EUR/USD Daily Video, October 10, 2011

[Sive Morten]

Goodday everybody, I have a question regarding the entering point after the confirmation bar of a DRPO. You will find some charts regarding this pair and my analysis since I dont wanna drop a question just like that. (I do it on this thread since I dont wanna mess up the weekly review of EUR/USD )

Monthly: From this chart I can see that price action has the form of a descending triangle wich should be treated as indecision. Reversal or continuation are both possible. September bar has achieved new all-time lows and closed above previous low (jan 2009) inside the triangle after reaching COP. Current bar show small range and has (for now) the shape of a hammer. Reaching and LPO and W&R of previous low are two bullish signs. Although is too early in the month to speak about this , touching the bottom of the triangle could take price action to the upper border. let's see weekly chart to have a better view.

Weekly time frame: market closed only during one week below the all-time low. We can also see that last week formed a hammer giving as a possible hint for bullish direction.

Daily: On this time frame we can appreciate the DRPO im talking about. Nice thrust down close above below and above giving us the confirmation bar on the 7th of October. Failure would occur if theres a close below .618 (118.12) or below the 3x3 DMA right? . Nearest target should be 1.00 expansion in agreement with daily overbought and with daily confluence resistance. but I just don't know how to properly enter this signal. I've looked through Joe's TWDL and couldn't find the correct information. I like .382 retracement of last swing up to enter, although since this is a strong directional signal I'm wondering maybe I should enter at the market a little bit like with the RRTs.

4-hour chart: show is a good moment to fade the stochastics. previous bar was a hammer aswell. This makes me wanna enter at-the-market although if i take a look on 1 hour chart there could be an ABCD bearish pattern with 1.00 extension just 10 pips above the .382 daily retracement at 118,93 .


So... Sive if u managed to read till this point, thanks...lol . What's a proper entry for a DRPO signal after the confirmation bar? A shallow retracement I suppose but..could that mean not even .382 retracement? and...what do u think about overall analysis? there's a lot of conclusions based on what I see but I might just get the facts wrong..I would appreciate very much your view on this subject. Thank you and have a good day.

PS:I didnt drawpivot points since I think the good pivot points are the ones from futures, not forex.

There's also another D DROP on Cable.
I like it better than the one on GBPJPY, but GBPJPY has good potential as well. It will be followed closely.
On Cable, set already limit and stop buy orders as shown in the chart.
I play these patterns with caution since a failure could be significant. So, TPs and SLs are set once the order gets filled, usually FIBs Extensions and/or D/W Pivots.

Regards and your toughts Sive will be, as always, greatly appreciated...!!!

Thank you...!!!

Great discussion and analysis, Guys.
If you let me just a couple of comments.

IMHO, Investor's DRPO looks more prefferable, since market has not reached significant resistance level during first penetration and created new low by second bottom. This is good signs for DRPO.
The one thing, that probably is better to do - is to check does this DRPO at some significant support and/or LPO on higher time frames - weekly/monthly. If it does, then it worthy of our attention.

Damian, your analysis is very good
On monthly chart, we probably might say that market not quite indesicion, but at long-term LPO. After such swing down it just can't turn up & go. It needs some pace reducing action. 25x5 is very useful in such price action. If you will see some acceleration on monthly chart through it - it could be the first sign of reversal.
Also, since market already at XOP, we do not want to see significant move through it on monthly chart.
Now about DRPO... I do not like 2 things here - first, that market has reached 0.382 Fib resistance. IT means that most steam is already out and DRPO does not have significant fuel to sky rocket (As it should be in perfect case). Second, is that market has not created new lows, that could force breakout traders to jump in and add nessecary steam...
Also it's a bit worry moment that market turns to retracement at COP of DRPO. This is not typical.
The failure point of DRPO is 0.618 support at close, but not opposite penetration of 3x3. How to enter is more the question of money management. If you worry about missing it - enter at market with 30-50% of position, and add more on retracement.
Probably, Damian, this is more DRPO LAL. I dare to suggest that may be this price action is more due monthly XOP rather than DRPO itself.
But this is does not mean that it will definitely fail. DiNapoli recommend followed things:
1. Don't enter against LALs;
2. If you want to trade them - do it with reduce volume;
3. OR just skip it.

 

[samfx]

Hi Damian,

Sive said that you're using a software with DiNapoli tools, which software is it?

I can see from the charts you posted that you also have the Fib levels the same way
Sive have it on his charts. Way better and easy to see the levels then using MT4 charts.

Are you using a free software? Or you're using the same software as Sive.
Any suggestions?

Thank you for the help and looking forward to your reply.

 

[samfx]

Thank you Sive, LeFrog and kappa2547 for the recommendations.

Very much appreciated...

 

[sardinian]

Fib Indicator X Mt4

Hi Damian, are you using mt4 ind. for Dinapoli's fib? Where we can find it?

 

[samfx]

Sive,

After watching your video this morning and applied the levels on my charts. I noticed that you still have the following levels on the 4hour chart even though market has broken these Fib retracement levels! Are you just keeping them to show us that market have reached these levels. Shouldn't we delete them?

1.3626
______
0.618


1.3441
_______
0.382


Today market retraced to the 0.382 which co-inside with the pivot resistance 1 level, it didn't touch the pivot level on my chart but very close.
My second question is : Today's Pivot Point R1 is below the market, is it considered in this case a support as well? in another words resistance becomes support even with pivot points.

One more thing, I am not using Futures charts so data is not as accurate, right? By how many pips would you consider these levels did hit.
Example: today I was waiting for the market to hit 0.382 Fib level and Pivot point R1 before taking a trade long and expecting the market to reach previous high. But I didn't take the trade because on my chart market did not hit the pivot point by about 9pips. Even though market reached 0.382 retracement level. And I missed a good trade.

I have included my 4hour chart for your review.

Thank you

 

[Damian1987]

Great discussion and analysis, Guys.
If you let me just a couple of comments.

IMHO, Investor's DRPO looks more prefferable, since market has not reached significant resistance level during first penetration and created new low by second bottom. This is good signs for DRPO.
The one thing, that probably is better to do - is to check does this DRPO at some significant support and/or LPO on higher time frames - weekly/monthly. If it does, then it worthy of our attention.

Damian, your analysis is very good
On monthly chart, we probably might say that market not quite indesicion, but at long-term LPO. After such swing down it just can't turn up & go. It needs some pace reducing action. 25x5 is very useful in such price action. If you will see some acceleration on monthly chart through it - it could be the first sign of reversal.
Also, since market already at XOP, we do not want to see significant move through it on monthly chart.
Now about DRPO... I do not like 2 things here - first, that market has reached 0.382 Fib resistance. IT means that most steam is already out and DRPO does not have significant fuel to sky rocket (As it should be in perfect case). Second, is that market has not created new lows, that could force breakout traders to jump in and add nessecary steam...
Also it's a bit worry moment that market turns to retracement at COP of DRPO. This is not typical.
The failure point of DRPO is 0.618 support at close, but not opposite penetration of 3x3. How to enter is more the question of money management. If you worry about missing it - enter at market with 30-50% of position, and add more on retracement.
Probably, Damian, this is more DRPO LAL. I dare to suggest that may be this price action is more due monthly XOP rather than DRPO itself.
But this is does not mean that it will definitely fail. DiNapoli recommend followed things:
1. Don't enter against LALs;
2. If you want to trade them - do it with reduce volume;
3. OR just skip it.

wow thanks for all that usefull information Sive.

Hi Damian,

Sive said that you're using a software with DiNapoli tools, which software is it?

I can see from the charts you posted that you also have the Fib levels the same way
Sive have it on his charts. Way better and easy to see the levels then using MT4 charts.

Are you using a free software? Or you're using the same software as Sive.
Any suggestions?

Thank you for the help and looking forward to your reply.

Hi Damian, are you using mt4 ind. for Dinapoli's fib? Where we can find it?

Hey guys, the software I use is not Sive's , it's Dealbook 360 GFT UK, they have a license for Dinapoli levels. Anyway there's a monthly fee for the use of indicators. Sive is using CQG wich is for really professional people. I'm moving soon to Trade Navigator and the futures market, it's more $$ than GFT but completely worth it . Of course allways in my humble opinion.

 

[Sive Morten]

Sive,

After watching your video this morning and applied the levels on my charts. I noticed that you still have the following levels on the 4hour chart even though market has broken these Fib retracement levels! Are you just keeping them to show us that market have reached these levels. Shouldn't we delete them?

1.3626
______
0.618


1.3441
_______
0.382


Today market retraced to the 0.382 which co-inside with the pivot resistance 1 level, it didn't touch the pivot level on my chart but very close.
My second question is : Today's Pivot Point R1 is below the market, is it considered in this case a support as well? in another words resistance becomes support even with pivot points.

One more thing, I am not using Futures charts so data is not as accurate, right? By how many pips would you consider these levels did hit.
Example: today I was waiting for the market to hit 0.382 Fib level and Pivot point R1 before taking a trade long and expecting the market to reach previous high. But I didn't take the trade because on my chart market did not hit the pivot point by about 9pips. Even though market reached 0.382 retracement level. And I missed a good trade.

I have included my 4hour chart for your review.

Thank you

Hi Samfx,
1. Well, I leave some levels, just because had not enough time to delete them. If you're speaking about current research - then software does not allow to delete some levels only just from single reaction. So, this is more technical problem.
2. Do you speak about daily pivots or weekly? I do not use daily pivots. Speaking about weekly, then yes, R1 could act as support during pullback.
3. There is no absolute number how market should touch the levels. But general rule - entry orders should be placed ahead of level, while stop orders beyond it.