Archive For "May, 2008"

5-23-08

8:49a GMT – AUD/USD is approaching former support line around .9615 (green trendline on chart below) while at the same time approaching the top of its downtrending RSI line (blue line on RSI chart below). After breaking its bullish channel I expect the downtrend to continue in the short-term. Slow SS is also flipping on 60M.

Trading Idea: Wait for bearish candlestick to confirm entry and price reversal to enter. First target around .9550. Below that look fo5 .9500. If it breaks resistance look for .9650 and .9700.

Result: -40 pips

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Based on my technical analysis of the USD/JPY pair I entered short on a bearish candlestick. Risk was only 15 pips (bearish candlestick was close to resistance) and profit was 30 pips.

You can read the analysis that prompted this trade here:

Technical Analysis – USD/JPY – Caution Advised

P.S. For those of you who are new here because that analysis was under Technical Analysis and not “Free Forex Signal” (where I provide entries and exits) it will NOT be counted in “May Forex Performance” box in the top left. The only trades that go in there are the “free forex signals”. This one just goes straight to my wallet ;).

Happy pipping.

5-23-08

7:12a GMT – Pair is coming down on two support levels after breaking higher from its already bullish channel. First level of support is the former resistance line that was broken on 5/22. Second is the support (closest line in green on chart below). From a channel which is still intact. RSI is also approaching the bottom of its bullish channel.

Trading Idea: I will wait for a bullish candlestick to confirm the trade and then enter long. First target is 1.98 then 1.985 and higher. If it breaks support levels look for 1.975 then 1.97.

Result: +80 pips

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5-22-08

2:25a GMT – Pair is nearing resistance (blue line on graph below) that has been tested numerous times over the past month. Trend is down and I don’t expect that to be broken here. Resistance is currently at .9890 and below this look for .9850 and .9800 as targets. If the pair breaks resistance above .9890 look for .9920 and .9950 as targets

Trading Idea: Look for bearish candlestick near resistance line or clear bounce off resistance and enter short.

Result: -40 pips

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5-22-08

2:12a GMT – Mixed signals on the USD/JPY pair. Pair charged upward through resistance at 104.00 only to meet tougher resistance at 104.40 (the 68.2% Fibonacci retracement of the 105.4-102.7 drop). Pair bounced hard off that only to return to 104 and bounce off that as well. Two possible trend resistance lines were broken in yesterday’s upward charge but one remains (seen on chart below in blue). Bearish wick just bounced off this trend line making me lean toward bearish underneath it despite the upward pressure of 104.00.

Trading Idea: Mixed signals advise caution and to wait for a clear signal one way or another. I remain bearish under the blue trend line currently at 104.30. Beneath this look for 104.00 and 103.60 as targets. Above this trend line or off another 104.00 bounce look for 104.50 and then 104.90 as targets.

UPDATE – 6:19a GMT – To add to the mixed signals there is what appears to be a triangle consolidation pattern on top of the flagpole, which would indicate a bullish shoot upwards. Pattern and flagpole in yellow below:

Result: +70 pips

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5-22-08

18:53 GMT – Flagpole trade entry orders placed below current pair consolidation. Pair has nice flag consolidation pattern after 60 pip drop and is near large round # at .9550. Negatives include strong resistance at .95 and oversold hourlies (but dailies are overbought).

Sell – .9538
S – .958 (20 pips)
L1 – .9518 (20 pips, move second stop to BE)
L2 – .94750 (67 pips)

UPDATE – Trade parameters adjusted above.

UPDATE – 20:52 GMT – This trade has been put on hold until Tokyo market comes online to avoid a false breakout in thin markets. Entry price not yet hit.

UPDATE – Trade Cancelled on a break to the upside. Good no trade.

Result: 0 pips

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5-21-08

18:21 GMT – Entered flagpole breakout entry above consolidation at 104.00. Consolidation made nice pattern, flagpole was 90 pips and trade is in direction of flagpole. Also pair was making nice horizontal stabs at 104.00 resistance, a large round #. Negatives include the possibly strong trend support below 104.5 (and very close to my limit) and the resistance at 104.50

Buy – 104.195
S – 103.945 (25 pips)
L1 – 104.445 (25 pips, move second stop stop to BE)
L2 – 104.795 (60 pips)

(Having issue with my screen capture, will get a chart up here ASAP)

Alright here’s my screen capture (by the time I got the screen captured we are 14 pips in the profit per lot, hope you weren’t waiting on this!)

UPDATE – Mixed hourly signals. A bearish candle followed our breakout and pair may have bounced off of 61.8% daily retracement of latest drop or the trend line resistance. Positives are that the former resistance at 104.2 should now be strong support. No shame in closing this trade after that bearish candlestick though. I am tightening my stop to 5 pips below the support at 104.147.

UPDATE – Well, as I suggested above I did close that trade out at a small loss of 10 pips, so that will go up into the May Forex performance (top left). According to my ticker the original stop was never hit so this one would be still be open. The technicals on this one are mixed without a clear direction as you will see in my technical analysis I will post soon.

RESULT: -10 pips

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5-22-08

6:54a GMT – Pair has tested 1.58 several times today and yesterday and was unable to break through. After retreating down and gaining some ground from the overbought hourlies the EUR poised for another breakout.

Buy – 1.5808
S – 1.5883
L1 – 1.5833
L2 – 1.5865

UPDATE – 7:15a – Pair quickly dropped from 1.58 after getting up to 1.5815 leaving us with a 50 pip loss. Will analyze this one in more detail later.

Trade Result: -50 pips loss.

Analysis – Basically the more conservative trend lines (the ones on the outside) won out on this one. In hindsight this could be expected since the pair had bounced off them twice in the past 12 hours. The matching trend support further confirmed the upper trend resistance.

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5-21-08

23:46p GMT – Placing two entry orders above current consolidation just below large round # at 1.5800. Current price action is around 1.5786. Treating the four candlestick, 50 pip rise from 1.5750 as a flagpole and placing entry 5 pips above flagpole and large round # at 1.5805. Stop and first exit are relatively tight as RSI is pretty overbought at this point but fundamentals back more EUR gains. In the direction of the trend and have a nice down curl consolidation below 1.58 as bears try and fight back but I think bulls will win this one.

Buy – 1.5805
S – 1.5780 (25p)
L1 – 1.5830 (25p, move second stop to break even)
L2 – 1.5870 (65 pips, at the bottom of former support levels)

UPDATE – 3:57a GMT – Signal cancelled, again. Break to the downside negates signal. We will look to buy dips.

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The EUR/USD free forex signal from earlier today has been cancelled. See original post for cancel details.

I might reopen this one once Japanese markets open up later tonight but price action is so close to my entry that a large order that wouldn’t normally drive the market might cause a false breakout and trip my entry.