AUDUSD 60M DIV 13JAN09 Tuesday 13JAN09 12:30Pair is Divergent on the MACD. It had a quick fall to the 800, possible retracement back to the 62 or 200. Careful on entry, need to have candles come out of oversold OR be very convicted. Scale in, watch for reversal continuation.
EURJPY – surprise box setup on 1HR and 4HR.
EURJPY 1HR has stopped at a daily Pivot and is almost divergent. Watch for a move back to the 800. If it moves decisively below 118.70 I would take a short down to the midpoint and reset stops with goal of the next Pivot. Low leverage if I take this as this is not a pair I trade often.
GBPUSD is hitting lower resistance at the 200 SMA on the 1HR. Watch for either break below this level OR a rise to continue the older upward trend. My bias is to the downside due to the GBP fundamentals but I would have no problem taking a long trade with careful stops.
EURUSD Surprise Box 12JAN09 – the pair has consolidated on multiple timeframes (1HR, 4HR and 5 min.). It is also slightly divergent on the 4HR. I am watching for a break of the 1 hour box, with a target to the top of the 4HR box and a possible continuation to the 800, or a break down with a target to the lower trendline on the 4HR. Also FIBS would be a good target. Biased towards the downside.
EURUSD Overbt_DIV 15DEC08 (click to see chart) The EURUSD retracement is strongly overbought but the move may not be quite done. As I write this, I am watching for a break above 1.3723 in which case I will go long with an initial target of either 1.3796 or 1.3881 depending on where the breakout candle closes. During active sessions I will take a break on the 15 min but in slower sessions I prefer using the 1 hour timeframe. Also I am watching for a retracement back to the 62 currently at 1.3455 or further if we come out of overbought. There is a clear divergent setup on the MACD and the Stochastic is in overbought territory. This has been a clear breakout in hindsite but was a bit tricky as I was watching for a pullback too early around the 1.3256 area.
NZDJPY surprise 15DEC08 (click to see chart) On the NZDJPY a colsolidation box has formed around the MA’s. They are all in a range between 49.90 and 50.22. Watch for a breakout and on a convicted candle take the trade in the breakout direction. Initial targets = 51.15 or 48.50. Upside secondary target = 800 MA. We are near multiyear lows at 48.13 so be careful. Also we are in a strong downward trending phase on the 240 and daily even though we are consolidating MA’s on the 1HR, again, caution and low risk warranted. Scale in/out. A bigger box would be 51.19 and 48.13
USDCHF reversal watch 15DEC08 (click to view graph) USDCHF has been falling on recent dollar weakness and has been oversold for a while. We are far away from the 62. Watch for colsolidation and break back towards the 62 and 800 MA’s on the 1HR. This is really just a watch and wait right now. No signals are being given, it just feels like it’s been trending down too fast and ready for a pullback. Notice the consolidation area at 1.1557. I would consider shorting if it broke convincingly below this point for a 50 to 100 pip trade target but low leverage and scaling in/out would be how I would play this one.
I have been watching the movement of several currency pairs over the past few months to determine the most statistically reliable intraday price movements. One movement I have been very interested in is the pre-Chicago closing (usually starts around 1430 +/-) and then the post Chicago close after 1500. I have observed that prior to the close, a reliable movement takes place opposite the dominant session trend, and many times reverses quickly and hard after 1500. The trade below is a trade using that idea that netted 94 PIPS with two quick trades. I had a bad entry on the first trade and got out a bit early otherwise the PIPS would have been considerably more. The same patterns were also observable on the GBPUSD and GBPJPY during the same times as well as on the EURUSD.
I am currently backtesting this trade idea extensively as well as studying the time of day per currency pair that show the most movement (best times to trade) and the average range of this movement as far down as 5 minute to 5 minute timelines to find correlations.
Below is the trade as shown on the 5 min chart:
GBPCHF 14:30 and 15:00 Market Imbalance trade
GBP Crosses showing same closing patterns
GBPCHF 1 Hour – I have a box drawn around the most recent high and a former MESA line at 2.0222 and the recent low just below the 200 MA @ 2.0061 as the lower end of the box. This is a fast moving pair and initially started a downward break but quickly retraced a break of another box trade. Similar to the GBPJPY I am being very cautios on this pair this week due to the U.S. financial crisis ongoing. I may take some very small probing trades after major news (after the initial whipsaws) if a trend looks like it is starting, and only add to the trade if it closes outside the box and shows strong conviction.
GBPJPY has formed a clear support/resistance box between 197.41 and 194.23. Some may use the 62 EMA for a tighter lower limit, but I prefer the wider range due to the unprecedented US financial crisis. There are a few possible trades within the box, like trading a bounce off the 800 down to the 62 or the bottom of the box. I am watching and waiting and not expecting to trade this pair until a clear trend has resumed or a wider channel with several trendline confirmations.
Opened a short trade on the 1 hour on NZDUSD. A support/resistance zone is currently in place between the 800 MA and the 144 MA. Trade is just to the 144, with a tight stop above the 800. Opened @ .6856 with SL @ .6887 and profit target @ .6805. I have a larger Surprise Box on this pair as well, if the pair closes below the 144, I will keep trading short with a stop above the 144.
After the exceptional volatility of the past week, a large downward channel is starting to develop. I have no predictions if it will hold, or what volatility will be over the next few days due to the ongoing U.S. financial market bailout congressional hearings. I am shorting at the top of the most recent touch of the channel down to the mid level fibble with a target of 1.4625. My Stop loss is 1.4744. I suspect that either I will be stopped out above the channel due to some whip saw candles during the European openings, or the opposite, I will get filled at my target profit. If I am awake and the trade is moving in my directions and closes below the middle fibble, I would lock in profit and extend down to 1.4577. I have a downward bias for this pair for the medium term, but am not willing to give up profits in the short term due to high volatility.
Here is the chart at my entry at 23:52 on Wednesday evening:
Hosting company Server issues are preventing publishing chart at this time
September 2008: Wow – this was one heck of a call. I missed most of the move because I thought I missed the break initially. Looking back with 20/20 hindsight this was one of the trades of the year. As I write this, the pair has retraced back to the 62 MA on the daily which is at 1.4888 after reaching a multi-year low of 1.3880. Once the U.S. market shock works its way out of the system, I will be watching for a break downward again. I am very cautious nearterm due to recent and expected volatility as we deal with the banking / mortgage/ credit/ economic crisis in the u.s. Long term I think there is a strong arguement for the pair to fall below the most recent low. This time I will be taking very small probing possitions until I catch the eventual trend down again. Or we hope!
24July08 Late Asian Session
EURUSD Daily and Weekly charts show an interesting range that form a perfect Surprise box. This is a large timeframe for a surprise trade, but really shows the range this pair has been trading in. Add to this a recent break downward and two long standing Trend Lines and we have a large potential short trade setting up. This is really a continuation trade of the EURUSD trade I entered on July 23rd and closed earlier today. I have a probing position on now that I opened after a bounce back to the 800 on the 60Min chart. This may take a few entries to catch the ride down. I am not planning on risking much on my probing entries. If I catch a trend I’ll add to it.
UPDATE 25July08Pre US Open: I had two probing possitions on. The pair reversed and traded through the 62 and has almost touched the 144. One of my possitions closed. I am keeping a single possition on and raised my SL to 10 pips above the 144. If this gets taken out that will be the last attempt for this week and I will again be in watch an wait mode. I am not willing to take a large SL possition on this trade over the weekend right now even with a small possition. Too much going on politically and I don’t want a surprise gap! I’d rather take a few small probes and wait to catch a run down when it eventually happens. Which it will at some point – 1 day, 1 week, 1 month, 1 year… As I tell my wife, trading is really simple, it either goes up or goes down, I can’t tell you which way it will go, only what I will do when it does.
UPDATE 25July08 Mid NY Session: the pair expectedly rose at the European close, then fell again below the 800. I put a tight stop with a continution profit target to the nearest SR line. The pair rose quickly to the 62 on the 60M and I am now out of this trade for now. My last probing entry was profitable around 60+ PIPS. The overall setup remains valid and on my watch list but I do not want to be exposed over the weekend. I don’t like paying interest either unless I am deep in the money with a good trend catch.
UPDATE 29July08 – as we enter the Asian session, you can see that the long term trendline is being hit. I am now watching for either a bounce or a break below. If we break below, then we may be ready to start a new trend. With so much fundamental news these days, any longer term position entry will be probing (small) and again, I’d rather take a few small losses until I catch a trend than one or two ill timed wrong ones!
Update 31July08 – took a few probing trades the past few days. Thought I finally had the trend and got stopped out due to new this morning. Once the dust settled, I re-entered the trade and added to the position thoughout the day. Took half off just before the Asian rollover and have a tight 15 PIP loss in case the Eurpean session retraces the move. I don’t normally keep trades open over the weekend and tomorrow is Friday, so either way I will close this trade out for the week.
Update 1AUG08 – Friday morning NFP report and some other news announcements are expected. This trade held a very tight range overnight in expectation of the data release. I closed the remaining 2 possitions out around 7:45. Good call as my stops would have been touched during the news release spikes. The pair eventually settled back into it’s previous range. Trade on hold for the weekend. I’d like to see a break below the most recent low before re-entering. I will also consider an entry below the 62 on bearish candles on the 1 hour.
See Multi Timeline Charts Below:
UPATED Daily Chart 29July08
Updated 1 Hour / 5 min charts and Daily. Note the trend line break on Daily which I have been waiting for (31July08):
GBPUSD Surprise Box –I’ve been watching this setup for a few days. I tried a probing trade at the STOCH cross that started to creep down and I was hoping to get the entire box and then the breakout. As you can see, we spiked up hard on news and I was stopped out of the original probing trade. This was a stupid mistake on my part as I forgot to check the news calendar as I was feeling a bit tired and lazy. It cost me a few PIPS!
I am now waiting for a breakout of the box. It is Friday as I write this, so I am not expecting to take a position until next week if this trade confirms.
UPDATE Monday 4AUG08: I am a bit bummed over this trade setup because it worked out perfectly! I unfortunately was a victom of sleep deprivation and had to go to bed just after the 12:00 a.m. rollover Sunday night. The breakout occurred just after, and I also missed checking on it Monday morning which would have provided a nice second chance. On the upside, I did not chase the trade after it was well underway. There will be plenty of other breakouts to trade!
Trade setup as of Friday a.m. 1AUG08: Missed Breakout Tuesday 5AUG08: