RealTrue Fx

I took a bit of a break from the markets today because of frustration, but have just completed my analysis for the day. I’ll abbreviate it a bit since it is a couple hours past the time I wanted, but at least it is up here now. (Note I literally had to put out a fire at the beginning of this posting, so apologies for lateness and anything else as a result of jitters)

As usual, I’m watching the pivots, but today I also want to note that the 50% Fib line had an upthrust earlier in the day around 1.4165. Also there was a hold of the lower trend line as well. Unless that trend is broken I’m still bullish. Extension to 1.43+ is still possible. Again fundamentals will play a role, so keep an eye out for U.S. equities and Ben Bernanke’s testimony wrapping up on Wednesday.

Anything above 4212 should confirm bullishness early on with targets at 4261,4325, and 4374 which should see a good correction down if it were to make it that far upwards today as that is also a major resistance point. Below 4212 watch the fib retracements and the pivots at 4148, 4099 and 4035. Any of those are likely if the lower trend breaks, which at the moment has held(as of about 0400 GMT). Here’s the chart(note, pivots aren’t marked right on the chart, but pay special attention to the fibs for now) I’ve got to run and get dinner now, since what was cooking got burnt in the fire. Good trading and good day all!

As expected the EURUSD broke out of the triangle yesterday. I was a bit disappointed that I missed the move, as I was out and about, but that is life in a 24 hour market. I did manage to take a couple of trades later in the New York session when the Euro started ranging though and got about 40 pips overall. It’s not easy finding time to trade the markets when one has a full time job and a family, but I give it my best. The chart below is not quite complete as it is missing official pivots that are about a half hour away till I get today’s official close from the broker. I think it is relatively safe to say that the highs and lows of the day are pretty accurate at this point though. So here is the outlook and what I will be shooting for–

Yesterday the bulls had the advantage and broke out and today it looks like the bulls will likely still be in control. Anything over 1.42 should remain bullish, with first target around 1.4277 -1.4288. There is some decent resistance at that point and upside could be limited to that area. The next stop would be 1.4320-1.4230 area which is the high from the first week of June and also coincides with a slightly downsloping trend line. Personally, if we break 1.43 that would be about my highest target, conservatively. The next pivot would be around 1.44 and with a strong break of 1.4330 I would set that as my target.

On the downside, 1.4160 looks like good support. There is a strong bullish intraday candle that should help serve as resistance there and first pivot support is also in that area. A good break of that would likely push back in the 1.40-4099 area.

One final note, the chart is a 15 minute chart and there is another triangle that has formed this afternoon. The break, either up or down should be telling and likely will occur before European open, and I think even more likely early in Asia.

So without further ado, here’s the chart–

Here it goes folks, the first of many “forecasts”. I will note this, this is not a prediction. I do not predict where the markets are going. I have learned and am still learning to let the market tell me where it is going. So please do not take this “advice” as fact. Do your own analysis and if you must, accept others’ analysis as suggestions, none of which should be elevated above your own.

My thoughts, the EURUSD is priming for a breakout. The triangle formation that almost every technical analyst is aware of held on Friday, but looking at the charts looks to be almost bumping up against the end of it. Conventional wisdom says we should expect a decent move in either direction soon. Now I’m not sure which way it will go. The triangle is symmetrical so it could swing either way. With U.S. equities being a major driver in the past week and no huge fundamental news out of Europe, Monday morning in New York might be the best opportunity to catch a decent move. Right now we are in a 1.4150 – 1.4060 range. On the daily chart, there is a dark cloud cover, which is bearish. There is a bit of a long lower shadow though, which sort of trims the significance off though. Dailys are also nearing oversold on stochastics with a possible divergence forming(but I will discount that until it happens, if it does) Also, though it was a down day on Friday, most of that appears to be a last hour sell-off from those that didn’t want to hold a position over the break. So net advantage is to the bulls, at least in my mind. Look for the signs and make your own conclusion though.

My targets as usual are the daily pivots and other key resistances/supports. On the bullish end 1.4150 which is the pivot, near top of the triangle, and top of another longer term trend. That might be hard to crack. After that, 4180. 4203, 4227, and the very key area of 1.4289. Above that is key for a continuation of a stronger move.

On the downside 1.4093, 4069, 4038,  the 1.40 area, and 1.3959 which is also a key longer term area for a bearish continuation. Also on the way down, 1.4059, which was the intraday support area from Friday.

So what is all the talk without a chart —

Good luck all!

Trading forex is like no other experience I have had before. I’ve said in previous posts that it has taught me a lot about myself and sometimes I don’t always like what I have seen. Last night was the first time I made a live trade in several months. The GBP/JPY basically broke my back once and for the last time a few months ago and since then I’ve spent a huge amount of time getting back to basics studying technicals. The idea is to get things to an automatic state so that emotion doesn’t come into play. I can pull the trigger and forget the ‘what if’s’ If I take a loss, it doesn’t matter because it is always supposed to be minimal. Finally, my profits will outweigh my losses by a vast amount. That is the plan. I have it in my head, but…

Evidently it wasn’t quite automatic. My first trade of the EUR/USD was insane. I think I was emotional from the start. I was scared, impatient, and didn’t want to admit I was wrong. I didn’t evaluate it, just jumped in and got burned. Basically, I went back to instinct, which is flawed. The loss itself wasn’t bad, but I know that I MUST follow the rules, or I’ll be like the majority of forex traders, losers. No offense to those who lose, not calling names, only saying what everyone already knows, that being successful in forex is not easy and most traders don’t make it. When it finally got down to it, I set my stop loss higher than I should have. At least I set it. Then I left the trade to the market to take care of. I knew I was wrong and should have closed it, but at least I didn’t leave it hanging out there. A few hours later the stop was hit and when I awoke this morning it was all over. Monetarily, it was not a big loss. I did at least take a baby step. By the afternoon I was profitable for the day and had recovered.

The point is this though; losses like that or at least ones that develop that way can easily wipe out all gains and more. If I could take out less than 10% of my losing trades from last year, I would have been extremely successful. Instead, I got wiped. Why? The answer is simple. Let a bad trade go! Set the stop from the beginning and let it go if it gets hit. If it got hit, I was wrong anyways. Let it go and start looking for the next good opportunity. If there is anger, take a break. There is ALWAYS another opportunity. If I’m not in a trade, the next best thing to profit is avoiding a loss. The best way to avoid a loss is to not be in a trade.

Well, no trading for me today. I need to make sure my head is in the right place and I’ve done my homework before the next time. Plus, I was up a few hours too late hoping that trade would turn for me last night so I’m tired. On top of that, somber personal anniversary of July 16th 2003. I won’t go into detail here, but it’s best I avoid stress for now. The bottom line is this, make sure your head is in the game or sit on the sidelines.

Well I finally got to analyzing the last couple of week’s trades and pulled some valuable information from looking at my entries and exits. My patience (or lack thereof) is continuing to do me a bit of harm. Overall, my concentration on price action looks to be starting to create a payoff. The other important factor is my attention to risk and reward. The losses I have taken have been far outweighed by the gains, which is of course the point of investing anyways. So here are some charts, 5 in all.

Patience is key and on this trade I jumped a bit soon. I also only based my trade on the dark cloud cover, which was another mistake. Since my day was almost over,  I set my trade to be close to break even and ended up with +3 pips almost two hours after  opening the trade, right before the Euro began it’s descent toward my original take profit point. Had I waited for that signal, or at the very least left my stop loss alone, it would have worked out for around 80 pips.

This was a pretty good trade from what I can tell. I noticed some consolidation for the last couple of hours before the trade and was fortunate enough to see a break below that near term support line that had formed after a downtrend. Expecting a resumption of the trend after the break I entered  with a stop above that newly transformed resistance line that had been support. The target was a pivot line which was hit for +56 pips.

I don’t know what this trade was. Looking back at it now, I can’t find a good reason to have entered and it didn’t even have a TP or SL set. The only good thing I did right was exiting with profit after seeing a bullish engulfing candle on the 15 minute chart, since I was short.

This shows a series of anticipation trades without real confirmation. The area in blue was a resistance area, but the trades I took did not confirm that area with price action. The losses were small though, as I had set a reasonable stop loss. Ironically enough, there was a bearish engulfing candle shortly after my last trade, which would have been a fine trade(in theory). Of course it would have been a loss either way, as the Euro lunged higher afterwards.

I think I entered a bit early on this one too, but it worked out well. I was playing off the daily pivot point as resistance, which it actually broke for a bit, but couldn’t hold. There was also a falling trend line that served as resistance which it held beautifully. Take profit was at the first daily pivot support, which worked out well also.

Soon I should be posting some real setups. Setups will be found on this page, but real time trade action will be available on my Twitter page. I find Twitter to be much easier to update such short messages on the run, but setups can’t be described in 140 characters or less.  That will likely be all until Monday, but I