FOREX PRO Weekly September 10-14, 2012

[Sive Morten]

Hi Sive,
thanks as usual for ur analysis. pls i have these questions for you.
1.If patterns (harmonic & charts) are in contrast with a shift in trend by MACD, will you consider patterns to overrule trend shift?
2.If K-Area ranges between 100-150pips in higher time frame e.g. monthly, weekly & daily. will you still consider the range as K-Area? because after I analyse GBP/USD I discover the above questions. thanks.

Hi Ochills,
1. Lower time frame patterns are likely will be opposite to trend, since they are the first sign of retracement/reversal. Step sequence is as follows:
a) find a solid area of support/resistance with or w/o overbought/oversold, that you intends to use as entry level;
b) Monitor it. If you will get patterns that signal the same direction as you've suggested you may try to enter. Here you can either wait when intraday trend will confirm the pattern or stick to pattern per se. This is a bit different risk, different risk/reward ratio etc.
c) Be sure that daily trend will confirm your entry.
That is if you want to trade trend combining with entry based on patterns.

But you also could trade just patterns. In this case you act as it was described in Forex Military School.

2. IF you mean how to combine say monthly K-area and daily trading, then you can use higher time frame K-areas as directional pattern (DiNapoli tells about it in his book BTW). Hence, you should be ready that some daily reversal pattern should appear somewhere around or inside monthly or weekly K-area.

 

[Sive Morten]

Guys,
it could be DRPO LAL "Sell" on 4-hour chart.

 

[D.R.&Quinch]

would the pivot at 1.2757 be best point to go short?
i am short, was waiting to get flaT AT 1.2762
IF THAT BAT FAILS, WOULD THIS CONFIRM DREPO SELL? OR IS BAT IRRELEVANT?


also, does it matter that h4 green candle closed above 0.618 of previous swing down from top?

 

[Triantus Shango]

we're on the cusp of a sell-off. i'd wait to see another H1 candle but on the other hand, you could enter short anytime now anywhere up to 2850 BUT in a staggered/scaled in way, i.e. 1 lot here, another lot higher, and another lot when price goes even higher, if it does. that sort of thing. it's looking more and more as if we are gonna have some bullish divergences on u/j and DXY (USD index) and conversely on e/u. SP500 bullish momentum is waning as well. forget the bat for the time being. also, DRPO sell LAL has been invalidated, if i am not mistaken--i just reread your last sentence--right on: close above the 0.618 is the invalidation.

but no matter. i believe we are just a few candles away from a reversal on H1.

 

[Lolly Tripathy]

30min 1hr

 

[D.R.&Quinch]

nice chart lolly. hope u caught my bat (plus50 pips that was)

 

[Triantus Shango]

you love those butterflies, don't you? ;-)

 

[Joshnix]

Sive, what is your perspective on it going through 3150 area? Seems like a close above 200 sma and 25x5 warrants pause in trading the confluence area. I am going to trade a small amount with my stop behind 2934 (61.8 fib). Let us know your thoughts though.

 

[D.R.&Quinch]

hi lolly, in response to your chart, this is what isee


i see it as a crab, due to b point placement
ps i cant really see why we cant reach the 3.618 ext before the sell off

 

[Lolly Tripathy]

Thanks for the help D.R.