FOREX PRO Weekly December 10-15, 2012

[Sive Morten]

Hey Sive

Could this be another scenario where we can apply the "scale in" method? Take a look at my chart below.

Market has broken through 4hr k-support with little respect. After this break, market is now gradually retracing back up to the 4hr k-support that was disrespected.

Could we apply the scale in method here where we wait for price action to retrace back to the k-support and then enter short? This will be the 3/8 retracemenet of current swing down, and also WPP.

I understand that we have possible B&B here on the daily TF with minimum target at 1.3031 so all SL will be above that level.

I am just not quite sure if current market situation is applicable with the scaling in method.

Thanks, Sive!

View attachment 7668

Hi Beekay8
When you apply scale-in - your risk should not become greater. As you've said about "scale", hence, you should already have some part of your position. So, applying scale in in current situation probably will demand to move stop on your first entry on b/e or even better, so that potential loss (if market will complete B&B) will not be greater than on first position. Speaking shortly any scale-in is acceptable, if it increase probably of profit and do not increase your total risk. You can get an example of step-by-step risk calculation within scale-in in our FMS.
Speaking about entry context - well, why not? That could be working trading plan. It could turn so, that market will show just spike up to 1.3030, but major price actioin will coil around 3/8 resistance. And second shoulder of H&S will be formed. Who knows...

Still, as far as it possible - confirm scaling by patterns on lower time frames around desirable levels. But this is not always possible.

 

[voronovich]

Thanks, Sive.

 

[knight270]

Is the H&S pattern on EUR/AUD weekly chart tradeable

Good day to u Sive, In all fairness your weeklly updates has made me a better trader! thanks a lot. I am presently trading a H&S pattern from EUR/AUD weekly chart, and 0.618 retracement on Daily was used as a trigger for my long entry. But my question is where should I place my stop loss, is it below the right shoulder (offers a good risk to reward ratio) or below the head? knowing fully well that if price action should take out the low of the right shoulder the H&S pattern will still be valid.

 

[healer22]

Thanks so much Sive being watching you for a long while you're really really good God bless you.
This is what I think overall trend is bullish market would get to 1.35 before ever touching 1.2660.
So for long term this is a good time to buy seeing R:R, however for shortterm traders present
rise is a trap. Market would suddenly reverse highest levels is the 1.2985 area but its most likely not
getting there it would just deceive traders try as if it would then reverse down break the 1.2885
area and go below then reverse again to beat the 1.31 area. This might be too precise but i am
looking at the fall reversing around 1.2820-1.2830 area.
Note all this reversing would happen quite fast in a matter of days since its a sub wave.
I still see this month "December" ending bullish with January and February also bullish
So lets see how it goes.

 

[Sive Morten]

Good day to u Sive, In all fairness your weeklly updates has made me a better trader! thanks a lot. I am presently trading a H&S pattern from EUR/AUD weekly chart, and 0.618 retracement on Daily was used as a trigger for my long entry. But my question is where should I place my stop loss, is it below the right shoulder (offers a good risk to reward ratio) or below the head? knowing fully well that if price action should take out the low of the right shoulder the H&S pattern will still be valid.

Hi Knight. That's infinite question - where to place stop on H&S trading. Most thoughts on this topic is in our Forex Military School in dedicated to H&S pattern chapter. The major idea - you better to have some reversal pattern on the top of right shoulder, that will give you clear area where to place stop.
If you do not have it, then, probably you can apply some Fib work and trend trading on the way down from the top of right shoulder. It means that if you do not have pattern - you should not anticipate and try to catch right shoulder reversal, but enter a bit later on shallow retracement whent this move will start. Placing stop classicaly - above the head is possible, but it depends on Risk/reward and your money management. Anyway, it will give you worse opportunity, I suppose.

Thanks so much Sive being watching you for a long while you're really really good God bless you.
This is what I think overall trend is bullish market would get to 1.35 before ever touching 1.2660.
So for long term this is a good time to buy seeing R:R, however for shortterm traders present
rise is a trap. Market would suddenly reverse highest levels is the 1.2985 area but its most likely not
getting there it would just deceive traders try as if it would then reverse down break the 1.2885
area and go below then reverse again to beat the 1.31 area. This might be too precise but i am
looking at the fall reversing around 1.2820-1.2830 area.
Note all this reversing would happen quite fast in a matter of days since its a sub wave.
I still see this month "December" ending bullish with January and February also bullish
So lets see how it goes.

Hi Healer,
in fact that is our plan - we also expect move down as H&S pattern suggests. Even if we're wrong with our current move up - that's not a tragedy, since long position is already risk-free.
Speaking about longer-term perspective, I still has no clear opinion on it. Fiscal cliff is 2 week near - that could make surprise impact and market probably feels it and remain in weekly coil.

 

[gagolek]

Dear Seive
It is for the first time I understand well your analysis and see the deep sense on it. Step by step, from MN to H4 everything is logical and outcoming one from another. Great job!!!!!!! Perhaps from today I will start to understand what's going on this market, as I was dark as tobacco in the corner so far. Thanks and regards
Gagolek (Poland)

 

[Zaleske]

Thanks for your sound analysis Sive, as a lot of us are, I'm really grateful for the education you're providing
PA is very interesting at the moment. As expected, previously disregarded K-resistance is being retested from the other side. Now I'm wondering if: first, it will break, and second, will the second shoulder appear or will price directly proceed towards daily B&B target.
Thanks again sir for making this fun to watch!

 

[squidge42]

well - 50% at around 1.3 - could be time soon for the down on the right hand shoulder...let's see

 

[Smart Ogbata]

Thanks Sive...

I want to use this wounderful oppurtunity to say thanks for all you have done for the forum members, expecialy me for you
improved my trading magistically, i trade like the PRO now. It is only GOD that will REWARD you for all you have done, I have
nothing to give but my PRAYERS for you and your famlily i wish you the best in life. I trade your style of tading and what i need now exactly is your indicators....so please you can send me the site where i can go and buy smart2point@yahoo.com is my email you can send me the link. thanks.

 

[Zaleske]

Price is slowly creeping closer to 1.30ish, looks like the double bottom Sive mentioned today will be completed at some point soon.
I'm most curious about what will happen next. My guess is we will have answers soon after NY open (yeah, right when i have to get my eyes off the market ).