Category Archives: Trade Ideas

GBPUSD – watchlist

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 S/R and Overbougt Divergent

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 S/R Box breakout 1HR

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 Trade Idea Oversold 60M

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.

GBPCHF 1 HR Surprise Box 25SEP08

25SEP08 0130EDT

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 Surprise Box 25SEP08

25SEP08 0130EDT

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.

EURUSD Daily Surprise Box and Dual Trend Lines – Closed

22Sep08

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:                                                               

EURUSD Daily Suprise and Trendlines 24July08    

 UPATED Daily Chart 29July08

  EURUSD Daily Surprise 29JUL08.jpg          

Updated 1 Hour / 5 min charts and Daily.  Note the  trend line break on Daily which I have been waiting for (31July08):

    Daily EurUSD Trendline Break 31July08                           EURUSD 5 Min update 31July08           EURUSD Daily Trendline Break 31July08                 

GBPUSD Surprise Trade setup and STOCH Cross 1AUG08 – Closed

1AUG08

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:

GBPUSD Suprise Box 1AUG08                                           GBPUSD Missed Surprise 5AUG08                                           

GBPJPY – hitting 800 on 1 hour, divergent trade watch 1AUG08 – CLOSED ITM

GBPJPY – Friday 1AUG08:- my last trade on this pair closed out Friday morning when it hit the 800 SMA on the 1 hour.  This pair has bounced off the 800 twice recently.  This is a heads up to start looking for Divergent trade setups.  Nothing currently, but watch the pair as the week opens to see if we get any good setups.

UPDATE Tuesday 5AUG08:  I took two trades off this setup. The first was a quick SR trade Sunday night.  Pair was in a range between the 800 and about 30 PIPS below.  I took a quick trade on a downward movement that closed overnight for a gain of about 30 PIPS.  Monday night, the pair broke the long term SR level and the 800.  Entered on a bearish candle that closed below the 800.   I had 2 short positions on that were not doing much before the 12:00 a.m. rollover.  I felt strong about the overall trade, but due to the FED data coming out Tuesday I did not want to risk a fast spike up/down in anticipation so I took off one position.  I ended up +98 PIPS in the a.m. when I woke up.  Dissapointed I lightened the position, but I slept much better.  I have learned the hard way it is more important to give up some potential PIPS to protect your account balance.

 Friday 1 AUG close                                Tuesday 5AUG08 – completed trade movement

GBPJPY_800_ 1HR_1AUG08                                  GBPJPY Surprise Box 5AUG08

USDJPY Trade Idea – Stochastic Cross 1AUG08 – CLOSED

USDJPY Friday 1AUG08: The pair had a Stochastic cross on the 1 hour but it was oversold and the candles did not cross the 200 yet. I am watching to see if the pair can cross the 200 SMA for a possible trend resumption and confirm by closing above the 62 EMA. This would be a good probe for a probing trade with the still in place upward trend. Goal 50 to 100 pips. This is a watch an wait setup for next week.

UPDATE Monday 2AUG08:  I took a probing trade on a Stochastic cross and oversold candles but closed it when I saw strong upward movement for a small loss.  Good call as the pair continued upward for many candles. 

USDJPY Stochastic Cross Setup 1AUG08

GBPJPY Support/Resistance short Channel break 29Jul08 – CLOSED ITM

GBPJPY Support/Resistance trade – This is really a continuation of a trade setup from last week that closed out.  We had a Channel breakout to the downside last week and traded it down to the 800 SMA on the 1 hour chart.  I then took a few probing short trades that stopped out, only to realize price was heading up to the bottom the old Channel, which is exactly where it stopped.  Now, we have some clear SR trendlines in place.  I think there is more of a chance of it breaking to the downside based on trendlines and oversold indicators.  I built a small possition overnight (was stopped out first but eventually found the correct levels) and woke up to 70+ PIPS on a small position.  I then doubled up (still below my normal trade size), and moved my SL down to 25 PIPS above the most recent SR line.  I was taken out at a 4 PIP profit – B/E.  If you look at my last GBPJPY trade idea you can see a good view of the previous Channel and subsequent break out downwards.

 After drawing the new downward TL that is now in place, I think I found the TL that price is following. I again have a small exploratory trade on that is in a tight 25 PIP range for most of the day.  If price breaks the TL and eventually the old Channel, I may consider a trade up to the old most recent high.  The current trade is short back down to the lowest most recent SR level as Target 1, and Target 2 is just above the 800 SMA on the 1 Hour.

UPDATE 29JULY08 – This trade significantly broke the channel on the upward side overnight and stopped out.  I decided to take another short probing entry this morning, all in all I have broke even less a few pips after I closed that possition once it touched the 200 and started to retrace.  I am now flat in this pair and am watching to see if the pair can close below the 200 on the 1 Hour.  If the risk reward ratio still looks good I may consider another small possition trying to get to the 800.  Otherwise this trade idea is over. 

UPATE 30July08 – This trade is closed for now.  The pair spiked up overnight and hit my stops.  I still think it is biased to the downside but unless it breaks the long term SL line on the daily, I am not going to re-enter for the time being.

 UPDATE 31July08 – Trade setup started trending down, re-opened.  Trade is hitting long term trendline.  If breaks, I believe this one will run far.  I have a small probing trade on now as the Asian session is winding down.

UPATE 1AUG08 – Pair broke through the bottom of the box and shot down to the 800 overnight.  My targets were hit and this trade is now closed.    100 PIPS while I was sleeping – nice!

Here is what the Trade setup looked like as of 1800 Monday 28Jul08:

 GBPJPY Support/Resistance trade 28July08

Updated view – showing channel break – 1800 19Jul08  

 GBPJPY Channel Trade Close 29July08

31July08 1 hour and 5 minute chart update

GBPJPY Trendline break setup - probing 1 hour 31July08            GBPJPY 5 Min view 31July08

              

NZDJPY STOCH Cross and 62 EMA cross 29JUL08 – In the money CLOSED

NZDJPY STOCH Cross and 62 EMA cross – This is a quick little trade that I saw.  Two of my favorite setups, one is a Stochastic crossover indicating the pair is going to fall, and a cross back down through the 62 EMA which resumes a previous downward trend.  I am so hyperfocused on the GBPJPY and EURUSD for the past few days, I am glad to find this little trade.  Only going for about 35 PIPS as this is normally a slower moving pair.  Risk is very low even if the trade does not work out.

 Update – this trade worked out textbook.  I closed it at the previous low on the oversold bar below.  I scaled in two possitions as this was a nice slow moving trade.  I got the bonus of the trade closing during rollover at 12:00 a.m. and a fast oversold spike.  I had a stop market on and picked up an additional 18 pips!

Here is the trade opening:                                                                                             

NZDJPY STOCH Cross + 62 cross   

 Here is the close – I got out at the large overbought just before breaking the Mesa line

 NZDJPY Stoch Cross CLOSE 29JUL08            

GBPJPY Mesa SR Line Break trade 25July08 -CLOSED

GBPJPY pre-us open – taking a small stab at a mesa trade down to 212.76, trade just opened.  SL is at 214.50 and entry is at 213.95.  Most likely this is the last trade for the week.  This is a quick trade, no analysis, just a reaction to what I am seeing the market do and based on existing trade setups I like. 

UPDATE – Trade closed and hit my stop loss almost a quick as I put it on.  This pair amazes me at its powerful surges.  It is reaching as I type for the bottom on the former Channel Trendline.  I jumped into this and should have waited for the candle to close.  

Here is the trade setup:

GBPJPY Mesa short trade 25July08