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FOREX PRO Weekly October 24-28, 2011

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Oct 22, 2011.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    On monthly chart we will continue to focus on possible stop grabber pattern that could be formed by market at the end of the month. This is in fact the most interesting thing that could happen in near term. Although monthly chart currently looks almost the same as on previous week, there are some changes have happened on daily time frame that have changed an intrinsic content of current price behavior. Formally we have bullish trend currently, because market has not closed yet October bar. We might say that unconfirmed trend is bearish, but still the actual trend direction should be checked by October close.
    If October bar will close above 1.4038, then trend will remain bullish, and current trend shifting to bearish will be treated as failed. Can you imagine how many long-term traders will be locked in wrong positions? And how do you think, where they have place their stops? Right – the most probable area is above 1.4925 high. Here is the target of potential stop grabber pattern – 1.50 area.
    Also, this pattern could tight our trading range. To enter with this pattern we will need only current white candle, since market should not close below its low. That allows us to trade on daily-weekly and place much tighter stops. Third advantage is you will know the overall direction – to 1.50. This will allow you to enter long on lower time frames without scare to catch deep pullback or drawdown. Other words you will know the direction and target of the market for 1-3 months ahead.

    If this scenario will not happen, we will start to search another one, but currently I can’t find the reasons why this perspective could be unreal. It’s worthy to track monthly chart from that point of view. This pattern is also useful for us in perspective of its failure. Since we know what to watch for, we will be able to act accordingly, when and if we will see that this pattern has failed.
    If bears are really strong – we should not be too surprised if market will break all supports and accelerates down further. Nearest target on monthly chart stands at 1.2905 from large AB-CD pattern – near major 0.618 Fib support 1.3039, so we might say that this is also a monthly Agreement. Current price action looks like Gartley “222” from AB swing on chart, so we can’t exclude that also.

    [​IMG]

    Weekly
    Important point that we’ve not mentioned in monthly analysis is that we need price above 1.4038 at close of October, but not just permanent penetration of it. We will not get any advantage if market will reach even 1.45 but close month below 1.4038. On the weekly time frame we see that this will be the real fortress to break.
    Weekly trend is bearish currently, but we see that it will remain bearish just till 1.4004 area. That is the breakeven point of trend. Also we see, that past week was relatively calm, it terms of weekly scale, of cause, and looks like some kind of inside bar. Market neither at oversold nor at overbought, so it has no barriers except resistance levels. But these levels are impressive for coming week. Look at 1.4014-1.4080 area – this is classical and strong resistance level, Fib resistance at 1.4014, 1.4076 is monthly pivot resistance and 1.4102 – slightly above it minor Fib resistance. So, market will really struggle to pass through it.
    Here is worthy to mention one of the possible scenarios that could happen. Market could reach that level since it has no barriers between current price and 1.40-1.41 area, but since this level is quite strong, probably market will not break it at first touch. So, we can see reaching of this level and some retracement from it on coming week and breakout could come on last week of October (if it will come at all, of cause).
    Also today I’ve added weekly AB-CD 0.618 target – 1.4412 – that is a nearest target if our long-term bullish analysis will become true.

    [​IMG]

    Daily
    Now let’s pass to most interesting part of research. Current situation is unique, if you will try to think: “What range or swing should I be focused on, to get logical points whether market will go up or down?” Try to think by yourself first and read analysis second.

    Let’s start from the most simple thing first – 1.40-1.41 area above the market. This is really strong area of resistance that we have seen from weekly chart analysis. Daily time frame adds here daily overbought and AB-CD 0.618 target at 1.4121. So, if market will continue move down – that’s clear for us – this area will become a next target and solid barrier.
    But what our crucial points – how to decide whether market will continue move up or not, or may be it will go down? Everyone among us have his own methods and tools to estimate that. But as at seems, clue is linked with our bearish engulfing pattern. Its range is 1.3714-1.3905. This pattern has appeared on Monday, but market during whole week was not able to either trigger it by close below 1.3714 or fail it by close above 1.3905. Instead of that market was coiling around and building energy, remained indecision. Since this was a bearish pattern and market did not show corresponding move down – it obvious to suggest that market should move in opposite direction. This statement we’ve made yesterday and that has happened. Still, market remains inside engulfing range.
    It is highly probable that market during next week will continue move to the upside. And there is only one thing to be aware of – Wash& Rinse of 1.3905. This is crucial point to the upside. If market will break this level, but then will return right back and close below it – showing W&R, this will tell that probably market will show deeper retracement down. Market should remain above this area to give us a confidence that it will proceed to 1.40-1.41

    [​IMG]

    And what is about down move? Here is the chart #2. We can see here nice context for daily DRPO “Sell” pattern. I do not pretend on quality of bar’s counting, this is just my opinion, but it seems that this thrust, although it’s a bit short, is significant for DRPO pattern. We see that during first penetration of 3x3 DMA (green line on the chart), market has not reached any significant Fib support level. Now we have close above the DMA again. All that we need is to get second close below 3x3 DMA, preferably if it will happen after W&R of 1.3905. This will be just perfect. Additional assistant here is weekly pivot point at 1.3803. If market will close below it – be extra careful, since price could be underway to second penetration below 3x3. Potential target of this pattern is deeper retracement to 1.3575 – 1.36 K-area.

    [​IMG]

    Now we have all that we need – what to watch for in the beginning of the week – how understand that market turns down, continues up or will show deeper retracement.

    4-hour
    Colored thin dash lines are weekly pivot levels. Here we see just development of our “second” scenario (if H&S will fail) that we’ve discussed during the week. Personally, I think that the probability of continuation right to 1.4050 is greater than appearing of DRPO “Sell”, since recent price action does not suggest reversal. On 4-hour chart trend is bullish, ultimate butterfly target is 1.4066, intermediate target 1.27 at 1.3961-1.40 (1.618 of AB-CD). So, from perspective of daily time frame, W&R of 1.3905 may happen, if, say, butterfly will reach just 1.27 and reverse down. Also it could happen, if market will reverse right from current level. In both cases our major assistant is weekly pivot at 1.3803. This is a sentiment barometer. If market will move and close below it – be ready for down move, since current patterns and price behavior does not suggest that.

    [​IMG]



    Hourly
    [​IMG]

    This time frame is for scalpers only. Trend is bullish here as daily and 4-hour. The major thing that we see is that it will remain bullish till nearest K-support area 1.3846-1.3851.
    If you’re bullish:
    Since all other trends are bullish, you may try to enter long from this K-area with placing stop below next K-area 1.3820 or better below 1.3802 – Fib support and weekly pivot. Remember, that stop should be below the level minimum at 20 pips. If trend will shift bearish on hourly time frame, it will tell that market intends to show deeper move down. Your target is 1.27 of butterfly at minimum.
    If you’re bearish:
    You should closely watch on possible W&R around 1.3960 – Butterfly “Sell” pattern and try to anticipate it. But this is risky, since in this case you will trade Butterfly purely – trend will be against you. If you will still intend to trade it – move stop loss at breakeven as soon as possible, if market will show some even little respect to 1.3960 area.
    Second possible trade - is to enter short if market will move below pivot point, especially if this will happen after some W&R of 1.3905. In this case you may try to anticipate DRPO “Sell” on daily and place tighter stops. But again, both of this trades are quite risky and be ready for responsibility for this action.
    Most safest attempt to short the market is from 1.4050-1.41 area. There is higher probability of respect this area from the market.

    Conclusion:
    On long-term chart market could show a “Reversal and trap of the year” if October will close above 1.4038 level.
    Still, on lower time frames market gives us a huge different scenarios to trade – as for bulls as for bears, although not all of them are identical in terms of risk.
    Current price action looks so, that upward move is more probable that reversal down. But still market is cunning, and there are some patterns to watch, if you do not want to be trapped by them. I mean possible W&R on daily time frame, close below pivot and others.
    Probably it is relatively safe to hold longs till 1.3940-1.3960 area, and enter with scalp short somewhere around 1.4050-1.41, but this is a bit early to talk about it.
    If market will move below pivot – we will keep an eye on possible DRPO “Sell” on daily time frame.



    The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.
     
    #1 Sive Morten, Oct 22, 2011
    Last edited: Oct 24, 2011
  2. asif faryad

    asif faryad Sergeant

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    Thank you

    thanks Sive for a in depth anayalis as always
     
  3. rashidin5178

    rashidin5178 Sergeant

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    Thanks a lot, Sir.:)

    Thanks and Best Regards
     
  4. tony mau

    tony mau Private

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    Still hope for short

    Hey Sive

    Thanks again Sive.
    I still hope that marked will go short to 13614. I have short position and loose a lot if i close now. To bad. Well anyway i hope that it will hit 13614 area in begining of the week. My big problem is allways that i get in at the wrong time and then have to have a lot of money on my account so i can wait til marked turns. Have a nice week.

    Kind regards Tony
     
  5. rashidin5178

    rashidin5178 Sergeant

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    Definitely stoploss is our greatest arsenal to protect our capital. But why we always ignoring it?:(

    Thanks and Best Regards
     
  6. tony mau

    tony mau Private

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    Stop loss

    Hey rashidin5178

    Yes why do we ignore stop loss. Offen 80% when i am close to my stop loss i delete it. and then hope that market will turn. its a 50 50 %. But why do we do it. And is there a better way to do it. 80% off the stop loss, i think we can do better bye handling it manualy.

    Kind regards Tony
     
  7. pckeys

    pckeys Private

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    What possible reason would you have for ever widening your stop?

    Your stop should be based on your analysis prior to opening a position based on the maximum amount you are prepared to lose on a single trade.

    With this in mind, why would "the amount you are prepared to lose" suddenly be more just because a trade is going against you. This is extremely pore money management and risk management.

    Plan the trade, then trade the plan .. dont friggin change it!! If you cant help yourself, stop looking at it!

    If you continually find yourself losing more trades than you win, you need to take more time learning and implementing analyses and money management skills.

    Sorry for the tone of this message, but widening stops just because your trade is going against you is ludicrous.
     
  8. RahmanSL

    RahmanSL Major

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    "...Sorry for the tone of this message,..."

    I think you guys are referring to Day Trading.

    For long term trading, your large available margin is the "Stop Loss"....unless one is a complete novice or idiot, long term trade positions should not be entered at a level which will sustain large enough losses to wipe out the account. More than likely, the TP will get triggered over a period of time.

    In fact, for real investors, long term trading (weeks, months, and even a year or so) is the only real sure way to make money in trading the forex in which to better Bank's interest many times over.
     
  9. justolufemi

    justolufemi Private

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    weekly pivot differs

    thanks for ur analysis, i must confess u ve made me a better trader, in this week's pivot i got 1.3819 which is different 4rm urs 1.3803, pls i want to know wher i went wrong, i used ur calculation of classical pivot which i believe u use also
    high= 1.3913
    close= 1.3893
    low= 1.3652
    pls help me
     
  10. pckeys

    pckeys Private

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    Agree entirely, looking at the post that I replied to, he mentions the level of 1.3614... certainly not a trade based on anything longer than a daily tf.
     

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