Weekly Thread: July 20-25

Hello everyone, I will be posting my weekly thread here just as I have been posting on moneytec, so you're welcome to participate, add coments, remarks, questions. Mainly both threads (here and there) will be the same, except for communication with you. I would like to get to know more traders. I have a bit of experience in forex (6 years), and am looking forward to discuss market with anyone who's interested.
I'm usually previewing past week actions on market and afterwards posting commentary on coming week, updaing during the week all my observations and trades. I post my trades the moment I execute them, and mostly I warn ahead if I'm planing to enter the market. I'm not hyper-active trader: 10-14 trades a month, targets 100-300 pips, stops 50-100 pips, maybe little more, holding position for 1-10 days. I had 6 trades this month, 4 closed at breakeven (b/e), one -35 pips, and one +225 pips. All were posted live at moneytec as well as previous months' trades. So, after litle introduction, lets get to point.

I will quote my previous week post about that week, compare how it was in light of what we really got, and add comments based on actual action we saw.
Quote from last week:

At the moment odds that we really got the bottom are really good, so those of you who prefer really aggressive trading, can buy euro as soon as there will be push close to recent lows (in case there will be such), with 10-20 stops below those very lows. As you know, I'm not aggressive trader, because aggressive trading means more exposure to risk…so take in consideration it’s a bit risky trade, as another push may occur and lead to new lows before the final bottom will form (maybe another 100 pips) . I don’t like talking about how low/high the market can push, and don’t really care where these critical points occur – I care to go with the move which follows them. During the week euro was still definite sell, and I wanted to short it, but didn’t see good risk: reward. So I passed. What can we expect? That’s in coming post.
Quote from last week:

Well, we did get a turnaround this week, but only after it went all the way down to 130.60, bouncing from there thanks to Japanese intervention on yen. The move continued afterwards, following the usdjpy pair till the end of the week. Conditions to sell didn’t occur, so there was no sell. After the bounce back and the intervention, I had no interest in shorting here, so I didn’t even look at it more than once in a while.

(I meant 192.80’s when wrote 138 - counfused with euryen??? – tgt to be at least twice as big as stop)
The highest we got here was 192, and that was on first day of trading. Afterwards it went all the way to 186s’. (way far my target). But we got a bounce here as well, after the yen selling. Although cable cross didn’t go up as well as euro cross did, and that’s due to cable sell off. In brief, it could be a good trade in case it got to levels I was expecting…its history now.

Indeed, cable didn’t even go a bit higher, and continued massive fall for first two days of the week. I tried to enter in the middle of the week (sold at 1.5946 - compare to 1.63+ I wanted to sell back then ), but after rapid move down next day (100 pip in my favor) it retraced to my entry point where I had a stop loss moved to. Therefore my trade was closed at b/e. Next day cable made another attempt to go lower, and even though it went to lower levels, nice buying tool it back to 1.59 level, and that’s where we got the close point of the week. Now here’s something to analyze:
The sentiment was really bearish here, and the expectation was proven by market. 2 days in raw at the beginning of the week, we got very strong sell off, without looking back even not for one moment. Afterwards, we got consolidation for rest of the week, with almost same range of 1.5850-1.5980. The question is – whether this is just consolidation before the resumption of down move or is it “the beginning of the end” for down move. Well, as far as I see, the down move is pretty strong, and the fact on Friday we got new low and lower high makes it a good sing for looking to short position here. On the other hand, such a rapid fall during past two weeks we got needs at least a bit more retracement than we got. At least more consolidation – also can do. Also now we got levels, supported by strong uptrend line since Feb. 2002. This, and some more signals provided by my system are indicating ….well, now I’m getting into coming week market commentary, so I will resume this thinking in my next post when talking about cable.

 

Not much said, but as mentioned, the trade was opened week before, (11.July) and that means, all the comments, and the “following after it before entry” were there in previous thread. I couldn’t refer it better if I wanted, than I did before entering and during the trade. Now lets try to get some understanding why was my trade stopped at b/e, and the following action.
I even entered additional trade on his one at 6545, but that was before the market closed both of my trades at 6576. So what happened? (how should I know?) Well, lets at least try to understand. It may not be interesting for most, but it may be of some interest for those who followed and traded together with me. First of all – I should say, I am not moving stop more than to b/e point, unless its safe – I’m targeting the initial levels, and 50 pips for me are good, but not that important as target. So I hold stops a bit away and let the position run unless there are sings of possible reversal. As you all see, almost all my trades this month (4 out of 6) – swissy, aussie, euryen and cable were closed at breakeven after about 60-80 pip move in my favor. So, those of you who want, may put trailing of 30 or 20 as soon as I move to b/e in order to protect profits. I will tell you why I am not doing it. Lets take the Canadian, for example. I bought 1.3750, and after the bounce to 1.39, I moved the stop to 1.38 for only 50 pip profit guarantee (100 pips away). If I had moved the stop to 1.3880, it would get hit; if I moved the stop to 1.3860, it would get hit; 1.3845 – also hit. So, I would be out of trade 100 pips short, and maybe even 130 (if stop was /45). On the other hand, if I would do same thing on rest trades, I would get (lets say) 30 pips in swissy, 20 pips on aussie, and 40 pips on cable – how much is it? If we add 95 pips I would get on Canadian, to sum up I would get 95+50+40=180 pips…and how much did I get by just holing my Canadian trade? 225! I’m not taking in consideration -35 on aussie – I was talking about the green trades and the approach of moving the stop. I don’t see reasonable putting 20-30 pips stop on trades, targeting 100-300 pips target, and which are held for days. 20-30 pip move against desired direction is a usual thing for market, and 20-30 pip move and even more can easily occur even during very strong trend (against that very trend)…That’s the “philosophy” behind it. But I‘m always ready to learn, study and improve, so if anyone has any ideas/remarks/criticism/suggestions, I will always be glad and thankful to read and review…long and off the topic… lets continue with aussie. I guess you all agree that moving stop on aussie to opening level after there was more than 80 pip move in my favor was the least to do. But, market was not that confident about the potential for down move and many saw lower 6500 level good time to buy. As we can see now, couple days after – they were wrong. What I got on this trade was the kiss goodbye from aussie to my stop, and only after resuming the move as was expected. I wrote already the story behind such behavior, and I wont repeat it… But the market did what it had to do, and I was saying before, that many see aussie as good, even best buy once/if the greenback continues the fall (this may partially explain the pullback, as it happened together with euro going up at that moment). That’s what we got. After my trade was closed, I didn’t rush and jump back into trade, but analyzed it first, and saw potential for my initial target was weakened after the pullback, and in addition I didn’t get clear entry point from my system. Plus 240mins were oversold, and still are (though we all know overbought/sold levels may be in market for long time, and not change the tendency). So as you see, even If I wanted to enter – I didn’t get such clear chance to enter as when entered the first time. Well, If my stop wasn’t hit, probably I would have moved my stop to 6550 right now, and in case target reached – good. If not – maybe I would get some warning signals and take more that 10 pips…but it doesn’t matter now – history also. Lets go on.
Quote from last week:

As you see, the entry was at 1.3750, and the trade was defined even before the week opening. Turned out to be good trade also. We got a bit of consolidation after the quick bounce (the rate announcement. BTW, as you see, technical analysis once again proved to be the way to trade, without any need to know the fundamentals. I didn’t even know about the announcement, and first heard of it same day couple hours before, from yup777, and I told him that market most probably was waiting for it to start the move up, and I believe even if there was no rate cut, the move would be up – it would be seen as “wow – they didn’t rise the rate – probably will cut next time, lets sell Canadian now…” . The move wouldn’t be so rapid, but the direction would be the same). So, the consolidation lasted for 1-2 days, before reaching my initial target. I said during the week, that my tp order was in place and that even though move further was very possible (as you see I saw possible move to higher levels than initial tp a week ago as well), I would still prefer the trade to be closed at initial tgt. And indeed we got as high as 1.4140 and bounce back to 1.4070 by the week close. But those were Friday moves, and I am skeptical about it. In general, we got a very bullish week on this pair, and I wouldn’t be surprised to see even higher levels.

Well, that’s all I had to comment on what I said last week. I tried to cover as much action of past week as possible, but didn’t refer all currency pairs. I will do it in the coming week post, as I see some possible interesting action on those pairs which I had on hold this week for confirmation.

Good Trades,
Rezo.

 

Sorry, but the post is long, and I get a message to make it shorter, so I have to divide it to several posts. Weekly pre-opening posts are long as I have to comment the whole week, and the coming week. Usually I divided it to 2 posts - one for commenting last week, and another to comment the coming week. Well, I hope this is not of any inconvenience to you.
Here goes.
As usual, I wont be discussing much those instruments which I see of no interest at the moment (except for majors – those are always to be previewed).
Here’s the coming week commentary:

EURUSD As I mentioned, on weekly charts we got a doji candle, which is very close to be hammer – this candle no doubt is one of strongest signals provided by candlestick analysis. One thing it says – beware, bears are weakening. Most of the times this candle is followed if not by reversal, then at least correction to consolidation. Taking in consideration recent strong uptrend we had, I would say as soon as we see little sing of bottom formed, market is expected to push this one much higher. But as I said, buying at the moment is risky play for ME, as I don’t have nothing but warnings that here MAY form a bottom. Charts are still far from showing me possible buy, so all I can say – wait for clear picture, and decide afterwards. Daily charts are trying to reverse, but still not confident. Trading here was very uncertain last week, even though new low was reached. Sentiment was still to sell the single currency, and I would say another possible bear attack may follow. I doubt the attack will gain lower levels, but the possibility of that additional push lower is still big. Once again, lets not run ahead of the market, see what will be the action and then make calls. I’m not trading for 50-100 pips, and in current situation its not easy to say which way will be the bigger move. Warnings of possible reversal (upwards) are present, but the move is not confirmed yet. So neither way is suitable for me at the moment. I was suggesting the range from the moment the retracement started, and thought bottom would be 1.13 – the lowest, but once again – you never know. We may get the range from now on for couple months…will see. In the end of the day, it doesn’t matter what will it be – what matters is profit form it.
GBPUSD Some warnings of possible bears weakness are present here and there, but to be differed from those on euro – much, much weaker signals. But still not weak enough to ignore. For example, one of such are 3 hammer candlesticks in raw on daily charts – not good for bears, but on the other hand, any candle needs confirmation by following ones. Its very rare to see 3 such strong candles in raw on daily charts. How to interpret such situation? Well, the fall was very strong to be stopped just like this. Therefore, market is not certain. The fall here is much more possible than in euro, and I think selling $ is best against cable at the moment, though still not good enough for me. Its your call. I prefer to see consolidation or even correction before possible sell, but first I will have to see how strong will be the correction, and if main signals remain unchanged, I may sell, but tell you the truth, I doubt this week… you never know for sure in such situations.

 

USDJPY Way too uncertain here, and we have strong long running range here, with no signals of its end. We may see same 117-50-119.50 as we saw app. past 2 months. We got 2 attempts to break it – once upwards (30. June), and downside this week. Upside was capped by weak dollar, and downside was capped by Japanese. What we do? For me the range is way too tight to trade, but those who like ranges (and I know there are many) – know what to do. In longer term I’m still more confident we go down, and I will wait for the moment we start that move. Once I see that’s really it – I will join the ride – I think at least all the way to 1.15.
USDCHF Tricky one – very tricky. I missed my +200 pips here and got “0” trade because of the mixed behavior, but it was 2 weeks ago, and its almost trading on those levels we entered back then. Ok, what’s next on swissy? May become a sell, if shown new lows, in general, I don’t find much to look at here – suggested go lower may occur, but I don’t think its worth trading yet. Will see.

I still didn’t get to those I’m interested to trade this week, but I will publish the rest in about ½ an hour. See you then.
Rezo.

 

Ok, here comes my focus at least as I see it right now. That doesn’t rule out possible trade on other pairs, but this for sure means I will not trade the rest at least for 1-2 coming days. So first - those I really see good potential in.
EURCHF 2 orders were not filled last week, both times the pair ran out og me, though orders were 20-30 pips away from its levels at that time. My order is still in place, to sell @1.5390, stop 1.5445, tgt 1.5280. All my commentary on this pair from last week are good for now. It still has room for lower levels.
GBPCHF Very nice. Sell and sell again, but not at current levels. As soon as I see good entry – sell. Maybe Monday, maybe Tuesday. Maybe later. Whenever I get a green light – I’m in.

EURGBP Same here – buy anytime during the week. Targeting recent highs with max 50 pip stop. Entry not defined yet. Potential is good, especially looking at cable weakness.

GBPJPY (short) Still good sell here, and I will wait for good entry as soon as confirmation received. Initial target of course will be 1.86 levels (define exactly in case trade it), but stops here are not that pleasant (80-100 pips). Hopefully the volatility will slow down a bit in couple days and lets hope entry will occur by that time. Anyways, I think there is good chance I get to enter higher. Though…its cable cross, and may not give clear entry signal. If it goes first down and only afterwards retrace higher – I will have to reconsider. But I’ll be updating, not to worry. Lets hope all goes well.
AUDUSD Surprised? Me too. I’ve been looking at this one for long time. All indications are for nice down potential. Same here as on gbpjpy – if it goes first down and then retraces – will need to reconsider. If first retraces and keeps more or less same signals as its giving at the moment – good sell. Same targets as on pecent short we had here – 6420 for the start. Stops are good – not more than 40-50 pips tops. Good Possible trade. But again – not in the first coming sessions. Maybe Tuesday-Wednesday.
USDCAD Very similar picture here, And even though the move is strong, see possible retracement. If it will not ruin current signals – buy again. I will update.
GBPUSD May still become a sell, but closer to second half of the week. Wednesday - Thursday. This pair may ignore all the warnings of possible reversal, and even the long term trend line support – and go lower. Once again – the fall was very impressive. I would prefer retracement to enter. Will see.
EURJPY Not interesting at the moment.


sorry, I know i promised to update earlier, but I was "staring" at charts, and had was too tired to put the commentary.
Well, I wish you all have very good Trading week.

Regars,
Rezo.

 

Rezo.. what time frames do you use for your signals?

 

Current eurchf order is close to get filled. Double top may be formed at 1.5390, and the move down from there on can resume.
15 more pips I need the order to be executed.
Cable pairs are now in that corrective move I was talking about, so lets see there will that move lead. Even if the consolidation at current levels will hold on cable pairs during the US session, I think cable may be shorted. eurgbp - buy, gbpchf - sell. GBPJPY is not quiet in good position for sell. Another possible trade - short audusd if it goes higher 6500.
Good Luck.

 

I sent you pm with link to where I discussed my trading. Bit long to read, but if you're really interested - there you go.
Good Trading.

 

Removed the order, went with market price sell eurchf 1.5377

 

Same stop 1.5445, tgt same as mentioned 1.5280, but probably I will hold this one to 1.5260, maybe even lower. Will see.