Technical Analysis of the Forex Spot Markets using Elliott Waves, Chart Patterns, Candlesticks and other tools. Disclaimer: None of the comments in this blog shall be construed as professional trading or investment advice.
1H Chart
Prices for EURUSD like the one for USDJPY has made a nice run down. I find the waves for EURUSD getting more difficult to count, but I suspect that the wave has not yet completed its 5 waves.
There’s a rounding bottom reversal, and price looks quite strong on the upside. I’ll be cautious and take partial profits, or exit all together and look for new opportunities.
Good luck with your trading!
I hope you had been happily riding the wave down after the past two entries on the USDJPY.
Price has made considerable move downwards, and I can count 5 waves of some degree completed. This may be a good area to lock in some profits and let the prices ride. If it it extends, that puts extra cash into the account. But it is prudent to expect some correction after the 5 waves down.
Hourly Chart
Based on the post-triangle thrust measurement (see the vertical white line on the chart), price still have a ways to go. The 5 waves down may below to an extended wave 3, which means there’s a possible correction for a wave 4, and then for prices to move back down to complete wave 5. Either way, it is good to preserve capital over being greedy for gains.
The Swiss National Bank (SNB) had set a price floor for EURCHF at 1.2000, and price is dangerously close at 1.2010 right now. Actually, it has been hovering at that price for a good many months! Take a look at the chart here:
Each vertical section represents 1 month, so we can see that prices have been stagnating for many months now. Now, EURCHF is not a currency pair that I usually trade, nor am I a fundamentals trader, so I didn’t even know about the price floor until a friend told me.
And since I know now, I thought you should know too!
If you are keen to take a position, you might want to consider going long (it’s a price floor after all). But remember, there are no guarantees in trading, so remember your risk management and position sizing too.
Here’s an April 2012 special report by DailyFX which I found:
Euro/Swiss Franc Nears 1.20, Swiss National Bank Hovers-Trade Setups?
Following up on my previous wave count, it does seem like wave .iv has completed, and it’s making its wave .v down. The only thing is, it seems to me like wave .v is sub-dividing, which means, more bearish potential.
Here’s an update on my quick and dirty forecast on USDJPY Yesterday:
Prices have broken the wave d low, that my entry, and my stop is above the wave e high. If it breaks the wave e high at this point, then the count is wrong.
If you are trading this, be cautious as I know many people who do not think USDJPY would sink much further. Be prudent by take partial profits along the way if the trade moves your way.
From BusinessInsider.com’s article on “61 Behavioral Biases That Screw Up The Way You Think”, I decided to take a look at it’s source: Tim Richard's Psy-Fi Blog. I found that these were actually expanded from a list of “slightly odd behaviours in the sphere of investment”.
As a part of trading psychology, and a way to better understand ourselves as traders. I think these articles are a good read. And it’s good to identify some of our own biases and guard against them.
For the full article, click on the links above, and here are my thoughts on some of these Biases.
Often times when we speak to traders, they will share their winning trades with you. It is important to get the full picture and see both winning and losing trades. And often times, there are more things to learn from losing trades than winning ones. The goal is, naturally, to learn from mistakes and not make them again.
The next time someone shares their winning trade with you, ask (nicely) about all the trades the person had for the week or month.
Some people think that trading many currency pairs in many timeframes using many trading strategies is the best way to be profitable. Contrary to that, successful trades often focus on a few pairs of currencies, using only a few profitable strategies. Having too many strategies (and too many indicators in one) will likely only confuse you.
Sometimes, Less is More.
Bias Blind Spot: we agree that everyone else is biased, but not ourselves
I’m guilty of this one, and it’s important to recognize that we always have a bias. In fact, when you trade, you always have a bullish or bearish bias, why else would you trade in that direction? But it’s important to recognize that it’s a bias, not a fact, that you are trading.
Every trader has done this before – Ignore contradictory signals because he has already entered a trade. And again, this bias often only becomes clear after the trade his a stop and becomes reality. Here is where an opportunity to have a smaller loss is ignored, in favor or hope that other evidence which supports your trade will prevail.
This is the thought process behind the Martingale Money Management Strategy. “I’ve lost 5 times in a row, the next one will be a win!” That’s the reason that gambles double their bets each time they lose in a bid to win back the losses. Give it an unlimited number of tries, and you will have a win simply due to randomness / probability. However, you must first have very deep pockets as doubling up each time will quickly bankrupt you.
If you risked 1% of your account for your first trade, and doubled up each time you made a loss. In a string of 5 losses, you would have lost 24% of your account! It gets worse! In your 7th string of losses, you would have lost 96% of your entire account, and a string of 7 losses is not uncommon in trading!
And there you are! Remember, Psychology is a key pillar in trading!
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Wave .iv may be complete and wave .v could be in progress. Watch the price and trade safely!
Hi folks, it’s the weekend again! Hope everyone has something enjoyable planned out. For me, it’s time to look at the charts again and see what things might possibly go. I find the markets difficult to read, and the Euro crisis may be throwing the waves into greater strength or weaknesses across all currencies.
Let’s take a look at the USDCHF.
Daily Chart
Each vertical section in the chart is 1 month, so we get to see the monthly movement for USDCHF. My preferred wave count is that we are in the middle of a complex correction, with limited upside before it makes a wave C downwards to complete it’s correction. I’m looking at around 0.8600 where my wave 4 is for that correction.
If that’s correct, it should be making its way upwards to complete its wave (2) or (B).
The alternative wave count is that wave A is in fact the full retracement, and price is on its merry way up to far far away land from here. But the movement after preferred count wave A seems more corrective than impulsive. So that will be my alternate count.
8H Chart
* Each vertical segment represents 1 week in this 8h chart.
Counting up from preferred wave count A. I’m not sure if the move up is completed. My inclination is in fact, that wave 3 had extended, and we are merely completing wave v of 3.
So generally, looking to go long in the short term, until I see strong signs of reversal, which I will then be inclined to look for short trades in favor of a Wave C downwards.
Well, that’s my opinion of USDCHF right now. Remember, personal due diligence, and good money management!
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After my session with Ray and FuzzyLogic, I decided to re-do my wavecounts all the way from the weekly timeframe down to the lower time frame. It’s something I used to do, but I got lazy…. so here it is.
Weekly
Daily
8 Hourly
Not much additional information from the Daily to the 8 hourly. So let’s see if wave v of 3 is completed. Down to the 15min.
15min
Looks like wave 3 has yet to complete. If wave .iii has completed, expect wave .iv to stagnate or end around 1.2650. It has some good fibb convergence and S&R levels.
That’s it for my wave counts. Take care out there!
I had the opportunity to meet up with RayG and FuzzyLogic from the forums in “My Trading Room”. Thanks for joining in!
Both of them had a really great way of trading, and I’m thinking of making FuzzyLogic my mentor in price action trading. Haha!
During the session, I had an extensive session with RayG on wavecounts on the AUDUSD on a weekly timeframe. There was some different in opinion, but RayG’s inputs helped me solidify my thinking and pushed me to think of alternative wave counts! Thanks for getting rid of my laziness!
Here’s the forecast:
’m counting a complex correction for wave B on the way right now. If wave Y unfolds and goes beyond 1.10930, that would make my entire ABC structure an expanded flat, and bring the C wave all the way down to around 0.84967 which is
If my preferred count is correct, we would have completed (or is completing) wave b of Y and would be facing a turn around soon. I’ll be looking for fractal breakouts in the lower time frame to enter the market.
For the alternate count. In seat of a complex correction. I’m counting my wave W as a completed Wave B, that makes us currently in a Wave C decline which is yet to complete. What keeps me away from this count is that the move recent move down looks a lot more alike a zig-zig than a impulse wave downwards.
So time will tell, and I don’t typically trade on the weekly and daily timeframe. But it gives a very good overview of the general direction for trading my lower timeframe.
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In other words, a trendline can help you identify the market's trend. Consider this example in the price chart of Google.
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[The chart above] shows a slight variation of a contracting triangle, called a running triangle. A running triangle occurs when wave B makes a new extreme beyond the origin of wave A. This type of corrective wave pattern occurs frequently in commodities.
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There we go! I’m counting my wave 5 from hell completed as the price reversed nicely and looks fairly impulsive. Still, keep your stops tight, and watch the prices closely.
Good luck with your trading!
Similar to the EURUSD, I think this is a wave 5 from hell! LOL.
If you refer to the video, the prices have sky rocketed to the trading zone identified at the daily timeframe. And there was I silly enough to think that it would be turning soon based on the 1hourly. Everyone knows that the higher timeframe takes precedence right? Actually, nothing is for certain in trading, we just have to monitor the different timeframes and see which one is respected.
Here’s the daily chart showing that prices have entered into the daily TF trading zone that I pre-planned.
But we’ll always need to look at the lower timeframe to see how it unfolds. And it’s not pretty! Here’s the 5min.
Can anyone say “PARABOLIC”?
Again, I find the waves expanding like crazy…. and I think there’s probably one move up left. I’m sandwiching the price bands with alerts so I know which way it is breaking out. I can smell this one growing ripe!
Quick follow up on USDCHF.
Upon market open, prices have gapped up above my original target reversal zone, and I’m revising my count to a expanded wave 5. I’m going to monitor this closely.
Hi Folks, it’s been a long while since I put up any forecast. Here’s a quick and dirty on my thoughts on the EURUSD.
On the 8h Chart, I’m counting a Wave C of Y of (B). Prices have returned to below 38.2% of its upward move, and Wave (B) looks like a complex correction. Prices are overlapping enough for me to believe that it is a corrective move, and strength of downward movements appear rather strong, so I will be cautious in entering long. But I do think that prices might be stalling soon. Here’s why:
Around 1.2900 region we have:
(a) Wave Y = Wave W
(b) Wave c = Wave a
(c) Round Figure of 1.2900
Let’s look at my wave C at a lower timeframe.
It seems that momentum has been slowing down and is getting more difficult to count which is fairly characteristic of wave 4. I think it will move up a little before breaking 1.2900. I would look for reversals around 1.2864-1.2875.
It is possible for prices to move up from here since the higher timeframe suggests that 1.2900 is a confluence of levels, but I think it will move lower before the move down is complete.
Here you go, be cautious with your trading, and remember, capital preservation is key!
