Another FX Traders Point of View
Until I can add a feature that shows a unique identity for a poster without requiring registration, I am posting a message from an unknown forex trader. It’s very interesting to hear comments and trading strategies. I hope the poster doesn’t mind…
"Comparative USD$ long positioning has yet to reach levels which historically attract contrarian trades. The CoT figures, plotted and viewed as a chart are quite revealing … viz, shorts.
I use a basic chart without chart studies bar MA’s and fib’s. I prefer a 180 min chart to the dealer 240 min, holding positrons for days and even weeks. I follow price action, I completely understand trend, I hold tight on a tree shake and build positions gradually. I’m always aware to the reasons I took the trade in the first place but alert to change. These are my (not so technical) technicals 
I carry trade most of the time so I tend to look to the high yielders – NZD-AUD-USD-GBP/JPY – although I do take the occasional day trade through a sub account when it’s choppy (not for the faint hearted). "
Since reading this, I’ve actually started looking at the 3 hour charts and really like what I see. There isn’t major price action as in hourly charts and there isn’t minimal movement as with daily charts.
Fibonacci Projection Lesson
I’m going to give a quick lesson on Fibonacci Projection so that we can
all understand. This is a hypothetical example as if
the date was September 12th, 2005. You’ll understand why in a
bit. First we need to select a low point and a high point.
I’m taking the 2005 low back in January, 101.67. I’m taking
the July, 2005 high of 113.71.
Technical Article of the Day
There is a decent article that answers the question, Are Fibonacci
Levels Leading Indicators for Forex. Before reading this article,
Fibonacci retracement was part of my technical analysis toolset but
this article talks a lot about Fibonacci projection. Fibonacci
projection is a great way to exit or enter a trade and can be used to
predict overall price movement. The premise is that since
typically during a price movement a retracement will occur, you wait to
enter the trade until the retrace is complete. Once the retrace
is complete, you enter the trade and use Fibonacci projection to
“project” the point at which to exit. You can read more about
Fibonacci projection on the web, but I would check out the following
article as well. Are Fibonacci Levels Leading Indicators For Forex?
EUR/USD reaches solid support
From the daily charts it looks like even though the
USD has been relentless against the EURO, solid support exists at
1.1896. I’m going to continue to watch and may be looking at
going long on this pair. The 38.2% fibonacci for monthly high and
today’s monthly low is 1.2180. The one thing that is concerning
is that all statements out of the US today point toward interest rates
increasing.
Will the Yen clear the hurdle
I’m down over 45 pips on my short of USD/JPY yesterday
evening. I have not had a good week. I will exit my USD/JPY
position if it breaks the 114.50 barrier which is solid long-term 38.2%
fibonacci of 135.20-101.70 high low. In fact, I may exit and the
reverse my position. The pair seems to have stalled at 114.49 so
I’ll be watching closely.
Shorting the USD/JPY
I sold USD/JPY this evening at 114.02. I studied technicals for the pair and came to the following conclusions:
Â¥ Solid resistance exists at 114.39 which was lightly brushed yesterday at 114.28
Â¥ Japan economic indicators have remained strong. Machine Order
announcement tomorrow is expected to indicate a rise
Â¥ Ichimoku support cloud is at 111.27 and 38.2% Fibonacci Retracement for September low and October high at 112.45
Â¥ Comments by U.S. Treasury Secretary Snow stating that he and the
other G7 countries share the view that China should strive towards a
more flexible FX system. Remember my previous post that proposed
that reevaluation of the yuan could boost all Asian currencies
