Trend of the Day - Page 38

Gregory McLeod · #**556** (**permalink**) 06-23-2009, 11:27 AM

Quote:

Originally Posted by Kimaki

Good Morning sir how are you today? Forgive me but I am not sure what you are saying about the entry for the GBP/CHF pair. "1 ATR & 2 ATR"?. I tend to place my trades off of a 2hour chart, should I use a 4hour for this ???

Even though a trader looks at smaller time frames, the Daily chart can be helpful in setting stops to reduce the chance of being stopped out by intraday movement. GBP/CHF has a ATR of 216 pips so an arbitrary 50 pip stop has a high probability of being hit by random fluctuations rather than a true change of market direction. see the attached chart. Use of micro lots would be ideal for these larger stops.

Kimaki · #**557** (**permalink**) 06-23-2009, 11:48 AM

Thanks to you guys I always start with my Daily chart but I cant say I ever heard you mention the ATR indicator before. I use it in to set a trail stop sometimes, but I thought possibly you were talking about something else.
Thanks again Greg.

Quote:

Originally Posted by Gregory McLeod

Even though a trader looks at smaller time frames, the Daily chart can be helpful in setting stops to reduce the chance of being stopped out by intraday movement. GBP/CHF has a ATR of 216 pips so an arbitrary 50 pip stop has a high probability of being hit by random fluctuations rather than a true change of market direction. see the attached chart. Use of micro lots would be ideal for these larger stops.

Kimaki · #**558** (**permalink**) 06-23-2009, 02:17 PM

Greg, sorry to be jumping this far back on the forum. I am glad to see I my thinking of diversifying and having long term trades is a good thing, however it would seem that I don't have the capital for it as yet so I may have o hold on it for a while. It has occurred to me that if try and locate a pair with a strong trend and the right conditions, I can enter the trade and do no other trades until the pip movement is equal my stop amount, then I can move to even and resume regular trading. Depending on the activity it may keep me idle for a couple weeks or more but it may be worth it. Even that is only possible if normally my stop on that pair would be around 100pips because that would make the carry about 500pips. More than that and I would be over extending myself.

Quote:

Originally Posted by Gregory McLeod

The great thing about position trading is the little time required to manage the position. Over managing and watching the position trade could be the worse possible thing to do. Think of a jet liner flying from Los Angeles to New York. Aside from the incidental turbulence, the flight feels like you are sitting still until the final destination is reached. On the other hand flying a fighter jet would be more akin to day trading as you would feel the swings and the gyrations of the aircraft as it dodges in and out. A constant watching of controls and indicators is required and looking away could spell sudden doom.
I find that my best position trades have a stop and limit and I forget that its there.

My apologies for the long post.

Gregory McLeod · #**559** (**permalink**) 06-24-2009, 06:36 AM

Quote:

Originally Posted by Kimaki

Thanks to you guys I always start with my Daily chart but I cant say I ever heard you mention the ATR indicator before. I use it in to set a trail stop sometimes, but I thought possibly you were talking about something else.
Thanks again Greg.

You are welcome. Richard Dennis of Turtle Trader fame popularized this way of setting stops and limits.

Gregory McLeod · #**560** (**permalink**) 06-24-2009, 06:40 AM

Quote:

Originally Posted by Kimaki

Greg, sorry to be jumping this far back on the forum. I am glad to see I my thinking of diversifying and having long term trades is a good thing, however it would seem that I don't have the capital for it as yet so I may have o hold on it for a while. It has occurred to me that if try and locate a pair with a strong trend and the right conditions, I can enter the trade and do no other trades until the pip movement is equal my stop amount, then I can move to even and resume regular trading. Depending on the activity it may keep me idle for a couple weeks or more but it may be worth it. Even that is only possible if normally my stop on that pair would be around 100pips because that would make the carry about 500pips. More than that and I would be over extending myself.

This is what makes an FXCM Microlot account very attractive as the stop would be $21.60 versus $216 for a standard account. These larger moves require bigger stops and this is a way to take advantage of them.

Gregory McLeod · #**561** (**permalink**) 06-24-2009, 06:54 AM

Quote:

Originally Posted by Gregory McLeod

GBP/CHF rallied some 460 pips on the back of Swiss National Bank intervention from 1.7466 to 1.7928. However, it was retraced back to almost were it started. The trend remains up and the retrace provides a good entry at or near the daily 200 SMA at 1.7450. Another strategy would be to have a manually trailed entry order a few pips above the last 4 hour high in order to be stopped into the trade with a 1 ATR stop below an entry and a 2 ATR Limit. This could be a volatile trade in anticipation of a possible intervention repeat, so position size should be scaled down.

As I stated yesterday, the 200 SMA served as a strong support for GBP/CHF. The pair is up some 320 pips at the time of this writing and may close in on its target soon.

Gregory McLeod · #**562** (**permalink**) 06-24-2009, 07:53 AM

Quote:

Originally Posted by Gregory McLeod

The daily trend of the GBP/CHF is up despite falling 200 pips. British retail sales figures came out lower than expected and the pound was punished across the board. This sets up a "Buy on the Dips" scenario as the 38.2% Fibonacci retracement level and a daily rising trend line overlap in the 1.7126 vicinity. The Swiss National Bank also declared that they would defend against any further appreciation of the Franc.

There is a definite pattern in the Swiss cross rates this morning. Notice how AUD/CHF, GBP/CHF, USD/CHF, and EUR/CHF are all at the top of the ProRealtime heatmap:

Kimaki · #**563** (**permalink**) 06-24-2009, 10:46 AM

Good Morning Greg, on the 2&4 Hour these all seem over sold though, is it that they could be looking at more gains? Question 2: All of my positions on GBP/CHF ; EUR/JPY & GBP/CAD either hit their limits or backed up on a stop all in all I had about 700 pips in gains. I am wondering if the GBP/CAD may continue back up, its sticking to its trend line and did not yet get to that 1.9241 limit. I gained 80pips on her and wonder if re-entering is an option?

Quote:

Originally Posted by Gregory McLeod

There is a definite pattern in the Swiss cross rates this morning. Notice how AUD/CHF, GBP/CHF, USD/CHF, and EUR/CHF are all at the top of the ProRealtime heatmap:

Gregory McLeod · #**564** (**permalink**) 06-24-2009, 11:25 AM

Quote:

Originally Posted by Kimaki

Good Morning Greg, on the 2&4 Hour these all seem over sold though, is it that they could be looking at more gains? Question 2: All of my positions on GBP/CHF ; EUR/JPY & GBP/CAD either hit their limits or backed up on a stop all in all I had about 700 pips in gains. I am wondering if the GBP/CAD may continue back up, its sticking to its trend line and did not yet get to that 1.9241 limit. I gained 80pips on her and wonder if re-entering is an option?

Congratulations, Robert! That is terrific. If you take a look at MACD on the 4-hour chart, there is negative divergence. So we may get some type of 3 wave counter-trend correction against the trend. However, move out to a daily and look at MACD with great angle and separation above the horizontal zero reference line is extremely bullish. This indicates that we may get another leg higher. There was pretty good whole number '00' resistance for GBP/CAD so the 1.9241 may come after it knocks out old resistance and pulls back. Waiting for this counter trend to end would be the course of action before re-entry. It may take 3 or 4 days.

Kimaki · #**565** (**permalink**) 06-24-2009, 11:54 AM

Thanks Greg, I am trying not to be too emotional about it,

. Oho, what the heck,

,

.

Quote:

Originally Posted by Gregory McLeod

Congratulations, Robert! That is terrific. If you take a look at MACD on the 4-hour chart, there is negative divergence. So we may get some type of 3 wave counter-trend correction against the trend. However, move out to a daily and look at MACD with great angle and separation above the horizontal zero reference line is extremely bullish. This indicates that we may get another leg higher. There was pretty good whole number '00' resistance for GBP/CAD so the 1.9241 may come after it knocks out old resistance and pulls back. Waiting for this counter trend to end would be the course of action before re-entry. It may take 3 or 4 days.

Xiao · #**566** (**permalink**) 06-25-2009, 03:43 AM

Quote:

Originally Posted by Gregory McLeod

Congratulations, Robert! That is terrific. If you take a look at MACD on the 4-hour chart, there is negative divergence. So we may get some type of 3 wave counter-trend correction against the trend. However, move out to a daily and look at MACD with great angle and separation above the horizontal zero reference line is extremely bullish. This indicates that we may get another leg higher. There was pretty good whole number '00' resistance for GBP/CAD so the 1.9241 may come after it knocks out old resistance and pulls back. Waiting for this counter trend to end would be the course of action before re-entry. It may take 3 or 4 days.

It is Such a wonderful To See Of Your Conversation..

now I got much Good Knowledge In Extra side..

so I have to study More...

To Become Like You...

thank you

And Sir, I have to See All The Chart As you mean, Like 5 min,, 1 - 2h 4h daily and etc.. To Predicting and What going to else..

Gregory McLeod · #**567** (**permalink**) 06-25-2009, 07:13 AM

The 1.5000 area seems to be the line in the sand for EUR/CHF. The Swiss National Bank (SNB) seems determined to defend this level and prevent their currency from appreciating against the Euro. The daily 200 SMA comes in at 1.5152 which could function as near term support and a possible Long entry price level. Stops would be on the other side of the 1.5000 area. A 1:2 risk to reward limit or the March high of 1.5455 would be two possible choices. A break above the 1.5455 level would open up the 1.5879 December '08 high as the next target.

Gregory McLeod · #**568** (**permalink**) 06-25-2009, 07:18 AM

Quote:

Originally Posted by Xiao

It is Such a wonderful To See Of Your Conversation..

now I got much Good Knowledge In Extra side..

so I have to study More...

To Become Like You...

thank you

And Sir, I have to See All The Chart As you mean, Like 5 min,, 1 - 2h 4h daily and etc.. To Predicting and What going to else..

Thanks for the kind words. Each trader has a unique way of interpreting the market that fits their personally. They usually discover it after they have learned all of the basic concepts. I am sure you will find out what your special talent or "edge" is so you won't have to become like someone else.

Izumi · #**569** (**permalink**) 06-25-2009, 08:00 AM

Gregory,

I'm trying to diversify and am looking over more currencies now, not just EURO/USD and AUD/USD. I created a sell entry order on USD/CAD at 1.18000 (which is close to the 18.05.2009 high). Would it be better to set the entry at 1.16600? The 1.166 value is close to the 50% fibonacci retracement of the 1.03031-1.30180 growth interval and to the 38.2% retracement of the 1.30638-1.07831 interval, as shown in the attached chart. The confluence of 2 fibonacci retracements should provide a strong resistance, don't you think so?

I know that I shouldn't enter this trade against the trend, but I think that the trend will change at one of the above mentioned values. I need your experience.

Izumi

Gregory McLeod · #**570** (**permalink**) 06-25-2009, 08:17 AM

Quote:

Originally Posted by Izumi

Gregory,

I'm trying to diversify and am looking over more currencies now, not just EURO/USD and AUD/USD. I created a sell entry order on USD/CAD at 1.18000 (which is close to the 18.05.2009 high). Would it be better to set the entry at 1.16600? The 1.166 value is close to the 50% fibonacci retracement of the 1.03031-1.30180 growth interval and to the 38.2% retracement of the 1.30638-1.07831 interval, as shown in the attached chart. The confluence of 2 fibonacci retracements should provide a strong resistance, don't you think so?

I know that I shouldn't enter this trade against the trend, but I think that the trend will change at one of the above mentioned values. I need your experience.

Izumi

A break of the red trend line would be added confirmation that the downtrend has returned. See the attached chart: