10-12-09
6:36a GMT – Welcome back for another week, I hope everyone had a great weekend! Long-term signals for the EUR/USD remain bullish with daily and weekly charts showing a clear uptrend. However, the weekly chart shows a bearish doji a couple weeks ago and with the recent bearish break of a bullish consolidation channel I will continue to look for shorting opportunities in the short-term.
Trading Idea: I will look for bearish candlestick signals and failures in the resistance zone between 1.4755-1.4775 with short targets at 1.4735, 1.4700 and 1.4670.
(click to enlarge)
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Discuss this signal with me and fellow traders at the new Forex Discussion Groups
October 12, 2009 at 10:24
Mark, do you have any support and resistance MT4 indicators I can use with this strategy? Thanks
October 12, 2009 at 13:33
No there is none. I am working at developing one currently but so far it has proven very very hard to get some code to see a chart the way I see it and produce good S/R lines. I have plenty that produce S/R lines but none of them put the S/R in the same places I would.
October 12, 2009 at 11:27
at what EUR/USD should I buy to make a profit today itself
October 12, 2009 at 11:29
Hi shaheen,
according to Mark’s (Piphut creator) analisys, you should not buy, but sell. The range price is more or less where it is now, but we should look for a candlestick confimarion. Regards
October 12, 2009 at 11:55
what is candlestick confirmation? how to see it?
October 12, 2009 at 12:02
Vyteni, neuzdavinek tokiu kvailu klausimu cia. Jei angliskai supranti tai vien is zodziu turetum suprast ka tai reiskia.
October 12, 2009 at 12:08
neapsimesk cia vierchu.. esu naujas ir bandau kaip visas tai veikia.. tiesiog dar nezinau kas tai yra ir viskas.. butu buve paprasciau jei butum visa tai paaiskines..
October 12, 2009 at 12:21
So once again, what is candlestick confirmation? Sory for such questions, i’m new..
October 12, 2009 at 13:38
Vytenis, no need to apologize. Candlestick signals are certain candlestick formations that are supposed to mean different things. For example, there are certain candlesticks that mean the market is getting ready for a price reversal, or for more gains/losses, etc. They are not always reliable but they give us another data point in our trading. Some are more reliable than others and the higher the timeframe the better. Below is a good resource for candlestick formations and their meanings:
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:candlestick_pattern_
October 12, 2009 at 13:24
The pair is exactly in the resistance zone right now. Didn’t a shooting star on the 1 h chart hit/pierce your upper trendline, or this wasn’t a shooting star? (due to the lower shadow). Is it only a shooting star without a shadow or how exact must this be to be a valid entry signal? :)
October 12, 2009 at 13:31
No shooting star yet… The resistance zone is definitely giving it some resistance but it is starting to look a little like a flagpole consolidation pattern (long “pole” with flag consolidation pattern) which would signal more gains. I am still waiting for a good bearish candlestick.
October 12, 2009 at 13:42
Whoa, good thing we waited! EUR/USD just exploded up to 1.4800.
October 12, 2009 at 13:53
On 15min chart it looks like Harami is forming .. to bad its not on 1h chart :D
October 12, 2009 at 13:54
ahh nwm going back up :(
October 12, 2009 at 14:23
“Whoa, good thing we waited! EUR/USD just exploded up to 1.4800.”
right :)
To ask again, can a shooting star also have a lower shadow or must it strictly have a low close to be a valid signal? Or are there any grey areas?
Are these signals only valid once at the start of the new hour? What about when signals occur somewhere within an hour?
October 12, 2009 at 14:34
It can have a lower shadow but it should be very very small but, yes, there are grey areas. They are only valid on a CLOSE. Frequently you will see what looks like a perfect signal even 5 minutes before the close of the hour only to have it completely gone 5 minutes later.
October 12, 2009 at 14:24
Am I correct to say that the short-term trend is now bullish? Should we start buying dip?
October 12, 2009 at 14:36
You could buy dips but be careful around 1.4815 as that is stronger intraday resistance and could limit gains. I’d like to sell on a bearish candlestick around 1.4800 myself.
October 12, 2009 at 15:36
Mark , when Its time to enter will the targets be the ones you gave earlier or do we just look for signs of a reversal?
October 12, 2009 at 15:40
Depending on where you enter you could add a target either at the top of congestion at 1.4775 or bottom 1.4755.
October 12, 2009 at 17:02
Was that a shooting star wich just formed on 1h chart ? or does it only formes at the top ?
October 12, 2009 at 17:32
candlesticks reversals are only significant when formed at the top/bottom of a range or near support resistance. In my experience they are most reliable when they have a long wick that goes above/below all other price action.
October 12, 2009 at 17:16
Hi Mark, you explained to an earlier question, you see support and resistance different from most automatic software. So how different is your outlook from other traders? Also what is logic behind the statement a candle at 59 min does not mean anything till it close. Is it self fulfilling aspect of forex ie more traders waiting for candle to close? Thank you
October 12, 2009 at 17:42
The reason I see it different from automatic software is because of the inherent difficulties of programming software to recognize things as a human does. For example, lets say we code an SR indicator that checks the last 100 candles on a chart and gives you back the SR. If we are in a strong downtrend there might not be an evident SR in a nearby timeframe. As a human I just back out to a larger timeframe and can easily spot the SR. Also, do you code it to check highs/lows/opens/closes? How many candlesticks until support is valid? If you have 3 wicks that all had lows within 3 pips of eachother is that now a support level? What if you had 10 lows within 10 pips of eachother – is that support? These are all things the human eye/experience can very easily cope with but would mean many many lines of code, hours of troubleshooting,etc. I’m not saying it can’t be done – I’ve just never seen an indicator that does a very good job at it.
Regarding the candlestick closes in my experience it is just a whole lot safer to wait for the close. Obviously if you act on a candle at 59 minutes and 59 seconds there is little chance that candle will change drastically. But I answered Andy’s question about ANY time during the candlestick, not just 1 second before close. I’ve seen candlesticks that look great at 30, 40, 50 even 58 minutes that have changed from a sure signal into something completely different by the time it closes. Again it all boils down to how aggressive of a trader you are. The more aggressive you are you will get a lot more signals, true, but you will also have a much higher drawdown in your account because a lot more of those signals will be false. Same concept as using higher timeframe charts to get better results vs. lower timeframe.
October 12, 2009 at 17:40
Allready went short at 1.4784 :/ i need to slow down a bit lol
hopefuly its gona go down :)
October 12, 2009 at 22:15
Is this signal still in effect or hve you closed out your trade for the day?