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Oktoberfest Nightclub

  • #5,441
  • May 29, 2014 2:57am May 29, 2014 2:57am
Good morning.
Bank holiday here, won't do much today... still the plan is to enter longs in EU and GU to short higher. Mostly try to put sl at be as soon as possible, mixed success sofar this week.
Entered a new EA long @4635, tight sl. UJ: still got a pending long at 101.26, let's see. ECad: had another look, might be I was mistaken with the placement of my levels. If so, 4712 might do the trick.
Fail better.
  • #5,442
  • May 29, 2014 3:16am May 29, 2014 3:16am
Quoting doggette
E/U outlook: looking at a possible long area at 1.3587. There's a strong support level, nice demand and a confluence of weekly and monthly pivots. If it's gonna bounce, that's where I'm putting my money.
Limit order triggered
  • #5,443
  • May 29, 2014 3:25am May 29, 2014 3:25am
Quoting doggette
Crude oil update: there is a double top in place on H4, but before any further downside, 103.52 needs to be taken out
Crude oil broke 103.52, along with the weekly pivot, although I must admit I didn't expect it to fall quite so fast. Only caught the move to 103.40.

Now looking at a buy area between 102.25-102.55 or another test of Weekly pivot for a sell in the general zone between 103.40 and 103.60, which also represents previous support. The sell play is a safer one, since there's a double top and a nice trend change to the downside
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  • #5,444
  • May 29, 2014 3:40am May 29, 2014 3:40am
Quoting LarryDarrell
Good morning. Bank holiday here, won't do much today... still the plan is to enter longs in EU and GU to short higher. Mostly try to put sl at be as soon as possible, mixed success sofar this week. Entered a new EA long @4635, tight sl. UJ: still got a pending long at 101.26, let's see. ECad: had another look, might be I was mistaken with the placement of my levels. If so, 4712 might do the trick.
same page, looking at 1.676x in cable...

Quoting doggette
{quote} Limit order triggered
like your area doggette, and rejected so far.. what are you aiming for?
Patience is a virtue...
  • #5,445
  • May 29, 2014 3:44am May 29, 2014 3:44am
Quoting doggette
{quote} Limit order triggered
aaaaaand POP!
  • #5,446
  • May 29, 2014 3:46am May 29, 2014 3:46am
Quoting hadox
{quote} same page, looking at 1.676x in cable... {quote} like your area doggette, and rejected so far.. what are you aiming for?
Hadox, I'm looking 1.3690/1.37 with caution around 1.3650 because there is a supply there
  • #5,447
  • May 29, 2014 3:54am May 29, 2014 3:54am
Good morning ... E/U is the most manipulated pair for me. Nothing but stress trading it. Will focus on my Geppy long from 1.69.697 now ...
Fix up, trade sharp ...
  • #5,448
  • May 29, 2014 3:57am May 29, 2014 3:57am
Quoting doggette
{quote} Hadox, I'm looking 1.3690/1.37 with caution around 1.3650 because there is a supply there
exactly the same levels I'm looking at +/- a handful of pips.. so far bulls have failed the latest attempts, but the day is young, so lets see what happens..
Patience is a virtue...
  • #5,449
  • May 29, 2014 3:59am May 29, 2014 3:59am
Quoting hadox
{quote} exactly the same levels I'm looking at +/- a handful of pips.. so far bulls have failed the latest attempts, but the day is young, so lets see what happens..
Also hoping for 1.37 to get my head out of the sling there ... should be "normal". But what is normal in this pair? Ok, back to Geppy
Fix up, trade sharp ...
  • #5,450
  • May 29, 2014 4:16am May 29, 2014 4:16am
Quoting Hickson
{quote} Also hoping for 1.37 to get my head out of the sling there ... should be "normal". But what is normal in this pair? Ok, back to Geppy
yes agree, but 1 level at a time for me.. could be a small retrace could be a runner, time will tell I guess.. IMO you should start with 1 pair, write down the basic of your strategy, then later you can try testing it on other pairs.. I know it's pretty boring, but all the pairs move different, act differently.. if you like GJ, stick to it for some months and ignore everything else.. I mean, you said you didn't have so much time avaliable, could be a win-win situation.. lol..
Patience is a virtue...
  • #5,451
  • May 29, 2014 4:35am May 29, 2014 4:35am
EA: s/o. EU: in 3589, out 3610, trying little short with tight sl, aiming for low.
Fail better.
  • #5,452
  • May 29, 2014 4:38am May 29, 2014 4:38am
One thing to note from a fundamental point of view.

Possibility of QE from the upcoming ECB meeting is the likely reason E/U doesn't want to go up. If a form of QE is introduced, it will mean devaluation and a downtrend for E/U. There is nothing strange nor manipulated about this, it's just the way it is. If the central bank is trying to stimulate economy and fight the persistent deflation, they will introduce quantitative easing to devalue the currency and boost exports.

The trouble with ECB doing QE is that Germany has made this practice illegal because they experienced hyper-inflation when they printed money after the WWII trying to repay their debt.

However ECB has been pushed into a corner, with deflation stubbornly continuing, even though they've lowered interest rates.

When a country introduces QE, it means they will effectively be taking out a massive loan, by purchasing government bonds, increasing the demand for the bonds, and lowering their yield (yield is like your loan annual rate), making the bonds (loan) cheaper and more affordable to the country. This in turn increases the money supply available to the central bank, a sort of a crutch to help the weak recovery.

To understand why E/U moves the way it does, you also have to understand that ECB doesn't control the rate, unlike the FED. In this respect, ECB is a very unique system where Deutsche Bank (the largest buyer and provider of euro) is the one who basically sets the rate with their own actions. And their actions until now were to keep buying the euro, because Germany doesn't have an issue with euro strength and can perfectly cope with e/u at 1.45.

The reason why e/u's daily range has fallen from 150 to 50 ticks a day is because liquidity has dried up and there's not enough cash going around for interbank swaps.

So to wrap this essay up, I don't think QE has been priced in and while I am longing e/u right now, off a purely technical overstretched perspective, I do not expect the down trend to end any time soon if QE is indeed introduced. In fact, we'll be in for quite the fall.

To see the effects of QE on a currency, we've had two recent experiments: FED and BOJ.

It might be worth having a butchers (taking a look, a bit of cockney slang there for you) at usd index and yen chart after those countries started their QE programs and you'll get a clearer picture of where E/U will be with QE.
  • #5,453
  • May 29, 2014 4:49am May 29, 2014 4:49am
Quoting doggette
One thing to note from a fundamental point of view. Possibility of QE from the upcoming ECB meeting is the likely reason E/U doesn't want to go up. If a form of QE is introduced, it will mean devaluation and a downtrend for E/U. There is nothing strange nor manipulated about this, it's just the way it is. If the central bank is trying to stimulate economy and fight the persistent deflation, they will introduce quantitative easing to devalue the currency and boost exports. The trouble with ECB doing QE is that Germany has made this practice illegal...
really nice post!

I'll have to re-read it a couple of times to understand everything though, I focus on TA, and I have a long way to go with FA..
Patience is a virtue...
  • #5,454
  • May 29, 2014 4:55am May 29, 2014 4:55am
Quoting doggette
One thing to note from a fundamental point of view. ...
Nice post. To add my 2 cents: atm I don't see outright QE, but in my opinion Draghi is trying to pull off the same trick he did 2 years ago, only now talking it down. They'll lower the rate and jawbone this lower by talking extensively about QE. But the german finance minister a few days ago narrowed the opportunities of the ECB, and there is still the open case at the german constitutional court.
So: I see a lower EU as well, much lower, but I'm sceptical that we'll see 'real' QE.
Fail better.
  • #5,455
  • May 29, 2014 5:01am May 29, 2014 5:01am
Quoting hadox
{quote} yes agree, but 1 level at a time for me.. could be a small retrace could be a runner, time will tell I guess.. IMO you should start with 1 pair, write down the basic of your strategy, then later you can try testing it on other pairs.. I know it's pretty boring, but all the pairs move different, act differently.. if you like GJ, stick to it for some months and ignore everything else.. I mean, you said you didn't have so much time avaliable, could be a win-win situation.. lol..
Already thought about this, 1-3 pairs and nothing else. Just very hard to do from a psychological perspective, since I always have the feeling to "miss something". On the other hand, it probably just makes no sense, since nobody can do everything at the same time. Then again, if you want to trade Geppy for example, you also have to consider U/J and G/U.
Fix up, trade sharp ...
  • #5,456
  • May 29, 2014 5:14am May 29, 2014 5:14am
Quoting doggette
One thing to note from a fundamental point of view...
Good summary, it is true, once the Dragster is getting serious about QE, the Euro will fall hard. It has just been the case that the ECB did nothing but talking in the past, so investors were like "Whatever, nothing will change." Now the picture has changed indeed, and though technically the trendline has not fallen apart yet, it is probably only a question of time as soon as the QE becomes reality.
Fix up, trade sharp ...
  • #5,457
  • May 29, 2014 5:21am May 29, 2014 5:21am
Quoting Hickson
{quote} Already thought about this, 1-3 pairs and nothing else. Just very hard to do from a psychological perspective, since I always have the feeling to "miss something". On the other hand, it probably just makes no sense, since nobody can do everything at the same time. Then again, if you want to trade Geppy for example, you also have to consider U/J and G/U.
I get your point.. I don't follow correlation though, have you considered adding correlation later on, I mean if you don't know what to focus on, it's prolly not making it easier, at least in the beginning..

I don't know Hickson, you'll figure it.. patience is a virtue.. lol..
Patience is a virtue...
  • #5,458
  • May 29, 2014 5:25am May 29, 2014 5:25am
Quoting Hickson
{quote} Already thought about this, 1-3 pairs and nothing else. Just very hard to do from a psychological perspective, since I always have the feeling to "miss something". On the other hand, it probably just makes no sense, since nobody can do everything at the same time. Then again, if you want to trade Geppy for example, you also have to consider U/J and G/U.
I understand, but you are missing setups all the time. There are countless of them each day, and so it doesn't matter.
Sometimes it's confusing here, because out of the blue somebody posts something that no-one else had on the plate. Example: now USD/CNH, TRY, RUB are all the craze. On the other hand there are a lot of serious traders who only trade 1-3 pairs.

Some reflection: I started with EU, then branched out into GU and AU. GU still is a problem for me, AU is a fundamental, large tf pair for me. EA is just a cross. UChf is a kind of mirror image for EU, and the only reason I trade that as well is that I trade EChf from a strictly FA/speculative perspective. Well, and then there is UJ. As well speculative, large tf pair.
I guess what I want to say: if you trade the smaller tf's, TA-wise, it's imho important to know your pair by heart.
Fail better.
  • #5,459
  • May 29, 2014 5:27am May 29, 2014 5:27am
Quoting hadox
{quote} I get your point.. I don't follow correlation though, have you considered adding correlation later on, I mean if you don't know what to focus on, it's prolly not making it easier, at least in the beginning.. I don't know Hickson, you'll figure it.. patience is a virtue.. lol..
Ken introduced me to this idea, and I think it makes it a little easier to predict crosses, having a view how the related pairs move around certain levels. Understanding how a pair moves might also be supported by fundamental understanding, on the other hand it is too confusing. For example just knowing things like NZD being choppy could prove more usable than knowing the fundamental reasons in practice.
Fix up, trade sharp ...
  • #5,460
  • May 29, 2014 5:44am May 29, 2014 5:44am
Quoting Hickson
{quote} Ken introduced me to this idea, and I think it makes it a little easier to predict crosses, having a view how the related pairs move around certain levels. Understanding how a pair moves might also be supported by fundamental understanding, on the other hand it is too confusing. For example just knowing things like NZD being choppy could prove more usable than knowing the fundamental reasons in practice.
If you're gonna trade Yen crosses, they are very closely correlated with S&P500. On most days, e/j follows spx moves. But one also has to take into account the time of day and the kind of news that are driving the moves - if only e/j is moving and its London morning session, its likely that the move in E/J is being caused by a euro-related event/speaker.

You should also consider if there is any kind of risk on/risk off sentiment in the markets and then use multiple assets to position yourself accordingly, maybe even hedge risk. Typically on a risk-on day, equities will rise, along with aud/usd (high yield currency) and yen crosses, because investors might be buying dollar as a safe haven asset, while riskier assets will fall, such as crude oil and gbp/usd.

So a trader needs to understand the driving forces between the different pairs and other instruments to successfully trade multiple assets with continued success.

Btw, I am a TA nut, but I won't go against fundamental news that are changing the name of the game, unless there is a reason for it, like time of the day and reported large option expiries, month end profit taking etc. Coming up to one of those this week hence the reason for long e/u outlook and position. Month end rebalancing. Caution is advised.
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