Trend of the Day - Page 32

Gregory McLeod · #**466** (**permalink**) 06-04-2009, 12:27 PM

Quote:

Originally Posted by Kimaki

Hi Greg, how are you? Chatter has been quite low on the forum these days I guess you are very busy, don't over do it. Question looking back on four previous trends, three seem to be doing a retrace, tell me what you think: NZD/USD retracing to 0.61329 about 61% on Fib. AUD/JPY retracing to 74.455 just before 61 % on Fib. AUD/USD retracing to 0.78671 50% on Fib. The triple question mark though is the EUR/JPY ???. she seems to have been going sideways and not wherei want her to go LOL.

I see a possible short term bounce up to just below the recent highs before moving much lower. When drawing Fibs on any of those pairs, I would use the lows back from March as my starting point up the the recent yearly high to establish retracement levels. The currencies you have listed all have similar patterns so I won't chart all of them. But look at the Kiwi Dollar chart as a template. The 38.2% Fibonacci support level comes in at .5949 and the 61.8% level comes in at .5544. The inability of any of the aforementioned pairs to hold the 61.8% level suggests a deeper correction that would move through our March lows. You will probably see Gold and the world stock markets take a hit to retest those March lows as well.

Kimaki · #**467** (**permalink**) 06-04-2009, 03:09 PM

Greg, I am not sure why the short term bounce to then go much lower, is it that when the Fibs are placed from March low the retracment is only about 23% and wont be enough to hold hence a short bounce and continue to more depth?

Quote:

Originally Posted by Gregory McLeod

I see a possible short term bounce up to just below the recent highs before moving much lower. When drawing Fibs on any of those pairs, I would use the lows back from March as my starting point up the the recent yearly high to establish retracement levels. The currencies you have listed all have similar patterns so I won't chart all of them. But look at the Kiwi Dollar chart as a template. The 38.2% Fibonacci support level comes in at .5949 and the 61.8% level comes in at .5544. The inability of any of the aforementioned pairs to hold the 61.8% level suggests a deeper correction that would move through our March lows. You will probably see Gold and the world stock markets take a hit to retest those March lows as well.

Gregory McLeod · #**468** (**permalink**) 06-05-2009, 07:03 AM

Quote:

Originally Posted by Kimaki

Greg, I am not sure why the short term bounce to then go much lower, is it that when the Fibs are placed from March low the retracment is only about 23% and wont be enough to hold hence a short bounce and continue to more depth?

NZDUSD and AUD/JPY have all bounced to the upside this morning. Usually after a large sudden sell-off, prices bounce. This is what is called a "dead cat" bounce. My apologies to animal lovers out there. I did not make it up.

Gregory McLeod · #**469** (**permalink**) 06-05-2009, 07:08 AM

EURGBP has recently broken its 200 SMA at .8688 which is a bullish sign for the pair. However, price was rejected from a daily down trend line. Look for further strengthening of the Pound versus the Euro that may take this pair back down to retest the 200 SMA at 8688 and possibly to the June 3 low of .8574. Stops above the June 5th 4-hour high could be placed at around the .8873 area.

freshboizz · #**470** (**permalink**) 06-05-2009, 11:30 AM

Hi Greg,
what do u suggest we should do withe regards to your eur/usd, nzd/usd and aud/usd trades u posted. Should we exit the trade or tighten stops at it seems the there is goin to be a big retracement which could wipe out the stops.
thx.

Gregory McLeod · #**471** (**permalink**) 06-05-2009, 11:48 AM

Quote:

Originally Posted by freshboizz

Hi Greg,
what do u suggest we should do withe regards to your eur/usd, nzd/usd and aud/usd trades u posted. Should we exit the trade or tighten stops at it seems the there is goin to be a big retracement which could wipe out the stops.
thx.

There are a couple of ways to handle the trade. Selling half of the position and bringing stops up to break even on the second half of the trade is one way to lock in profits and have a "riskless" trade in case this pullback is just a retracement of the current trend. The second way would be to tighten stops on the entire position. A third way would be to go ahead and close the position and preserve profits and wait until the market settles out. After a volatile NFP announcement, the markets will need some time to find their direction.

Kimaki · #**472** (**permalink**) 06-05-2009, 11:59 AM

Thanks Greg, but are there really people who would get offended by the term "dead cat"? WoW,, ok.

Quote:

Originally Posted by Gregory McLeod

NZDUSD and AUD/JPY have all bounced to the upside this morning. Usually after a large sudden sell-off, prices bounce. This is what is called a "dead cat" bounce. My apologies to animal lovers out there. I did not make it up.

Kimaki · #**473** (**permalink**) 06-05-2009, 12:05 PM

Greg, Isn't the third option of closing the position "Interfering with the trade" ?

Quote:

Originally Posted by Gregory McLeod

There are a couple of ways to handle the trade. Selling half of the position and bringing stops up to break even on the second half of the trade is one way to lock in profits and have a "riskless" trade in case this pullback is just a retracement of the current trend. The second way would be to tighten stops on the entire position. A third way would be to go ahead and close the position and preserve profits and wait until the market settles out. After a volatile NFP announcement, the markets will need some time to find their direction.

Gregory McLeod · #**474** (**permalink**) 06-05-2009, 12:22 PM

Quote:

Originally Posted by Kimaki

Greg, Isn't the third option of closing the position "Interfering with the trade" ?

It all depends on the amount of profit in the trades that he had. The initial targets 2:1 targets may have been met on some of those trades he described depending on his entry. So everything else would be gravy. On the ones that have not met their profit objectives, we have to consider the length of time it has taken for them to get going and the prospect of entering the weekend with these trades.

Kimaki · #**475** (**permalink**) 06-05-2009, 01:09 PM

Thanks Greg, It takes a while but the pieces do come together. Too many tmes that scenario would occur with me, especially going into the weekend, even 100+ pips in my favor but the stop not yet moved to the break even, and it lingers there, goes into the weekend and reverses and after one week in the trade I then end up -150 or more depending. I have lost thousands like that, but I guess I am learning as the pieces fall into place.

Quote:

Originally Posted by Gregory McLeod

It all depends on the amount of profit in the trades that he had. The initial targets 2:1 targets may have been met on some of those trades he described depending on his entry. So everything else would be gravy. On the ones that have not met their profit objectives, we have to consider the length of time it has taken for them to get going and the prospect of entering the weekend with these trades.

Gregory McLeod · #**476** (**permalink**) 06-05-2009, 01:14 PM

Quote:

Originally Posted by Kimaki

Thanks Greg, It takes a while but the pieces do come together. Too many tmes that scenario would occur with me, especially going into the weekend, even 100+ pips in my favor but the stop not yet moved to the break even, and it lingers there, goes into the weekend and reverses and after one week in the trade I then end up -150 or more depending. I have lost thousands like that, but I guess I am learning as the pieces fall into place.

The pieces are still coming together for me as well. I was up about a 100 on the short USD/JPY trade before profits were cut to 20. We have to remember that "there is always another train leaving the station.."

aurel · #**477** (**permalink**) 06-05-2009, 01:33 PM

Hello Gregory

Before all, let me thank you for your analysis and the quality of your work.

I am not an expert, just questioning a few indicators about the USDCHF cross.
Don't you fear an unexpected upwards slip as cross reaches 1,0920 instead of bouncing down in the downwards sloping trend ?

On the following graph, I remarked that MACD and Stochs crossed in late May. May it be a BUY signal enhancing an up trend ?

As you mention, the cross is supposed to follow the resistance downtrend line towards an approximate 1,0500 level. Should this scenarion occur, the December level would have been reached. What other indicator would you use to prove this plan feasible ?

Many thanks,

Aurélien.

Thomas Long · #**478** (**permalink**) 06-08-2009, 09:47 AM

Quote:

Originally Posted by aurel

Hello Gregory

Before all, let me thank you for your analysis and the quality of your work.

I am not an expert, just questioning a few indicators about the USDCHF cross.
Don't you fear an unexpected upwards slip as cross reaches 1,0920 instead of bouncing down in the downwards sloping trend ?

On the following graph, I remarked that MACD and Stochs crossed in late May. May it be a BUY signal enhancing an up trend ?

As you mention, the cross is supposed to follow the resistance downtrend line towards an approximate 1,0500 level. Should this scenarion occur, the December level would have been reached. What other indicator would you use to prove this plan feasible ?

Many thanks,

Aurélien.

Gregory is enjoying some time off and will be back next week with new trading ideas.

All traders should be concerned that the market will change trends after an entry into a trade. The only control we have is where we choose to exit the trade and the use of a protective stop is the best approach to the possible of a reversal after our entry. But the most important piece of technical information to a trader is the direction of the trend. There are really no indicators that can accurately tell us when the trend will change as that is more of a fundamental factor than a technical point. Technical indicators are all really just fance moving averages, which means that tell us where we came from and have no predictive value at all. The best they can do is to show us changing momentum which does not always lead to a reversal or a trend change. When we attempt to buy in a downtrend, our entry and exit have to be pretty close to perfect in timing for us to be consistently profitable. Trading with the trend allows some wiggle room for mistakes. That is an edge that is just too big to give up. So we should assume that the trend is intact until we can comfirm that it has changed. Those who follow the fundamentals closely may have an advantage in that they may sense a trend change before it shows up on the charts, which is one reason why traders should be cautious this week based on the markets reaction to last Friday's release of the Nonfarm Payroll. But to assume that the markets have changed now may be premature and just too risky.

Kimaki · #**479** (**permalink**) 06-08-2009, 02:22 PM

Hi Tom, nice to see you here with us on this side, hope Greg enjoyes his well deserved rest.

Quote:

Originally Posted by Thomas Long

Gregory is enjoying some time off and will be back next week with new trading ideas.

All traders should be concerned that the market will change trends after an entry into a trade. The only control we have is where we choose to exit the trade and the use of a protective stop is the best approach to the possible of a reversal after our entry. But the most important piece of technical information to a trader is the direction of the trend. There are really no indicators that can accurately tell us when the trend will change as that is more of a fundamental factor than a technical point. Technical indicators are all really just fance moving averages, which means that tell us where we came from and have no predictive value at all. The best they can do is to show us changing momentum which does not always lead to a reversal or a trend change. When we attempt to buy in a downtrend, our entry and exit have to be pretty close to perfect in timing for us to be consistently profitable. Trading with the trend allows some wiggle room for mistakes. That is an edge that is just too big to give up. So we should assume that the trend is intact until we can comfirm that it has changed. Those who follow the fundamentals closely may have an advantage in that they may sense a trend change before it shows up on the charts, which is one reason why traders should be cautious this week based on the markets reaction to last Friday's release of the Nonfarm Payroll. But to assume that the markets have changed now may be premature and just too risky.

Thomas Long · #**480** (**permalink**) 06-08-2009, 02:24 PM

Quote:

Originally Posted by Kimaki

Hi Tom, nice to see you here with us on this side, hope Greg enjoyes his well deserved rest.

Thank you....I'm sure he will.