FOREX PRO Weekly January 09-13, 2012

[Sive Morten]

Sive,

Last week you suggested that on the 4-hour time frame that a double repo buy MAY appear. I know that after the initial thrust, there should be a pierce above the 3x3 and then right back down below the 3x3 before going up.

The link below is my chart. I entered long at 1.2785 in anticipation of the double repo buy and I know that if price action moves BELOW the bar up after the initial thrust down, then that means the double repo has showed a FAILED PATTERN, therefore a SL should be placed below the bar that pierced above the 3x3.

Despite knowing that a SL should be set below the bar that pierced through the 3x3, I still did not set it because I figured 1.2750 was a very strong support and that I thought the odds of going below 1.2750 was very little.

I just want to know WHEN should I make the decision to buy or sell when I see a double repo pattern forming? In this case, I made a buy after the second bar pierced back below the 3x3. Was this the right timing? The ORANGE CIRCLE below in my chart is where I entered my buy. Obviously this has not been a winning trade but did I make the right buy at that price level? I know I should have set a SL but I figured since my long at 1.2785 was so close to the strong support at 1.2750 that I figured I did not need to set a SL.

At what bar should I be making the assumption that the double repo has succeeded? Is it after the second bar after the initial thrust down?

Thanks a lot Sive!

Hi BeeKay,
Unfortunately I do not see your picture, but this is not a problem. In general, it makes sense to follow the simple rule. If you trade some pattern - you have to place stop and profit accordingly. Speaking about DRPO "Buy" your enter should be after second penetration of 3x3 by close, stop - below 0.618 support from lowest bottom of DRPO to confirmation bar high, profit - 1.0 extension of AB-CD pattern of bottoms (sometimes it may not realize, when second bottom is lower than the first). That's all - no holidng loss position after hiting loss level.
The same is with others patterns. Do not ever combine patterns with other contexts for trading, as trend for example. In your description I see something like that: "well, market has moved below my stop area, but trend is still bullish or this support is rather strong - I probably will hold my position a bit longer". THis is a mistake - breaking your trading plan. Just get out if you have entered at some pattern and it failed...

 

[Triantus Shango]

I suppose if retracement will start, it should be at least 0.382 of whole move down on daily time frame.

Sive

that would be down from around 4194/4200 and 38.2% = 325x?

 

[Triantus Shango]

Lol. That is not of your business.

Concerning our biz here: trade, Sive, the recent price action suggest that the retracement wont come? (price touch 1.2666 by now)

forexjosa

what do the charts look like now? ;-) looks like we have the beginning of shorts covering.

also, sive, is that some kind of weird non-classic morning star pattern on the daily further indicating a potential reversal is beginning?

 

[zakiaziz]

hi sive.. thanks again for your great work.. may i know from your opinion what is the key or whats level that confirm the market has start reverse to upside?

 

[RahmanSL]

Retracement downwards seems to have gotta underway from 1.2759 level....even the Daily, weekly, and monthly charts indicate a downward trend.LOL there goes the hope of any upward thrust!

Anybody got any idea how deep the retracement will go?

 

[Triantus Shango]

Retracement downwards seems to have gotta underway from 1.2759 level....even the Daily, weekly, and monthly charts indicate a downward trend.LOL there goes the hope of any upward thrust!

Anybody got any idea how deep the retracement will go?

it ain't over 'til the fat lady sings!

on H1 price price > 3x3 > 7x5 > 25X5 AND BB1 acting as support... for now. also, upper fractal level has not yet been reached, neither has 38.2 fib from 3075 (2825 where weekly pivot also is), and not overbought yet either. also all daily pivots have been disrespected most rudely

on H4 MACD has turned bullish, not to mention previous candle was a big f%#$ing marubozu.

on daily, we are coming out of oversold, retracing to the mean with BB1 RSST coming in at 2837 and lower fractal band at 2858 and mid BB at 2958.

i'd say there is scope for a bounce.

oh i forgot... buy stops from 2820 and up.

 

[Triantus Shango]

of course, if we just completed the BC leg of an AB-CD pattern on H1 from the latest drop, then CD will bring us lower... but wait and see, right?

 

[wapen4]

I currently feel that prices are turning to the down side. Have a short trade in @ 1.2750 and target of 1.2730.

 

[Triantus Shango]

sive,

why did real money start selling again above 2770? is there some kind of significant level there? i don't see anything on my charts except a 23.6% fib level and previous SPPT where market paused before dropping to the latest low?

 

[RahmanSL]

Triantus my friend, you seem pretty sure on all that

Ok, on the next dip, I better remove some chips from the table...was hoping to ride all my short positions right down to the 1.2650 level