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Daily analysis and trading strategies 2-11-10

Posted by Liviu on February 11, 2010 – 7:08AM GMT - 11037Leave your thoughts2010-02-11+07%3A08%3A39Liviu

Quote of the day: The only summit meeting that can succeed is the one that does not take place. — Barry M. Goldwater

EURUSD

Trading strategy: stand aside

Yesterday’s trading sessions have been mixed – euro falling after a failed attempt to breach above 1.3800, but found support on the 61.8% of the recently developed upward swing from 1.3585 to 1.3840 – at 1.3680. My strategy to sell at 1.3825 was correct – reaching the 100 points target at 1.3725. Upside remains favored, though, as the euro found solid bids and currently trades pips away from $1.38. Today’s most important event is the E.U. meeting – where the E.U. officials are likely to discuss and find a solution to Greece’s debt problems. Above 1.3800, next important barriers are seen at 1.3840/60 and 1.3900/30. I believe that the $1.40 handle remains in cards on a short-term basis. Below 1.3680/00 would cancel the bullish scenario. Current exchange rate is 1.3781 @07:10 GMT

Support: 1.3725/50, 1.3700, 1.3650/80 and 1.3585
Resistance: 1.3800/05, 1.3840/60 and 1.3900/30
Market sentiment: long term – bullish, medium term – bearish, short term – bearish, intra-day – bullish

: EURUSD 4hrs chart 2-11-2010

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Daily analysis and trading strategies 2-10-10

Posted by Liviu on February 10, 2010 – 7:19AM GMT - 11033Leave your thoughts2010-02-10+07%3A19%3A26Liviu

Quote of the day: A rumor without a leg to stand on will get around some other way. – John Tudor

EURUSD

Trading strategy: holding yesterday’s short at 1.3825 with stop at breakeven, objective at 1.3725.

The euro recovered up to 1.3840 session’s high yesterday due to news of Eurozone deciding to aid Greece. The rally was short-lived as the news turned out to be unfounded. One gets to realize how sensitive the market is. However, the rally to 1.3840 fulfilled my expectations and my strategy’s short at 1.3825 got triggered, being a good trade which reached 90 points profit a bit earlier today, but still not reaching the 100 points target. Despite intra-day charts being slightly bearish, I think that the EUR holds gains just fine and the decline from 1.3840 could have been larger, potentially bringing Monday’s trading region back in focus. As the pair maintains its bid tone above 1.3750 – more upside action is likely, retesting yesterday’s top and 1.3900/30 eventually. Short-term sentiment is bearish and a change of current bearish structure would occur only on a sustained breach above 1.3900. Current exchange rate is 1.3777 @07:20 GMT

Support: 1.3725/50, 1.3700, 1.3650 and 1.3585
Resistance: 1.3800/05, 1.3840/60 and 1.3900/30
Market sentiment: long term – bullish, medium term – bearish, short term – bearish, intra-day – slightly bearish

: EURUSD 4hrs chart 2-10-2010

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Daily analysis and trading strategies 2-9-10

Posted by Liviu on February 9, 2010 – 6:59AM GMT - 11028Leave your thoughts2010-02-09+06%3A59%3A21Liviu

Quote of the day: A lot of people are afraid of heights. Not me. I’m afraid of widths. — Steven Wright

EURUSD

Trading strategy: short at 1.3825, stop at 1.3885(1% risk), objective at 1.3725.

The consolidation continues and the euro shows modest signs of recovery, currently testing last two days’ top side into the 1.3720/40 region. Intra-day studies are slightly bullish and a break above 1.3740 would potentially strengthen short-term momentum – thereafter aiming the higher barriers, such as 1.3800 and 1.3850/60. A falling trend line coming from 1.4265 of January 8 has provided support on last two corrective cycles, as seen in the chart below, but we are now dealing with a potential break out above the said line, which would be a notable bullish sign. However, it’s too early to consider this minor recovery a reversal, as current drop from 1.5140 to 1.3585 is a decline of historical proportions – moves of 1500 points down against the dollar in 9 weeks have been seen back in the tumultuous times of 2008. Scrolling back, such declines were also seen back in `91 and `92. Back to current charts – the intra-day bullish structure will remain intact while 1.3650/60 holds. Below the said levels, downtrend will resume – next downside objectives being 1.3550/85 and 1.3500. Current exchange rate is 1.3721 @07:00 GMT

Support: 1.3585/90, 1.3550 and 1.3500
Resistance: 1.3740/50, 1.3800/05 and 1.3850/60
Market sentiment: long term – bullish, medium term – bearish, short term – bearish, intra-day – slightly bullish

: EURUSD 4hrs chart 2-9-2010

: EURUSD 1500 points down in 9 weeks

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Daily analysis and trading strategies 2-8-10

Posted by Liviu on February 8, 2010 – 7:23AM GMT - 11022Leave your thoughts2010-02-08+07%3A23%3A56Liviu

Quote of the day: It seems to be a law of nature, inflexible and inexorable, that those who will not risk cannot win. — John Paul Jones

EURUSD

Trading strategy: stand aside

The euro continues to face weakness against the dollar, trading near multi-month low reached Friday at 1.3585, as a result of another sell-off round following U.S. unemployment data – NFP coming at -20k and the unemployment rate at 9.7%, beating the 10% expectation. Short term and intra-day charts remain into the bearish territory and near term resistance levels may limit gains at 1.3720 – falling trend line which provided support on two corrective cycles, followed by 1.38 and 1.3850/60. A sustained break above 1.3850 would signal a change in current short-term structure, but while the euro is heavy near the 1.35 region – gains to 1.3850 should be hard to achieve – as rallies are facing strong selling since December. In case of more losses – support starts at 1.3585/90, backed by 1.3550 and 1.3500. 1.3480 which is a notable support formed by the 61.8% of last year’s full rise comes lower – around 1.3480. Current exchange rate is 1.3640 @07:24 GMT

Support: 1.3585/90, 1.3550 and 1.3500
Resistance: 1.3700/20, 1.3750, 1.3800 and 1.3850/60
Market sentiment: long term – bullish, medium term – bearish, short term – bearish, intra-day – bearish

: EURUSD 4hrs chart 2-8-2010

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How to identify trends

Posted by Liviu on February 6, 2010 – 4:54PM GMT - 1098711 CommentsHow+to+identify+trends2010-02-06+16%3A54%3A45Liviu

When it comes to the basics in trading, it is a common thing but also time consuming (and quite irrational) to use a lot of indicators, even advanced ones, to identify something so simple that even some 5 years-old child would recognize with the naked eye, without using a state-of-the-art charting platform. I am surprised how many traders face difficulties, on a regular basis, when identifying trends. One of the reasons for the failure on identifying market trends is using various technical tools which react in different ways to price action, either causing confusion or signaling trend changes too often due to spikes, retracements, tight consolidation cycles, gaps etc – hence not seeing the forest for the trees.

This short article aims to support once again the “keep it simple” principle and the fact that you do not need a complex solution to answer a simple question. A simple solution is less time consuming, therefore allowing you to allocate your time other activities.

The question that always comes in my mind is why would someone use a lot of technical studies to identify something clearly visible?

Do we need a light meter to know if it’s day outside? – nope.
Do we need to calculate gravity before throwing a rock off a building? – No. We know it will fall fast …and someone might get hurt.
Do we know where the left direction is? Or the right? Sure we do.
The meaning of relative direction words is conveyed through tradition, education, and direct reference. So we all know where left or right is, therefore we most likely know where up or down is, too.

Let’s define trend – trend is the course / tendency or direction of the financial market.

Repeat: direction. Again: DIRECTION.

What’s the direction a market goes? -It is up, down or sideways / neutral – from left to right (the time axis) on a chart.

Coming back to what I mentioned earlier – that you don’t have to be an experienced trader, nor have an MBA degree, to identify which direction an object moves. It is common sense.

And some exercise: