Sive Morten
Special Consultant to the FPA
- Messages
- 18,739
Greetings,
EUR position has not changed significantly. On daily chart we mostly have the same context - DiNapoli bearish "Stretch" pattern. Price stands at resistance of daily Overbought level and combination of 5/8 Fib levels. This is not the time to go long. It means that for daily traders trading plan is the same - wait for pullback:
On 4H chart EUR has shown reaction on our OP target yesterday but it was as small as reaction on previous OP from our minor AB-CD that we've talked about yesterday. Now the major question here whether EUR will proceed to XOP first and turn to retracement second, or will start dropping immediately. Actually for daily traders this is not the concern at all, because we do not care much from which point retracement will start. The major thing is to get retracement. But for intraday traders this could become a headache. Anyway, our suggestion is the same - if you do not have confidence and experience - do not take scalp trades against major tendency, follow the trend. If you still decide to go short - supportive bearish pattern is must.
But even existence of supportive bearish pattern will not make your life easier. Take a look at what has happened yesterday. We was at 4H OP and with the same bearish daily Stretch in the pocket. On 1H chart we've got DRPO "Sell" - the pattern that we need to go short. It seems that everything is perfect. But now take a look how difficult it was to trade against the trend. How fast you need to make a decisions and how concentrated you have to be:
Once DRPO has been confirmed, EUR has dropped to nearest 3/8 Fib level of the thrust, but then it turned up again and DRPO Failure has been formed, which is also directional pattern. It means that at "fail" point you have to reverse your position. Whether this trade was successful? Yes, DRPO loss is smaller than DRPO Failure profit, but - it was really the challenge to pass through it and finish this trade positively. If you do not have neither experience nor confidence to do this - stay with the trend and wait for retracement now
EUR position has not changed significantly. On daily chart we mostly have the same context - DiNapoli bearish "Stretch" pattern. Price stands at resistance of daily Overbought level and combination of 5/8 Fib levels. This is not the time to go long. It means that for daily traders trading plan is the same - wait for pullback:
On 4H chart EUR has shown reaction on our OP target yesterday but it was as small as reaction on previous OP from our minor AB-CD that we've talked about yesterday. Now the major question here whether EUR will proceed to XOP first and turn to retracement second, or will start dropping immediately. Actually for daily traders this is not the concern at all, because we do not care much from which point retracement will start. The major thing is to get retracement. But for intraday traders this could become a headache. Anyway, our suggestion is the same - if you do not have confidence and experience - do not take scalp trades against major tendency, follow the trend. If you still decide to go short - supportive bearish pattern is must.
But even existence of supportive bearish pattern will not make your life easier. Take a look at what has happened yesterday. We was at 4H OP and with the same bearish daily Stretch in the pocket. On 1H chart we've got DRPO "Sell" - the pattern that we need to go short. It seems that everything is perfect. But now take a look how difficult it was to trade against the trend. How fast you need to make a decisions and how concentrated you have to be:
Once DRPO has been confirmed, EUR has dropped to nearest 3/8 Fib level of the thrust, but then it turned up again and DRPO Failure has been formed, which is also directional pattern. It means that at "fail" point you have to reverse your position. Whether this trade was successful? Yes, DRPO loss is smaller than DRPO Failure profit, but - it was really the challenge to pass through it and finish this trade positively. If you do not have neither experience nor confidence to do this - stay with the trend and wait for retracement now
Last edited: