Tagged "resistance"

Here is a great example I wanted to share with you from yesterday that combined a) Support and Resistance with the b) Double Detection feature of CandlePro that would have netted you up to 56 pips within 2.5 hours.

First off, we always look at the charts and determine where our S/R levels are. In this example I actually did this for you in the free daily signal (October 7th, 2010) when I wrote: “A more aggressive but more realistic long would be a long in the 1.3860-1.3890 support zone with a bullish signal targeting (from 1.3890) 1.3915, 1.3945, 1.3975 and 1.40 for 110 pips profit.” In essence, to a CandlePro user this should boil down to “Looking for good bullish signals in the 3860-3890 range.”

At 16:45 GMT we got our bullish confirmation – a 15m EUR/USD and GBP/USD DOUBLE with 100/100 Forecast Strength:

It is a) with the strong trend, b) good forecast strength, c) a DOUBLE and d) right in our support zone. They don’t get much better than this as far as confluence lining up for you – these are the sort of trades you should be waiting for.

I normally don’t trade 15m charts very much but as the trend gets stronger and stronger I look on smaller and smaller timeframes to get more entry points in the high-probability trends.

3-4-10

4:17a GMT – Euro bulls were able to extend the rally past 1.3700 resistance yesterday. I had a small position much lower down on a bearish doji that was stopped on a very tight stop and did not enter at 1.3700 as their was no candlestick signal to confirm the trade. The Greek worries were set aside for a bit yesterday as risk sentiment improved and the US dollar sank accordingly. Greece is just the tip of the iceberg however, with problems in Portugal, Italy and Spain (PIGS for short) on the horizon. EU is in a bind because aiding Greece is in their best interests in the short-term but long-term how will they respond if one of the other PIGS countries needs help?

Daily Outlook: I’ve posted a possible weekly scenario below for everyone to look at, and circled the double dojis that give me pause and make me concerned this bullish sentiment could continue for a few more days. The pair is still capped by a falling trend resistance on the daily chart however.

Trading Idea: I will play it cautious today as the short-term trend exposes itself. No need to risk my capital on a 50/50 toss. The primary trade I will look for is a short near falling trend resistance (falling blue line below on 1h chart) which is around 1.3800. 1.3800 is also resistance from mid-February. From 1.3800 at 1.3765, 1.3730 and 1.3700. If you are feeling aggressive a long in the 1.3600 area offers a good shot at jumping back up, but I will not be taking that trade.

(click to enlarge)

Weekly Chart with Bullish Dojis:

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12-28-09

6:14a GMT – I hope everyone had a relaxing few days off last week! This is generally the slowest week of the year before the New Year, and I know many of you are still out for the week on vacation, but the markets are open so the signals will continue! We finally saw a breath of life out of the bulls last week as the EURUSD managed to close on a high note, climbing above 1.4400 and almost piercing the 23.6% fibonacci retracement resistance from 12/3-12/22 at 1.4330. Price also managed to break the downtrend resistance we’ve had since December 3rd.

Daily Outlook: So what does this all mean? Well, if we were in a long-term downtrend for all of 2009 I would let this go and continue selling, but given the thin markets and the fact that we have actually been in a strong uptrend all of 2009 these are enough bullish signals to make me a believer – I looking to buy on dips today.

Trading Idea: I’m looking first for bullish signals near support at 1.4320 and, if that gets broken, I’ll look above 1.4275. From 1.4275 targets are 1.4315, 1.4345, 1.4390 and 1.4420. Make sure to keep an eye out for candlestick signals here to confirm the trade.

(click to enlarge)

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12-18-09

5:14a GMT – Before today’s signal I want to say something quick about patience. As you all probably know I talk about NOT trading about as much as I talk about trading. About waiting for a good pullback to buy/sell on, about waiting for confirmation, and about not minding if I miss a trade because there will always be another one. It’s one of the hardest things to learn in becoming a trader but I think the most important. I’m going to write a full article on it this weekend but until then please 30 seconds and read this post by James in the forum on Patience and Trading here. Feel free to share your own thoughts and stories (reply to the forum please) so we can all grow as a community.

On to the signal! Markets will probably be thin today due to it being Friday and so close to the holidays. We’ve definitely seen the end-of-year increase in volatility that many of us were expecting, and Friday’s can make it even worse. As always use stops and good money management. No entry on yesterday’s sell signal as the price dropped like a rock and never looked back. Mind the news event at 9a GMT – details on the forex calendar.

Daily Outlook: Short-term trend is obviously still bearish, and we have a short-term resistance in place at 1.4420 that should provide a good guide as to the direction of the pair on the day. 1.4420 is the 38.2% retracement of Wednesday’s high and Thursday’s low and has been twice tested (7:00 and 14:00 yesterday).

Trading Idea: Below 1.4425 I am bearish. For the day I will look for a bearish confirmation signal (candlestick, failure, etc.) to enter on with short targets at 1.4390, 1.4355 1.4320 and 1.4290. If 1.4425 is broken to the upside look for a re-challenge of 1.4500.

(click to enlarge)

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12-10-09

5:14a GMT – Shooting stars on the 30m chart have really been providing solid sell signals for me the past few weeks – have you all noticed the same thing? In general if the star is near resistance and is higher than the 10 or so preceding candles (meaning that it qualifies as an ‘extinction’ candle) it has been a very reliable sell signal. Take a look at the 30m chart below with shooting stars circled in blue:

Of course nearly anything has been a good sell signal this week – the EURUSD has dropped almost 500 pips since December 3rd! That includes our signal from yesterday too – we had a near picture perfect pierce of our resistance at 1.4775 with the tip of a shooting star (10:30 GMT on the 30m charts) that was quickly followed by a nice drop. If you missed the first entry the markets were kind enough to provide a second opportunity to enter above 1.4770 a few hours later on a 13:00 GMT rally. I ended up covering at 1.4700 after my third target at 1.4670 was not reached for +75 pips profit.

On to today – you can view the forex calendar here but we have the GBP and CHF announcing rate decisions (12:00 and 8:30 GMT, respectively), trade balances for the USD and CAD (13:30 GMT) and initial jobless claims for USD (13:30 GMT). The news I’m watching closely is the US initial jobless claims. It was a jobs report last week that sent the USD on its major rally and I believe it will be this report that defines the direction of the pair for the coming days.

Daily Outlook: On the 4-hour chart below we can clearly see that after the strong rising trend support was broken the pair has entered into what appears to be a bearish continuation pattern -(aka a “death spiral”). Technical outlook is therefore extremely bearish in the short-term however we have the big news events mentioned above that could thin out markets and make for some aimless ranging in the morning hours.

Trading Idea: I will stay out of the EURUSD until the news has been announced at 13:30 GMT. Until then there might be some (very short-term) trades worth taking at the top of the 30m channel  (shown above) where the last shooting star just touched off of. Also a break below 1.4700 will most likely open way to another challenge of 1.4670 for a quick 30 pips. After news events I will look for a shorting opportunity off of 1.4750 with targets at 1.4715, 1.4675 and 1.4640.

(click to enlarge)

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11-24-09

7:10a GMT – I’ve got some exciting additions to PipHut to announce – I was going to just tack them on to the bottom of this signal but thought they were exciting enough to warrant a second post so keep your eyes open for a another post a few minutes after this one.

Yesterday we did indeed get a nice bounce off of the channel resistance and I went short after a bearish engulfing on the 15:00 1h charts (with an entry at 1.4980). Took half the profits at 1.4950 and covered the rest at 1.4915.

Daily Outlook: As you can see from the 4-hour chart below we have dropped back into the middle of the short-term bearish channel (which is still in the middle of a longer-term bull channel). I am still net bearish as long as this short-term bear channel is intact and 1.5050 remains to cap any gains. Also, make sure to mind the news events today. A few big events that could make staying out of the markets the best choice at certain times.

Trading Idea: I wouldn’t buy or sell in the middle of this channel as a proper risk/reward would be hard to obtain, so I will wait for a rise to 1.4990 for another shorting opportunity with short targets at 1.4950, 1.4915 and 1.4880.

(click to enlarge)

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9-25-08

3:26a GMT – My last signal was a buy at 1.4600. Close that for a 100-pip gain. The horrible housing data in the US actually gave some traders the glimmer of hope that a bottom is forming in the housing market. Plus Congress is actively discussing bailout options to loosen the credit crunch for home buyers. Together some traders see a stronger US housing market in the long-term future.

Technically the pair stalled about 1.4880, bounced off 1.4600 and now seems confined between 1.4750-1.4600.

Trading Idea: With the topside failure I am looking for selling opp around 1.4750-1.4765. Look for a bearish reversal signal in this range with short targets favored down to 1.4600 and 1.4550. If resistance is broken look for a re-test of 1.4800.

(click to enlarge)

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9-12-08

3:26a GMT – AUD/USD has a nice bullish RSI divergence and the AUD received news today that indicated they might not have to lower interest rates as soon as previously thought. This points toward a possible further bounce in the pair and I see that extending as far as resistance between .8165-.8195.

Trading Idea: Below .8195 shorts are favored back to the targets .8095, .8005 and eventually .7915. If .8200 is broken look for a challenge of .8315.

(click to enlarge)

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9-9-08

5:06a GMT – USD/JPY shows weakness on the 4 hour charts and mixed signals on the dailies, but the technical picture shows more losses in the short term. Resistance is at 108.00 with a downside return to 106.00 likely.

Trading Idea: Shorts favored below 108.00 with targets down to 106.00. Above 108.00 look for limited gains, possibly to 109.00.

(click to enlarge)

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9-8-08

5:50a GMT – GBP/USD is approaching resistance at 1.8000 as the pair saw its first major corrective action in weeks. I will continue to sell the downtrend and will look for selling opportunities on this latest strength. Wait for candlestick confirmation or other technical indicators, however, as the pair is drastically oversold and any bad news out of the U.S. could cause traders to begin covering their shorts.

Trading Idea: Look for short trade confirmations (e.g. bearish candlestick reversals) around resistance at 1.8000 with short targets at 1.7800, 1.7750, and 1.7650. If 1.8000 is broken look for a challenge of 1.8200.

(click to enlarge)

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