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Davit's Confluence Trading

  • #1,081
  • Jun 5, 2014 11:20am Jun 5, 2014 11:20am
Here's my thoughts on AUD/NZD which seems like a clear bullish setup to me. If this grid is too cluttered I can explain in more detail and/or repost individual charts to clarify.

Essentially I am waiting for a pullback or a break above recent 1.1025 highs to target 1.115 (NetDania prices are consistently displayed 0.00025 lower than reality, or at least the prices I trade) which is confluence with daily extension and weekly retracement and prior support now resistance, then 1.125 which places it at monthly 23.6% and descending monthly channel resistance. Breaking above 1.125 is 1.1675 (prior weekly high) then the "real" target of 1.1753 38.2% retracement of the full move down from the 2011 high and the extension of the prior descending fractal channel.

AUD/NZD long term grid
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You can always make money tomorrow provided you don't lose it today.
  • #1,082
  • Jun 5, 2014 12:15pm Jun 5, 2014 12:15pm
Great thread here Davit. Stumbled upon it a couple of days ago and have been quietly reading. Look forward to more. I definitely need to move more towards fundamentals, or at least taking them more into consideration.

Was doing that at beginning of last year when the Yen crosses were skyrocketing. Lots of pips made those months.

Anyway, thanks for the thread again Davit and kudos to all the contributors. Nice group here.
  • #1,083
  • Jun 5, 2014 12:24pm Jun 5, 2014 12:24pm
G/U short filled at 1.6808. Will add if it goes higher and see what happens. Geppy also looks like a good try. Might short this ish as well, but only with a tight stop scalping.
Fix up, trade sharp ...
  • #1,084
  • Jun 5, 2014 12:35pm Jun 5, 2014 12:35pm
Quoting spyderman
Great thread here Davit. Stumbled upon it a couple of days ago and have been quietly reading. Look forward to more. I definitely need to move more towards fundamentals, or at least taking them more into consideration. Was doing that at beginning of last year when the Yen crosses were skyrocketing. Lots of pips made those months. Anyway, thanks for the thread again Davit and kudos to all the contributors. Nice group here.
Glad to have you
Its a confluence thread which means stacking as many edges in our favor as possible
Download my template,BB system and track the pairs when they go into 2-3rd deviation and 30/70RSI
You got pretty good edge.
Important to state no system is 100% hence discretion is a must.As Chris found out BB 2-3D usually falls on S/R levels.
Regards
In trading, you have to be defensive and aggressive at the same time
  • #1,085
  • Jun 5, 2014 12:37pm Jun 5, 2014 12:37pm
Quoting Hickson
G/U short filled at 1.6808. Will add if it goes higher and see what happens. Geppy also looks like a good try. Might short this ish as well, but only with a tight stop scalping.
Hi friend
If you are short on funds shorting G/J can be challenging.Its a beast.I don't trade it even though signal now looks so enticing....
Regards
In trading, you have to be defensive and aggressive at the same time
  • #1,086
  • Jun 5, 2014 12:43pm Jun 5, 2014 12:43pm
Quoting KADC
Here's my thoughts on AUD/NZD which seems like a clear bullish setup to me. If this grid is too cluttered I can explain in more detail and/or repost individual charts to clarify. Essentially I am waiting for a pullback or a break above recent 1.1025 highs to target 1.115 (NetDania prices are consistently displayed 0.00025 lower than reality, or at least the prices I trade) which is confluence with daily extension and weekly retracement and prior support now resistance, then 1.125 which places it at monthly 23.6% and descending monthly channel resistance....
This is good example why not every signal is worth taking.
On my BB system its clear Sell.Harmonically its a sell as well but when you look at weekly candle then shorting looks pretty weak.
Skipping this all together and I understand your Bull bias.
Good luck
In trading, you have to be defensive and aggressive at the same time
  • #1,087
  • Edited 3:32pm Jun 5, 2014 12:49pm | Edited 3:32pm
Quoting Davit
{quote} I don't think we will see 3850 on EU any time soon. You gave my idea to check E/A Trading is like sport.Takes some time to get in sink when you were out of it as you were.. I am sure you will start kicking ass soon
Shorting EUR/AUD also takes advantage of the now even better carry trade. AUD/USD is retesting prior 0.933 high at the moment -- this is its make or break level ...and there is goes just now. There may be similarly attractive Kiwi trades, particularly with it NZD/USD about to retest 0.85, having already broken well clear of the descending channel on the 4-hour chart. If the carry trade is indeed back on, that also puts Kiwi and Aussie longs in general back in the spotlight.

With the USD Index having turned bearish (though an exceptional unemployment print tomorrow could change that) I don't want to short EUR/USD, at least not today. The monthly chart still spells lower to me with rising support down at 1.345, but the daily moved down, to the pip, the full range of the move up from February to March and came within spitting distance of support and the 50% Fibonacci of the 2011 high to 2012 low, so at this point I'm more comfortable entering short from a higher point or waiting for a break below 1.3475. It's retesting 1.365 again now for the third time today and if it clears 1.367, the high from a week ago Monday, I would even consider adding to my Euro long, but I can also see an argument for shorting from this point if it fails to clear.

My larger concern for EUR/USD lies in the weekly chart. RSI broke below rising support and dropped below 50 which is very bearish, but it turned flat at the descending support line instead of breaking through which spells at least a bounce and we're looking at a weekly bullish reversal candle that I don't want to trade against. But then again I entered my EUR/AUD short 50 pips shy of where I should have gotten in so maybe my brain just isn't in gear today.

Correction: The weekly chart I'd uploaded before was missing an important RSI pivot/support line which was exactly where RSI was rejected. I need this to be broken before I can short EUR/USD from this area.

EUR/USD weekly chart
Attached Image (click to enlarge)
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You can always make money tomorrow provided you don't lose it today.
  • #1,088
  • Jun 5, 2014 12:50pm Jun 5, 2014 12:50pm
Quoting Davit
{quote} Hi friend If you are short on funds shorting G/J can be challenging.Its a beast.I don't trade it even though signal now looks so enticing.... Regards
Hi Davit, good to see you had a very profitable trading day. I was quite busy, but on my way I saw E/U bouncing from support after the ECB-Meeting and bought some. Played out well, about 200 pips on these positions before I was home

For Geppy, yeah, it is really a beast. I only trade this with tight stop or I hedge this (which is less convincing for me so far). But G/U shorts could be fine, the position is small and I can just leave it for a while.
Fix up, trade sharp ...
  • #1,089
  • Jun 5, 2014 1:01pm Jun 5, 2014 1:01pm
Quoting Hickson
{quote} Hi Davit, good to see you had a very profitable trading day. I was quite busy, but on my way I saw E/U bouncing from support after the ECB-Meeting and bought some. Played out well, about 200 pips on these positions before I was home For Geppy, yeah, it is really a beast. I only trade this with tight stop or I hedge this (which is less convincing for me so far). But G/U shorts could be fine, the position is small and I can just leave it for a while.
I may plunge on short side on G/J but not yet
Notice RSI and BB not where they should be plus resistance is another 60-70 pips up
Attached Image (click to enlarge)
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In trading, you have to be defensive and aggressive at the same time
  • #1,090
  • Jun 5, 2014 1:06pm Jun 5, 2014 1:06pm
And we place Fibs from recent swing
Confluence area is 127 at 172.57
Attached Image (click to enlarge)
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In trading, you have to be defensive and aggressive at the same time
  • #1,091
  • Jun 5, 2014 1:09pm Jun 5, 2014 1:09pm
Quoting KADC
{quote} Shorting EUR/AUD also takes advantage of the now even better carry trade. AUD/USD is retesting prior 0.933 high at the moment -- this is its make or break level ...and there is goes just now. There may be similarly attractive Kiwi trades, particularly with it NZD/USD about to retest 0.85, having already broken well clear of the descending channel on the 4-hour chart. If the carry trade is indeed back on, that also puts Kiwi and Aussie longs in general back in the spotlight. With the USD Index having turned bearish (though an exceptional...
KADC
I am fundamentally short on EU
1.35 TP
today’s meeting the Governing Council of the ECB took the following monetary policy decisions:

  1. The interest rate on the main refinancing operations of the Eurosystem will be decreased by 10 basis points to 0.15%, starting from the operation to be settled on 11 June 2014.
  2. The interest rate on the marginal lending facility will be decreased by 35 basis points to 0.40%, with effect from 11 June 2014.
  3. The interest rate on the deposit facility will be decreased by 10 basis points to -0.10%, with effect from 11 June 2014. A separate press release to be published at 3.30 p.m. CET today will provide details on the implementation of the negative deposit facility rate.

We might get some push before June 11 but after its all Bear

In trading, you have to be defensive and aggressive at the same time
  • #1,092
  • Jun 5, 2014 1:14pm Jun 5, 2014 1:14pm
First euro short taken

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It's all about bucks, kid. The rest is conversation.
  • #1,093
  • Edited 3:31pm Jun 5, 2014 1:17pm | Edited 3:31pm
Daily RSI has moved exactly where I don't want it. A break above ascending and descending support says to go long, a break below go short. Similarly in price action it is now at 1.367 resistance -- a move above has me adding to my long, otherwise a good place to short from. For the time being I'll hold my long and wait for it to choose a direction.

EUR/USD daily
Attached Image (click to enlarge)
Click to Enlarge Name: EUR.USD - 140605 daily.jpg Size: 466 KB
You can always make money tomorrow provided you don't lose it today.
  • #1,094
  • Jun 5, 2014 1:23pm Jun 5, 2014 1:23pm
Quoting Davit
{quote} KADC I am fundamentally short on EU 1.35 TP today’s meeting the Governing Council of the ECB took the following monetary policy decisions: The interest rate on the main refinancing operations of the Eurosystem will be decreased by 10 basis points to 0.15%, starting from the operation to be settled on 11 June 2014. The interest rate on the marginal lending facility will be decreased by 35 basis points to 0.40%, with effect from 11 June 2014. The interest rate on the deposit facility will be decreased by 10 basis points to -0.10%, with effect...
I'm bearish Euro, just not against USD, at least not until after the US unemployment print tomorrow.
You can always make money tomorrow provided you don't lose it today.
  • #1,095
  • Jun 5, 2014 1:45pm Jun 5, 2014 1:45pm
Got indicators, etc. loaded. Having trouble compiling fibs. Getting errors, anyone have version compiled for newer MT4 builds.

Thanks
  • #1,096
  • Jun 5, 2014 2:44pm Jun 5, 2014 2:44pm
Quoting spyderman
Got indicators, etc. loaded. Having trouble compiling fibs. Getting errors, anyone have version compiled for newer MT4 builds. Thanks
You need these files EX4 files
Attached File(s)
File Type: ex4 Fibo_Independence E.ex4   15 KB | 246 downloads
File Type: mq4 Fibo_Independence E.mq4   12 KB | 257 downloads
File Type: ex4 Fibo_Independence.ex4   18 KB | 252 downloads
File Type: mq4 Fibo_Independence.mq4   13 KB | 250 downloads
In trading, you have to be defensive and aggressive at the same time
  • #1,097
  • Jun 5, 2014 2:55pm Jun 5, 2014 2:55pm
Thx
  • #1,098
  • Edited 1:11am Jun 6, 2014 12:58am | Edited 1:11am
I was thinking (I do that occasionally) about what what the real effect of today's ECB decision had on the Euro. First of all, it's now cheaper to borrow which makes it more attractive which is bullish. This on top of its already discounted price from last month which made it cheaper to buy to begin with. The Euro is now less attractive to hold on to, so you have to invest it, and that's economic stimulus. The currencies of markets with economic growth become more attractive, which is bullish.

I don't know what that means near term, but I have less confidence in longer term Euro weakness now. At the moment EUR/USD is almost in the middle of the ascending wedge on the weekly chart (middle of ranges is not a place I like to enter new positions) but there's a pinbar candle indicating bullish reversal, plus RSI has been rejected at weekly support. Since I'm already long EUR/USD I'll place a stop just below the top of the most recent consolidation range on shorter-term charts at 1.364. Breaking below that puts it back in that consolidation range, so an initial target just above the bottom of that range at 1.359 makes sense, and if it breaks below 1.3585, preferably on a dip below and retest, we're looking at support at the bottom of the wedge around 1.345. Otherwise, if the top of the consolidation range holds, I'm targeting the top of the weekly rising wedge, currently at around 1.40.

Now breaking through the bottom of the wedge will certainly have me changing my tune about Euro bearishness as we'll be looking at the monthly chart, and the first destination is the 38.2% of the 2011-2012 range at 1.315 which has confluence as both support and resistance, then 1.2725, then the bottom at 1.205. Until then it's still stuck in this ascending wedge which I'd rather play the tops and bottom of than choose a direction here in the middle.

EUR/USD 4-hour
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I like my EUR/AUD carry trade -- the head and shoulders hasn't been invalidated and has yet to reach its target with a well-tested descending resistance sitting around 1.47 and it's still making lower highs and lower lows. By necessity, this means I think the Aussie will be stronger than the Euro, and I'm currently long AUD/USD looking for 1.945 (current range top) then 1.9525 78.6% of the prior range (butterfly on the weekly, or did the move sideways invalidate it?) and 38.2% of the 2013 range.

It looks like I should have taken that AUD/NZD long at 1.975 after all as it bounced of an ascending RSI pivot support (not on the chart I posted -- I over decluttered) so I'm still waiting to go long whenever it gets around to hitting another target entry point.

If the USD/JPY breaks below 102.25, I'll ride it to support of the rising channel on the 4-hour chart at 102 and see what happens. Seasonally, it's time for Yen strength USD weakness, and unless something changes tomorrow the USD Index is currently pointing down so it wouldn't be unreasonable to see the USD/JPY travel back down to 101. It's not until the Yen hits 100 that the BoJ really starts to get nervous, and with Kuroda talking up the economy 100 (99.85 according to my monthly chart) isn't out of the question, but it's not until it hits 94 that we see real technical support with 38.2% Fibonacci confluence of the 2008-2011 range, though the weekly shows support at 96.7 and 95.9 before that.

That's what I'm thinking about at the moment. I know it's contradictory to what other people are looking at, but I am a contradictory sort of fellow so that only stands to reason that I trade that way as well.
You can always make money tomorrow provided you don't lose it today.
  • #1,099
  • Jun 6, 2014 1:37am Jun 6, 2014 1:37am
Quoting KADC
I was thinking (I do that occasionally) about what what the real effect of today's ECB decision had on the Euro. First of all, it's now cheaper to borrow which makes it more attractive which is bullish. This on top of its already discounted price from last month which made it cheaper to buy to begin with. The Euro is now less attractive to hold on to, so you have to invest it, and that's economic stimulus. The currencies of markets with economic growth become more attractive, which is bullish. I don't know what that means near term, but I have less...
KADC
Your thoughts and opinions are welcome even if it contradicts mine.I think swing and you think the big picture.Could be both correct.
I like taking my 80-100pips x5-8 trades then look another.
Regards
In trading, you have to be defensive and aggressive at the same time
  • #1,100
  • Jun 6, 2014 2:48am Jun 6, 2014 2:48am
Davit

No doubt you would have seen this article:

http://www.nzherald.co.nz/business/n...ectid=11268440
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