Saturday, January 30, 2010

cable

Tom Hougaard and i were delivering a Forex trading seminar at Canary Wharf in London on Thursday and Friday last. We traded in the www.whichwaytoday.com live trading room while sharing the speaking duties. I liked the look of the cable short on Friday afternoon but did not get time to post it here. There will be plenty of time to get aboard, what looks like a big move south in cable, on Monday morning.

Those of you who have done my course should be able to see the two bar outside reversal short on the cable four hour chart. This pattern successfuly traded the GDP number, which was much better than expected.

Have a great weekend. I will be posting from London and returning to South Africa at the end of next week.

Wednesday, January 27, 2010

Cable

I have been stopped out of cable at entry. No profit no loss.

Busy looking for opportunity.

Good Trading

Cable

Its just past the FOMC meeting where they decided to do nothing as expected. The cable is trading down at 1.6152. We entered at 1.6214 which represents a healthy profit . I am pulling the stop to entry and letting it run overnight.
Another free bet.

Have a great evening.

Cable

It seems i cannot subtract.
The risk on the cable trade is in fact 76 points on a 1/3 position size, which is 25 full points of risk.

Its pretty much where I got aboard and is now trading at 1.6216.

Good Luck.

Cable


The cable neckline that I put in the last post has not broken and the market has rallied to a 0.786 retracement of yesterdays move down.
The pattern is called a Gartley 222. It is bearish.
For this reason I wish to sell cable at 1.6213 This is where it is trading as i write. Place a protective stop at 6289. This is a risk of 73 points . Its very much against the flow and i am going to trade it also in 1/3 of my normal size. This is a risk of 24 full points . The initial target is the neckline at 1.6100 as shown in my last post.
This is the most speculative trade I have taken so far in this blog. I cannot see any other opportunity.
Good Trading.

CABLE

If this level goes there is a 430 point target in cable . Stay tuned .
I will sell the break and test of the neckline .
Good Trading

Tuesday, January 26, 2010

Euro $

I have let the euro $ run all morning and its refused to go below 1.4050. There seems to be a change in the indices but its early days there.

We are short from 1.4150 and its now trading at 1.4055. There is news coming.

Thats 95 points on a 1/3 position size which equates to 31 full points .

I am going to the gym now and thats as good a reason to bank as any.

I am closing the position which is my 8th winner in a row on this blog now at 1.4055.


good trading

euro $

The Euro $ is trading in a tight range this morning. I am as confident as one can be in this game that is going to break down and my target of 1.3950 for this w5 of w5 of 1 of C remains the same .
The market is at 1.4090 at the moment and i am sitting with the stop at entry.
I missed the trade in cable this morning. I felt that the news out of the UK would push it up before the fall. In fact the GDP number out of the UK was much worse than expected and it fell without the writer aboard.

Good Trading

Monday, January 25, 2010

Euro $

I watched the Euro $ go sideways all day yesterday and was tempted to scratch the trade many times . The four hour chart has finally proven its worth and the market broke as forecast by a coupling of Eva Mendez and Ralph Elliott. The mind boggles.

My entry short was 1.4150 and the euro$ is now trading at 1.4080. Lets get the stop to entry and sit a while. The old low is at 1.4027.

We now have a free bet .

Have a great trading day.

Euro $

The Euro $ has confirmed a short position at 800 am GMT. Its not a strong signal but i intend to take it as its in sync with my Elliott based count .

I am short Euro $ from 1.4150 stop 1.4270 on a swing trade looking for a target of 1.3950.
The Elliott count is complemented by a EVA MENDEZ setup on the h4 chart .

As i am using a 120 point stop the position is in 1/3 size.

I am risking 40 base points .

Tom and I have reviewed money management in whichwaytoday and i will implement a similar system here when i get the time away from flying and Elliott wave analysis. In Elliott, i laughted when an old trader told me, many years ago, that the first 10 years was the worst.
He was incorrect, its the first 25 years. After that its all downhill.
For real time analysis of indices and forex www.whichwaytoday.com

Have a great day.

Sunday, January 24, 2010

Euro $

I posted a series of charts last week on the technical position of the euro $. Here i believe that the market is in the process of making a wave 1 down of a C wave .

Within this wave 1 down , the euro $ is charting an w5 of this w1. Within w5 of w1 there is a subwave of 5 waves and my analysis says that there is a w5 of a w5 of 1 of c to come . This is quite a mouthful i know.

I am waiting confirmation to short the euro$ and will get that with any luck at 800 am GMT.

Have a great trading morning.

$yen

I have been travelling. On Thurday last I mulled over closing the $ yen position but by the time I got to Cape Town the decision had been made for me. The position was closed on stop and a small profit locked in. The stop was at 91.10 and entry was 90.57 . This is a profit of 53 points on a 1/3 sized position. Thus another 18 full points.

I am presently in London and will be trading from here for the next two weeks.

All my intraday trades will be reported on www.whichwaytoday.com as they happen.

Good trading

Wednesday, January 20, 2010

$ yen

The $ yen has had a good night for us and is now trading at 91.63. This means we are in profit of 100 points, on a 1/3 size position. What is very pleasing is that its the seventh winner in a row. The stop is already above entry but i now wish to pull up the stop again.

Lets get the stop to 91.10. This locks in about 50 points of profit .

Have a great day

$ yen

The $ yen has broken up after a mixed day where the pair was held back by the fall in the euroyen. It is trading at 91.21 now and i wish to pull the stop up to 90.75. This will lock in a small profit and we are still in the game .

Lets sit another night.

Good trading.

Tuesday, January 19, 2010

$ yen

The $ yen is now trading at 91.17 . This is 60 points of profit on a 1/3 position.
Lets get the stop to entry at 90.57 and sit.

Have a great trading day.

$ yen

The $ yen is now trading at 90.96. Lets increase the stop to 90.25 and hold it overnight.

Good Trading

$ yen


I have selected the $ yen forex pair for my next trade.I am still watching the cable and sterling yen with interest. There is inflation numbers coming out of the UK this morning.


In the above chart of $ Yen, a daily view is shown .On the daily a falling wedge to a 38% retracement in evident. There is also a reverse divergence which is a part of my Eva Mendez setup.


I have had some confirmation that support is going to hold from the hourly chart .


I am going long the $ yen at market. I have got a price of 90.57 as i write. I have placed a protective stop 100 points below at 89.57 . As the stop is wide i am trading this in 1/3 size. This means i am risking 33 full points on this trade.


The initial target is 92.30 and the final objective is 95.00


Good trading

Sunday, January 17, 2010

Sterling Dollar---Cable


The markets are closed in the US on Monday 18th of January, but will be trading everywhere else in the world. I would expect the N Y session to be a non event and i will probably not enter any swing trades untill Tuesday.


The cable looks very interesting.

On the daily chart above, the price has made a falling top and the stoch a rising top . This divergence pattern predicts a sell off in cable with a high hit rate . In my seminars it called an Eva Mendez setup. There are several other features ,which together with the divergence, make this pattern one of the most reliable in my toolbox.


On the daily, the price action is healthy for a sell as the market has charted out a bearish outside day. The stop on the daily is excessive and i will try to get a more elegant entry on the four hour chart. The potential move is many hundreds of points . I will report at the start of the London session on the technical situation on the four hour cable chart.

I am happy to report that the Elliott analysis on the Euro $ that I posted seems to be working out as stated.

Enjoy whats left of the weekend and good trading tomorrow.

Friday, January 15, 2010

Gbp/Yen

The sterling yen trade is finding support at a .618 retrace of the last upswing. The level is 147.86.

We are up 114 points.

Lets close the trade the trade at about 148.00 or as close as you can get.

This is a profit of 114/3 full points. That is 38 full points and my sixth profitable trade in a row .

I will account the score at the weekend .

Good Trading.

Thursday, January 14, 2010

Gbp/Yen

The above pair is now trading at 148.30. We have 84 points of open profits which equates to 28 full points .

I am letting the position run, but pulling the stop to entry at 149.14.

We have now a free bet.

Have a great trading morning

GBP/YEN

The trade is moving in the fit and proper direction. The short was initiated at 149.14 and the pair is now trading at 148.60 .

I should like to move the stop a bit tighter to a level of 149.65 and leave the position overnight.
I shall consider adding to the position in the morning.

The risk is now 51 points /3 full points . The risk is now 18 full points .

Have a great evening.

Sterling Yen

The Gbpyen has confirmed a signal short on the four hour chart by way of a very useful barchart pattern . The best entry was at 149.30 .I missed this as I was at the gym.

I am shorting the Gbp/Yen at market 149.14 stop loss 150. 24 risking 110 points on a 1/3 of my normal position size . I am risking 11o points /3, which equals a risk of 36 full points .

Lets hope for a big one . I have waited long enough for it .

Good Luck

Sterling Yen

Gbp Yen has found resistance at a equidistant channel drawn as shown above . The forex pairs just love simple channels. I would like to see a high probability reversal bar chart pattern to confirm a short entry. I hope this will come this afternoon in the NY session.

Again patience is required

Euro/$

I am still waiting for entry signals from the $ yen and gbp yen. I will update the blog intraday when these occur. Its a game of patience .
Above I show a chart of the Euro$. Its a daily view and updates my thoughts of last Friday just before the payroll report. Then and now, I feel that there is a wave 5 to come as marked above, to complete the larger wave down. By my count in the euro$ ,we are just about to start w5 of 1 down of C. I explained the longer term count in the blog entry of last week.
US retail sales is the key report this afternoon .
Good Trading

Wednesday, January 13, 2010

$ Yen and Gbp Yen




I have watched Sterling Yen go up the chart all day. I mentioned the Fib fan last night and i include above,a four hour chart of its uncanny ability to calculate support and resistance levels.


The four hour chart shows the $ yen is sitting on Fib support and that Gbp yen has broken initial support and is now sitting a major resistance point.

Every molecule of me wants to short the hell out of both of them.

Many years of doing battle against the Yen crosses advises strongly against this .

I am waiting for the start of the London session for a signal. Trading is a game of patience. In the http://www.whichwaytoday.com/ live trading room , Tom and I trade the shorter time frames so if you want action that is a good place to look. Its not practical to report those trades here as they would be over, before most would have seen or read the post.


I hope we get a good four hour trade tomorrow .
Have a great evening

Tuesday, January 12, 2010

Sterlong Yen

The Trend line on the daily Gbp/yen has held. Above I show a hourly chart taken at 7.15 GMT.The pair has risen and is now charting out a bearish technical pattern which is called in my classes an EVA MENDEZ setup. It is is my view that sterling yen is going to break down and test and hopefully break the trend line on the daily chart presented last evening. If this works out as planned, we are standing on the brink of the trade of the month.
I am waiting for confirmation of a turn. I will communicate this as it happens.

Have a great trading morning.

$ yen and Sterling Yen


My decision on the $ yen has proved to be poor judgement. The pair has continued to fall and has found Fibonacci based dynamic support at a construction known as the FIB Fan.
The Fan easily and without any Gann based , scaling of charts, derives dynamic support and resistance levels which are quite uncanny. It is fully taught in our trading course. The next is running in London at the end of January 2010. The seminar is taught by myself and Tom Hougaard and is held on the 26th Floor of 40 Bank St., Canary Wharf. Its worth coming just for the view of London.
Tomorrow we can easily get a signal to re enter the $ yen based on a break and a kiss of the Fan level. Todays was a winning trade and i should be grateful for that.


The gpb Yen is sitting on the support level from the daily rising wedge that I presented on Sunday evening. As i said this morning there was a signal on this pair on the hourly chart which i ignored on this Blog. Again I would expect the Sterling Yen pair to break this daily trend line and then kiss it . This will make a relativly low risk entry similar to the trade on the $ yen we took this morning. I think this can be a 200- 300 point trade but as we know well in this business ...ANYTHING CAN HAPPEN.... It only takes one trader somewhere in the world of size,to totally stuff your prize theory.

The four hour view is shown above.
As i write the pair is bouncing off the trendline.
Cable looks as if it can break up in the morning. I missed a signal on the four hour chart in this pair this afternoon while i was at the gym. There will be many more .
So as the end of London trading approaches I am flat. A little blue that i did not hold the $ yen a while longer. Very eager to get a low risk trade in Gbp/Yen in the morning.
I will post my thoughts before the start of the London session at about 0600 GMT.
Have a great evening.

$/Yen

The battlefield is fluid. I shorted the $ yen this morning at 92.22, as i felt it was going to break down hard. It has fallen to 91.66 as i write. There are, however, annoying divergence patterns evolving on the lower timeframes against the position.
I think there is the risk of a bounce at the US open and for that reason i am closing the trade at 91.66.

The position was taken with a 1/3 position size, so 56/3 full points can be booked. That is another 18 full points to the good, which puts the tally close to 250 points for January.

Apart from that I have had 5 winners in a row . Long may it last.

Have a great trading afternoon.

Monday, January 11, 2010

$/Yen


Yesterday we placed three trades in the http://www.whichwaytoday.com/ live trading room. Two of which were short term trades and one a swing trade. The latter is still running and is at breakeven at this moment. Both short term trades were winners.


There was a possibility of trading the Gpb/yen yesterday but the setup occured on a one hour chart. I have discussed the type of trade that I report on this blog with some of the people who follow my calls. They feel that anything less than the four hour chart is hard to and impractical for them to follow. I would love to hear your views at traderdavy@gmail.com


Now the $ yen. On the four hour chart it has broken down through a major trend line and has gone back to kiss the trend line overnight. The trendline break is PRECEDED by macd compound divergence which in my book adds weight to the trend line break. This gives us a low risk entry point.


I am shorting the $ yen at market 92.22 stop 92.90 position size 1/3 of my normal short term trading size. I am risking 68/3 full points .
This is the fifth trade i have taken on this blog since its beginning just after Christmas 2009. I have had 2 big winners and 2 small winners so far. The tally is over 200 full points. I report the exact tally later in the day when trading is over. In the words of Kenny Rodgers..time enough for counting when the dealings done..
Have a great trading day.

Sunday, January 10, 2010

Gpb/Yen




The gpb/yen still excites me. We had a very good trade in the pair at the start of last week. It was a trade that I unfortunately took profits much to quickly. The rising wedge on the pair is still intact on the daily view, while the four hour view has made a very bearish bar chart formation. Both charts are shown above.


This is the most devious of forex pairs but there is the potential of a 500 point fast move. The Fibonacci expansion on the four hour chart above, shows the potential.
I shall be looking for confirmation of a move from the lower timeframes and will report on that before the start of the London session at about 0615 GMT.
Be careful. This pair is known by many as the BEAST.
Untill the morning of Monday 11th January.


Good Night .

Friday, January 8, 2010

$/Cad

The NFP report came out showing many more job losses than the market expected.
This was very bad for the dollar just after the report. The general technical picture that i described will PROBABLY be restored after the dust has settled.

Our position on the $/Cad is pretty much as it was at entry 1.0357. I am closing this position now for a small profit and going into the weekend flat.

I will post over the weekend on the technical situation for next week

Have a great weekend.

Euro$

The above chart is a four hour candle view of the Euro$ pair. The Elliott labelling always takes a little imagination and many say that a tot or two of Jamisons helps the process along.
In my view the Euro $ is charting out a wave 4 of a wave 1 down within the c wave that I described in the last post. This means that to complete wave 1 down of c , a final w5 is required.
This should take the Euro$ down to around 1.3750.
With any luck this should start this afternoon at the payroll report and follow through on Monday. Remember w5 of 1 of c will also have 5 waves within it.
In conclusion i am calling the $ to strengthen when the dust of the NFP report settles.

This bodes well for our position in the $/Cad.

When w5 of 1 of c has run its course then a significant multiday rally in the euro$ will begin. This will be w2 of c .Lets not stress about that this afternoon.
If you have not traded the NFP before, i suggest that you observe a few before entering the battlefield with meaningful sums of cash.

Good luck with your trading

Thursday, January 7, 2010

Euro/$

The above monthly chart shows my attempt to use the Elliott wave to determine the technical position of the Euro$ forex pair. It is my view that the euro$ has begun a corrective wave(labelled c) which should result in major dollar strength over the coming months. Those of you who attend my monthly meetings held all over South Africa will know i have been calling this for a few months now.
The wave C which has started , can according to Elliott have either 3 or 5 waves within it. The strengthening of the dollar wont happen in a straight line but I am confident that we will see a stronger dollar over the next six months to a year.
In the next post i will examine the internal structure of the C wave. The objective being to forecast what is going to happen this afternoon after the payroll report is released.

N.B. I am still holding the $ Cad. The stop is unchanged.

$/Cad

The $/Cad is hanging in there. I am holding it overnight but its still early in the trade to pull the stop up closer to entry. As i write the pair is trading at 1.0347 which is about our entry point.

I have done well on wedge trades over the years and i remain optimistic about this one .
They are far from easy to execute as they are counter trend and sometimes the trend takes a while to turn. Remember my Rule 1. THE HARD TRADE IS THE GOOD TRADE.

I am holding the $/Cad overnight and will review the situation at about 630 GMT.

The trade is in line with my Elliott forecast on the Euro$. I will dedicate a post to this topic prior to the start of the London session on Unemployment Friday.

Have a great evening.

$ Cad

Well its been an interesting morning in the $/Cad. As you will have noted it drove down to the lows of last night before finding support at the lower trendline defining the falling wedge formation.

As i write the pair is trading at 1.0326 and i am holding the position with an initial target of 1.045 and final target from the wedge of 1.0600.

I remain optimistic. As in all things trading related , time will tell.

I will decide if the position should be held overnight around 1700 GMT.

Good Trading

Wednesday, January 6, 2010

$/Cad

Good Morning

As discussed last evening the falling wedge on the $ Cad is still intact.
I wish to re enter the long position at market which is 1.0333, as i write this at 0540 GMT. I am going to use the 1/3 postion size used previously. The stop loss is at 1.0270. This is 63 points of risk on a 1/3 position, which equates to 21 full points of risk.

The target for the trade is 1.0600. If the position gains some traction i will add to the size, WHEN the stop can be safely increased to entry.

Good Luck today.

$/Cad

The decision to close the $/Cad has proven wise. The pair has fallen from 1.0380 to 1.0326, as i write at 1640 GMT.

The falling wedge is however intact and i am tempted to re enter the position.

The trend line defining the bottom of the wedge shows support at 1.0320. This means a long position now would be filled at a great level.

Its getting late and experience has taught me ,that, it will be prudent to wait for the London open.

Good Trading.

$/Cad

I am disappointed that the $/Cad has not moved as planned. I have decided to get out of this trade at 1.0381 at 1.15 GMT.

Wedges should explode and this one looks lifeless. This is a profit of 36 points on a 1/3 position size. This is a profit of 12 full points and brings the total over the first three trades on this blog to 217.

I will look for opportunity and post my findings later in the New York session.

Good trading .

Tuesday, January 5, 2010

$ Cad

As I write at 0452 GMT the $/Cad is trading at 1.0379. The trade initiated in the last post is up 34 points, on a position which is 1/3 of my normal. In our accounting convention this is a paper profit of about 11 points .

The support at the lower trend line of the falling wedge, which is the reason for the trade is solid and the market seems to be charting out a right shoulder on a 15 minute view.

Those of you who have done our course will know that ALL wedge trades are counter trend and thats why i am conservative on the size of the position.
Tom Hougaard is convinced that i see wedges under the kitchen sink.

I am holding the trade overnight and if its OK in the morning will consider adding to the trade size.

I am hoping that the Gpb/Yen will pull back and KISS the trend line, marking the bottoms of the rising wedge, that I showed yesterday. This would be a good place to consider a new short position in this very challenging pair. Nothing to do at this stage of the trading day.

So lots to do at the start of the London session.

Have a great evening.

$ CAD

The $ Cad is now at very good levels . As i write its trading at 1.0345. Depending on the exact method of constructing the lower trendline of the wedge, i now estimate support at 1.0325. The stop loss is 1.0270 which is a 75 point stop. Remember i wish to trade this on a 1/3 of my normal size.

I am filled on $ Cad at 1.0345 with stop 1.0270 on a 1/3 of my normal size . The target is 1.0590. These trades normally move or fail quickly .

Fingers crossed.

Good luck in your trading.

$ CAD

The $ Cad is shown on a four hour candle chart. The formation shown within the red trendlines is a falling wedge which is a bullish pattern. Its sister the rising wedge worked well for me yesterday on the Gpb/Yen. i would like to buy the $ Cad on any weakness down around the 1.0350 level with a stop at 1.0275. This is 75 points of risk . As it is a swing trade with about 200 points of profit potential i will trade this with 1/3 my short term trading size. This means if the trade goes against me i will lose about 25 full points .
I favour waiting untill the US open for an entry. I will post when i take a position.

Sterling Yen

The Gpb/yen has fallen hard and in hindsight i took profits far too early. The market has broken the lower trendline which defines the wedge which is shown on the charts i sent yesterday.

Getting an entry now in an extended market will be no easy affair. Its late in the european morning and i will try and get an entry at the US open.

Also a post to come on a big opportunity in the $cad

Monday, January 4, 2010

Sterling Yen

The sterling yen trade has gone much better and quicker than i thought. I was taught this business by an old trader from the floor of the Chicago Merc. He said "always take windfall profits " . I am closing the Gpbyen trade at 148.80 at the below time . This is a profit of 120 points on 1/3 of a position, which results in 40 full points.

This means in two trades i have pulled 205 full points from the market.

I hope to have something to trade in a similar fashion tomorrow.

Have a fun evening.

Sterling Yen

The chart shows a 30min candle view of the Gpb/Yen. I have added a MACD indicator which shows bearish divergence to the technically educated .This is some confirmation that the pattern is going to hold . I am going to short the GPB/Yen with a third of my normal position size using a stop loss of 100 points . Thus if the trade should fail i would lose 100/3 NORMAL size points . So i am short now the Gpb/Yen at 150.00. The stop loss is 151.00 and i am risking 33 normal size points. All of the above is taught in detail in my 2 day trading workshops which are held in South Africa and London.
If this trade goes well i feel we will be in it for many days. If the trade does proceed to plan I would be very happy to add to the size of the trade as the market proves my position correct. This is good trading practice. Lets see.

sterling yen

The above chart is a 4 hour candle view of the pound/yen. Its a very volatile animal and is a forex pair NOT for the faint of heart. Some of my forex students refer to it as the BEAST.
In TA speak it has charted out a rising wedge pattern which is bearish and the pair has been sold hard now twice at the top trend line. I am waiting for confirmation from a candle pattern on the four hour chart which will require a stop of about 100 points. The brave entry was at the trend line. The target is many hundreds of points south . I will shout when i feel its time to mtake some risk.

Saturday, January 2, 2010

The outlook for Gold

The gold market has pulled back significantly since the high of 1228 was made in early December 2009. In the language of the technical analyst the pullback is charting out a falling wedge formation which is a bullish continuation pattern. The trend is still up and i am getting interested in a swing trade in Gold in which i shall be betting that the Gold price is going to move up again and challenge the the high of last month. IT IS STILL EARLY DAYS.

The question is now when to join the party. There are three interesting features on the chart.

1. On the daily chart the falling wedge pattern would seem to have broken on the up side and is now coming back to KISS the trend line, defining the top of the falling wedge . This is common when a trend line is broken and is caused by the fact that the big traders would rather jump of a cliff than CHASE a market. Chasing does not work with girls or markets .

2. Whether you believe that Fibonacci numbers are absolute or that the levels are self fullfilling the Gold market, from years of observation, loves them. On the daily chart the next FIB level (0.786) is about 1069 which is pretty much where the gold market should kiss the down sloping trend line mentioned above. Technicans call this a confluence of support.

3. On the weekly chart the last significant low is at 904. If a FIB retracement is constructed from that low to the high of December last there is a 50% retrace at a level of 1066.

In other words at around 1065-1070 there are three important measures of support . I reckon that this is where the Gold market is going and represents a good place to consider a trade long.

This is still a few days away. I will shout when we get to this level and have had some confirmation from the market that Gold is on the turn.