The Purely Technical EUR/USD Trading Thread

[fazi]

there will probably be another (for the umpteenth time) failure to close above 1h 80 lrma. The top was also camarilla h3 line (sharp) - I use cams with NY close as a 00.00 hour (same thing with pivots)

[Gregory McLeod]

AV1 will not have to worry about double posting anymore.

[fazi]

OK, so your little hissy-fit is about my bond chart. Let me explain a bit. That post was a reply to quite a few others who said that they found USD/JPY confusing and hard to trade. If one only squits at the charts, lot of the things don't make sense, because the markets are inter-related and there is a macro environment out there. Bonds are important not just because it's a grand-daddy and move markets, it's important to $/Y because of the role of Yen as a funding currency. If you listen to the feed in the S&P pit in CME, Ben comments on Bonds, golds, and Euro currency futures and a few other markets constantly for people trading ES because no market really stands on its own these days, and many who trade other indices also listen to the pit feed for that reason.

EUR/USD does not exist on its own, and as euro is a major of the majors and in the spot market linked to the dollar, it's affected by many other factors, politicics or other markets. I was not even suggesting that one should look at bonds all the time to trade euro. But since you mentioned, it in fact would not hurt and will certainly help immensely to have a bit more awareness of the macros and other factors at work.

Well, today is Friday and there is my little hissy-fit this time round. I had thought the forum became quite jovial with a good mix of fundamentals and techs since I came back a couple of months ago. Perhaps I am wrong and should stay with my little Skype group because it's like what jibiggart said: a group of people who don't take themselves too seriously and enjoy a bit of jovial banter.... and we also share charts of other markets too.

Have a nice weekend all.

hahahahaha - I can see a little discussion with Stan has set a tone for a day for you - btw - tnote chart looks scary - enjoy the weekend

edit: hourly close below 80 lrma and kumo - bearish IMHO

[Rasputin]

Anyone know of a free website that has live running quotes of bonds-particularly European bonds (Italian, Greek, German, etc.).? I don't want to invest in a BLOOMBERG terminal but thought maybe there was a site that has some of the info...

[Franosh]

hahahahaha - I can see a little discussion with Stan has set a tone for a day for you - btw - tnote chart looks scary - enjoy the weekend

edit: hourly close below 80 lrma and kumo - bearish IMHO

heheh.... I am always up for a little combat (oops.... should say debate/discussion), could do close-bodied bare-handed combat too . Disagreements are good for the brains, consensus is suffocating.

I am guessing from Sunday onward it would be squeeze, ECB style.

[Gregory McLeod]

Anyone know of a free website that has live running quotes of bonds-particularly European bonds (Italian, Greek, German, etc.).? I don't want to invest in a BLOOMBERG terminal but thought maybe there was a site that has some of the info...

Hello Rasputin.

This site may offer what you are looking for: Government Bonds yields, List by Country

[Rasputin]

Thanks. This is a good site, but I am looking for a site that where one can monitor live trades.

[Paul Chin]

Last chart for a bit.

This is the daily chart I am using with fibo time lines. We can see that price breached the trend line at bottom and to get back above will mean taking at 1.2775. It is right on the 50% fibo time line of the last wave down from 1.4939, if that wave was complete (familiar argument!). This high is also from where I am working my time squares (squares roots etc based on Gann/Hall).

If the 1.2623 low is taken out, me think the last wave down that I am basing the time lines on, is not complete, but if it holds and we work back into the consolidation zone, then I still routing for a C wave up (but will take anything as previously mentioned).

The time line telegraphed something, just what is the guessy bit!

Catch up later.

Anything you say, man, anything, as long as we are on the same side

[Paul Chin]

OK, so your little hissy-fit is about my bond chart. Let me explain a bit. That post was a reply to quite a few others who said that they found USD/JPY confusing and hard to trade. If one only squits at the charts, lot of the things don't make sense, because the markets are inter-related and there is a macro environment out there. Bonds are important not just because it's a grand-daddy and move markets, it's important to $/Y because of the role of Yen as a funding currency. If you listen to the feed in the S&P pit in CME, Ben comments on Bonds, golds, and Euro currency futures and a few other markets constantly for people trading ES because no market really stands on its own these days, and many who trade other indices also listen to the pit feed for that reason.

EUR/USD does not exist on its own, and as euro is a major of the majors and in the spot market linked to the dollar, it's affected by many other factors, politicics or other markets. I was not even suggesting that one should look at bonds all the time to trade euro. But since you mentioned, it in fact would not hurt and will certainly help immensely to have a bit more awareness of the macros and other factors at work.

Well, today is Friday and there is my little hissy-fit this time round. I had thought the forum became quite jovial with a good mix of fundamentals and techs since I came back a couple of months ago. Perhaps I am wrong and should stay with my little Skype group because it's like what jibiggart said: a group of people who don't take themselves too seriously and enjoy a bit of jovial banter.... and we also share charts of other markets too.

Have a nice weekend all.

I quite like your scientific approach to intepreting the market. The problem is I cannot access a live chart of Gold or Bond, to try to corelate with EURUSD. All forms of correlations, is only temporary, or lagging, of course we can view it from another angle, say the stock market leads the real economy by half a year, we can based on existing stock market trend to say the real economy is not going to shrink for the next half year.

Would be interested if there's such a cool leading indicator out there that leads the EURUSD, because that will slightly reduce the rate of growth of my greying hair!

Good luck!

[Paul Chin]

I am sorry if you are offended. I will not repost your material. I did mention that I would do so and no one had any objections at the time. I respect your wishes.

Honestly, it appears a little hypocritical that you would want the moderator to move others post without regard for their wishes, however are offended that I do move yours.

But, I do understand your views and will not repost your material.
If there are others that feel the same way, please let me know by responding to this post.

If you would like your material reposted, you can indicate so on your post.

Dear Mr Greg,

I would like my post not to appear in another thread without my knowledge, because I just went there to see, and it's mostly bearish! Which doesn't make a lot of sense when you put my post about everyone bullish over there! Thank you.

[Clivewaverider]

The BB's were on 240min settings, so dropping quickly - maybe into consolidation. Price continually held in bearish side of my time squares (under thick blue line in previous chart) which is somewhat subduing bullish stabs up. 1.62x the potential first wave this morning gets to 1.2773 if that existing backtest holds as wave 2, so I'll be covered around there if surges fail to stick.

That MA band is the 100-200 period on an attenuation basis (as opposed to exponential, weighted, et al) - I have been watching how it works with the Hull MA (2day period 10) to both support trend and indicate change afoot. When the thin red (100) crosses up through the Hull, subtle changes seem to happening in underlying currents, even if price does not immediately follow.

I am hoping that price will now level off into the MA band, consolidate and provide base for a retracement - whether wave 4 of 3 or 4 of overall wave or anything else in fact as long as it goes up!

Well not too bad a day at all. Catch up Monday.

[Paul Chin]

Any longs would have been profitable. I did not participate... because I'm already very long!




As can see, never taken a short since the drop below 1.27. 7 trades. 2 days. 111.5 pips.

Will probably be able to clear my remaining longs next week. I secretly hope it will close those eye-hindering gaps as well.

It's been very enjoyable day. We beat the SSI today

Good luck!

[Robert Eckert]

So: techie question. I enjoyed the Hurst book that I was kindly linked to, and was especially impressed that he did all that figuring in the pre-computer era. It was about decomposing complicated oscillations into superimpositions of simple cyclic motions, a venerable mathematical technique pioneered by Claudius Ptolemy in his 1st century work on planetary orbits (he gets a bad rap in scientific history as the fool whose errors modern astronomers corrected; I like to give him a shout-out because he is actually one of my heroes), now mostly associated with the name of Fourier (French mathematician who rigorously proved under what circumstances it can be done, and how to do it).

Nowadays, there is considerable software available to do Fourier transforms on this kind of data-set, but I do not see anybody using indicators in that style. Does anyone know if there are programs out there that do this kind of thing? If not, it would seem to be a possible money-maker to write one.

Irrelevant story: this is NOT, contrary to some recently expressed opinions, an example of a contentious Internet board. My only experience as moderator of an Internet board was several years ago on the Middle East Abrahamic Forum, a board founded by a Muslim with one Jewish and one --------- assistant manager "as a place where all faiths can discuss regional issues with mutual respect". You can examine how well it went generally, but there were interims of calm interfaith lovey-dovey talk; I said I was a Buddhist (didn't want to say "atheist" as I had no interest in arguing religion) but was told I was welcome anyhow. Then Palestinians blew up an elementary school bus, the flame wars developed into a forest fire, "oh yeah, what about ISRAELI crimes?" with gory pictures etc. etc. The manager raised the assistant managers to "manager" rank (conferred the power to delete posters as well as posts) and quit, not responding to e-mails pleading for his return. The Jewish manager banned the majority of Muslim posters. The --------- manager raised one of the surviving Muslims to manager rank and he figured out that this board system even let managers ban other managers, so he banned the Jewish manager and all the Jews, to which the --------- responded by banning him, raising me to manager as the only neutral, and quitting. This all happened in a few hours while I was off-line, and I knew nothing about it until I woke up to over 300 e-mails. I unbanned everyone, including the one who had been on a tirade of personal attacks against me; naturally she started posting that I was the conspirator behind the whole debacle.

[Paul Chin]

So: techie question. I enjoyed the Hurst book that I was kindly linked to, and was especially impressed that he did all that figuring in the pre-computer era. It was about decomposing complicated oscillations into superimpositions of simple cyclic motions, a venerable mathematical technique pioneered by Claudius Ptolemy in his 1st century work on planetary orbits (he gets a bad rap in scientific history as the fool whose errors modern astronomers corrected; I like to give him a shout-out because he is actually one of my heroes), now mostly associated with the name of Fourier (French mathematician who rigorously proved under what circumstances it can be done, and how to do it).

Nowadays, there is considerable software available to do Fourier transforms on this kind of data-set, but I do not see anybody using indicators in that style. Does anyone know if there are programs out there that do this kind of thing? If not, it would seem to be a possible money-maker to write one.

Irrelevant story: this is NOT, contrary to some recently expressed opinions, an example of a contentious Internet board. My only experience as moderator of an Internet board was several years ago on the Middle East Abrahamic Forum, a board founded by a Muslim with one Jewish and one --------- assistant manager "as a place where all faiths can discuss regional issues with mutual respect". You can examine how well it went generally, but there were interims of calm interfaith lovey-dovey talk; I said I was a Buddhist (didn't want to say "atheist" as I had no interest in arguing religion) but was told I was welcome anyhow. Then Palestinians blew up an elementary school bus, the flame wars developed into a forest fire, "oh yeah, what about ISRAELI crimes?" with gory pictures etc. etc. The manager raised the assistant managers to "manager" rank (conferred the power to delete posters as well as posts) and quit, not responding to e-mails pleading for his return. The Jewish manager banned the majority of Muslim posters. The --------- manager raised one of the surviving Muslims to manager rank and he figured out that this board system even let managers ban other managers, so he banned the Jewish manager and all the Jews, to which the --------- responded by banning him, raising me to manager as the only neutral, and quitting. This all happened in a few hours while I was off-line, and I knew nothing about it until I woke up to over 300 e-mails. I unbanned everyone, including the one who had been on a tirade of personal attacks against me; naturally she started posting that I was the conspirator behind the whole debacle.

Dear Mr Robert,

Thank you for showing up in this thread. Good to see you around

For your interesting question on Fourier Transform applied to forex, I'm eager to know the answer as well, so I did a google search - Here's a post from forexfactory which I consider a satisfactory answer to your question...

The Fourier Transform analysis can only be applied to periodic functions.

A peridic function is defined as a function which repeats itself every certain period of time. This of course is not applicable to the price action of any known financial instrument, simply because the price action does not repeat equally during certain time periods.



So, from the theoritical point of view, the Fourier Transform can't be used to analyze the price action of currencies or any other financial instrument.

However, I believe that it can be managed to apply the fourier transform analysis but to portions of price actions. Let me explain this a little bit.

If the price action of a certain currency pair is considered, it must be cut down in which each piece must be confined within a certain known limit. For example, cutting the price action of the EUR/USD for 2 days based on the 1 hour chart provided that the price during these 2 days was oscillating between 1.1900 and 1.2000 for example.

Then applying a smoothing moving average for the extracted data, and then getting the time function of the moving average, and after all applying the Fourier Transform for the time function of the moving average.

The step of the moving average is important, as it will be very difficult to get the time function of the price data itself. It can be done by using curve fitting, but it's a very difficult and time consuming issue. I don't even know if there is any software out there that do curve fitting for inserted data or not.

When you apply the Fourier Transform, you will get another time function which consists of only Sines and/or Cosines. The function will contain an infinite number of terms. The first term is called the fundamental component, and the rest are called the harmonics. That's what the Fourier Transform function is called when analyzing the Alternating Electric Current or anyother waveform.

The Fundamental component is usually the most effective component, with the 3rd, 5th & the 7th components being taken into consideration. Usually, all the higher order harmonics are neglected due to their minimal effect. Of course, I don't know what will be the analysis of the price action of currencies will result in.

Now the real question is: How can this improve trading and speculation?

If you are analyzing the most recent data, this can be a very useful tool to project price targets as well as defining market trend. Simply insert the required future time in the Fourier time function, calculate the fundamental, 3rd, 5th and 7th components, and you get a price. This price relative to what the price is right now will give an idea about the market next move.

Why this won't work as expected?

1- I don't believe that this will work as expected, just because the pair doesn't move in completely identical cycles. This deviation will result in errors in the Fourier Transform projections.

2- The market is trending during 60-70% of the time. These trending periods can't be analyzed using the Fourier Transform Analysis.

3- The Fourier Transofrm was created to analyze the behavior of waves, electric signals and electric current. These phenomenas are completely natural and are moving without any kind of emotions. On the other hand, the currencies and any financial market is being affected by many things, and emotions drive the markets sometimes, so there can be no fixed formula for the market, that's why trading systems that used to work in the past do not work in the future, because people change, but waves and electricity do not change their attitude because they don't like the way of their life for example, or because of terrorist attacks.

Hope that I have been helpful

Nader.

He is wrong about the market trending 60-70% of the time of course, because a trend is itself very subjective, and should be taken with good humour - laugh a little..

And I'm a little curious about your age, sir, if you don't mind...

Irrevelant: It's a delicate balance in posting our views - to maintain our edge by not disclosing too much, to maintain a safe distance from one another, to filter out the gems from loads of garbages, to quietly tolerate all the wannabe traders bragging, and their negativity, and at the same time show good mannerisms at all time.

With the internet, people are suffering from information overload, and to be able to have a space sharing with sincere and honest posters, with good sense of humour and well-mannered, satisfies my need for some traders interaction. (Can't disclose what I'm doing to most around me)

I must thank this forum for that! Hopefully will not end up as the Middle East Abrahamic Forum, we have the Moderators!!!

[Robert Eckert]

For your interesting question on Fourier Transform applied to forex, I'm eager to know the answer as well, so I did a google search - Here's a post from forexfactory which I consider a satisfactory answer to your question...

Ptolemy's epicyclic decomposition of the planetary motions is an example of a case that does not meet Fourier's criterion of exact repetition: the ellipse of the moon's orbit can be modeled as deviations from a circular motion by exact harmonics (that is, integer multiples of the base frequency) but the moon does not repeat the same ellipse each time because of perturbations by outside bodies (Sun especially, also Venus and Jupiter etc.) and those terms are at irrational multiples of the base frequency, hence not discoverable by Fourier's methods (what impresses me about Ptolemy is that he had nothing like Newton's laws to guide him as to what these terms should be, but figured them out purely from the raw data of "the charts"). Now what Hurst says about price motions is that the frequencies of the major cycles themselves shift somewhat with time, with amplitude increasing or decreasing together with the frequency; this is far more complex than a Fourier analysis, but I was hoping that somebody had done some of this work. I guess if I want it done, I have to do it myself.

And I'm a little curious about your age, sir, if you don't mind...

Mid-fifties, but as my favorite math teacher put it, "Growing old is mandatory, but you don't have to get mature."

Hopefully will not end up as the Middle East Abrahamic Forum, we have the Moderators!!!

Indeed. The downfall of MEAF was when the emotional upsets infected the moderators as well. Back then there was no Al-Jazeera English; if you wanted to know news and views from that part of the world (and as you can tell, I am curious about what is going on all over the planet) and couldn't read Arabic and Hebrew, there were few good sources. I still feel I get a better pulse on, say, Greek elections by listening to angry Greeks ranting on Internet boards than from any media-- but you have to avoid getting sucked into it (I blew my top at a Golden Dawn ranter a couple weeks back, drawing a caution from the moderator of one of my favorite boards, that was bad).