My Trades from Forex-Nation.com

[Forexwatchman]

That's what I use too, and I have the new pivots set to calculate new points based on Europe's session open 8 GMT (although I'm aware that some start it at 7:30). The thing is, as I'm sure you already are aware, you can calibrate when the new day's pivots are created. To be honest, I use the daily pivots as a very rough estimate as to where a move might end up stalling (S1 to R1, M1 to M3) and if they overlap with other indicators. Otherwise, I pretty much ignore them most of the time.

 

[Forexwatchman]

Well the sell that was visible in yesterday's screen shot netted me over 140 pips since posting that, which I needed after the week began with a net loss of 105 pips on three unsuccessful trades. 191 pips were possible when the downtrend finally bottomed out at 1.3726, but my trailing S/L was triggered before then. Not meaning to brag in any way but rather to inform, I was able to take over 200 pips in profit from this recent continuation of the downtrend and keep my exposure to risk at a minimum through the use of a trailing S/L based on my red MA on the 15 min chart. The exact details of this I would be happy to share, but it's a bit too much info for the purposes of this post, so email me for more info. Also, I will add to my lesson on the alligator indicator to expand on this as it's the best visual tool I know of to accuratly judge where to place your trailing S/L.

For a brief overview, my first trade occurred when the red MA crossed over on my 15 minute chart, an early signal of the upcoming crossover on the hourly chart. I closed that trade when price action became oversold according to my envelopes on the hourly chart at 10 am EST. I then reassessed the market sentiment and based on the technicals and fundamentals both agreeing that the main down trend had ressumed and little rumor of any buyers in the market, I waited for price action to retrace to my red MA on the 15 min. chart, which it did around 12:15 pm EST, and I jumped back in. Price action then dropped rapidly again and I was able to trail my S/L until this morning, netted 140 pips. by closing out the first trade once price action was oversold, and then reassessing the next entry, I left myself open to less risk since the first trade's profits were secured and the second was based on similar technical and fundamental analysis. These are two fundamental philosophies that I preach as a day trader: If technicals and fundamentals agree, go for it, if not, trust your technicals. Had the fundamentals not been in agreement, I would have never placed the second trade.

Summary of the EUR/USD
Now this pair is showing no signs of letting up, frankly I believe no one else wants to touch the EUR before tomorrow's big announcement; Non-Farm Payroll. So with no other force to act against it, the EUR/USD continues downward despite being oversold. It's Newton's law of motion in effect: A body in motion will stay in motion until some other force acts upon it.

That’s the best way to describe the latter stages of the European and American trading day. Risk AVERSION reached epic proportions sending the EUR/USD and othe connected currencies down the drain so to speak!

The short term, macro fundamental picture has turned very sour for risk in general and the euro in particular. The explosion of volatility in European bond markets have killed the hopes of the Euro becoming a major rival to the dollar in major reserve currency status. Germany and Holland remain stable, but many are now under a harsh glare to which they are not accustomed. That has badly hit confidence in the euro zone as a whole which is clearly reflected in the weakening euro.

As for tomorrow's US employment report, some might say it is almost an afterthought at the moment with these major macro factors working through the minds of investors. i will be trading the NFP, so watch my posts on how it went!

 

[Forexwatchman]

This morning there was speculation of a rescue package for Greece and efforts at pension reform were announced. The pension reforms are key as they would ban early retirements and raise the retirement age. So combining that good news with lack of fundamental data from the US to push it back down, we are seeing a decent retracement that has actually broken the 38.2 fib level, so I would not be surprised to see it goes as high as 1.3806, which is the 50 fib level. I've attached a screen shot to show a visual of the area to watch for resistance. You'll also notice the slow MA's which will also be another form of resistance once price action reaches them.

 

[Forexwatchman]

UPDATE: 1:48 pm EST

These are the types of market reactions that almost scared me out of becoming a forex trader. Risk appetite went through the roof after two contradictory reports regarding aid to Greece hit the wires. The first report said claims regarding a euro zone bailout for Greece were unfounded causing the EUR/USD to drop like a rock down to our trendline on the hourly (see above pic). The next report came from reuters with the headline "Eurozone agreed in principle to aid Greece-Bilateral aid the most likely option". That's what fueled the spike back up. Now I've stayed out of the market due to no clear signal either fundamentally or technically, and it takes strong disciple to do so as I'm not making any money for the last two days straight. But judging the over reaction in the markets to the seemingly mundane news reports, I'm better off for having stayed put. Whenever there is so little economic news to go off of for several days, reports such as these cause huge over-reactions in the market that could blow up your account if you fail to apply money management, which just so happens to be the next lesson I will be posting tomorrow at Forex-Nation.com!

So where do we go with this currency pair from here? I don't expect to see much more of a reaction one way or the other now that the fireworks show is over. Most likely traders will stay put where they are now. I wouldn't jump into this market unless we see a MA crossover on the 15 min chart, and even then set a tight S/L.

Looking ahead, we have US trade balance coming out tomorrow, and that could be of some effect on the market. Thursday will be the biggest news day of the week with retails sales coming out of the US.

 

[Forexwatchman]

Here in Pennsilvania we are getting record amounts of snowfall with blizzard-like conditions, while in the EUR/USD world things are even scarier. Greece continues to be a main force driving market sentiment without any real economic data to drive price action. Reports are still just as conflicted as they were yesterday leading to the extreme choppyness that we’ve been seeing, but it looks like there will be actual details ironed out at tomorrow’s EU Summit with confirmation of what those details actually are on Monday of next week after the eurogroup meeting. Today’s market was a series of profit taking and rushing to judgement based off of the conflicting headlines that continue to pour out of the region, and optimism that a package for Greece was a done deal sent EUR/USD up from 1.3676 lows as high as 1.3759. Your safest bet here is to stay put, and weather the storm. I am still biased towards a sell anywhere around our slower moving averages (1.3800’s), and I am still holding onto a position that I opened at 1.3737 with my S/L at 1.3765, but to be safe I would recommend sitting out the rest of the day and night here. Good luck out there. My lesson regarding Money Management will be published tomorrow and it is a crucial read, so check back tomorrow!

 

[Forexwatchman]

This was definitely a rough and tumble week for the EUR/USD, and money management was crucial in order to have prevented massive account drawdown due to the volatility. There just wasn’t enough solid economic data to sustain any trend direction for this currency pair, and Greece took center stage as a result. It seems like no one in the euro zone wants to take any real concrete stand on what is about to happen with that countries debt issues, and so each headline that emerged received more attention than the last as investors looked for clues as to what decision will ultimately come out of the EU Summit. Due to the weather, the Retail Sales in the US had to be put off till today, and those numbers we better than expected which lends further reason to believe next week will be a continuation of our main downtrend.

Even with the volatile market conditions, the technicals did supply four great trade opportunities, and also 2 fake-outs unfortunately. I’ve attached an image of my charts with these opportunities and fake-outs highlighted so that it makes things clearer for those who are following along with my trading strategy. The best opportunity came when price action retested the slower blue MA for a third time on Thursday, which also coincided with our 50 fib line and our major trendline begun on Jan 14th.

To be honest, I stayed out of the market Thursday and Friday, because I felt better about waiting for next weeks fundamentals to fall into place before I place anymore orders. It’s hard sometimes to fight the temptation to make profit, but that temptation is often fueled by greed instead of sound judgment. Never let greed into the equation: If things are too uncertain and too hard to read, stay put. But here’s what could have been gained from this week’s technical analysis.

 

[Forexwatchman]

With investors taking huge chunks of profit off the table from long term positions that were being held since mid January, and a lull in volume because of the week-long Chinese holiday celebration, investors jumped aboard the 'return to 1.3800 ' prediction during yesterday's New York session. For whatever reason, many analysts are claiming that the situation with Greece and other euro zone countries is not as bad as some have claimed and that the previous downtrend was a bit of an overreaction. I completely disagree though, because without any concrete details being ironed out yet, and another 30 day wait and see period for Greece to do the impossible and just fix itself, this euro is in no way being undervalued here. There's also new speculation that Italy may be in worse shape than Greece. I still believe we will see continued downward push until we reach 1.3100. But yesterday was certainly not a good thing for traders like myself, who watched in disbelief as the currency pair defied logic (fundamental and technical analysis) and broke through major trendline and slower MA resistance to reach the weekly R1 area at 1.3775 before finally coming to stop. This was yet another time where I had to cut my losses short, stomping and shouting, and wait on the sidelines for a resumption of the main trend back down.

Luckily all I had to do was wait 24 hours, as this morning's fundamental data showed that US Housing Starts have increased 2.8% to 591,000 annual rate, while US industrial production elevated to its highest level since August of last year, growing 0.9%, up from 0.6% in the previous month and beating market forecasts of a more modest growth of 0.8%.

Meanwhile building permits report, which provides a slight future outlook for house demands in the U.S. reported a rise in permits reaching 621 thousand, coming in inches above the expected 620 thousand by markets but below the previous reported estimate of 653 thousand. As I have mentioned before, this rise in future demand on house permits might be highly related to the near termination government program “the Tax Credit”, which is due to expire by the end of the first quarter of this year as the index dropped in the prior month by 4.9 percent from the previous rise of 10.9 percent.

So in summary for this mid-week report, the Euro failed to gain traction on this recent upswing, losing every bit of it's 1.3700's foothold and then some, trading as low as 1.3604 as I type. I am currently along for the ride on this one, waiting to see another crossover on my alligator before I exit again, which hopefully means I'm in for a long wait and a big payday at the end. I'll also be monitoring my trade using the liberal (less restrictive method) trailing S/L that I included in my Money Management for Beginners lesson to maximize these profits and make up for the rough week last week and bad day yesterday. This is a great example where you have to plan for the droughts in order to make it through and reap the rewards when it rains again (yeah, that was a bit dramatic I know).

 

[Ricex]

Just my tuppence worth but be careful with your beliefs and what you think should happen. Price action is all a result of trader perceptions of certain fundamental situations, it's certainly very rarely logical.

You have been caught out because your belief of what you thought should happen didn't. There are always two sides to a currency pair remember, and when it's paired with the dollar it becomes even more complicated due to it's safe haven appeal.

Trade what you see.

Just my thoughts.

 

[Forexwatchman]

True statemnet there. The psychology of the market is part of the allure for me. This past week has been a love hate relationship, more hate than love. Everytime I think I'm out, it drags me back in though! Thanks for the input, always a value to hear from another senior trader.

 

[Forexwatchman]

Classic bulls versus bears battle this morning in the the U.S. as the New York session see tremendous volatility. I was certainly on the edge of my seat watching as my huge profits from Tuesday's bounce off weekly R1trade, which had netted my close to 200 pips by New York open, got cut in half thanks to China and Russia who apparently wanted to put some distance between their 1.3500 barriers and the market and begun aggressively buying EUR/USD, pushing it as high as 1.3653 and almost reaching the 50 fib level from this week's 1.3782 to 1.3538 drop. As I write it appears that the bull have begun to lose footing and price action has fallen from the high of 1.3653 back down to 1.3622.

Lots of fundamental forces are stacked against any serious retracement chances for the euro since economic reports support a hawkish outlook for the dollar. The producer price index (PPI) was up 1.4% in January, while the market had only expected an increase of 0.8% from the 0.4% growth seen in December. This means in annual terms that the PPI in January grew by 4.6% over forecasts of a repeat of December's 4.4% rate. Core PPI also grew more than expected in January, up 0.3% on the month from 0.0% in December. In annual terms, the core PPI rose to 1.0% in January from 0.9% in December. Changes in the PPI are widely followed as an indicator of commodity inflation. A high reading is seen as positive (or bullish) for the USD, whereas a low reading is seen as negative (or bearish).

Bad news though came from the US Initial jobless claims which were 473,000 for the week ending on February 13, that's up 31,000 from the previous week. Market expectations were for a 1,000 decrease in first-time claims. This perhaps will be interpreted as proof of recovery seen in the US economy does not translate into employment creation.

Also at 10:00 am the Philly Fed index came out at 17.6 in February versus 15.2 last month. New orders also jumped to 22.7 from 3.2. Leading indicators rose 0.3%, below the 0.5% consensus. That makes this the 10th straight rise in leading indicators.

My crystal ball is telling me to hold on to my previous sell order and wait to see if the 1.3549 level will continue to hold up for a third time or not. If it does, I'll take my profits and call it a good week. Good luck to you!