Support and Resistance Spillover

There's a short lesson on support and resistance spillovers on Dailyfx.  Specifically, they talk about using 20% of the range for stop placement below or above the new low or new high. If you are fading and short at proximity of the range high, instead of placing a tight stop right above the range high, you would calculate 20% of the range and place a stop loss at that value above the range high.

Support and Resistance Spillover

Popularity: 1%

Trading Results Are Bad

Looking at my trading results for the month of July doesn't leave me feeling any sense of accomplishment.  My results are actually embarrasing as they show that my trading is getting worse.  I'm down 401 pips this month and looking at all of my trades makes me wonder if I can make any money doing this no matter what side of the price action I'm on.  Looking more closely also makes me wonder if something is psychologically wrong with me as my habitude of shorting looks not to be coincidence.  Out of 15 trades this month, 14 were short.  Last month I made 8 trades and all 8 were short.  This is just strange and something I had not noticed until yesterday.  Performing a search on Google for this habit turns up nothing.  

Another thing that I cannot fully explain is that even though I've had a terrible month, I am still optimistic.  When I first started trading, one thing that I heard a lot of was, "The Trend is Your Friend." I remain optimistic because I realize that I've lost sight of this saying.  A lot of my trades have been counter-trend in nature and I've been trying to pick tops and bottoms.  Trying to do so is difficult if not impossible for even the most seasoned traders. 

Next week I will remain cognizant of the trend as I try to recover from this deficit. 

I am finding that the setup of my charts are reverting back to their previous state and I think that my attempt to analyze with a limited number of indicators may be a mistake.  For instance, more advanced traders can see momentum increasing or decreasing by price alone but I know that I just cannot do so with my limited experience.  I've been trying to get by with mainly support and resistance lines but I'm going to start using MACD and moving averages more.  

Popularity: 3%

Trading in La La Land

I've said this before but there is no easier way to take the emotion out of a trade by placing the trade, setting your stops and limits and going to bed.  I made a decent trade last night going short on the EUR/JPY and woke up to a nice surprise, +42 pips (limit reached, trade closed.)  I'll post the journal entry for this one later.  I still see a favorable trade lower but I'm waiting for certain levels to hit.  

Today should be quite a crazy day to trade.  I already missed a trade at 7 this morning on the AUD/USD that I was going to go long on but thought twice because of a resistance line up above.  I'm trying to show some discipline by not going into the trade 2 candles late.  By then the risk/reward isn't what it was and it's a good way to lose money.   

Have a good trading day and be safe.   

Popularity: 3%

Momentum Divergence in the EUR/JPY

An observation from Learn::Forex that may pique your interest.

Euro/JPY has our attention…

Why? 

Notice
on a Daily chart we are attempting to push up into the zone of 145.00
although the momentum is clearly beginning to fall off. This is again
confirmed with the 120 minute chart as well. This combine with the
resistance area we are looking for a short opportunity anywhere from
current price up to a retest of the 144.80/145.00 zone. Targets on the
short side are 143.00 and if we get a clear break of 143.00 we could
have a second target of 142.00. We would look to place a stop up above
the 145.00 level.

  

 

 

 

 

 

 

 

Popularity: 3%

Learn:Forex Exclusive Analysis

Learn::Forex provides exclusive content for members of FXCM.  I find that out of all Guest Trading Ideas they have "keeping it simple" analysis that you have to respect.  Others have analysis that from day to day is not consistent and analysis that also can be contrued as more of an art.  (easily interpreted differently from 1 person to another)

Here is Learn::Forex's Analysis today.  See for yourself.

AUD/JPY April 12th, 2006

The pairing that has caught our attention this week is the AUD/JPY.

First lets take a look at the Daily. Two things that stand out.First, notice that we have TWO different fib pulls that are coming together and have for resistance. And second, look at the momentum.it is appearing to weaken.

Then on the 240 minute chart we find confirmation of the price action losing momentum and we also get a nice trend line to use. In SHORT there seems to be an opportunity here.anywhere from current market price all the way back to re-test the trend line and resistance zone of 87.00

We have some support at the 85.50 area with more major support coming in at 85.00 which also happens to line up with a .382 retracement fib. 

 

 

 

 

 

 

 

 

Popularity: 3%

My first trade in weeks

Just like that I'm back in the game.  I made my first trade in weeks going short on the USD/JPY.  Why did I decide to go short? Quite simply because of the strong resistance directly above my entry.  Early in the Asian session today, we saw the pair push as high as 118.69 but it couldn't hold. I'm looking for the pair to come back down to the 116.75-118.00 range perhaps retracing to the .618 fibonacci from the 4/3/06 high of 118.80. 

{mosimage} 

Popularity: 2%

Learn:Forex Exclusive Guest Idea

EUR/CAD – April 6th, 2006

 

Our attention is looking away from the USD based pairs with the NFP report due out Friday.

 

Notice the EUR/CAD has been on a month long uptrend with one
correction. We feel it is due for another minor correction. Why? There
are a few things pointing in this direction. First, the candle pattern
(a shooting star). Second, notice the high of the wick yesterday
attempted to test the .618 fib. Fourth, the resistance in this area.
And finally look at the momentum indicator at the bottom…divergence is
forming.

 

 

 

 

 

Popularity: 2%

Wave Analysis for Multiple Currency Pairs

The fibo-group submitted their wave analysis to my forex directory yesterday and it’s pretty interesting stuff.  Here’s an example of the commentary and respective chart for the Daily USD/CAD:

The pair reversed sharply, having broken the second critical level. No “Signal line” of the descending “Andrew’s pitchfork” degree Minor is broken. That’s why it is too early to talk about reversal. We see retracement. The depth of the retracement is seen as the “Reaction line 23,6%” of the “Andrew’s pitchfork” degree Intermediate, drawn from the last wave pivots of this wave degree. The pair forms pivot on this “Reaction line” in 80% of all cases.
This suppose is confirmed by the fact that this resistance level is marked by the “Upper signal line” of the descending “Andrew’s pitchfork” degree Minor.

 

 

 

 

 

 

 

 

 

You can check it all out at http://www.fibo-group.com/pages/505

Popularity: 3%

USD/JPY 2006-02-21

UPDATE!!!  The pair has dropped another 70 pips since I exited.  That is why I am far from reaching my goal.

TRADE

Date: Tuesday, February 21st

Entry: Short USD/JPY at 118.78.

Reason for trade/setup: This trade was mostly based on the fact that resistance was up above at 119.00.  Furthur confirmation was obtained from the crossover of the Stochastic (9(3),3) from overbought territory. 

Initial Stop:  119.06, which was 6 pips above the high of the entry day.

Initial Target:  118.00 which is the top of the Ichimoku Kumo or cloud.

RESULT 

Exit: 118.35

Reason for Exit:  Profit taking.  I needed to get back on track this week.  I couldn’t leave $1000 on the table

Profit/loss:  43 pips / $1070

Trade executed according to plan? no; early exit

Outcome: After trade entry, the pair played with the 119.00 resistance level for the entire U.S. trading session before finally finding more sellers than buyers at the Asian open.  The pair then stalled at 118.40 during lunchtime in Japan on Tuesday evening.  The pair retraced almost back to the 119.00 mark on Wednesday during the European session before heading back down.  There is solid resistance at 119.00.  I exited the trade before my target.  The main reason was for my need to get back some of my losses from the week.  I didn’t want to leave $1000 on the table.

 

 

 

Popularity: 3%