoretical analysis (both technical and fundamental) supported by good, persuasive, reasoned argument. Finally, a thread where you can actually learn something. Good job and keep it up.

p.s. pip-trapper would you buy silver right now with the dollar index being as bullish as it is? (why or why not?) thanks in advance.
I would not buy silver but that's because I don't follow it. I have an aversion to precious metals due to the tendency of margin requirements being changed without notice. Gold is the only exception. I would buy it if it hit a low of around 1250, otherwise I cannot be bothered.
Those who say it cannot be done should not interrupt those who are doing it
  • #32,546
  • May 26, 2012 3:15pm May 26, 2012 3:15pm
Quoting PipTrapper
Hey Alorente.. Glad you dropped by. Hope all is well.

You are correct. There is in fact unfinished work up above, and I am sure it will be finished eventually. However, I don't believe it is going to happen before the Greek elections. Until a pro-euro government in Greece is elected or until the polls show the PASOK or ND party in the lead, it's total risk off. Add to that the less than helpful EZ leader comments and the banking crisis in Spain, and you've got yourself a bit of a mini meltdown. Once we hit target 1 (1.2225/35 area), then...
The main Spanish paper has published this evening the results of 5 different polls that came out today in Greece, where ND is ahead by between 0.5 and 5.7 points. All the polls agree. The greeks may be stepping away from the edge of the cliff. This could affect the Euro on Monday.

http://www.elmundo.es/elmundo/2012/0...338045060.html
Observation is the path to discovery.
  • #32,547
  • May 26, 2012 5:33pm May 26, 2012 5:33pm
Quoting Alorente
The main Spanish paper has published this evening the results of 5 different polls that came out today in Greece, where ND is ahead by between 0.5 and 5.7 points. All the polls agree. The greeks may be stepping away from the edge of the cliff. This could affect the Euro on Monday.

http://www.elmundo.es/elmundo/2012/0...338045060.html
Being as objective about this as possible, I still see this too close of a race to calm the markets. If ND keeps gaining in subsequent polls then there could be some relief. Besides the neck and neck race between Syriza and ND, there is also the question of the PASOK popularity. They need to gain in the polls also otherwise the next election will end in another failure to form a coalition. Time will tell.

Thanks for bringing it to my attention.
Those who say it cannot be done should not interrupt those who are doing it
  • #32,548
  • May 26, 2012 6:39pm May 26, 2012 6:39pm
Quoting Alorente
Hello PT,

I agree with your analysis.I have been bearish on the Euro for a long time now. In fact, I expect weŽll reach parity in the next year.

However, I am concerned in the very short term of the probability of a strong, temporary rebound happening, possibly in the next two weeks. My concern is technical in nature and it involves the weekly gap at 1.3080. There has been no attempt to close it since it occurred. I have looked at the weekly data all the way back to 1993 and there has not been a single instance of a gap remaining open. In...
Hi Alorente/PT,

I agree with you. The actual move started on 1st of May, when the EU was at 1.3283 that I'll call point A. Then on the 3rd of May we touched 1.3094 point B, then on 4 of May we had 1.3177 point C. Now we are at 1.2496 that is exactly 361.8% extension of the AB move starting from C.
So now I expect as 90% of the times that the EU will go back to the BC zone (1.3094/1.3177).
I expect this by an HS, so starting on monday a pull back to 1.2826, then a short move to form the right shoulder to 1.2682, then 100% extension of this HS to about 1.3140.
This is my trade plan for the next 2/3 weeks.
We will be helped by the following news:
Greek pro-bailout conservatives regain lead - polls
http://uk.reuters.com/article/2012/0...84P06F20120526


Good night!

forexBOOM
  • #32,549
  • May 27, 2012 12:31am May 27, 2012 12:31am
1. Failing to cut your losses

It’s a cliche, but “cut your losses” will always be the central rule for effective money management.The problem is that human nature is programmed to seek pleasure and avoid pain. It’s a survivalmechanism that keeps our species from extinction.In terms of financial markets, profits give us pleasure and losses give us pain.That means that we “naturally” avoid taking losses. No one enjoys taking a loss. No one likesadmitting they are wrong.But the truth is a big loss can quickly undo months or years of your hard work.The world’s best traders know that to succeed at trading, you have to overcome your natural tendency to avoid taking a loss. That doesn’t mean you have to like them, but you have to accept them.Paul Tudor Jones is one of the world’s most successful hedge fund managers. He’s been trading for 35 years and Forbes lists his wealth at over $3 billion, so he knows a thing or two about making money from trading the markets. Here’s what he has to say on the subject:
“If I have positions going against me, I get right out; if they are going for me, I keep them... Risk control is the most important thing in trading. If you have a losing position that is making you uncomfortable, the solution is very simple: Get out, because you can always get back in.”
There’s a simple way to avoid this mistake: Place a stop every time you make a trade.

2. Adding to a losing trade
Adding to a losing trade or “averaging down” as it’s sometimes called, is equivalent to not admitting your mistakes.
As we’ve discussed earlier, successful traders are brave enough to cut their losses. Adding to a losing trade is doing the exact opposite of this (throwing fuel on the fire). Sure, sometimes a trade might hit your stop-loss and then turn around and go back up. That can be very frustrating, but that doesn’t mean you should abandon money management. Adding to a losing trade effectively ties up more and more of your money in the trades that aren’t
working. It’s putting added pressure on the weakest part of your portfolio. This could back you into a corner, shutting you off from reason or clear thinking. Your trading will become paralysed by emotion rather than logic.
Adding to a losing trade is the most direct road to ruin that we know of.
If there was easy money lying around,no one would be forcing it into your
  • #32,550
  • May 27, 2012 1:06am May 27, 2012 1:06am
It seems like the general consensus is something like:

1. Bearish euro... but mostly against the dollar and the yen

2. Regarding E/U... We don't know if this is going to bounce within the next 5-150 pips, but we would all be a lot more comfortable if it did so, as it would provide a better place to sell it again

3. The massive exotic optionality that was in play at 1.25 is now gone... and we as a community are not sure what the immediate implication is considering <1.2500 was the best possible place to take profits on shorts for at least another 100-200 pips. However, we as a community believe this ultimately does clear a big hurdle on the way down to lower levels.

4. Rumors are leaking that Merkel may soften her stance on austerity as it currently is structured. And at this rate, if there is even a single ACTUAL, somewhat defined possible avenue that could realistically be better than financial armageddon, it may scare some shorts into covering (lest a squeeze rip money out of their accounts)

5. the eur/usd is at all time record net shorts according to the COT report. With so many short, who is left to sell to at this moment?

6. if greece polling rumors persist that a pro-austerity, pro-EU political party is actually ahead of the rest... this ALSO could scare shorts into a bit of a squeeze.

In conclusion - we as a whole are bearish until a clear possible solution develops and is supported in europe (even if it's devoid of logic, as long as it's supported broadly, and keeps greece in the EU and using the euro for now), or until it is clear that greece is likely going to elect a pro-austerity party. However, we as a community are not sure of shorting at THIS low price right now, though at the moment most of us see little reason to lighten up much...due to the fantastic R:R that we can get should the "unthinkable" happen, and greece leave the EU and euro in a disorganized manner.

Given this conclusion (and assuming I am more right than wrong here with this armchair analysis), I'm feeling a bit of a range coming on, or possibly a slow grind, at least for a day or 2.

Best trade seems to risk missing out on the down move, and wait for a pullback to at least 2700-3000, in which case a short would be a no brainer as long as there is NOT a major perceived miracle solution that comes out of Europe.

X
  • #32,551
  • May 27, 2012 1:47am May 27, 2012 1:47am
I likeee

Quoting PipTrapper
My View

Well it’s been an interesting week. All hell has broken loose in Europe and there is no solution in sight despite an EU summit on Wednesday. As a matter of fact, the summit caused more damage than it prevented. Furthermore, with every announcement from the talking heads themselves, the same people who are supposed to be building our confidence in Europe, the news gets worse and the confidence deteriorates further. What a bunch of incompetent morons, and I’m being nice here.

Now don’t get me wrong. I’m not complaining. I’m just pointing...
On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #32,552
  • May 27, 2012 1:56am May 27, 2012 1:56am
We see the same Pip

Quoting PipTrapper
Hey Alorente.. Glad you dropped by. Hope all is well.

You are correct. There is in fact unfinished work up above, and I am sure it will be finished eventually. However, I don't believe it is going to happen before the Greek elections. Until a pro-euro government in Greece is elected or until the polls show the PASOK or ND party in the lead, it's total risk off. Add to that the less than helpful EZ leader comments and the banking crisis in Spain, and you've got yourself a bit of a mini meltdown. Once we hit target 1 (1.2225/35 area), then if...
On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #32,553
  • May 27, 2012 1:58am May 27, 2012 1:58am
Pattern ?
Attached Image (click to enlarge)
Click to Enlarge Name: eu monthly pattern 26-5-12.png Size: 30 KB
On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #32,554
  • May 27, 2012 2:52am May 27, 2012 2:52am
eur itself has a very bearish set up ,I must use fibs for target put it that way
Attached Image (click to enlarge)
Click to Enlarge Name: eur lfx w1 26-5 break low.gif Size: 15 KB
On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #32,555
  • May 27, 2012 3:22am May 27, 2012 3:22am
hehe, fair enough

btw, say, pro-bailout party wins and Greece doesn't leave just yet.

Would you say it'll still happen in a year or two ?



Quoting PipTrapper
Hey Lumesh,

This is a case where the technical indicators are supporting my fundamental bearish outlook. No fallacy here. Remove all the technical reasoning I posted and throw it in the garbage and I would still be bearish. Anyway, my technical analysis was only used to pick a target and to show that there were no technical stumbling blocks in the way.

Yes I fully agree Tsipras is bargain hunting via a whole lot of rhetoric which in the end will probably get him nowhere. I don't believe Greece will leave but it is obvious the market sees...
  • #32,556
  • May 27, 2012 4:11am May 27, 2012 4:11am
Quoting forextraderx
It seems like the general consensus is something like:

1. Bearish euro... but mostly against the dollar and the yen

2. Regarding E/U... We don't know if this is going to bounce within the next 5-150 pips, but we would all be a lot more comfortable if it did so, as it would provide a better place to sell it again

3. The massive exotic optionality that was in play at 1.25 is now gone... and we as a community are not sure what the immediate implication is considering <1.2500 was the best possible place to take profits on shorts for at least another...
Allah has permitted trade and has forbidden interest [koran]
  • #32,557
  • May 27, 2012 4:21am May 27, 2012 4:21am
Quoting Bones
I likeee
allow me to welcome u on behalf of PT.also allow me to remind u in the best tradition of PT and this thread to read the rules on page one.
by the way i wonder whether u belong to skull and bones if so then is the bush family sent u here for spying on this thread so that they can profit..PT ur news is reaching far and wide,now ur in trouble.they got only bones now and looking for skulls
Allah has permitted trade and has forbidden interest [koran]
  • #32,558
  • May 27, 2012 4:27am May 27, 2012 4:27am
lol ,no prob thanks


Quoting drzakir123
allow me to welcome u on behalf of PT.also allow me to remind u in the best tradition of PT and this thread to read the rules on page one.
by the way i wonder whether u belong to skull and bones if so then is the bush family sent u here for spying on this thread so that they can profit..PT ur news is reaching far and wide,now ur in trouble.they got only bones now and looking for skulls
On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #32,559
  • May 27, 2012 4:29am May 27, 2012 4:29am
Also

Balanced trend ,really nice target is higher ,

Quoting Bones
eur itself has a very bearish set up ,I must use fibs for target put it that way
Attached Image (click to enlarge)
Click to Enlarge Name: usd lfx w1 balanced trend 26-5-12.gif Size: 16 KB
On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #32,560
  • Edited 5:49am May 27, 2012 4:38am | Edited 5:49am
[quote=mahogany;5702537]
Quoting PipTrapper
My View

Hello PipTrapper,

many thanks from me too for your analysis and all the other good work.
As a beginner in FX and in this thread may I ask a maybe silly question?
What das the abreviation PA mean and in addition. In former post I sometimes saw BE. Would you be so kind and explain it shortly?
Thank you in advance and a happy weekend for you
mahogany
Hi Mahogany,

Here are some common abbreviations

PA = Price Action
BE = Break Even
DD = Draw Down
TP = Take Profit or Limit
TS = Trailing Stop
SL = Stop Loss or Stop
MT4 = MetaTrader 4
MM = Money Management
PM = Private Message
PT = PipTrapper

Cheers
PT
Those who say it cannot be done should not interrupt those who are doing it
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