Forex FOREX PRO WEEKLY, November 14 - 18, 2022

Andreas72s

Corporal
Messages
70
Hi Sive, potential cluster area in short term....
update on 1h chart

EURUSD (1H).PNG
 
Last edited:

Sive Morten

Special Consultant to the FPA
Messages
16,963
Morning guys,

So, EUR is coming to daily XOP (while I was making video, it has been hit already) and here, on daily we have major interest around big reverse H&S pattern. So, here, on daily chart as bulls as bears have nothing to do by far. Bears because of no context, while bulls because market is at Overbought and we need to wait for some pullback here to get more acceptable entry conditions:
eur_d_15_11_22.png


At the same time, scalp traders could get some trading setups, mostly for bearish position of suggested pullback. On 4H chart we consider possible DRPO "Sell" pattern. We have it almost in place and need just 2nd close below 3x3 DMA to confirm it:
eur_4h_15_11_22.png


While on the 1H chart, upside action could be finalized by butterfly pattern. So, DRPO could take the shape of butterfly on 1H chart, or even small H&S pattern, we will see. Before taking any short position - wait when clear bearish pattern will be formed here:
eur_1h_15_11_22.png
 

FreddyFX

Sergeant
Messages
447
Master Sive, you asked me what I am struggling with.
I mentioned it a few weeks back with my question about how much money needs to change hands to move the EURUSD one point or 1 pip.
Recently with these huge moves I try to understand what causes these huge swings, like today it suddenly dropped on an enormous red candle after the Poland missile issue came out, just to fly back up within an hour after the news broke. Who are the players in these moves, what and who to watch for, as trading the last couple of weeks has not been a walk in the park and as a trader one needs to be very much aware of exposure to this.
Maybe for myself was to much pinned on your expectations that we will see 0.90 levels soon and that suddenly changed dramatically. What did I miss?
 

Sive Morten

Special Consultant to the FPA
Messages
16,963
Master Sive, you asked me what I am struggling with.
I mentioned it a few weeks back with my question about how much money needs to change hands to move the EURUSD one point or 1 pip.
Recently with these huge moves I try to understand what causes these huge swings, like today it suddenly dropped on an enormous red candle after the Poland missile issue came out, just to fly back up within an hour after the news broke. Who are the players in these moves, what and who to watch for, as trading the last couple of weeks has not been a walk in the park and as a trader one needs to be very much aware of exposure to this.
Maybe for myself was to much pinned on your expectations that we will see 0.90 levels soon and that suddenly changed dramatically. What did I miss?

It is important and big topic for discussion, I could just take a few important points. All quotes on FX market comes from the big banks. Others just translate it with own added spread. Thus, swings come from Top banks. There are always a lot of surprising moves on the markets based on news. But in recent time, global economy stands in turbulence, and the number of these events have increased in times. Volatility has raised significantly. This brings big discomfort, increases risks, etc.

By your post it seems that this recent swings on missile news are sensible to your portfolio, although they were not as strong, take a look at 1H chart. As a rule this happens if trader uses either too big leverage or too big time frame for trading.

In perfect situation trader has to take the position value so that it easily absorbs fluctuations that make no impact on major direction. For example, if you would trade on monthy chart with 0.9 target, you even do not recognize this "missile" swings.

How in general position structure works. You have one time frame for direction and one time frame for entry. That's all. The scale of time frame is chosen based on account value, leverage etc. If you have 1000$ you can't trade full 1.0 lot on a monthly chart. This is obvious.

Let's return back to 0.9 target. If we use monthly chart as "directional" time frame, our trend is bearish. And we use weekly as "entry" time frame. Until monthly trend stands bearish you chose potential entry levels on weekly chart and make decision on entry every time when market hits them. You do not care too much what happens on daily and lower time frames.

I suppose confusion comes from strong weekly upside action and doubts on 0.9 target. But, monthly trend is still bearish and EUR has not shown even 3/8 pullback, thus, technical picture puts no shadow on 0.9 target by far, despite, that pullback might be even to 1.08.
 

Sive Morten

Special Consultant to the FPA
Messages
16,963
Morning guys,

EUR has hit daily XOP and now the major question is whether we get reverse H&S and correspondingly deep right arm pullback. For bulls it is indifferent situation as anyway we wait for the pullback for entry, while bears here do not have the context to sell. Bears could consider setups only on intraday charts:

eur_d_16_11_22.png


On 4H chart we can't consider recent performance as DRPO because of too big difference between the tops. But we have here divergence and K-support area around 1.0140-1.0190:
eur_4h_16_11_22.png


On 1H chart we have a kind of H&S pattern and price already stands at 5/8 right arm resistance. It means that short-term bearish background is ready. But we still have one tricky moment - bullish divergence. So, if you consider short entry here with 1.02 target - think about this "additional" moment. Still, stop could be placed very close and potential loss will be small anyway.
eur_1h_16_11_22.png
 

Sive Morten

Special Consultant to the FPA
Messages
16,963
Maybe for myself was to much pinned on your expectations that we will see 0.90 levels soon and that suddenly changed dramatically. What did I miss?
I continue... maybe. Sometimes, the trading with no leverage or very small leverage, such as 1:2 - 1:3 could help. I trade long term gold in this way. It has a lot of advantages. You could not place stops, or place them rather far. Market has to drop 25-50% to make big impact on your assets. And you absolutely do not care about noise on daily and lower time frames. You just bet on major direction. Maybe this could be good solution? Yes, the return will be smaller, but anyway much higher than on bank deposit, somewhere around 10-15%. It is longer way, but it is not as annoying as day-by-day trading.
 

FreddyFX

Sergeant
Messages
447
Thanks Sive for your support, ALL very true, in my case I scalp on the M1, so a complete different style of trading than yours. Indeed a bit overleveraged, but was focusing too much on continuation to the 0.900 level. Now just a matter of staying alive and getting out of the DD, lol.

OR
taking some losses and reassess everything.
 
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