Eurusd 1.50000

[AbeSmith 10]

Hello. I'm interested in Forex market. I've never done it before but I like the high leverage that it gives. So I've been looking at EURUSD on the daily chart and it is looking like it is going up. So I'm thinking of buying on a dip and holding it for several days or more. But I see the big 1.50000 not too far away. Seems to me it might be a major resistance, but again I don't know much about Forex and don't know how much impact a simple number can have in forex. Just wondering if anyone has any advice on this trade. I'm interested in investing $1000 with as much leverage as possible without risking getting stopped out on volitility. Can it be done safely? Or should I look into something else in Forex? Perhaps the USDJPY?

 

What things should I watch out for? Only thing I know about Forex is that interest rates play an important role. If interest rate of a country goes up, then people are likely to move their money out of that currency and into a higher rate currency. Seems to me the Fed is not going to cut interest rates anymore, because it is hurting the dollar. Does that sound right? Again, excuse my ignorance if I'm not making any sense. Just wondering how I can enter the Forex market for swing trading. Or is day trading Forex a better option? What are the major S/R points in Forex? Do Pivots play an important role?

[torero 10]

If you want to learn more about forex, currently the best threads right now are:

 

http://www.traderslaboratory.com/forums/2/eur-usd-2591-3.html

http://www.traderslaboratory.com/forums/f2/gbp-usd-2854.html

 

You got 2 veterans who can gives you the insight you want (Anna-Marie and Milliard). One of the few threads I contribute on a regular basis now.

[AbeSmith 10]

If you want to learn more about forex, currently the best threads right now are:

 

http://www.traderslaboratory.com/forums/2/eur-usd-2591-3.html

http://www.traderslaboratory.com/forums/f2/gbp-usd-2854.html

 

You got 2 veterans who can gives you the insight you want (Anna-Marie and Milliard). One of the few threads I contribute on a regular basis now.

 

Awesome. Thanks Torero.

[Art Krantz 10]

Fear & conjecture (psychology) rule these instruments. They’re acutely sensitive to news flow of any color or creed.

 

Most of the ongoing chatter regarding:

interest rates

economic gauges (inflation numbers, foreign money inflows-outflows, housing, jobs data, blah blah)

central bank activity (& whispers)

global imbalances etc, constantly whip up the volatility & pitch & toss them around to intra-day & intra-week fair value camps.

 

Technicals are merely your weapon of choice to price & balance the fundamental biases which pop the pairs/crosses up & down the chart map day after day.

 

If you can get in tune with the psychology of the market - keep one ear on the fundamentals & the other one on the technicals, you got yourself an even chance of pulling serious dough out of this circus.

 

Players are constantly pricing in the fundamental flavor of the day as the relevant item of chatter/news hits the market. Your job is to interpret & grade it depending on importance or relevance & match it up with your technical grid/trade plan.

 

Sometimes, you’ll get an aggressive pop to the upside/downside, or an out of whack move, which is specific to a particular currency at that time.

 

If you know what you’re looking for (unique fundamentals) you can work the short-term strength/weakness of that specific currency to your benefit.

 

These instruments are awful fickle, as are the participants. But generally they’re pushed & shoved around by the currency packing the heaviest muscle. In other words, trade what’s in front of you now, not what might occur in a couple days/weeks.

 

Buy the strongest, sell the weakest is a simple, effective game plan to wrap a strategy around. Pure common sense (a trait severely lacking in most traders) will also be a good friend when navigating these waters.

[AbeSmith 10]

Fear & conjecture (psychology) rule these instruments. They’re acutely sensitive to news flow of any color or creed.

 

Most of the ongoing chatter regarding:

interest rates

economic gauges (inflation numbers, foreign money inflows-outflows, housing, jobs data, blah blah)

central bank activity (& whispers)

global imbalances etc, constantly whip up the volatility & pitch & toss them around to intra-day & intra-week fair value camps.

 

Technicals are merely your weapon of choice to price & balance the fundamental biases which pop the pairs/crosses up & down the chart map day after day.

 

If you can get in tune with the psychology of the market - keep one ear on the fundamentals & the other one on the technicals, you got yourself an even chance of pulling serious dough out of this circus.

 

Players are constantly pricing in the fundamental flavor of the day as the relevant item of chatter/news hits the market. Your job is to interpret & grade it depending on importance or relevance & match it up with your technical grid/trade plan.

 

Sometimes, you’ll get an aggressive pop to the upside/downside, or an out of whack move, which is specific to a particular currency at that time.

 

If you know what you’re looking for (unique fundamentals) you can work the short-term strength/weakness of that specific currency to your benefit.

 

These instruments are awful fickle, as are the participants. But generally they’re pushed & shoved around by the currency packing the heaviest muscle. In other words, trade what’s in front of you now, not what might occur in a couple days/weeks.

 

Buy the strongest, sell the weakest is a simple, effective game plan to wrap a strategy around. Pure common sense (a trait severely lacking in most traders) will also be a good friend when navigating these waters.

 

Thanks Art for the very informative post.

[brownsfan019 17]

Abe,

I assume that the jump to forex is saying that the jump to futures didn't go as planned.

 

I realize each market is it's own animal and perhaps trading forex will work better for you, but proceed with caution. It looks like you are looking for leverage and that alone is not reason enough considering how much leverage is available in futures.

 

My point is that this is a classic newbie move - try market #1 and when that doesn't work b/c you have not put in enough time and energy, move to market #2 b/c you found a chart or two that just provided thousands in profits.

 

Just proceed with caution Abe as I would argue that Forex is even HARDER to trade than futures since your broker can be working AGAINST YOU. The 'no commission' marketing BS is just that - BS. If you really like currencies, there's a few on the CME that trade, in particular the EC/6E that is plenty liquid for most traders.

[Art Krantz 10]

 

Just proceed with caution Abe as I would argue that Forex is even HARDER to trade than futures since your broker can be working AGAINST YOU.

 

The 'no commission' marketing BS is just that - BS. If you really like currencies, there's a few on the CME that trade, in particular the EC/6E that is plenty liquid for most traders.

 

I'd sure agree with that point. I know Andre (milliard), Anna & myself included, wouldn't touch (traditional) retail FX if you paid us.

 

I appreciate there are a couple half decent operators out there, & if you're a hobby trader, then it doesn't really matter either way - but if you're playing this circus for serious dough, you won't be trading via the bucketshops anyway.

[Anna-Maria 10]

Ditto. Always wise to give a wide berth to the spin & churn merchants. Even the larger, popular retail shops have absolutetly nothing serious to offer.

 

Budget retail spot is ok if you leg in via the likes of Interactive Brokers, Hotspot & EFX.

 

Choose your partner according to your pocket, aims & expectations. If you're competant, manage to avoid the usual pitfalls & stay the course, alternative avenues will open up for you if you really want them to.

 

Usual advice applies: Due diligence, engage brain & double check!!

[AbeSmith 10]

Abe,

I assume that the jump to forex is saying that the jump to futures didn't go as planned.

 

I realize each market is it's own animal and perhaps trading forex will work better for you, but proceed with caution. It looks like you are looking for leverage and that alone is not reason enough considering how much leverage is available in futures.

 

My point is that this is a classic newbie move - try market #1 and when that doesn't work b/c you have not put in enough time and energy, move to market #2 b/c you found a chart or two that just provided thousands in profits.

 

Just proceed with caution Abe as I would argue that Forex is even HARDER to trade than futures since your broker can be working AGAINST YOU. The 'no commission' marketing BS is just that - BS. If you really like currencies, there's a few on the CME that trade, in particular the EC/6E that is plenty liquid for most traders.

 

Brownsfan, you are a very intuitive guy. I admit that I did consider moving away from futues due to lots of loss. But now I'm trying futures again with minimum leverage and following my rules this time.

 

But Forex is not a runaway move from futures. The leverage is good and it is another market which I want to watch. So right now I'm watching YM, some stocks, and starting to follow currencies as well. Also starting to watch mini Gold. Anyways, thanks for the heads up.

[AbeSmith 10]

Ditto. Always wise to give a wide berth to the spin & churn merchants. Even the larger, popular retail shops have absolutetly nothing serious to offer.

 

Budget retail spot is ok if you leg in via the likes of Interactive Brokers, Hotspot & EFX.

 

Choose your partner according to your pocket, aims & expectations. If you're competant, manage to avoid the usual pitfalls & stay the course, alternative avenues will open up for you if you really want them to.

 

Usual advice applies: Due diligence, engage brain & double check!!

 

So Interactive Brokers and EFX won't try to rip me off? What about Forex.com? Could you talk about some of the pitfalls? Thanks.

[Anna-Maria 10]

So Interactive Brokers and EFX won't try to rip me off?

 

What about Forex.com?

 

Could you talk about some of the pitfalls?

 

Rip you off as in what? how? They're not deal desks. They earn their fee's (from your account anyway) via the comms, therefore they route you directly into the flow. To my knowledge, they don't shade or fade you. Get on the phones, speak to them & tell them what you want/need.

 

They won't hold your hand, but talk out there is positive for both firms.

 

I have no view/comments on Forex.com, sorry.

 

Pitfalls?

 

The web, specific sites-threads, 2nd & 3rd hand contacts etc, are awash with varying degree's of inefficiency and/or bad karma regards the deal desk outfits.

 

Most of it can be attributed to inexperienced, ineffective & ill prepared traders. Majority are under-capped, over leveraged gamblers who blow up then cry wolf & urinate on the brokers.

 

However, it's (unregulated) a free for all out there, especially amongst the low tier shops. Worst offenders will fade, shade & skew prices when they get the slightest opportunity, in both hectic & quiet periods.

 

Outside of the majors, spreads are criminal, particularly on Yen crosses. Dangerous territory if you're a greenhorn.

 

+ why trade with a shop who controls the price (fixed spreads/high hidden costs) when you can leg in via a straight thru (ECN) operator?? Again, engage brain & use common sense.

 

Ask (the IB's & EFX's) searching questions...fee's/spreads/costs/liquidity blah blah.

 

Beware of greeks bearing gifts (fixed spreads - low or otherwise), no slippage, guaranteed fills & other such garbage. Markets are markets whatever the instrument!!

[AbeSmith 10]

Rip you off as in what? how? They're not deal desks. They earn their fee's (from your account anyway) via the comms, therefore they route you directly into the flow. To my knowledge, they don't shade or fade you. Get on the phones, speak to them & tell them what you want/need.

 

They won't hold your hand, but talk out there is positive for both firms.

 

I have no view/comments on Forex.com, sorry.

 

Pitfalls?

 

The web, specific sites-threads, 2nd & 3rd hand contacts etc, are awash with varying degree's of inefficiency and/or bad karma regards the deal desk outfits.

 

Most of it can be attributed to inexperienced, ineffective & ill prepared traders. Majority are under-capped, over leveraged gamblers who blow up then cry wolf & urinate on the brokers.

 

However, it's (unregulated) a free for all out there, especially amongst the low tier shops. Worst offenders will fade, shade & skew prices when they get the slightest opportunity, in both hectic & quiet periods.

 

Outside of the majors, spreads are criminal, particularly on Yen crosses. Dangerous territory if you're a greenhorn.

 

+ why trade with a shop who controls the price (fixed spreads/high hidden costs) when you can leg in via a straight thru (ECN) operator?? Again, engage brain & use common sense.

 

Ask (the IB's & EFX's) searching questions...fee's/spreads/costs/liquidity blah blah.

 

Beware of greeks bearing gifts (fixed spreads - low or otherwise), no slippage, guaranteed fills & other such garbage. Markets are markets whatever the instrument!!

 

Ok. Thanks for the info Anna Maria.

[BlowFish 10]

There's always the currency futures too.

 

I heard EFX & MBT where giving access to the actual 'market' hows that working out? Do you really see a good chunk of those trillions of $'s of liquidity? Always made me chuckle the old snake oil salesman bigging up the market with no way for the retail trader to participate. With EFX & MBT do you get like a nasdaq LII display with who's bidding and offering what?

 

BTW enjoying the few currency threads as a lurker

[Sparrow 10]

I think they call it Level II in their current version of the MBT Navigator but changed its name to Market Depth in the new beta version of the software.

 

You just get a regular kind of DOM like for every other instrument. Now for FX that might be quite something but for futures it's not very impressive.

 

Being a noob I don't really know how to make sense of it.

 

Cheers

[torero 10]

It's Level II but without the market maker on MBT. I like it, what you see is what you get. I place an order and I can see the order on outside the bid or ask immediately (depending on where the price you placed) so I get transparency. Like I said, I haven't had problems with them for more than a year so. But test drive it yourself. Use these threads as a starting criteria to weed out the good from the bad, then create your own criteria for your own needs. Good luck.

[notouch 10]

The problem with targeting the 1.5 level is that if EUR/USD = 1.5 then USD/EUR = .666! It's not surprising price backed away from that level. Who knows if it will ever get there. You're entering the trend very late.

[AbeSmith 10]

The problem with targeting the 1.5 level is that if EUR/USD = 1.5 then USD/EUR = .666! It's not surprising price backed away from that level. Who knows if it will ever get there. You're entering the trend very late.

 

Ah yes, the good old 666.

[AbeSmith 10]

Ok guys and gals. The EURUSD is starting to look interesting on the long side. Stochastic is heading towards oversold. Smaller red candle on the 17th pointing to slowing down in direction. Also, reverse head and shoulders pattern. And fed rate cut helps to make it go up, right. Perhaps we'll get a surprise rate cut, like 1 basis point. That would make it go up? Anyways, still to early to enter at this point. But just wanted to point it out and see if anyone had any input. Probably best to wait for it to bottom and after it shows signs of reversal, perhaps 2 days of green then go long.

[AbeSmith 10]

Hello again. EurUsd dropped significantly today. It's starting to look better now. Stochastics are closer to oversold. Price might be headed to the support at 1.43.

[AbeSmith 10]

OMG. My first Forex trade!!! I woke up today without the alarm. Said to myself today I will not set the alarm. I will wake up whenever I feel like it. I woke up aroud 8CT, and by the time I did my morning routine 10 minutes before the open I found out that the fed had cut rates 3/4 point, Emergency cut. So I said to myself, wow. I looked at the forex and my first thought was, when did the cut happen. Looking at the spike on the chart I assumed it was around 7:25CT. Then I noticed the classic 1-2-3 pattern often when there is a fed cut. 1 is the initial spike. 2 is a retracement. And 3 is the second rally. I noticed we were in the 2 range, and price was consolidating. Then I decided to calculate how much to risk and where to place my stop. Since I was looking at the daily chart I had a swing trade in mind. So decided that with the stop at 1.43 I could risk a little over 1K if I buy 50,000 euros. So then I entered into my IB TWS account and first I noticed that there were 2 choices, Ideal and Ideal pro. So I did some reserach online and found that Ideal pro was the one to go with. Then I placed the order for 50,000 Euros at 8:40CT, hit transmit, and BAM, the DING sounded and almost instantly my TWS spreadsheet showed a -505 loss in realized P/L, with the trade closed!!!!! The portfolio section also showed no signs of a trade. But the trades section only showed the buy! And the account section was showing the trade active with the P/L changing. OMG. So I called IB, was placed on hold. Normally I would panick and get upset, but from prior experience I knew that the most important thing was to remain calm. I theorized that perhaps I was overleveraged and IB closed out the trade. But that didn't make much sense because I had 10K in my account. But suffice it to say that I do not like to read instruction manuals and so do not know what the leverage is. This got me in trouble once with a GOOG swing trade. So I was on hold for several minutes and right when the IB representative answered the phone, I mean right at that exact moment, the TWS spreadsheet erased the -505 loss closed out trade and showed an active EURUSD trade.

 

So now the trade is active. My stop is at 1.43. But I'm considering what to do with it. Tighten the stop to break even perhaps. Take some profit at 1.48. Fed might continue to cut rates in the next meeting.

 

Anyways, the lesson I learned is, don't panick. Don't loose your temper. It will make the situation worse. This time I didn't panick or lose my temper.

[AbeSmith 10]

Here are the pics:

[torero 10]

Great narrantion, Abe! Here's rooting for you! You caught on right. Stay with the trade, just move up the stop loss as it marks new higher lows (on whatever timeframe you're trading at). That way, you'll make your way to breakeven and then with luck, locking in some unrealized profits little by little and also giving it room to move up more. Good luck!

[AbeSmith 10]

Great narrantion, Abe! Here's rooting for you! You caught on right. Stay with the trade, just move up the stop loss as it marks new higher lows (on whatever timeframe you're trading at). That way, you'll make your way your breakeven and then to your profits and also giving it room to move up. Good luck!

 

Thanks Torero. I'm watching this one closely. It was very exciting.

[AbeSmith 10]

Hello again. Here is an article related to EURUSD. It says that fears of a European rate cut have reduced following some comments by their Fed. So market seems to be bullish on EURUSD. Also, the US Fed meeting is coming up before the Euro fed meeting. The US is Fed rate announcement is scheduled for Jan 30, while the ECB announcement is scheduled for Feb. 7th. I got stopped out on my swing trade, but might be looking to find and entry again for the swing trade. Then if price continues to rise I might sell some ahead of the EUR fed meeting.

 

FOREX-Euro bounces back as rate cut hopes ease

By Ian Chua

 

LONDON, Jan 24 (Reuters) - The euro strengthened against the dollar and yen on Thursday after tough talk on inflation from European Central Bank policymaker Axel Weber dampened expectations of a possible near-term interest rate cut.

 

The yen retreated on the back of the bounce in the euro and as European stocks extended their rally, after earlier gaining on lingering concerns over the health of the global economy.

 

"For the time being, the ECB are maintaining a very hawkish line so no signs of any rate cut any time soon," said Chris Turner, head of FX strategy at ING.

 

"You're then left with sharply lower U.S. rates, stable European rates and with equities doing quite well at the moment ... the market is just going to focus on the dollar bearish story."

 

Weber said the U.S. Federal Reserve's surprise decision to cut interest rates by 75 basis points this week hasn't shifted the ECB focus on euro zone inflation, dampening mounting expectations that it too will have to cut rates soon.

 

The euro climbed 0.3 percent to $1.4683 by 1206 GMT and was also up 0.3 percent

 

versus the Japanese currency at 156.60 yen , well above an early low of 154.86 yen.

 

The dollar was steady against the Japanese currency at 106.65 yen , off early lows.

 

Higher-yielding currencies such as the New Zealand also benefited, gaining 0.6 percent to $0.7715 .

 

The euro had come under selling pressure in recent weeks as signs emerge that weakness in the U.S. economy is having a knock-on effect on the euro zone, fuelling the argument for a rate cut by the European Central Bank.

 

Some of those concerns also eased slightly after German corporate sentiment unexpectedly rose in January, bolstering policymakers' assertion that the euro zone economy can withstand turmoil in financial markets. [iD:nL24345341].

 

CHANGING LANDSCAPE

 

The turnaround in the euro helped reverse earlier demand for the low-yielding yen when investors remained worried about the U.S. economy despite Wall Street's positive performance overnight.

 

Optimism about a U.S. government plan to rescue ailing bond insurers, which could prevent investors from being forced to sell billions of dollars of bonds the insurers had covered, sparked a comeback in stocks, but was greeted initially with scepticism in the currency markets.

 

The FTSEurofirst 300 <.FTEU3> index of top European shares jumped 5 percent. (Editing by Ron Askew) ((ian.chua@reuters.com; +44 207 542 1028; Reuters Messaging: ian.chua.reuters.com@reuters.net))

Edited January 24, 2008 by AbeSmith

[AbeSmith 10]

Hello. Today EURUSD came down. I bought some at 1.46732 (represented by arrow in chart) and place the stop at 1.45560 (blue horizontal line). Might add some more if it gets close to support around 1.45800. Basically we had a breakout of that pivot and now it is coming down and might be retesting it. There seems to be a guantlet of support here, visible both on the daily and 60 minutes. Technically I'm comfortable with the play. Fundamentally I haven't seen anything to make me want to change my stance.

Edited January 26, 2008 by AbeSmith