12-2-09
5:45a GMT – No trade was entered from yesterday as I held off for the news (which had very little immediate impact). Which is fine with me – as many of you know I prefer less trades with a higher win percentage rather than trying to make lots of trades. Many of you yesterday did ignore the news however and entered long at the 05:00a bullish hammer which pierced our support at 1.4980 – a move which would have yielded 100+ pips within just a few hours.
Daily Outlook: 4-hour chart below, zoomed out so we can see the bullish uptrend of the last few months that we find ourselves in. With many speculative traders attempting to short the pair as it approaches its 2009 high I will continue my strategy of looking to buy on dips. I’d prefer the 1.5015 or 1.4980 supports to buy on but the uptrend is strong right now so I will also keep my eyes open for bullish candles around 1.5050 support. There is USD news event (non-farm payroll) at 13:15 GMT so I will stay out of markets around these times. For more details on it visit the forex calendar here.
Trading Idea: From 1.5015 support targets are 1.5045, 1.5080, 1.5110 and 1.5140. Will also look for a solid entry reason around 1.5050 (such as a reversal candlestick from the candlestick alert service here) as well as uptrend is fairly strong right now, but would still prefer a solid dip to buy into.
(click to enlarge)
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December 2, 2009 at 23:18
Mark, I was wondering if you ever use a lower time frame such as 15min, 5min. The reason I ask is that I seem to be attracted to the 5 min and 1 hour time frame with 100 & 200 ema’s as my main indicators. I have found that most every one here seems to work off of the 1 hr and 4 hr time frames. Is it better for a newbie to work off of higher time frames or lower. Please if anyone else can give me there opinion I would greatly appreciate it.
December 2, 2009 at 23:23
Hey Matt, in my experience larger timeframes produce more reliable signals and therefore more consistent profits.
I think beginners are more attracted to smaller timeframes because there are more signals produce, i.e. more action, so they feel like they are being a more active trader.
But the major problem most beginners have is they get going with small trades, some pips here, some pips there, until they get one major setback (or several) that wipes them out.
December 2, 2009 at 23:32
Thanks Mark, That makes since.
December 2, 2009 at 23:34
Mark,
Just curious. Did you enter a buy trade in the 1.5050 range?
December 2, 2009 at 23:36
Nope, never saw a compelling candlestick. We’ll see if this latest rally holds…
December 3, 2009 at 00:32
Did anyone jump into this little correction from 1.5032
December 3, 2009 at 00:48
I have a doji on 4h chart close to 20 mva BB …
did enter after that doji nou hopefuly it holds as you say :D
December 3, 2009 at 00:51
Mark, I am have an issue with s&R lines, I understand going long on support and shorting at resistance, but I find myself not taking trades due to the fact that I have s&r lines within say ten pips of each other. I noticed on your chart the other day you also had allot of s&r lines. How do you determine the valid lines when there are so many. the only thing I can think of is buying or selling at the most extreme s&r lines and expecting a reversal on the opposite extreme line where there are allot of either sellers or buyers. I hope you understand my problem. I am good with my money management and patience but the S&R lines confuse me a little. ( well allot )
December 3, 2009 at 00:54
If anyone has had the same problem that could help, please chime in.
December 3, 2009 at 02:55
Matt, try this, pull up a weekly chart and locate your pivots and main trend lines, save this for reference, then do the same to a daily,4hr,1hr,30min, save them all in your workspace for reference. The longer the timeframe the more powerful the S/R is, so you will know where to go big. At those points we can put on a good risk reward trade.
December 3, 2009 at 03:21
Thank you David, I did that and it cleared up my chart and made it easier to understand. I think the lines I have now are more valid. I think my problem is I think that every time the price stalls, I consider it a S&R line. I had something like 20 S&R lines so I was afraid to trade thinking that it would bounce off the very next line and I’ll lose money. Thanks again.
Matt
December 3, 2009 at 10:36
David,
How do you save the trendlines to your workspace for reference? Will they be all on the same chart or will you have to manually place them on your chart once you go through each timeframe and get and identify the main S/R lines on larger timeframes?
December 3, 2009 at 11:06
Lisa, if you are using MT4, you will have several charts open at the same time, all in different time frames. It helps to have more than 1 monitor.
Yes