FOREX PRO Weekly November 28- December 02, 2011

[Triantus Shango]

We may have a 3 drive sell (1 hr TF). First Drive at 1.3340, second at 1.3400 and the last at 1.3444 and now we have had a sell off with a small ABCD on 15 minute. A break below 1.3284 would confirm.

TraderBob

I just read Sive's latest post... that 3-drive you mentioned, is this off a futures chart or SPOT? I am looking at SPOT and it doesn't look anything like a 3-drive on my screen.

 

[Triantus Shango]

Sive

the big guys, do they usually trade off futures charts or spot charts, or both?

 

[asif faryad]

TraderBob

I beg to differ. I went back to Pesavento&Jouflas's book, 'Trade what you see', and it doesn't look like what you are referring to on H1 satisfies the structural characteristics laid out on pages 83-84.

So I would argue we don't have a 3-drive sell pattern on H1. I expect the market to retrace back up towards the 3450/60 levels where on H1 we have a nice confluence zone of fib levels (two 70.7% ([3146-4248], [3556-3212]) bracketing one 61.8% [3614-3212], and one 23.6% [4248-3212]) and DiNapoli target level at 3463 (+ or -). That's one reason I was so surprised yesterday when the market didn't even graze those levels but turned around at 3444.

I also see on my H4 chart a daily resistance 2 (DR2) close to the aforementioned 61.8% retrace level.

Also, on H4 I see what could potentially be the beginning of the formation of the 2nd wing of a giant sell butterfly, the BC leg completed at retrace level of 88.6% and according to Harmonic Trading Vol. 1, the potential CD end point could be anywhere between 1.27 XA and 1.618 BC (please see attached chart).

But in the immediate term, the market is ranging and it looks like we might have a potential double bottom with bullish divergence on H4. I know, too early to tell, but I'll be looking for that buy signal.

We also have a nice floor at [3286-3300]. 3296 is 23.6% previous RSST from fib retrace of [3556-3212]. So if that support doesn't get breached conclusively, I'd put my money long.

Finally, is it my imagination or do we have an almost perfect inverse correlation between EURUSD and USDNOK? By the looks of USDNOK H4 and Daily, it would appear that the USD is poised for further downside in the short term. If that happens, then we are looking at the EUR strengthening. But that's very short term. Indicators on the daily are pointing lower. On H1, we might see a retrace up to the daily pivot but if that is not breached, then the downside might resume (USD down, I mean) in which case the EUR will have a good chance of hitting that 3460 area. Based on how price action develops on USDNOK, I would say in the next couple of hours we should have confirmation whether or not this is correct. (As I was rereading all this, USDNOK is getting very close to the daily pivot. 32 mins to go for the next hourly candle. If it bounces off back down that pivot line and fails to close above, dare I say the EUR long trade might be a good trade.)

Crossfingers, I am long EUR for a T/P @ 3450.

I have a bad feeling about this though. Maybe I shouldn't go long after all. But everyone is short, even my neighbor's dog! Shouldn't there be some short squeeze at some point?

Interesting your view,However please dont take this the wrong way as i enjoy reading your views on the market.

But have noticed you are very annoyed when the market doesn't do what you think.
The trading plan if you have one should mean you stick with the plan,remove the emotions completely (will take time took me 3 years!!!) and if your edge through the anyalis you use (as a tool) should give you an edge thats all! if it works and you have risk/reward 2:1 you will do very well!! as a professional trader.

I cannot express in words HOW important!!! it is to learn the phyocology of trading as this is more important than the anyalis whatever method you use.

I highly recommend a book called WHAT I LEARNED LOSING A MILLION DOLLARS BY BRENDAN MOHAN.

I wish you all the best with your trading Triantus and hope your edge gets your reward i hope its minuim 1:1 as otherwise its difficult to stay with this business as if thats what trade to achieve.

Asif

 

[yousuf]

hey damian, thanks for your reply bro.

 

[Triantus Shango]

thanks asif. i know, you are right. i got a temper. been working on it, not quite there yet when it comes to emotion control. however, right now, looks like my long call was dead wrong... staying cool... still cool ;-)

 

[yousuf]

yo shango, in the previous weeks thread, sive mentioned something important, that trading of harmonic patterns against the trend is dangerous, so i thought that if harmonic patterns which have a high success rate against the trend are dangerous than normal patterns dont stand a chance?

im sorry you are in for long, but following the trend, with higher high and lower lows is the easiest thing, and rewarding too , i wish you the best of luck in the future, and hope you recover your losses from elsewhere.

 

[Triantus Shango]

yousuf, thanks for the advice. can't disagree with that. i know.

that being said, right now, the trend short term seems to point down BUT again in the very short term there seems to be indications making a reversal to 3450/60 probable.

as to the butterfly, who knows indeed... but if it happens it would mean a reversal to the upside to be completed by end of JAN. then EUR crash. if somehow, the ECB or IMF pull some kind of macroeconomic rabbit from their magic hat in the next week or so, it might give us a relief rally until some kind of shock by JAN 2012 when money will flow into USD as a safe haven and the $ index will start moving up in earnest and the EUR collapse.

i can't imagine the EUR starting its meltdown today or this week for that matter. so i still believe the downside will be limited, regardless of the gloomy news. everyone has probably already priced in all the gloom and doom for the week... so what else is left to push the market significantly lower? i don't think much... maybe it's wishful thinking on my part now (for obvious reasons ;-) ) but i feel we might get a nice short squeeze soon.

 

[Sive Morten]

Also, on H4 I see what could potentially be the beginning of the formation of the 2nd wing of a giant sell butterfly, the BC leg completed at retrace level of 88.6% and according to Harmonic Trading Vol. 1, the potential CD end point could be anywhere between 1.27 XA and 1.618 BC (please see attached chart).

Triantus, if you don't mind, I just want to note that Butterfly "sell" forms on tops, since this is reversal pattern. On bottoms you can see only butterfly "buy"...
Your pattern has more common with possible "222" Sell pattern... (if you make your initial swing a bit longer)

 

[papao]

MACD or DMA?

Hi Yousuf,
You should use for trend estimation either MA or MACD, but not them both. In fact, Joe has used MA's until it switched to MACD. Now we use MA, especially 25x5 on long terms just as confirmation signal of potential reversal. 3x3 for thrust identification and directional patterns.

Hi Sive, yesterday Yousuf asked you something about DMA or MACD. I understand that the choice is personal, and what is suitable for a trader may don't work so well for another. But, as we know, you are much more experienced than us (and than me!), so i'd like to ask you: what the MACD does better than the DMA for you? (in trend estimation). I mean, MACD can be used also for other purposes, like divergences, and (with the MACDP) we can spot other signals (stop grabber and dynamic pressure). With the DMA we can't do that. But the MACD measures the acceleration/deceleration of the price, so it often leads to fake out (this is the dynamic pressure). Also, with the Joe parameters the MACD is much more sensible than the DMA 25x5 (may be it's more similar to the DMA 7x5). This imply that (with the MACD) you need to estimate the trend (the context) in a higher timeframe (because most of times the 5/8 support resistance is beyond the MACDP, and sometimes also the 3/8 support/resistance), while the DMA 25x5 is smoother and hold better the trend (3/8 and 5/8 support/resistance stays "inside" the the DMA more often than MACDP).
Sive, i'm not trying to persuade you that it would be better if you use the DMA instead the MACD (of course!) but i'm asking why do you choose MACD (this is because maybe i can't see something important in this tool).
Thank you in advance for your patience :-D

 

[gammel]

hi asif ..
I dont why but to trade without emotions is not that easy .. yesterday i went nuts if you remember my entrys were missed by 5 pips...and i missed the hole move down ... besides i would like to ask you if you have the book in e-book version what do you tell yourself to get emotionless...

and where does your name come from?

sincerly

Winny